THE National Social Security Fund (NSSF) has been given a go-ahead to resume trading at the Uganda Securities Exchange (USE). Sources said in the next few days, NSSF would start trading again, a development that is expected to boost the predominantly dull bourse.
Keith Muhakanizi, the deputy secretary to the Treasury, confirmed the development. He explained that with the institution of a new board for NSSF, the finance minister had withdrawn a directive to halt further investments by NSSF until investigations were over.
The finance ministry stopped NSSF from trading at the stock exchange after the Temangalo land scandal in which the fundâ€™s top management were implicated.
â€œWe cleared them. They can do whatever they want, including investing on the stock exchange,â€ Muhakanizi said.
The absence of NSSF at the USE has caused a massive reduction in traded volumes since the fund is the biggest player.
About two weeks ago, the stock market witnessed an historic day during which no single share was traded, the first such occurrence in over two years.
Victor Karamagi, the NSSF public relations manager, said the board was in a meeting and a communication regarding the matter would be made.
Simon Rutega, the chief executive officer of the USE, said the stock market was solely dependant on NSSF as a big institutional investor.
He said due to NSSFâ€™s monopoly, there have been persistent calls for liberalisation of the pension sector to allow more big institutions join the stock exchange.
â€œWith the current market conditions, you require the big institutions. Individual investors constitute about 15% of the stock market,â€ Rutega said.
Following a strategic decision to increase its equity holding to 50% by 2012, NSSF started by more than doubling its equity holdings by the end of its financial year in March 2008 to sh104b from sh44b the previous year.
NSSF returns to stock exchange