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TimesLIVE
5 days ago
- Business
- TimesLIVE
Uganda's debut 25-year bond oversubscribed but most bids rejected
Uganda's debut 25-year bond was oversubscribed, auction results showed, but the central bank rejected more than 90% of the offers. Analysts said the rejection reflected the divergence in the central bank's and investors' assessment of the bond's risk premium. The Ugandan government introduced the long-term bond, its longest-dated credit instrument yet, to extend its debt maturity profile and limit cashflow pressures. At the auction, the central bank received bids worth a total of 851.1-billion shillings (R4.26bn) for the 500-billion shillings (R2.50bn) worth of bonds offered, results released late on Wednesday showed. It accepted just 57.2-billion shillings (R286.2m). The bond had a yield of 16.0%, lower than the 17.6% rate on the 15-year bond also on sale at the same auction. "The risk premium as seen in the unsuccessful bids indicates what investors perceive as the long-term prospects of the economy," Stephen Kaboyo, managing director of Kampala-based Alpha Capital Partners, told Reuters. Investors' pricing of the bond's risk, "was out of sync with the issuer", and investors were likely concerned the economy could stumble "under the weight of several years of debt accumulation, with fiscal consolidation becoming more elusive", Kaboyo said.
Reuters
08-04-2025
- Business
- Reuters
Ugandan shilling stable, US tariffs increase interbank dollar demand
KAMPALA, April 8 (Reuters) - The Ugandan shilling was broadly stable on Tuesday, but was under a little pressure as U.S. President Donald Trump's trade tariffs triggered a surge in dollar demand among interbank players, traders said. At 0931 GMT commercial banks quoted the shilling at 3,704/3,714, compared to Monday's close of 3,702/3,712. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. "The broad market view is that there will be dollar scarcity going forward on expectation that dollar flows will fall because of trade disruptions and hence the need to build long dollar positions," said a market note from Alpha Capital Partners, a Kampala-based fund manager.
