Others advantages of the bond market are that a vibrant and well-functioning bond market also offers lower cost of capital, improved risk pricing and disintermediation.

This made part of a presentation by managing director of South Africa's Full Value Financial Services, Michael Sandler, when he spoke at Bank of Namibia's sixth annual symposium in Windhoek last week.

Sandler addressed the gathering on the topic, 'Developing a broad based and well functioning primary bond market in Namibia'.

In his presentation, Sandler said the Namibian Government should obtain sovereign rating and that Namibian bonds should be on their own.

A sovereign rating, he said, could be a mixed blessing as a poor rating would impact on the entire market, while a good rating would provide vital to the establishment of a well-functioning market.

He added that in order to attract international players- who are crucial for market to be efficient - ratings were essential.

"At present the Namibian Government has been focussing its maturities to almost mirror their South African counterparts.

Initially this is not bad idea as the South African bonds almost act as a benchmark against which the Namibian stocks are priced.

"Essentially however, the idea is for Namibian bonds to stand on their own," said Sandler.

He added that Government should be at the forefront of developments such as the appointment of primary dealers and the emergence of a derivatives market.

The BoN symposium is an annual event aimed at tackling various economic issues.

This year the symposium was held under the theme, 'The challenges for the development of the Namibian bond markets: lessons from other smaller economies'.

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