Category: News

Praise for Treasury as it issues new $1.25bn bond

Praise for Treasury as it issues new $1.25bn bond

Cape Town – National Treasury was praised for managing to attract interest in its new $1.25bn 10-year bond issuance on the international capital market on Friday.

South Africa issued its first international bond in two years on Thursday to fund its budget deficit that has increased to about 4% of gross domestic product in the last four years, Treasury announced on Friday.

The US dollar bond was priced at a coupon (interest rate) of 4.875%, which represents a spread of 335 basis points above the 10-year US Treasury’s benchmark bond, it said in a statement.

“That is down from about 350 bps (basis points) when it started marketing deal. At close of local trade, R203 was marked-to-market at 8.145% – down two bps,” NKC African Economics said in a note on Friday.

“The global investor base was primarily located in Europe and the United States,” National Treasury said.

“The transaction was more than two times oversubscribed,” it said. “The South African government sees the success of the transaction as an expression of investor confidence in the country’s sound macro-economic policy framework and prudent fiscal management.”

“In good times, the bond could have been four or five times oversubscribed,” said Umkhulu Consulting’s Adam Phillips. “However, to be over two times oversubscribed is a pretty good sign taking into consideration all the local political issues.

“We should take our hats off to Finance Minister Pravin Gordhan and Treasury for getting that much interest into that.”

The rand improved quickly on the news, trading at R15.09/$ by 10:40. “It has come down in the last half hour,” Phillips explained. “Since 9:00 it has been edging down on the news.

“Operators who are long the rand might play on it, but I think that the news will draw out importers as we nudge to 15.00,” he said. “Expect a quiet afternoon (in currency trading). Given what we have experienced over the last couple of weeks politically, I think Pravin Gordhan will be relieved.”

Phillips said SA bonds yields have edged up all week, so the yield players have been on the fence there. “But you have to watch the Yen and the EUR,” he said.

This issuance forms part of South Africa’s 2016/17 financing programme.

Government’s borrowing requirement over the medium term amounts to $5.5bn equivalent, which includes $1bn carried over from 2015/16.

The proceeds of the bond will partially finance the government’s foreign currency commitments of $6.4bn over the medium term, it said.

“During the remainder of 2015/16, government plans to raise the equivalent of $1bn in global capital markets,” Treasury said in its budget review in February.

“Over the medium term, government intends to borrow the equivalent of about $4.5bn to cover its total foreign currency commitments of $6.4bn in global markets. The rest will be financed through foreign exchange purchases,” it added.

Treasury said in the review that government’s foreign debt as a percentage of gross loan debt remains low, averaging 10% over the medium term.

“The current account deficit has swollen back to above 5% of GDP most recently, driving concern about how well South Africa will be able to stand up to sudden swings in capital flows that could be triggered by accelerated US monetary policy tightening,” NKC said.

“The rand has rebounded somewhat since hitting all-time lows in thin liquidity during mid-January, aided by hawkish action from the Sarb (South African Reserve Bank) and generally calmer emerging markets. However, further gains will be difficult given the heightened political risks environment,” it said.

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Research-Proven Tricks That Make You Seem Smarter Than You Are

Research-Proven Tricks That Make You Seem Smarter Than You Are

It’s great to be smart, but intelligence is a hard thing to pin down. In many cases, how smart people think you are is just as important as how smart you actually are.

“I not only use all the brains that I have, but all that I can borrow.” -Woodrow Wilson

As it turns out, intelligence only explains about 20% of how you do in life; much of the other 80% comes down to emotional intelligence (EQ). EQ is a skill that’s so important that 90% of top performers in the workplace have high EQs and people with high EQs make $28,000 more annually than those with low EQs.

The hallmark of emotional intelligence is self-awareness, which involves not just knowing how you are but also how other people perceive you. People with high emotional intelligence are masters of influence—they’re skilled at altering their behavior to make the most of a given situation.

You might not be able to alter your genetics, but there are some proven strategies that can help you appear to be smarter. Some of these strategies seem arbitrary, but research shows they make a massive difference. That makes this good information to have, especially when you need to sway someone to your way of thinking.

