BoN holds 6th annual symposium in capital

THE Bank of Namibia held its sixth annual symposium deliberating on the topic ‘The challenges for the development of the Namibian bond market: lessons from other smaller economies’ in Windhoek yesterday.

BoN Governor Tom Alweendo said the challenges were increasing in globalising world, but adding that these challenges were not new to the central bank. He said among the challenges facing Namibia in developing a bond market was the small size of the domestic market, which limits the amount of funds that the government and local corporation would need.The Governor also said the central bank had chosen that particular theme with a view of taking stock of the existing arrangements, instruments and markets and to pave the way forward to enhance the effectiveness and liquidity of the local bond market.Alweendo explained that a well-functioning and developed bond market would stimulate economic activities through financing various developmental projects that are crucial to economic growth.”By providing an appropriate framework for the trading of long-term securities, it creates a favourable and pivotal platform for the development of a stable and efficient financial market,” said Alweendo.The meeting heard that a well-developed bond market would also provide a more transparent and effective way of pricing and distributing risk, retain substantial domestic savings currently invested abroad and in turn attract foreign investment.Alweendo warned that lack of a well-developed bond market of sufficient size could have adverse effects on the economy; especially in the event that the economy is confronted with a financial crisis.Giving a presentation on the overview of the local bond market, BoN senior manager of financial markets, Phillip Shiimi said current challenges included lack of liquidity, non-transparent and not-so-efficient trading system, limited supply of bonds, limited foreign participants and outflows of funds.Shiimi said these challenges were BoN’s priorities to reach desired results.Although the local bond market has grown significantly compared to independence, a lot is still left to be desired in terms of liquidity, transparency, efficient market trading and infrastructure, number and size of bonds in the local market.The limited market development has been attributed to lack of active trading, limited supply of bonds, lack of skills and diversity in the market.Also speaking at the symposium were practitioners in the field from the South African bond market, Tom Lawless and Mike Sandler and Professor Nicholas Biekpe of the Development Finance and Econometrics and Head of the Africa Centre for Investment Analysis at the University of Stellenbosch Business School.Participants included representatives various financial market agents, policy- makers, researchers and academics among others.BoN’s symposium is an annual event aimed at tackling various economic issues.He said among the challenges facing Namibia in developing a bond market was the small size of the domestic market, which limits the amount of funds that the government and local corporation would need. The Governor also said the central bank had chosen that particular theme with a view of taking stock of the existing arrangements, instruments and markets and to pave the way forward to enhance the effectiveness and liquidity of the local bond market.Alweendo explained that a well-functioning and developed bond market would stimulate economic activities through financing various developmental projects that are crucial to economic growth.”By providing an appropriate framework for the trading of long-term securities, it creates a favourable and pivotal platform for the development of a stable and efficient financial market,” said Alweendo.The meeting heard that a well-developed bond market would also provide a more transparent and effective way of pricing and distributing risk, retain substantial domestic savings currently invested abroad and in turn attract foreign investment.Alweendo warned that lack of a well-developed bond market of sufficient size could have adverse effects on the economy; especially in the event that the economy is confronted with a financial crisis.Giving a presentation on the overview of the local bond market, BoN senior manager of financial markets, Phillip Shiimi said current challenges included lack of liquidity, non-transparent and not-so-efficient trading system, limited supply of bonds, limited foreign participants and outflows of funds.Shiimi said these challenges were BoN’s priorities to reach desired results.Although the local bond market has grown significantly compared to independence, a lot is still left to be desired in terms of liquidity, transparency, efficient market trading and infrastructure, number and size of bonds in the local market.The limited market development has been attributed to lack of active trading, limited supply of bonds, lack of skills and diversity in the market.Also speaking at the symposium were practitioners in the field from the South African bond market, Tom Lawless and Mike Sandler and Professor Nicholas Biekpe of the Development Finance and Econometrics and Head of the Africa Centre for Investment Analysis at the University of Stellenbosch Business School.Participants included representatives various financial market agents, policy- makers, researchers and academics among others.BoN’s symposium is an annual event aimed at tackling various economic issues.