Kampala — The commencement of electronic trading on the stock market in Uganda will boost regional integration, experts have said.

The system will not only make it easier and fast to trade on the stock market but will also make it possible for the region to have one stock market.

This means investors will be able to buy shares in any company of the member states. "Electronic trading on Ugandan's stock market will be good for regional integration because it will be possible to have one East African stock market," noted Japheth Katto the Chief Executive Officer Capital Markets Authority.

With the passing of the Securities Central Depository Act early this year, Katto said, electronic trading in Uganda is supposed to kick off before the end of this year before the East African common market that is hoped to start in January 2010.

He said once it is introduced it will eliminate the use of share certificates and instead the investors' information will be entered into a computer system and the investor issued a receipt.

Katto was speaking at a public lecture organised by Makerere University Business School (MUBS) recently in Kampala.

The lecture which ran under the theme: Investing in a Changing Economy; Making the Most of Financing options for the potential investor was intended to increase the diversity of business management among students and the public.

Whereas Kenya started electronic trading on the stock market four years back, Uganda had not started because of its small market.

Kato noted that even though this step will change the face of the stock market in Uganda; it is still faced by other challenges such as low levels of domestic savings in Uganda which is at 15%, low levels of awareness and thin supply of new equities into the capital market.

Other challenges on Uganda's stock market include an underdeveloped and unliberalised pension sector, underdeveloped life insurance sector and the current global financial crisis among others.

The long history of collaboration between the three East African states with its ups and downs has left a legacy - for good and bad. Notwithstanding the historical legacy, the current situation is fundamentally different from that obtaining nearly 30 years ago.

The regional integration project has progressed considerably. The major achievement is the conclusion of a customs union protocol.

The launching date for the political federation was set at 1 January 2010. After the customs union, the EAC would progress to a common market and the harmonisation of employment/labour policies and legislation.

The EAC secretariat is small but effective. Capacity is overstretched, dangerously close to overloading.