Affordable retail bond coming

ZAMBIANS will be able to buy a retail bond with as low as K500 once an initiative called Retail Bond which is being developed is introduced by Government.

Retail Bonds are specifically issued for retail investors.

The Ministry of Finance is working with the Lusaka Securities Exchange (LuSE) to introduce Retail Bonds.

This is according to the Minister of Finance, Dr Bwalya Ng’andu, who stressed that the introduction of the initiative was a result of perceptions from the general public that it was difficult to meet the minimum investment amount for buying bonds.

Dr Ng’andu said Zambians would be able to buy a retail bond with as little as K500 in comparison to the current K 30, 000 for a competitive bid once the initiative was introduced.

He said this in a speech read by Permanent Secretary for Budget, Emmanuel Pamu yesterday in Lusaka during the launch of the LuSE Online Application.

“They (retail bonds) will be denominated in Zambian Kwacha and can be bought in relatively small increments.

“In addition to the lower investment amount, retail bonds also encourage domestic participation, promotes financial literacy, gives citizens an alternative form of savings, away from the traditional bank account and offers a fixed interest that ensures the aspect of predictability for investors,” Dr Ng’andu said.

He observed that the trading of shares on the LuSE was relatively easier to understand in comparison to bonds.

Dr Ng’andu said both Government and corporate bonds traded on the secondary market of the LuSE demanded significantly higher investment amounts than buying shares.

“Once the retails bonds are launched, they will be made available to the LuSE online trading platform,” he said.

LuSE Board chairman, Raphael Kasonde said the introduction of retail bonds was another project the LuSE was working on.

Mr Kasonde said explained that these were ordinary bonds broken down into smaller units that catered to the needs and purposes of retail investors. “Retail Bonds will enable retail investors to participate in Government Bond purchases. With the MyLuSE platform being launched today, Retail bonds will also be accessible using a phone and mobile money platforms to make purchases,” Mr Kasonde said.