Kampala, Uganda | THE INDEPENDENT | The financial sector leaders have chosen to strengthen regulation to grow the stock market as opposed to relaxing rules to attract companies to listing shares.
They say strong regulation of the sector gives confidence to serious investors that their investments will be safe while relaxing can water down the quality of the stock market and discourage strong investors.
This is the view of the Capital Markets Authority-CMA that is faced with attracting more companies to list shares on the stock market and increase the availability of cheap long-term capital.
It’s 23 years since Uganda got its first stock exchange, but to-date, only nine Ugandan registered companies are listed, with another seven having transferred shares from the Nairobi stock exchange to the USE.
This low uptake has been attributed to stringent requirements including transparency in financial records, which many companies choose to avoid.
The Financial Reporting Awards, an initiative of the Institute of Certified Public Accountants of Uganda, the Capital Markets Authority and the Uganda Securities Exchange, aims to achieve this.
CMA chief executive, Keith Kalyegira says they would rather keep the rules tight and preserve the integrity of a small sector, than relaxing to attract more companies at the risk of losing value.
The FiRe Awards saw the National Social Security Fund emerge overall best reporter, while Kampala Capital City Authorities beat public service organisations.
Apart from giving unquestionable financial reports on their organisations performances, winners employed integrated reporting, a kind that also focuses on other relevant areas.
These include prevailing situations like the covid-19 pandemic, climate change or even the political environment, other than the traditional balance sheet report.
ICPAU President Frederick Kibedi says the covid-19 pandemic, which has enhanced the digital communication terrain, has also made it easy for one’s financial statements to be accessed globally online.And this he says comes with a disadvantage that the need for investors to ask for clarifications has reduced because investors have many options at hand, hence the need to abide by global standards in reporting.The awards come at a time that the financial market leaders are pushing for an increase in available patient capital in the economy, as the most common source of capital are the expensive commercial banks.However, recent economic volatilizes, as well as the decline in business activities and profitability, many commercial banks have found it safer to lend more to the government through government Treasury Bills and Bonds and less to […]