Impala Market Weekly Commentary: Uganda Bond Market Insights (Week Ending 24 April 2025)
By Impala Market Team
Market Overview: 22–24 April 2025
The Uganda government bond market recorded a significant rebound in trading volumes this week. Secondary market turnover surged to UGX 626.4 billion on 24 April — the highest daily turnover in the past two weeks — reversing the cautious trend observed mid-month.
This sharp rebound reflects strong liquidity in the secondary market, bolstered by renewed demand for both short-term instruments and mid- to long-term bonds.
Treasury Bill Auction Results (Auction No. 1203, 23-April-2025)
The Treasury Bill auction was characterized by overwhelming demand for the 364-day paper, where UGX 272.8 billion was accepted at a competitive yield.
The decision not to issue 91-day T-Bills hints at the Bank of Uganda’s strategic move to encourage longer tenor investments and moderate short-term refinancing risks.
Yield Curve Evolution: 17-Apr-2025 vs 24-Apr-2025
The Uganda Government Securities yield curve flattened slightly this week, with a notable shift at the long end.
Key Takeaways:
Short-term (0–1 year): Yields remained relatively steady, anchored by auction results and secondary market demand.
Mid-to-long term (5–20 years): Yields declined, reflecting strong buying interest and moderated inflation expectations.
15.800% of 2039 bond yields fell from 17.80% to ~17.06%.
15.000% of 2043 bond yields eased from ~17.80% to ~17.50%.
Auction Influence on Yield Curves
Week Ending 11-Apr: No major auctions. Curve was stable, driven by market sentiment.
Week Ending 17-Apr: Treasury Bond auction (16-Apr) for 2Y, 5Y, and 15Y set a higher yield anchor, especially at the 15Y (17.00% cut-off), pushing long-end yields higher.
Week Ending 24-Apr: Treasury Bill auction (23-Apr) with strong 364-day demand and no 91-day issuance supported short-end stability and triggered long-end yield compression.
Trading Focus by Segment
Most Active Bonds:
Short-term Zero-Coupon Instruments (e.g., May and July 2025 maturities).
14.000% of 29-May-2025 bond continued trading at a premium above 105.
14.125% of 13-Jan-2028 and 15.800% of 23-Jun-2039 remained popular among institutional buyers.
Market Sentiment and Forward View
Stronger liquidity post-auction boosted both short and long end trading.
Long-end buying shows growing investor appetite for locking in yields before any potential future policy easing.
Treasury management strategy: BoU’s limited 91-day issuance may continue shaping the curve toward a healthier maturity structure.
Look Ahead: Week Starting 29 April 2025
Primary Auctions: No Treasury Bill auction scheduled for 30 April 2025.
Next Bond Auction: Scheduled for 14 May 2025, offering 3-year, 10-year, and 15-year bonds.
Trading Conditions:
Short-end yields (0-1 year) likely to remain stable in the absence of new supply.
Mid- to long-end bonds (5Y–20Y) could continue to firm if liquidity stays supportive.
Expect moderate secondary market trading volumes with a focus on tactical positioning ahead of the May bond reopening.
For a detailed Trading Strategy Playbook (recommended buy zones, target yields, and positioning strategy for May auctions), subscribe to Impala Market Premium.
Weekly Summary
📊 Strong T-Bill auction outcomes anchored market sentiment.
🔄 Yield curve flattened — long-end yields eased.
🚀 Turnover spiked to a 2-week high on 24 April.
📈 Focus shifts to secondary market positioning ahead of 14 May bond auction.
Stay tuned for upcoming auction previews and tactical positioning insights.
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