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PERSONAL & BUSINESS WEALTH

MANAGEMENT
THROUGH
GOVERNMENT SECURITIES

PRESENTED TO BOU STAFF

© FINANCIAL MARKETS DEPARTMENT


SEPTEMBER 14TH 2017
Agenda
• Government Securities—What are they?
• Types
• Operational modalities
• Eligible investors
• Advantages
• Current rates
• Concluding Remarks
• Q&A

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Government Securities:
What Are they?
• Debt instruments issued to the public by the Government.
• BOU Agent of Government to collect money (since 1969).
• The public/lenders place funds with government through
their CSD accounts opened at BOU.

BOU Archives

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Who can invest?

• Ds

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Government Securities:
Types
Treasury Bills (T-Bills)
• Place funds on your CSD account for short term-
not more than 1 year i.e.

Treasury Bonds (T-Bonds)


• Long term investments:

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Account opening

Previous Account Opening Procedures Current account opening procedure

If retail client has savings or If retail client has current or


current account only with a savings account with a PD bank
non-PD bank

1. Retail Client fills in 1. Retail Client fills in


CSD account opening CSD account opening
forms. forms.

2. Forms are
submitted to PD
bank.
2. Forms are submitted
to non-PD bank.

3. Non-PD verifies and


submits to accepting 3. PD bank verifies
PD bank ie. Baroda or forms and submits to
Centenary BOU

4. PD bank stamps
and submits forms to
BOU.

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How to Invest
Primary Market/ Auctions
• Investing follows a Calendar (on the BoU Website)
– T-Bills , every 2 weeks (14 days).
– T-Bonds, every month (28 days ).
• Public invitation to tender is sent to the Press.
• Investors complete CSD Form 2 to place orders/bids.
Secondary Market
• Invest or dis-invest (buy/sale) any working day
through any bank through secondary market.
– ALL orders submitted through one of the 24 local
commercial banks.
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Investing, Cont’d
• Minimum bid amount is UGX100,000.

• Investors with amounts between UGX100, 000


and UGX200,000,000 succeed automatically
(Non Competitive).

• Monies above UGX200 million have to compete


(Competitive bids); these investors determine
the interest rates.
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Advantages
• Very good competitive rate of interest (even
with withholding tax of 20% on interest).
• Minimal credit risk.
• Saving and investment mechanism.
• Can be used as COLLATERAL.
• Can be liquidated any time at competitive rates
in the secondary market; these investments are
as liquid as cash.

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How much Do I Earn?

Source: FMD database

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Concluding Remarks
• Uganda Government Securities provide an
opportunity for Ugandans to invest in safe
assets.
• Given the need to increase the saving culture
in this nation, these liquid securities provide
both a saving as well as investment
opportunity for many to change livelihoods in
a slow but sure way.

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THANK YOU
Q&A
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