Treasury yields choke Uganda’s corporate bond market

Investors get information from the Capital Markets Authority stand at Markets Week in Kampala.

Photo credit: FILE | MORGAN MBABAZI | NMG

Uganda is attempting to revive its dormant corporate bond market by pushing companies to use credit ratings, sinking funds and financial guarantees to win back investors attracted to safer, higher-yielding Treasury bonds and bills.

Uganda’s Capital Markets Authority (CMA) says that high returns on government securities have made corporate bonds less attractive to issuers and investors, as companies face higher borrowing costs to compete with the safer, high-yielding government instruments.