N$2.1 Billion is being sought by the Bank of Namibia through a signal to enhance N$4.2 Billion, the Central Bank divulged
By Abdul Rahman Bangura–
NEW AFRICA BUSINESS NEWS (NABN) Freetown, Sierra Leone- This payment is twofold what the Bank was gazing for and benefits a financial strategy where there is money the more glancing for long-term and risk-free enterprises. The bonds that were up for auction have an adultness duration of a certain number of years
and according to the auction results, they were all oversubscribed.
Oversubscription was mainly rife on bonds with a longer maturing date – with the GC50 oversubscribed by N$147 million. The GC50 had N$60 million up on auction and was oversubscribed by 245%. It is paying a 10.5% token.
Following the GC50, is the GC27 which was oversubscribed by 240%. On offer were both normal (N$1,6 billion) and inflation-linked (N$400 million) bonds, and the government was auctioning off as little as N$50 million.
Government bonds are financial instruments through which the state borrows. The minimum amount for Namibia is N$50 000, and the coupon (interest) spent on this is invariably more than the normal interest expended on a savings account, as well as some money market products.
Normal bonds pay a coupon of 8% and above, while inflation-linked bonds average between 4% and 4,8%. According to the government’s borrowing plan, the state is expected to sweep over N$2,7 billion from the market this month in fixed income securities, if treasury bills are incorporated.
Even though the public has numerous routes to capitalize their savings, government securities demand the most reliable investment. Over the years, government bonds have been mainly taken up by pension funds.
At least N$10.8 billion has been allotted to fixed-rate bonds, while inflation-linked bonds are projected to bring in the N$2.1 billion balance.
For New Africa Business News (NABN) Abdul Rahman Bangura Reports, Africa Correspondent