Brics bank looks to rand bond on the JSE

2019-03-31 23:44

The Brics bank is looking to list a rand bond on the JSE this year.

This, according to Vuyelwa Vumendlini, the deputy director-general for international relations and regional economic policy at National Treasury.

She was speaking to City Press this week ahead of the Brics bank’s first annual meeting to be held in South Africa.

The two-day meeting takes place in Cape Town tomorrow and on Tuesday.

The Brics bank – which has Brazil, Russia, India, China and South Africa as founding members – is formally known as the New Development Bank (NDB).

Vumendlini could not say how much would be raised via the issue of the rand bonds.

The NDB has issued renminbi bonds in China, and South Africa will be the second country in which the bank has issued bonds in local currency.

“The NDB is looking to tap into the financial markets of each of the founding members,” Vumendlini said.

The first NDB annual meeting was held in Shanghai in 2016. The next was in New Delhi in 2017 and again in Shanghai in 2018. Now it is Cape Town’s turn.

In 2020, the annual meeting is likely to be held in Brazil.

About 400 people will attend the Cape Town gathering. “We have invited the heads of state-owned companies such as Transnet, Eskom, the Trans-Caledon Tunnel Authority, the Development Bank of Southern Africa and the Industrial Development Bank because they invest a lot in infrastructure,” Vumendlini said.

“We have also invited banks and long-term financiers, such as retirement houses and so forth. When the bank launches its rand bond, it would want these people to subscribe to it.

“So, we want these people to understand what the NDB is about. Some Cabinet ministers are attending. The ministers from the Brics countries who are NDB governors are also attending.”

Included among the guests at the NDB event will be Paul Romer, a Nobel prize-winning US economist and a pioneer of endogenous growth theory.

He was co-recipient of the 2018 Nobel Memorial Prize in Economic Sciences.

Endogenous growth theory holds that economic growth is primarily the result of internal rather than external forces.

Finance Minister Tito Mboweni currently chairs the NDB board of governors.

The NDB was founded in 2014 to fund infrastructure projects. It opened in Shanghai in 2015.

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December 8 2019