Local Companies Outlook on public listing in Uganda

Abstract

The main objective of the study was to establish the outlook of local companies in Uganda towards public listing. This outlook enables relevant authorities understand why new listings are few and far between. The study adopted a descriptive research design and used a quantitative approach to carry out the analysis. The researcher carried out a survey in 33 of the 200 companies which according to Uganda’s Capital Markets Development Plan qualify to list. Business owners and employees who are key informants in company policy formulation were purposively identified and interviewed to establish their general outlook on public listing. A closed-end questionnaire was issued to the participants to establish their view on the key aspects of government support towards the exchange, information availability and accessibility as well as the relevance of public ownership towards company performance. The data collected was analyzed using SPSS The study found out that local companies generally have a positive outlook on public listing. These companies however feel that there is inadequate government support in promoting public listing and they expressed low levels of confidence in the legal and regulatory framework governing Uganda’s stock market and capital markets at large. The study recommends a nationwide sensitization drive about the benefits of stock market relevance and capital markets at large. Relevant authorities should also create focus group initiatives targeting companies that qualify to list and ignite their interest in stock market activities. The legal and regulatory framework needs to be strengthened through increased capacity building, transparency and accountability. The government should also put business development initiatives at the forefront of its development agenda so as to grow more of the 460,000 business to listing status