Investors urged to develop retail bond market
Deputy Finance Minister Dr Ashatu Kijaji rings a bell to signify the official listing of the Exim Bank’s first Exchange Traded Retail Bonds (ETRBs) on the Dar es Salaam Stock Exchange (DSE) during a brief ceremony held in Dar es Salaam on Friday. PHOTO | COURTESY OF EXIM
What you need to know:
On Friday, Exim Bank listed its Exchange Traded Retail Bonds (ETRBs) on the Dar es Salaam Stock Exchange (DSE), making it the first ever in East Africa.
Dar es Salaam. The government has called on private investors to follow suit on Exim Bank Tanzania in developing the retail bond market.
On Friday, Exim Bank listed its Exchange Traded Retail Bonds (ETRBs) on the Dar es Salaam Stock Exchange (DSE), making it the first ever in East Africa.
Deputy Finance Minister Dr Ashatu Kijaji, who attended the brief listing ceremony 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 companies and municipal bodies to explore innovative methods for meeting their financing requirements,’’ she said.
The six-year bond which was oversubscribed by 95 per cent carries a coupon rate of 15.56 per cent per annum.
Exim Bank raised Sh19.95 billion which will strengthen the capital base of the bank and will be used for on-lending purpose.
Speaking at the ceremony, Mr Selemani Ponda, chief financial officer at Exim Bank Tanzania Limited said: “The six year retail bond was not only a major development in Tanzania’s financial sector but in East Africa also, as Exim Bank became the first bank in East Africa to issue ETRBs.”
For his part, the DSE chief executive officer Mr Moremi Marwa, said the listing of the Exim Bank 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 listed worth about Sh57 billion.
Tanzania’s total bonds market size is currently worth Sh4.56 trillion, equivalent to 6 per cent of the GDP out of which 99 per cent is made up of Government Bonds while 1 per cent is corporate bonds.
“These statistics clearly indicate that our bonds market is in the lower end relative to other markets, even in sub-Sahara African (SSA) standards,” said Mr Marwa.