Use a middle initial. John F. Kennedy. Franklin D. Roosevelt. It turns out there might be a reason that so many people who hold a prominent place in history used a middle initial. Not only does using a middle initial enhance your perceived social status, it also boosts expectations of intelligence capacity and performance. In one study, participants were asked to read and rate Einstein’s essay on the theory of relativity, with authorship being attributed to either David Clark, David F. Clark, David F. P. Clark, or David F. P. R. Clark. Not only did David F. Clark get higher ratings than David Clark, David F. P. R. Clark outdid them all. In another study, participants were asked to choose team members. For academic competitions, people who used middle initials were selected more frequently than those who didn’t. (It was quite a different story for athletic competitions.) So, if you want a quick perceived IQ boost, start using that middle initial.

Make graphs. Research conducted at Cornell suggests that people are more likely to trust a source if it contains graphs. In one of the Cornell studies, participants read a document on the effectiveness of a new cold medication. One report contained a graph; the other didn’t. Other than that, they were exactly the same. Still, 96% of the participants who read the report with a graph believed the claims, while only 67% percent of those who read the document without a graph thought the same. So, next time you create a document, stick in a graph. It doesn’t have to be complex; it just has to be accurate.

Skip that drink. And that’s not just because people tend to do stupid things when they’ve been drinking. A joint study conducted by the University of Michigan and the University of Pennsylvania revealed that merely seeing someone hold a drink is enough to make them seem less intelligent. It’s not that we assume less intelligent people are more likely to drink; it’s that the perceived correlation between drinking and cognitive impairment is so strong that we assume impairment even if there isn’t any. For example, although job candidates frequently think that ordering a glass of wine over a dinner interview will make them appear intelligent and worldly, it actually makes them come across as less intelligent and less hirable. There’s even a name for it: the “imbibing idiot bias.”

Believe in yourself. Nothing projects intelligence quite like confidence. When you believe in yourself, it shows, and research shows that believing in yourself improves your performance on cognitive tasks. Self-doubt, on the other hand, impairs your performance. What’s worse is that other people pick up on this doubt, which makes you appear less intelligent to them. If you want people to believe in you, you have to believe in yourself.

Write simply. If you’re really smart, you shouldn’t have to use big words to broadcast it. True intelligence speaks for itself, so you don’t have to show off your impressive vocabulary. In addition, you always run the chance of being wrong. Using a big word incorrectly makes you look, well, not so smart. So, if you want to appear more intelligent, stop studying the dictionary and just focus on communicating effectively.

Speak expressively. Communication expert Leonard Mlodinow makes the case that even if two people say exactly the same thing, the one who says it most expressively will be perceived as being smarter. “If two speakers utter exactly the same words, but one speaks a little faster and louder and with fewer pauses and greater variation in volume, that speaker will be judged to be more energetic, knowledgeable, and intelligent,” Mlodinow said. If you want to come across as more intelligent, modulate your speech by varying your pitch, volume, speed, and energy level.

Look ’em in the eye. We know we’re supposed to do this anyway—it’s good manners, right? That’s true, but it also makes you look smarter. In a study conducted at Loyola University, participants who intentionally managed their eye contact scored significantly higher on perceived intelligence.

Wear nerd glasses. Did your mom ever tell you to be nice to the nerds, because you’ll probably be working for them someday? As usual, mom was onto something. Research shows that people wearing glasses—especially thick, full-framed ones—are perceived as being more intelligent. So, if you want to seem smarter (when you’re giving a presentation, perhaps?), leave the contacts at home and wear your glasses.

Keep pace with the crowd. I mean this one literally. I know it may sound silly, but research conducted at Boston University shows that it’s true. It’s called the “timescale bias,” and it refers to our tendency to attribute greater intelligence—based on mental attributes like consciousness, awareness, and intention—to people who do things at about the same speed as everyone else. If you want to look smarter, you need to stop dawdling, but you also need to stop scurrying around like some crazed robot.

