USE Rolls Out Specialist Market ‘Edaala’ to Link Firms to Investors

Uganda Securities Exchange (USE) has rolled out a specialist market the ‘USE Edaala’, an unquoted securities platform aimed at enabling companies which do not meet the minimum listing requirements on the Exchange’s public market segment access capital for long term funding through private placements and restricted offers.

Through the new specialist market, USE will connect the companies with select providers of capital (professional investors) for both equity and debt funding.

The platform also facilitates private companies with numerous shareholders benefit from the efficiencies provided by the existing trading and depository platforms. Shareholders specifically, are able to trade their shares should they wish to divest their stock and utilise portfolio management tools available through the platform

Speaking at a press briefing this morning the CEO of the Exchange Paul Bwiso stated “We want to facilitate high growth companies with potential and solid growth strategies, but which may not meet the eligibility requirements of the USE public market segments at this point in time; achieve their objective by enabling them tap into both the pockets and expertise of professional investors to power their growth.”

Bwiso further stated that the Exchange has consistently talked about building an inclusive market through enhancing the Exchange’s digital capabilities and was of the view that this inclusion did not only stop at investors but also extended to Issuers or potential issuers – That the USE product and service range should cut across a wide spectrum of businesses be it in terms of size or business age/maturity.

“We are calling it “Edaala” from the luganda word Edaala meaning ladder- because of the underlying symbolic meaning of growth, raising to the next level, bridging gaps and or scaling heights and we think this is exactly what USE Edaala will do for the businesses” stated Bwiso.

Any private or public company incorporated in Uganda and registered /licensed with the relevant authority in its industry of operation is eligible apply to participate in the market provided it has minimum net capital of Ugx 500Mln and it is a going concern; that is, it is not subject to any insolvency proceedings or voluntary creditor arrangements.

The application period for the 1^st cohort of applicants commenced on 08^th November 2022 and closes on 08^th December 2022, after which the Exchange is expected to conduct an assessment of applicants eligible to proceed to the next step.

“It is a simple 3 step process,” explained Bwiso, adding that the Exchange estimated that it being a first time it would take between 2 to 2 and a half months to complete. He however promised an improved lead time to achieve a turn-around time of as little as 03 or 02 weeks. Which would be achieved through automating various elements of the process for efficiency.

In addition to supporting these entities raise capital, the specialist market is expected to accelerate and build a sustainable pipeline for listings on the other public market segments of the Exchange by acting as a steppingstone for the companies that are admitted to the USE Edaala to meet the eligibility requirements of these segments.