Impala Market Weekly Commentary: Uganda Bond Market (Week Ending 28 June 2025)
With Alpha Insights and Trading Strategy Playbook for Premium Subscribers
THIS WEEK IN SUMMARY
60 Second Brief
The market was steady with no auctions held, but volumes held up surprisingly well ahead of fiscal year-end. Dealers positioned lightly heading into the July 2nd T-Bill auction. The most significant development was confirmation of a new 25-year bond, launching November 2025 with a 15.00% coupon, introducing a new long-term anchor for the curve.
Meanwhile, activity continued in the 2Y and 2039 bonds, confirming the strength of short-duration carry and long-duration interest. The mid-curve remained a liquidity dead zone.
Market Headlines
No auctions this week, but T-Bill auction scheduled for 02 July 2025
New 25-Year bond confirmed with 15.00% coupon, to launch in Nov 2025
Secondary volumes hold firm at UGX 617.9B ( Up from UGX 583.7B last week)
Most active bond: 2039 → YTM range: 17.05%–17.50%
Curve compression persists; 2Y–10Y spread narrows to ~100bps
Weekly Trader Intelligence
Bank Desks: Focused on 2Y and rolling over T-Bill maturity flows
Fund Managers: Accumulating 2039, cautious on 2043
Offshore Investors: Quiet flows, but price-sensitive interest around long bonds
Week Ahead
02 July: T-Bill Auction (91d, 182d, 364d)
Focus: Reinvestment flows, FY2025/26 budget allocations, early signs of July offshore flows
Risk Theme: Will political narrative start impacting the long end?
Quick Numbers
Total Secondary Volume: UGX 617.9B
Number of Trades: 218
Avg Trade Size: UGX 2.83B
Most Active Bond: 15Y (2039)
Biggest Yield Move: 10Y ↓10bps
Offshore Activity: Medium, focus on 15Y/20Y tenors
Talking Points This Week
No auction this week, yet secondary volumes remained strong at UGX 617.9B.
T-Bill auction slated for 02 July – markets watching 364d vs 2Y yield parity.
25-Year bond confirmed, launching November 2025 with a 15% coupon – new long-end benchmark.
Front-end flattening: 364d and 2Y yielding ~15.65% → investors prefer 2Y for carry.
Long-end (2039 & 2043) demand stable, mid-curve remains illiquid and unattractive.
AUCTION OUTLOOK
No auction was held this week.
Next auction: 02 July 2025 → T-Bill auction
Watch the 364d closely - could clear around 15.50%
Reinvestment flows may move into 2Y if pricing aligns
OTC DESK CALL TO ACTION
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This Week’s Sourcing Signals:
SEEKING: 2043 below UGX 94.00
OFFERING: 2039 around UGX 100.50; 2Y bonds at par
HIGHLIGHT: NEW 25-YEAR BOND COMING NOVEMBER 2025
Coupon: 15.00% (Fixed)
Expected Yield at Launch: 17.8–18.5%
Pricing: Will likely open at a discount (~UGX 80–85)
Duration: ~19.5 years
Implication: Extends the yield curve and introduces a new benchmark for insurers, pensions, and long-horizon investors. Expect it to become a reference point for long-term infrastructure funding.
ALPHA BRIEF VS MARKET OUTCOMES
✅ 2/3 playbook calls hit:
2Y trades around par with strong execution
2039 held range around UGX 100.50–101.00
2043 was harder to source; low volumes but still firm
📈 Portfolio Performance Estimate:
+0.43% (Playbook Portfolio) vs +0.31% (Equal-Weight Benchmark)
ALPHA INSIGHTS & INTERPRETATION
364d vs 2Y Parity: 2Y continues to offer better rollover certainty
2039 Holding Steady: Best liquidity and demand of long bonds
2043 Supply Scarce: If priced below 94.00, becomes a yield play
Volatility Watch: July fiscal updates and auction signals critical for curve direction
CLOSING THOUGHT
“Uganda’s bond market remains a haven for carry, but the price of certainty is rising.”
With the 25Y bond set to launch in November, we now have a clear signal that the government is planning to deepen the curve. Yet in the near term, portfolio performance will hinge on smart rotation between the front-end (364d, 2Y) and selectively accumulating the long-end (2039, 2043).
The mid-curve continues to offer little value.
Curve-aware positioning and duration discipline will define alpha through the second half of the year.
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