[2007-11-27]  Bourse to Adopt CDs
The Uganda Securities Exchange is to set up a Central Depository System (CDS) next year, once the necessary legislation comes through.

The system will automate the bourse significantly bypassing manual paperwork and allowing transactions to be completed in a relatively shorter time - a maximum of five days, even four days, sources said.


As transactions are manually handled at present, an application to sell shares takes a minimum of two weeks to mature, due to the vast amount of paperwork that USE has to go through to process sale requests.

Sources at the USE say the bourse has already acquired the software from MIT Sri Lanka.

According to Simon Rutega, USE chief executive, plans to adopt a CDS have been on for over a year; at present, only legislation is delaying to implementing this.

It is understood that the Bill is now before the Cabinet and should be passed by parliament before the end of this year.

"We are ready to start. We are only waiting for the Bill to come through, which should be very soon," said Mr Rutega.

He added that USE has been training staff to handle the system.

The Nairobi Stock Exchange has been using a CDS longer than any other bourse in the region, while even the relatively younger Dar es Salaam Stock Exchange is now automated. Both the Nairobi and Dar bourses use technology supplied by MIT Sri Lanka.

The plans to start a CDS has excited stockbroking firms, which say their clients can now trade more often than they did under the manual system.

"The market is going to be more exciting because investors can now sell shares every five days," said Davis Gathaara, head of sales and research at MBEA Brokerage Services.

The seven-year-old bourse has market capitalisation of Ush4.7 trillion ($2.79 billion) spread across nine listed companies.

Six are local while three, namely East Africa Breweries Ltd, Kenya Airways and Jubilee Holdings Ltd are cross-listed at the Nairobi and Dar bourses.






Source: Copyright © 2007 The East African.