Finance

Home Game

Capital Markets

In April 2013, the Ministry of Finance indicated it is moving to put forward a law that would allow individuals to buy treasury bonds and short-term public debt directly. As […]

In April 2013, the Ministry of Finance indicated it is moving to put forward a law that would allow individuals to buy treasury bonds and short-term public debt directly. As part of this shift, Decree 5 of 2013 established the legal framework for treasury bonds and established the regulatory groundwork for those designated as Operators Specialized in Treasury Bonds (OEOT). A grouping of 14 of the main retail banks was established, with them being granted the right to participate in treasury issues that are expected to come in at MZN3.5 billion, or some $112.7 million. The issuing of treasury bonds will be done in several tranches over the year, as part of the Internal Debt Plan for 2013.

The government has also seen the BVM as a potential vehicle for wealth sharing in the upcoming mega projects being initiated around the country. Proposals to compel international operators to list their companies on the BVM, and provide a minimum free float of stock, continue to be refined. The idea behind such a listing would not only see local investors have the ability to share in the risks and rewards of natural gas and coal projects, but it also could improve liquidity in the market and up trading levels.

For some, the market represents more of an opportunity to tap into the local investor community and access an alternative source of capital. Moza Banco, an up-and-coming member of the local finance scene, has already gone to market to secure funding by issuing a commercial bond. In late 2012, the bank issued a MZN700 million ($23 million) commercial paper via the BVM. Demand exceeded supply for the bond by some 45%. The six-month paper was issued at the same rate as the Bank of Mozambique’s permanent liquidity facility rate of 9.5%. While favorable for Moza Banco, investor interest was somewhat dulled by the rate on offer. This was less a product of the bank’s policy, and more of the current regulations. “The financial market would welcome favorable regulatory terms for the efficient operation of the BVM,” explained Inaete Merali, CEO of Moza Banco, to TBY.

Other major local corporates seeking to launch bonds have included Petróleos de Moçambique (Petromoc), mobile operator mCell, and the local operations of banks such as Standard Bank and Millennium bim. While such confidence is hearty, the reality is that the market has a long way to go before it can be an efficient method for companies and individuals to participate in the capital markets.

You may also be interested in...

Female,Scuba,Diver,Swimming,Under,Water

Tourism

Diving in

Scuba diving in Mozambique

View More
Large,Industrial,Tanks,Or,Spherical,Tanks,For,Filter,Of,Petrochemical

Real Estate & Construction

Chin up

Challenges for the future

View More
Cocoa,Pods,In,Ghana,Forest

Agriculture

On the right track

Reforming the agricultural sector

View More
Casablanca,,Morocco,Industrial,Shipping,Port,At,Dawn.

Transport

The port of choice

The Port of Nacala

View More
The road to prosperity

Telecoms & IT

The road to prosperity

Internet access

View More
Come get involved

Finance

Come get involved

Financial inclusion

View More
Beer battles

Industry

Beer battles

Breweries in Mozambique

View More
A united front

Diplomacy

A united front

Cabo Delgado insurgency

View More
Between a rock and a hard place

Economy

Between a rock and a hard place

Mozambique versus COVID-19

View More
View All Articles