Listing Requirements And Development Of Capital Markets (A Case Of Uganda Capital Market)

Abstract

This study report paper examines the effects of listing requirements on capital markets development, the

case of Uganda's capital market. The results of the study show that the regulatory framework fa too

stringent to the extent that it discourages potential issuers. Requirements like the debt ratios, minimum track history, minimum number of shareholders and capital requirements are considered limiting. The results of the paper show that listing conditions constitute the key drivers of stock market development. The report further looks at the importance of capital markets in Uganda's economic activities. An econometric investigation of the impact of stock markets on growth in selected African countries, however, finds inconclusive evidence even though stock market value traded seem to be positively and significantly associated with growth. Uga.nda stock exchange faces the challenge of limited company listings notably the AIMs segment that has no listing since its introduction in 2003 and need better technical and institutional development to address the problem oflow liquidity. Preconditions for revamping Uganda's stock market include strong macro-economic environment, increased awareness, efficient market infrastructure, legal framework and a variety of products and services. Robust electronic trading systems and central depository systems will be important. Keywords: Stock markets, capital markets, listing requirements, capital markets development, economic growth and Uganda