Deputy Finance and Planning minister Dr Ashatu
Kijaji rings the bell to officially mark the listing of the Exim Bond at
the Dar es Salaam bourse on Friday. Photo: Courtesy of Exim Bank
The first ever exchange traded retail bonds (ETRBs) in East Africa
were listed on Friday last week. The event was graced by the Deputy
Minister of Finance and Planning, Dr Ashatu Kijaji, who commended Exim
Bank for the development.
She said the government welcomed the listing and urged other
private investors to follow Exim Bank’s example and invest in retail
bonds.
"This retail bond is expected to facilitate the development of a
vibrant retail bond market in Tanzania and open doors for other private
sector companies, government entities and municipal bodies to explore
innovative methods for meeting their financing requirements,” she said
Speaking at the ceremony, Selemani Ponda, Chief Financial Officer ,
Exim Bank Tanzania said: “The six year retail bond was not only a major
development in Tanzania financial sector but also in East Africa, as
Exim Bank becomes the first bank in East Africa to issue ETRBs.”
The bond carries a coupon rate of 15.56 per annum for a period of
six years. The bond issue received overwhelming response by retail
investors and was oversubscribed by 95 per cent.
Exim Bank raised 19.95bn/- out of which around 14.97bn/- was
retained and the balance refunded back to the investors. The bond will
strengthen the capital base of the bank and will be used for on-lending
purpose.
The Capital Market and Securities Authority (CMSA) director,
Nicodemus Makama, said the Exim Bank retail bond listing on the DSE is
historical, as it is the first exchange traded retail bond in the East
African Community (EAC) and Southern Africa Development Corporation
(SADC) blocs.
It is expected to facilitate the development of a vibrant retail
corporate bond market in these regions, he said. According to him,
exchange traded retail bonds provide opportunities to small investors to
invest in bonds in lower denomination, diversify their investments and
trade in the bonds market thus providing needed liquidity and periodic
cash flows.
On his part, the DSE Chief Executive Officer Moremi Marwa, said the
listing of the Exim retail bond brought to 15, the total number of
corporate bonds that have been issued by 10 corporations and listed on
the DSE. Out of these 15, four are corporate bonds that are still
outstanding and worth about 57bn/-.
Tanzania’s total bonds market size is currently worth 4.56trn/-,
equivalent to six per cent of the GDP, out of which 99 per cent is made
up government bonds while one per cent corporate bonds. It has a trading
turnover averaging 350bn/- per annum with a liquidity level of seven
per cent.
“These statistics clearly indicate that our bonds market is in the
lower end relative to other markets, even by sub-Sahara Africa (SSA)
standards,” said Mr. Marwa.
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