New Finance Bank Malawi (NFB) on Monday caused a ripple on the stock exchange when it offered a K14 billion bond on the Malawi Stock Exchange, the biggest bond on the local bourse to date.
Breaking the news during an event at Malawi Stock Exchange in Blantyre, NFB CEO Zandile Shaba said the listing is an indication of intent from the bank.
“This bond is listing is important because to us at New Finance Bank because it signifies our desire to participate in the development of the financial market of Malawi and subsequently have a positive impact on the day to day lives of ordinary Malawians,” she said.
Shaba explained that the NFB bond is an investment instrument with low entry cost.
“It is a highly efficient, transparent and convenient investment tool, designed to appeal not only to institutional but also retail investors. With an affordable standard lot size, the NFB bond will provide an avenue for retail investors to have access to the bond market,” she said. “It thus offers investors an additional investment alternative as well as an opportunity to diversify their investment into more asset classes.”
She noted that in view of the prevailing dynamic and often volatile financial environment, this bond listing is important to meet the differentiated demand of investors for a broader range of financial products at more competitive prices and through more efficient and convenient channels.
“The listing of this bond will generally raise awareness and generate interest of domestic and international investors in our bond market, thus contributing towards the development of a deeper and broader bond market in our beautiful country Malawi,” she said.
According to Shaba, the bank will list the K14 billion in three streams, starting with the K4 billion on Monday followed by two listings of K5 billion each in the next two years.
Malawi Stock Exchange CEO John Kamanga noted the NFB’ listing is an indication of the confidence corporates have in the local bourse.
New Finance Bank, a subsidiary of MyBucks SA and Luxemburg and Finsbury Investments of Zambia, commenced operations in Malawi in January 2015 and has since grown to operate seven branches across the country, including the landmark branch at Dzaleka Refugee Camp in Dowa.
Last week, NFB acquired microfinance institution Pride Malawi in a bid to expand its reach throughout Malawi.