NMB bond goes on offer today

DAILY NEWS Reporter

THREE-YEAR 20bn/- National Microfinance Bank retail bond goes on sale on the Dar es Salaam Stock Exchange today amid huge appetite shown by debt investors. The bond, with green shoe option of 5bn/-, offers a 13 per cent interest rate payable half yearly for its term of three years.

NMB Managing Director Ineke Bussemaker said on Monday in the city that the issuance allows the bank to mobilise fund for lending at “favourable rate.”

“Many investors have shown interest in investing in high quality bonds and we consider this as an opportunity to satisfy this need,” Ms Bussemaker said, expressing optimism that through the bond, the bank will stimulate development of the capital market while diversifying its funding resources.

DSE Manager for Market Research and Development Ibrahim Mshindo said the banking sector heavyweight backed offer will stimulate the stock market. “It’s very stimulating for the market to see such a high profile name continuing the expansion to the range of bonds available,” he said. NMB is the country’s largest bank in term of profitability, with 175 branches.

Though today NMB is offering 20bn/- in bond, in total, however, the capital market and securities authority had approved 200bn/- bond for the bank. Orbit Securities General Manager Juventus Simon told ‘Daily News’ recently that the bond is attractive especially for those looking for other risk free products.

“The bond is very attractive,” Mr Simon said, “the interest rate is handsome, slightly higher than the (government) bond of two and five years.” He said the interest is set to attract investors especially those looking for other investment options, bearing in mind that equities at DSE have been on bearish mode since January.

“This is one of the reasonable corporate bond issued in recent days,” Mr Simon said, “looking at the market trend the bond is subjected for oversubscription”. NMB is also listed at DSE main market. According to NMB the offers open on today through June 8 and listing is scheduled for mid next month.

In recent days, Exim Bank’s 10bn/- bond was oversubscribed and stock brokers are predicting this one will also follow the same path given the strong hold position of the bank in the market.

“Investors may shift to bond market on the back of stocks bearish mode—especially those who want to avert risks,” Mr Simon said. Last year, the bank posted a net profit of 148.8bn/- slight down from 154.5bn/- in 2014.