Financial market players in bond awareness drive

Players in the financial market have embarked on a campaign to sensitise individuals and corporates on the benefits of investing in long-term instruments such as bonds.

Late last year, Malawi Government listed three bonds—debt instruments issued for a period of more than one year—worth K109.2 billion on Malawi Stock Exchange (MSE)  to provide differentiated demands of investors for a broader range of financial products at more competitive prices and through more efficient and convenient channels.

The campaign started on Tuesday in Blantyre with a symposium hosted by Malawi Stock Exchange (MSE)-listed Standard Bank Malawi in partnership with Nico Asset Managers Limited, Savjani& Company and Malawi Stock Exchange.

Reserve Bank of Malawi (RBM) deputy governor (bank supervision) Grant Kabango said the forum was critical for financial market players and the economy at large.

“I have no doubt that contributions from this symposium will provide grounds for the continued development of our capital markets, which has the potential to be a key source of funding for entities and provide the diverse investment instruments for investors. This should, in turn, subsequently engender growth for our economy,” he said.

Kabango said by channelling savings to investment, the financial system contributes to economic performance through several avenues that mobilise savings, allocation of funds to their most productive uses and transferring and sharing risks.

“Bank lending and equity and bond issuance are the main vehicles for corporate fund-raising and channelling savings. Stakeholders to the capital market are all key to ensuring the creation of such a vibrant and efficient market and, in the process, promoting financial depth,” he said.

In his presentation, Standard Bank head of investment banking Shakil Sattar said the objective of the symposium was to provide a platform to discuss debt capital markets (DCM) in Malawi and the Southern African region.

“This symposium will provide a platform for us and the stakeholders to increase awareness of best market issuance practices for privately placed and public issues,” he said.

Sattar said Standard Bank’s investment banking unit is equipped to share best practices on DCM based on its leverage and exposure to regional and international capital markets in Africa.

MSE chief operating officer John Kamanga said the aim of the symposium was to tip investors and advisors as well as potential advisors on the importance of adhering to international best practices.

“We are advising the investors to follow proper time-frame, issue proper documents. These documents need to contain proper information in terms of disclosure and transparency,” he said.

Standard Bank investment banking team, which was at the centre of the organisation of the symposium, also works with other international finance houses to manage DCM portfolios.