Malawi Stock Exchange (MSE) registered its first trade on the debt market on Monday through a government bond listed in December last year.
The trade has broken the trading drought for listed government debt instruments meant to raise capital and refinance debt, but do not usually trade due to what analysts have linked to limited alternative investment instruments.
However, a daily market update from the local shares market on Monday showed that 1 000 certificates, with a face value of K1 000 000, were transacted at a price of K84.3890.
The traded security TO5NT is part of Treasury’s 26 debt instruments on MSE listed in December last year with a nominal value of K787 billion.
In an interview on Monday, MSE operations manager Kelline Kanyangala described the development as positive.
She said: “One of the challenges we have observed is that of investors holding on to their securities and, thus, do not usually trade.
“However, we do hope that this is a step in the right direction and that the initiatives put in place by the exchange to spur secondary trading of debt securities will bear fruits by resulting in more debt trade being registered.”
Stockbrokers Malawi Limited chief executive officer Noel Kadzakumanja observed that the development signals that the local shares market is capable of facilitating trade of any security.
“This is an encouraging development that brings more confidence in the market,” he said.
The first-ever trade of listed debt securities was recorded through a corporate bond issued by MyBucks Banking Corporation in 2019 at a nominal value of K10 000 000 in April last year.