Malawi money rates pick up

Malawi government’s appetite to borrow money domestically to finance its operations is attracting many investors at increasing return rates as witnessed last week on the money market.

Data from the Reserve Bank of Malawi (RBM) indicates that yields on one of its popular financial instrument, Treasury Bills (TBs), rose to mostly around 7 percent at the auction held October 18, 2011.

Average yields for TBs that generate earnings after 91 days increased to 7.01 percent from 4.98 percent while the 182-day tenor hit 7.23 percent up from 6.77 percent.

The development was welcome by investors who feel they have an option on whether to invest on the money market or indeed company shares at the Malawi Stock Exchange.

The central bank indicates that Treasury Bills are open to foreign investors with both capital and interest remittal after deduction of withholding tax on interest currently at 15 percent.

TB’s maturities during the week ended October 21, 2011 amounted to K3.48 billion which is 11.5 percent up compared with the previous week.

More investors have been willing to put their money in treasury bills which were oversubscribed the week under review by 25 percent or K4 billion.

Maturities for the week ending October 28, 2011 stand at K3.07 billion.

All this stands at the stock exchange’s total market capitalisation of K209.1 billion.

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