Standard Chartered Bank Uganda has been named the best-performing Primary Dealer Bank in the Government Securities Market for the year 2022-2023, earning the honour for the second time since the inception of the awards 19 years ago.
Primary dealing involves purchase and sell of government bonds and treasury bills through Bank of Uganda to generate funds to support government expenditure.
Standard Chartered beat Stanbic Bank, which was declared leader in 2022.
The award was presented to Standard Chartered Bank Uganda Acting CEO Kelvin Musana, and the bank’s acting Head of Markets Oscar Muwanga by the Central Bank Deputy Governor Michael Atingi-Ego during the 1st Annual Award Event on Friday.
According to Bank of Uganda, Standard Chartered exemplified its market-making role through consistent pricing on the E-bond platform, active auction participation, trade reporting on Bloomberg, and contributing to overall market liquidity.
“This is a testament to the differentiated, client-centric and innovative solutions we offer our clients,” Standard Chartered Bank said in a statement.
After significant reforms in 2020, primary dealing was restricted to eight banks to ensure subscriptions to primary auctions for increased trading and efficient pricing.
The eight banks are subject to a three-year period of performance-based restructuring.
Standard Chartered, Absa, Citi, dfcu, Equity, Housing Finance and Stanbic have been running the 2023/26 trading span and their effectiveness has helped Uganda to be ranked fourth on the Absa Africa Financial Markets Index.
To assess their performance, Bank of Uganda analyses their trading and how it boosts global visibility ahead of index listings, reporting trades on Bloomberg, and posting two-way pricing on the Ebond platform.
Because of this, Uganda joined the FTSE-Russell Frontier Markets Bond Index in July 2023 and is seeking to be included in other indexes such as the AFMI Bloomberg Bond Index and
And in an attempt to further encourage trading and liquidity, the performance criteria for this cycle weighted secondary market activity at 70 percent.
“These milestones reflect reforms enhancing market transparency, infrastructure, and product development over the past decade. The secondary market turnover ratio increased from 54 percent before reforms to 157 percent this past year,” said Bank of Uganda deputy governor Michael Atingi-Ego.
However, he said, there are still areas to improve, including disclosure standards, leveraging the regulatory framework, and technological capabilities to elevate operational efficiency and market access.
Financing needs
According to the Primary Dealership Association, collectively, the banks have supported government to meet financing needs and maintaining sustainable public debt levels.