MARKET NEWS
Uganda Treasury Bond Auction — Wednesday, 12 August 2026
Uganda’s Wednesday Treasury Bond auction points to continued compression in long-term government bond yields, with the 2043 bond recording a notable decline in its cut-off yield. The move is important for fixed-income investors because it indicates stronger willingness by investors to accept lower yields for longer-dated Uganda government paper.
2043 Bond: Yield Compression
The 20-year Treasury bond maturing in 2043 cleared at 15.65%, compared with 15.95% at the previous auction. This represents a 30-basis-point decline in the cut-off yield. In market terms, this is a meaningful compression at the long end of the curve and signals stronger demand for duration.
Auction Totals
Total bids tendered across all tenors amounted to UGX 2,270,430,900,000.
Total accepted bids amounted to UGX 1,146,280,900,000.
Total rejected bids amounted to UGX 1,124,150,000,000.
Tenor Analysis
The 3-Year bond received bids worth UGX 459,331,900,000. Accepted bids totaled UGX 307,331,900,000, while rejected bids amounted to UGX 152,000,000,000.
The 10-Year bond received bids worth UGX 949,468,100,000. Accepted bids totaled UGX 431,808,100,000, while rejected bids amounted to UGX 517,660,000,000.
The 20-Year bond received bids worth UGX 861,630,900,000. Accepted bids totaled UGX 407,140,900,000, while rejected bids amounted to UGX 454,490,000,000.
Investor Demand Insight
The 10-Year Treasury Bond attracted the strongest investor demand, recording total bids of UGX 949.47 billion. This represented about 41.8% of all bids submitted in the auction, making it the most sought-after tenor among investors
Investment Interpretation
· The 30-basis-point fall in the 2043 cut-off yield is the clearest signal from the auction. It suggests that investors were prepared to accept lower returns for long-duration government paper.
· The move is supportive for investors already holding the 2043 bond because lower yields imply higher bond prices, creating potential mark-to-market gains.
· For new investors, the compression means the entry yield has become less attractive than before, so the decision should increasingly consider total return rather than coupon carry alone.
· The 2043 remains more sensitive to changes in inflation expectations, exchange-rate pressure, fiscal borrowing and future monetary-policy expectations because of its long duration.
· The auction should therefore be read as evidence of continued demand for Uganda government securities, but not as proof that yields will continue falling in a straight line.
Take Home
Wednesday’s auction reinforces the ongoing repricing of Uganda’s government bond market. The 2043 bond’s yield declined by 30 basis points to 15.65%, signaling stronger demand for long-duration paper. For investors, the move is positive for existing bondholders through potential price appreciation, while new investors now face a lower entry yield. The key question going forward is whether demand remains strong enough to drive further yield compression or whether inflation, exchange-rate and fiscal-supply risks begin to put a floor under the long end of the curve.
Disclaimer: This newsletter is for information purposes only and does not constitute investment advice. Past performance does not guarantee future results
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