Challenges That Inhibit Indigenous Companies from Listing On the Uganda Securities Exchange

Tab~e of Contents

CHAPTER ONE 1

INTRODUCTION 1

Overview 1

Background of the study 1

Problem Statement 7

Purpose of the study 8

Specific Objectives of the study 9

Research Questions 9

Scope 9

Geographical Scope 9

Subject/Content Scope 10

Hypotheses 11

Conceptual Framework 12

CHAPTER TWO 14

REVIEW OF RELATED LITERATURE 14

Introduction 14

History of stock exchanges 15

Governance and operations of the stock exchange 17

The role of stock exchanges 22

Raising capital for businesses 22

Improvement of access to finance for new and smaller companies 23

Creation of Liquidity 24

The growth of the related financial services sector 25

Encouragement of higher standards of accounting, resource-management and public

disclosure 26

Facilitation of equity financing as opposed to debt financing 26

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Divestiture of Government Owned Companies .26

Price Discovery 27

Corporate governance 27

Creating investment opportunities for small investors 28

Government capital-raising for development projects 28

Barometer of the economy 29

Benefits of listing companies on the stock exchange 29

Performance of the USE 31

METHODOLOGY 33

Introduction

Research Design 33

Research Population 33

Sample Size 34

Sampling procedure 35

Research Instrument 36

Questionnaires 36

Interview guide 36

Validity and Reliability of the Instrument 36

Data Gathering Procedures 37

Data Analysis 39

Ethical considerations 39

Limitations of the Study 40

CHAPTER FOUR 41

ANALYSIS, PRESENTATION AND INTERPRETATION OF FINDINGS 41

Introduction 41

Background information of the companies sampled 41

Company characteristics 42

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Investment capital ~

Current turnover

Financing /Raising capital 43

Company Operations 44

Financial operations 45

Company future plans 47

Measures taken to ensure financial security 48

Knowledge of and Involvement in USE 49

Involvement in USE 52

Focus on the listed companies 53

Factors that were unfavorable during listing 54

Solutions to challenges faced during listing 55

Focus on the unlisted companies 56

Suggestions for improvement 58

Securities Exchange policies in Uganda 59

Legal and Fiscal Enviromnent 62

Economic factors affecting trading at the USE 63

Table 24: Challenges of listing in stock exchanges 66

Review 69

CHAPTER FIVE 70

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS 70

Overview 70

Summary of findings 70

Conclusions 75

Recommendations 77

REFERENCES 81

Appendices 83

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Appendix I: Major Stock Exchanges 83

Appendix III: Questionnaire 86

Appendix IV: Interview guide 94

Appendix V: Introduction letter 96

Appendix VI: Curriculum Vitae 97