The government is expected to borrow K1.69 trillion domestically through the Malawi Stock Exchange (MSE), having listed five development bonds and 30 debt securities on Monday.
According to communication from MSE, the 30 debt securities and five development bonds have a total nominal value of K0.10 trillion whilst the 25 Treasury notes have a total nominal value of K1.59 trillion.
The communication adds that the amount was raised in the primary market through various auctions and got listed through an introduction with the aim of facilitating price discovery through secondary trading and also aiding the development of a government yield curve.
“The listing also fosters financial inclusion considering that the minimum amount to invest in the listed debt securities through the Malawi Stock Exchange is only K1,000.00.
“The listing is in line with the Malawi Capital Market Development Plan, which seeks to improve access to Malawi capital markets for economic transformation and development, among other objectives,” the communication reads.
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Speaking in an interview, MSE Chief Executive Officer John Kamanga said the market is vibrant and this is the time to invest therein to hedge against exchange rate and inflation fluctuations.
Kamanga called on potential issuers to raise capital using the market, adding that it has enough financial resources to support such endeavours.
“It is up to the investing community to utilise the market so that you can grow your companies as we have demonstrated, where two companies have reached K1 trillion in market capitalisation, which is a signal that the market is in a position to create wealth,” Kamanga said.
Economist at Malawi University of Business and Applied Sciences Betchani Tchereni said conditions for the instruments foster systematic distribution of wealth.
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“As we are continuously worried with rising expensive government debt, this is the right way to go because it is also a good way for equal distribution of resources where people can also trade on the secondary market,” Tchereni said.
With the listing of the current government bonds and debt securities, the number of listed debt securities on MSE has jumped to 84.
