Uganda's Second Exchange to Begin Operations After Elections

  • Bourse will issue depository note after regulatory approval
  • First wants to see outcome of elections before moving ahead

Uganda’s second securities market plans to start trading soon after elections in February are out of the way.

ALT Xchange Ltd. will begin by issuing depository receipts on government debt and then consider introducing an exchange-traded fund backed by gold, Chief Executive Officer Joseph Kitamarike said in an interview in Johannesburg on Tuesday. The bourse, owned by Port Louis, Mauritius-based ALTX Africa Group Ltd., expects to receive regulatory approval for the depository notes by the end of this year, he said.

Ugandan President Yoweri Museveni, 71, has been cleared to seek re-election to extend his three-decade rule of Africa’s biggest coffee exporter as New York-based Human Rights Watch raises concern that police brutality against government opponents risks undermining the credibility of the Feb. 18 vote.

“We have an election going on now in Uganda and we’d like to get that out of the way,” Kitamarike said. “Elections can be unpredictable.”

ALT Xchange is in talks with three local brokerages and a South African broker to make markets in its debt instruments, he said, without giving more details. The bourse had initially planned to start operations in the fourth quarter of 2014. It had to wait 12 months to get a central securities depository license, which was granted in August of this year, Kitamarike said.

The 16-member Uganda Securities Exchange All Share Index has dropped 9 percent this year. Half of the companies are cross-listed on the bourse in neighboring Kenya.