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Stanbic Bank Uganda has won the Bank of Uganda (BoU) award for ‘Best-performing Primary Dealer Market Maker (PDMM) for 2022, becoming the first to earn the honour for a record 11 times, since its inception eighteen years ago.
“Primary Dealing” refers to a commercial bank directly buying government securities from the central bank and retailing them to the rest of the market (secondary market) to help raise revenues to support government spending.
In 2005, BoU launched the primary dealer (PD) system to promote participation and operational efficiency in the government securities market, improve secondary market trading and foster financial market development.
The system was reformed in October 2020, allowing 8 banks to guarantee subscriptions of primary auctions with added market-making obligations, for increased trading and more efficient pricing, for a three-year period after which the eight banks would be restructured based on performance.
Speaking at the awarding ceremony on Wednesday morning, Deputy Governor Dr. Michael Atingi Ego recognized Stanbic Bank Uganda for its contribution to the development of the securities market through participation in the primary auctions and fulfilling their market-making obligations in the secondary market.
“The bank has consistently posted two-way bid-ask pricing across the entire yield curve, as well as trading and reporting trades on the Bloomberg. I am therefore pleased to announce Stanbic Bank Uganda Ltd as the Best Performing Primary Dealer Market Maker in Uganda government securities for the ranking year ended September 2022,” he said.
Vote of confidence
Speaking at the award ceremony, Stanbic Bank Chief Executive Anne Juuko said winning the award for a record 11 times is a statement of approval for the lender’s commitment to supporting government mobilise resources to finance development activities.
“I thank Bank of Uganda for the recognition and our global markets team at Stanbic, for the hard work. This win is a statement of our commitment to playing our part in the collective responsibility of driving Uganda’s growth, which also happens to be our purpose,” she said.
Allan Muhinda, the Stanbic Bank Uganda Head of Global Markets which directly oversees the securities trading business, also said the award is a strong vote of confidence in the team he leads.
“We thank our customers because this award is only possible when their experience doing business with us is satisfactory,” said Muhinda.
Strong growth
Secondary market liquidity grew for the period under review, with trading volume rising 11.17 per cent to UGX 47.4 trillion in the PDMM year ending September 2022 from UGX 42.6 trillion in the year ending September 2021.
The ratio of secondary market turnover to the total outstanding stock of government securities was 154.55 in the year ended September 2022 from pre-PDMM year levels of below 55%.
The number of trades increased to 15,330 in the year ended September 2022 from 15,038 in the previous year (compared to 6,442 deals in the pre-PDMM era of 2020), partly due to increased retail participation in the secondary market supported by the countrywide promotion of government securities.