GOVERNMENT PRESENTS E150M INVESTMENT OPPORTUNITY

MBABANE – On behalf of the Government of the Kingdom of Eswatini, the Central Bank of Eswatini has presented an investment opportunity of up to E150 million.

 CBE has announced the reopening of five year, seven year and 10 year existing government bonds and the launch of a three year government bond.  The coupon rate for these bonds will be fixed at 9.25 per cent, 9.75 per cent, 10.25 per cent and 9.00 per cent respectively.

The auction date will be on August 28, 2018 for the sum of E150 million. CBE said the bonds would be issued using the competitive multiple bid auction models and is open to the public including individuals, corporate and institutional investors. All investors should apply through the Primary Dealers who are the four local Commercial Banks namely; Standard Bank, FNB, SwaziBank and Nedbank.

 “The purpose of the issuance is to develop the secondary market, establish a fair market price which will compensate both the borrower and investors for interest rate risks and to facilitate financial intermediation, while also meeting government budgetary requirements,” CBE explained.

It was mentioned that the applicable pricing supplement and other relevant documents pertaining to the issuance were available for viewing at the financial markets department of CBE situated in the third floor, Umntsholi Building in Mbabane, as well as on the Central Bank website.  The bank invited interested parties to contact their commercial banks or collect application forms and further details at the financial markets department.
CBE has in the past been advised to refrain from additional budget financing.

The Executive Board of the International Monetary Fund (IMF) directors noted that strong fiscal adjustment would help release pressures on monetary policy. They underscored that CBE should refrain from additional budget financing and, in the context of the peg with the South African Rand; the CBE should maintain the policy rate at a positive spread with the South African Reserve Bank’s rate. 

Directors welcomed the authorities’ plans to amend the CBE Act to bolster the Central Bank’s mandate and independence and strengthen its supervisory structure. They stressed the importance of monitoring and assessing financial stability and macro-financial risks arising from tight linkages between the government and the financial sector, and systemically large non‑bank financial institutions.

In this context, Directors recommended to accelerate plans to create a financial regulatory architecture and enhance the CBS’s capacity to assess macro‑ financial risks and exercise macro‑ prudential controls.

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