NMB issues first bonds to public at DSE

11May 2016
Victor Karega
The Guardian
NMB issues first bonds to public at DSE

NMB Bank has flexed its muscle by opening first bonds to the main market (DSE) and providing investment opportunity for everyone who has a minimum of 500,000/- savings to invest.

Ineke Bussemaker

The bank opened its bonds yesterday through its branches and stock brokers registered on the Dar es Salaam Stock Market (DSE).

NMB’s Chief Executive Officer, Ineke Bussemaker said they would repurchase up to 25bn/- of its outstanding bonds, adding that the bank’s liquidity positions is comfortable enough to carry out the buyback.

“We thought we should diversify our funding sources but also as one of the largest players in Tanzania, we would like to make a local bond market a moral market that every Tanzanian can invest.

This is because we know there are people who are looking for interesting investment opportunities,” she said during the launch of NMB bonds here.

NMB boss pointed that issuance of bonds followed their thoughts that where they will go for the next three years in terms of medium term and long term investment opportunities, and the answer was to offer a Tanzanian 13 per cent interest through bonds investment.

She said NMB Bank is a strong bank, adding that there were no worries about the health of the financial institution.

According to her, every 1m/- invested in bonds, an investor gets 130,000/- of interest annually. This is paid twice a year, after six months and after 12 months.

Bussemaker underscored that with the support of DSE and CMSA they want to grow and familiarise everyone with the domestic bond market in Tanzania that offers interesting investment opportunities to everyone who is looking to save some money and who does not need the money for three years.

NMB boss said the bank aims at creating more familiarity that there is a domestic bond market in Tanzania that helps everyone to grow economically.

A customer needs to have a complete signed bond application that is available at all NMB branches across the country, a copy of passport, driving license, National ID, Voters Registration Card, a Central Depository system (CDS) account, investment amount and the customer bank account details through which they will receive their interest and principal.

DSE Projects and Business Development Manager, Patrick Mususa said it is a great move for financial institutions like NMB Bank to provide investment securities for the public.

“I am certain that this offer will appeal to retail investors, with attractive yield and ability to trade at DSE as well as using the instrument as security for obtaining credit facilities from various institutions whilst giving valuable opportunities to participate,” he said.

He congratulated NMB for involving the public in participating in the capital market and the entire financial system.

Mususa said from 1998 to 2016, the stock market capitalisation has generated more than 22trn/-, hence in the first quarter of this year, Treasury Bills had recorded a total of 4.7trn/-.

He pointed out that although the stock market has a size of 22trn/-, there are few investors who do not exceed 500,000 compared to the country’s 50 million population.

He urged 30 percent of Tanzanians who are economically active to exploit opportunities offered in the capital market by investing in Treasury Bills since DSE is providing an opportunity for everyone who likes to invest in another bond.

According to him, this landmark listing is part of an exciting and extensive 25bn/- medium term note programme being undertaken by NMB and the decision to issue this initial bond on Dar es Salaam Stock Exchange demonstrates Tanzania’s position as one of the leading gateway for leading East African firms looking to access regional capital in the full range of currencies.