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State bonds will attract banks, insurance agencies and citizens as well

Stock Exchange of Montenegro expects that response to the purchase of state bonds will be big. Domestic and regional commercial banks, insurance agencies and other legal entities that would like to invest with minimum risk will show the greatest interest, said the acting CEO of the Montenegrin stock exchange, Mirko Marković.

He believes that, this time, even the citizens’ interest will be huge, due to the situation at the banking market.

“Lower risk and interest rate higher than the rate on time deposits or savings in banks are the reasons why citizens will choose to buy bonds instead. Another advantage is that the funds invested in bonds aren’t “trapped”. In case of need, citizens can sell the bonds at the secondary stock exchange and make profit before the maturity date”, said Marković.

Ministry of Finance has announced that they will issue bonds via Stock Exchange of Montenegro on 22 and 23 April. They are worth €190 million.

Price of one bond amounts €1.000. Maturity is five or seven years and the projected interest amounts 3 and 3,5%.

The new price is ten times lower than the one offered previously.

“This is another good reason for the citizens to choose to buy bonds, since the new price of a bond is much affordable”, says Marković.

Borrowing at the domestic market will provide cheaper means of budget financing and the capital market will extend its offer by two financial instruments.

“The impact that issue of state bonds will have on the capital market and the stock exchange itself is multiple positive”, said Marković.

According to him, extending the offer of the capital market will increase the interest of investors and restore trust when it comes to not only bonds but other financial instruments as well.

 

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