Dress for success. This one should be no surprise. Extensive research shows that how you dress affects how people see you. Dressing well makes you seem more intelligent, and showing skin makes you seem less intelligent, as it directs people’s attention to your body rather than to your mind. But did you know that how you dress also affects your performance? A recent study by Northwestern University found that making people wear lab coats improved their performance in tasks that required intelligence and concentration.

Bringing It All Together

Intelligence (IQ) is fixed at an early age. You might not be able to change your IQ, but you can definitely alter the way people perceive you. When it comes to succeeding in the real world, perception is half the battle.

What are some other things that make people seem intelligent? Please share your thoughts in the comments section below, as I learn just as much from you as you do from me.

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ZAR X given go-ahead to launch first stock exchange in SA in over 100 years

ZAR X given go-ahead to launch first stock exchange in SA in over 100 years

ZAR X (Pty) Ltd announced today (Wed. March 30) that it has been granted a stock exchange licence by the Financial Service Board (FSB). The licence enables the company to operate a fully-fledged, independent stock exchange and provides an exciting alternative to companies that want to list their securities on a licensed exchange.

Investors are able to trade securities across a state of the art technology platform that permits transactions to be executed on a T+0 or same day settlement of trades, said ZAR X CEO Etienne Nel. The current timeframe is T+5 or five days between matched trade and settlement and clearing into an investor’s account. The ZAR X model is world leading and significantly reduces settlement risk as all transactions are pre-funded.

“We also make investing simpler and affordable for the public – especially the lower income groups,” Nel added. The innovative technology enables investors to undertrake trading via their mobile devices.


Read the full article here.

IFC Issues First Namib Bond to Support Local Capital Market Development in Namibia

IFC Issues First Namib Bond to Support Local Capital Market Development in Namibia

Washington D.C., March 30, 2016—IFC, a member of the World Bank Group, has launched the first bond by a non-resident issuer in the Namibian capital markets, raising 180 million Namibia dollars—equivalent to $12 million—for private sector development in the country.

The five year bond is named “Namib” after the world’s oldest desert. Namib means “vast space” in the Nama language and gave rise to the name of the country. The bond is part of a medium term note program registered with the Namibian Stock Exchange that allows IFC to issue up to 10 billion Namibia dollars, or approximately $650 million, in bonds in the domestic market.

Read the full article on here.

Granite looks to chisel into Strate market

Granite looks to chisel into Strate market

A COMPETITOR to Strate, called Granite, has been licensed to act as a central securities depository (CSD) by the Financial Services Board.

“We have a licence to facilitate the deposit of uncertificated securities and to offer settlements and custody for uncertified securities. Our licence mandate is for bonds and money market instruments,” Granite CEO Leon Rossouw said on Wednesday.

“For now we are going to do bonds and later we will be in a position to do money market instruments.”

Mr Rossouw said that with the emergence of applicants for exchange licences to compete against the JSE, it made sense to add equities products to its CSD licence in the near future.

The plan is to be operational in the first quarter of next year.

Mr Rossouw said Granite had identified shortcomings in the bond settlement process. Granite aimed to introduce more settlement windows to avoid congestion at the liquidity desks of the settlement banks.

The settlement window is the time when delivery on payment takes place and value is exchanged in the form of cash for securities.

If a buyer of securities misses the last window the trade will probably fail to settle and will be rolled over to the next business day for settlement.

“Our intention is to have more frequent settlement windows, hourly if possible, and our intention is to keep the CSD system open until 6pm,” Mr Rossouw said.

Granite said it was introducing a more inclusive ownership model than Strate, which is owned by the JSE and the big four banks.

Granite intends inviting a number of local and international banks, black economic empowerment companies, asset managers, dealer brokers and listed companies to take an equity stake in the business. The company is privately owned.

Strate, SA’s sole CSD, said it welcomed the arrival of a competitor.

Strate CEO Monica Singer said the company had played a significant role in achieving the international ratings applied to the South African securities market and this had helped to make the market an attractive international investment destination.

Ms Singer said it was important these ratings were not jeopardised should a new entrant be unable to operate at the equivalent level.

On the issue of Granite beating Strate on costs she said: “Pricing reflects the level of the products and services offered and should be compared on a like-for-like basis. Strate is unable to comment on Granite’s pricing model.

