Stakeholders chart way forward for capital market

IN THE wake of strengthening United States (US) dollar against major currencies, stakeholders in the capital market have gathered today to deliberate on over-the-counter (OTC) derivative market reforms in Zambia under the auspices of the Bond and Derivatives Exchange Zambia (BaDEx) Plc.
The two-day consultative stakeholders workshop will discuss the OTC derivatives, which refer to debt securities and other financial instruments which are traded through a dealer network.
According to a programme issued by BaDEx on Friday, the workshop dubbed ‘OTC derivative market reforms Zambia’ will look at opportunities and challenges in the country.
The purpose of the workshop is to explore what currency hedging instruments are available in Zambia and how they are accessible.
Stakeholders will also look at the difference between OTC and exchange traded derivatives contracts standardised derivative contracts, for example futures contracts and options that are transacted on an organised futures exchange.
According to Bloomberg, Zambia’s kwacha weakened to a record low, extending the biggest decline among African currencies this year.
The currency of the second-largest copper producer retreated for a fifth day, as yields on the southern African nation’s US$1 billion of bonds due April 2024 jumped the most in two months.
But the Bank of Zambia (BoZ) will adjust upwards the minimum statutory reserve ratio requirement from 14 percent to 18 percent effective April 8, 2015.
Last week, the BoZ noted that the kwacha dropped by 19 percent since the beginning of the year due to a drop in copper price on the global market.
Meanwhile, the stakeholders are expected to form an association of capital market of Zambia.

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