DEPUTY
Minister for Finance and Planning Dr Ashatu Kijaji rings a bell to
signal inaugural trading of Exim Bank retail bond at the Dar es Salaam
Stock Exchange in city at the weekend. (Photo by Staff Photographer)
THE country first Exchange Traded Retail Bonds (ETRBs) issued by Exim Bank, got listed on Dar es Salaam Stock Exchange (DSE) at the weekend.
The listing ceremony was graced by
Deputy Finance and Planning Minister, Dr Ashatu Kijaji, who hailed the
listing and urged other investors in the private sector to join.
“This retail bond is expected to
facilitate development of a vibrant retail bond market and open doors
for other private sector companies, government companies and municipal
bodies to explore new methods to meet financing needs,” she said.
Mr Selemani Ponda, Chief Financial
Officer, EXIM Bank Tanzania Limited said: “The six-year retail bond was
not only a major development in Tanzania financial sector but also in
East Africa, as Exim Bank became the first bank in East Africa to issue
ETRBs.”
The Bond carries a coupon rate of 15.56
per cent per annum for a period of six years. Bond issue had 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 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, Mr 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) regions.
It is expected to facilitate the
development of a vibrant retail corporate bond market in these regions,
he said. Further he added that the 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.
DSE Chief Executive Officer Mr Moremi
Marwa said the listing of the Exim retail bond brought to 15, the number
of corporate bonds that have been issued by 10 firms and listed on the
DSE.
Out of these 15, four are corporate
bonds that are still outstanding and worth 57bn/-. Tanzania’s bonds
market size is currently worth 4.56tri/-, equivalent to six per cent of
the Gross Domestic Product, out of which 99 per cent is made up
Government Bonds while 1 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 the sub-Sahara Africa (SSA)
standards,” said Mr Marwa
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