“Strate has a strong, existing client base who have been using Strate’s services for many years. Their continued support is, we believe, based on the quality and value of the service and the risk mitigation that we offer.”

It is expected that Granite’s arrival will reduce after-trade costs such as custody and settlement fees.

Should the costs come down it is hoped institutions such as pension fund managers will pass on the cuts to the consumer.

View the original article here.

Independent central securities depository created

Independent central securities depository created

Johannesburg – The Financial Services Board (FSB South Africa) has granted Granite Central Securities Depository a financial market infrastructure license.

It is the first of its kind under the Financial Markets Act. Granite CSD is, therefore, South Africa’s first independent central securities depository (CSD) to settle securities, specifically in the debt securities market in the country.

Granite CSD plans to commence operations in the first quarter of 2016, and will initially be focused on the bond market, with money market and other products tabled for introduction in the near future, it said on Thursday.

The emphasis will be on providing efficient and cost effective service with shorter settlement intervals and a stronger focus on innovation and settlement risk reduction.

“This marks a significant challenge to the status quo which has until now operated in a monopoly scenario, with investors compelled to settle securities through a single service provider.,” said Granite.

Granite’s CSD model will allow for investment opportunities from the various financial market institutions, including debt issuers, authorised users, international banks, South African banks, asset managers, dealer brokers, and other parties for whom greater involvement in the
strategy of a CSD would be beneficial to the market.

“Our model, and entry into the market, is intended to provide people with an alternative to the status quo, from our operations to our strategy, through a user-owned model,” said Leon Rossouw, founder and CEO of Granite CSD.

“It will give access to all market participants, with a representative governance structure that will fulfil shareholder objectives. Furthermore, it will support liquidity in the South African debt market by providing more frequent settlement cycles and settlement stability.”

He said of particular interest to banks’ liquidity desks is that, while Granite CSD will launch with two settlement cycles each day, set to coincide with the status quo, it plans to introduce more frequent settlement runs during the day, running as often as hourly, and as late as 18:00 for internal settlements.

Transactions due for settlement on the same day can be reported for settlement at any time during that trade day, with settlement happening on the same day provided the seller can deliver the assets and payment can be secured.

Granite CSD believes that repurchase agreements should be seen as money market instruments, and that these types of agreements are recognised as collateralised loans, and as such should not be treated in the same way as spot bond transactions. It believes that these transactions can be reported directly to Granite CSD for settlement purposes, lessening the reporting burden and costs associated with the current system of reporting and settling these transactions.

View the original article here. 

Africa’s settlement market to be disrupted

Africa’s settlement market to be disrupted

A new player in South Africa’s settlement market. The Financial Services Board has issued an infrastructure licence to Granite, an institution that settles debt securities with a focus on the bond market. It is the first licence of its kind, Leon Rossouw, Chief Executive Officer at Granite joins CNBC Africa for more. Watch the video here. 

FSB Notice

FSB Notice


In terms of section 27(4)(a) of the Financial Markets Act, Act No 19 of 2012 (the FMA),the Registrar of Securities Services hereby gives notice of an application for a central securities depository licence.

The applicant’s name is Granite Central Securities Depository (Pty) Limited (“Granite”). The proposed depository rules may be inspected by members of the public at the offices of attorneys; NortonRoseFulbright, at 15 Alice Lane, Sandton. The contact person will be Pierre Swart, telephone (011) 685 8500, e-mail:

In terms of section 27(4)(b) of the FMA all interested persons who have objections to the application are hereby called upon to lodge their objections with the Registrar of Securities Services, within a period of 30 days from the date of publication of this Notice.

View the original document here: Notice – CSD Application


Stock exchange automates: Bourse keeping pace with the times

Stock exchange automates: Bourse keeping pace with the times

Buys and sales of shares will totally take place on line and will be seen by the rest of the world in real time.

Better trading volumes and activity is expected at the Uganda Securities exchange following the coming into operation of the Automated Trading System. Buys and sales of shares will totally take place on line and will be seen by the rest of the world in real time.

Read the full article here:

Elionn Digital