Uganda Securities Exchange CEO: How the bourse is adapting to COVID-19 disruptions

The Uganda Securities Exchange has seen a drop of about 4% points in the share index due to the COVID-19 pandemic. Despite this, the CEO, Paul Bwiso, remains optimistic about the performance of the exchange. In a recent interview with CNBC Africa, Bwiso discussed how the exchange is adapting to the disruptions caused by the pandemic and the strategies being implemented to support SMEs and investors during these challenging times. One key theme that emerged from the interview is the importance of providing long-term capital to SMEs and utilizing technology to navigate the current economic climate. The exchange has introduced a Growth Enterprise Market segment specifically designed to cater to SMEs and medium-sized companies. Bwiso highlighted the need for alternative sources of capital for SMEs as traditional lending from banks becomes more constrained. The exchange aims to provide long-term capital through avenues such as the corporate bond market and e-listings, offering customized solutions for SMEs to raise funds and navigate the current challenges. Despite the challenges faced, Bwiso expressed confidence in the resilience of SMEs and growth companies to access capital markets to support their businesses. Bwiso also addressed the issue of capital flight affecting major stock markets on the continent, noting that Uganda has not experienced the same level of impact as some other countries. The majority of investors in the Uganda Securities Exchange are domestic and foreign institutional investors, with limited international trading activity. Bwiso emphasized the importance of long-term investors, such as pension funds, in maintaining stability in the market during uncertain times. While local trading volumes may have been affected, the exchange has remained relatively stable compared to larger markets with higher levels of international investor participation. Looking ahead, Bwiso acknowledged the challenges that smaller stock exchanges may face in the coming months as the economy struggles. The performance of businesses directly impacts stock prices and investor confidence, leading to a period of uncertainty for smaller exchanges. However, Bwiso remains optimistic about the resilience of these markets and believes they will rebound once economic conditions improve. He highlighted the role of technology in enhancing the efficiency of the exchange, particularly during the pandemic. The Uganda Securities Exchange has already made strides in leveraging technology to enhance its operations. In 2018, the exchange transitioned to cloud services, enabling seamless remote operations for stock brokers during the lockdown. Investors can now open accounts online through an electronic portal, simplifying the process and expanding access for both existing and new investors. The exchange is planning to further enhance its technology capabilities, allowing investors to place orders remotely and facilitate seamless transactions between bank accounts and broker accounts. In conclusion, Bwiso emphasized the importance of adapting to the new normal brought about by the pandemic and utilizing technology to support the exchange and its participants. By providing long-term capital solutions for SMEs, maintaining stability in the face of market disruptions, and embracing digital innovations, the Uganda Securities Exchange aims to navigate the challenges posed by COVID-19 and emerge stronger in the future.