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Mozambique Issued 481M Meticals of Treasury Bonds on the Stock Exchange With Demand Outstripping Supply

Mozambique Issued 481M Meticals of Treasury Bonds on the Stock Exchange With Demand Outstripping Supply

On Tuesday 22 August, Mozambique placed 481 million meticais in a single issue of Treasury Bonds (OT) through the Mozambique Stock Exchange (BVM), with demand exceeding supply by three times.

At issue is an operation for direct subscription by Specialised Treasury Bond Operators (OEOT) of up to 500 million meticals, relating to the first reopening of the seventh series of Treasury Bonds (OT) 2023, launched on 8 August, which then guaranteed 475 million meticals.

The issue ended up not reaching the maximum amount allowed, but the overall demand for the reopening was 1.5 billion meticais, “with the demand and supply ratio being 306.20 per cent, with a minimum rate of 17.750 per cent and a maximum of 21.500 per cent”.

“According to the state cut-off rate, the value of the reopening was 481 million meticais,” reads BVM’s information on the operation, with a maturity of five years and a fixed interest rate of 17 per cent.

According to BVM, with this operation, Mozambique has already placed 25.4 billion meticais in OT since January through the institution, with the legal availability to issue a further 11.2 billion meticais by the end of the year.

According to decree 14/2023, issued by the Ministry of Economy and Finance (MEF) on 18 January, the issue of OT – public debt issued with longer maturities – for this year provides for an overall limit of 36.6 billion meticais, preferably in two monthly issues, until 5 December.

Meanwhile, BVM data compiled by Lusa indicates that 13 issues have already been made – including reopenings of scheduled issues – in 2023, with maturities of up to ten years and interest ranging from 17% to 19%, having so far reached almost 70% of the legal debt limit per OT for this year.

The amounts raised in each operation ranged from 475 million meticais on 8 August to 5.9 billion meticais in the operation held on 7 March.

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