KALONDE NYATI, Lusaka
FOUR local entities are this year expected to raise about K532 million through debt instruments, Securities and Exchange Commission (SEC) has disclosed.
SEC acting chief executive officer Philip Chitalu, who could however not name the entities, said the bond issuance will further boost the capital market.
“There are four potential bonds and registrations for 2015. Once registered, these entities envisage to raise about K532 million. We envisage a more organised market. The Commission is in the process of developing rules and regulations that will help govern the way market players behave,†Mr Chitalu said at a press briefing on Monday.
He said market activity is expected to increase owing to more players applying to participate in the market with SEC processing a total of 125 applications compared to 54 applications processed during the same period last year.
“The future of the Zambian capital markets is bright. Already we have seen that companies and investors alike have started showing confidence in the Zambian economy and the Zambian capital markets as evidenced in the increase of listed and quoted companies. At present we have 23 listed companies and nine quoted companies,†he said.
Mr Chitalu said positive gross domestic product (GDP) of around 6.5 percent, single digit inflation and a stable exchange rate will stimulate the growth of the capital market.
He also said favourable interest rates will play a critical role in the performance of capital market.
“If the interest rates go down this year, we envisage an increase in the number of activities as it will be cheaper to raise funds through the capital markets. If interest rates, however, go up, then commercial banks may capitalise on this as it will become more lucrative for them to lend to Government, hence affecting the capital markets negatively,†he said.
Mr Chitalu said the commission will this year intensify capital market awareness programmes following funding from the Financial Education Coordinating Unit (FECU) and Financial Sector Development Plan (FSDP).
