SSX MISSION STATEMENT
To promote the economic development of Swaziland through capital formation by developing and maintaining a fair, orderly, transparent and efficient securities market
ROLE IN SWAZILAND
A move towards a formal structure for capital markets development in Swaziland dates back in 1989 when a working party under the direction of the Central Bank was commissioned to examine if there were economic benefits to be derived from establishing a stock exchange. The working party concluded that there was a need and an opportunity for such a move and proposed, as a first step, the formation of a stockbroking company which would be licensed under the existing banking legislation pending the drafting of a securities law.
For eight years the Swaziland Stock Market operated as an over the counter-single stockbroker facility. It was not until July 1999 that a fully-fledged stock exchange, the Swaziland Stock Exchange (SSX), was inaugurated. The operations of the SSX were conducted under the supervision of the Capital Markets Development Unit of the Central Bank, which had regulatory oversight over the operations of the exchange.
What does the SSX do?
The stock exchange is basically a market for capital. It provides a link between economic agents in need of finance and investors seeking profitable investments opportunities. This process involves the issuing, listing and trading of securities. Companies that are in need of finance would normally issue securities on the exchange and investors would buy them as an investment. Three types of securities are currently listed on the SXX namely; equity, corporate bonds and Government bonds.
Functions of the SSX
The SSX has two main functions to fulfil, that is to:
·Act as a primary market for the raising of new capital by companies through the sale of securities to investors, and
·Provide a secondary market for the subsequent trading of these securities in a supervised and regulated environment.
The SSX aims to provide the right kind of product to suit investors and issuers so that it meets growing customer demands and challenges of the globalization of financial markets. This can be achieved through product innovation and diversification. The following products are currently offered;
· Corporate Bonds
· Government Bonds
The equity market is a facility that can be used by companies to raise capital for their operations through the issue of equity, stock or shares. The words equity, stock and share are often used interchangeably since they mean the same thing. A share is regarded as part ownership of a company, therefore shareholders own the company through the purchase of shares in the company.
Only public limited companies are eligible to list on the stock exchange. A company intending to apply for listing must conform to the listings requirements, which specify the rules and procedures that govern new applications, proposed marketing of securities and the continuing obligations of issuers.
SSX and International Affiliation
·The SSX is an active member of the Committee of SADC Stock Exchanges (CoSSE).
·The SSX is the National Numbering Agency and a Member of the Association of National Numbering Agencies (ANNA).
·The SSX is a member of the African Securities Exchange Association (ASEA)
ABOUT SSX - To promote the economic development of Swaziland through capital formation by developing and Maintaining a fair, orderly, transparent and efficient securities market.
Bonds are debt instruments issued by a borrower (company) in the form of a certificate that states the terms and conditions of borrowing. The certificate establishes the debt of the borrowers and their obligation to repay the lender a fixed amount (the principal) on a specified future date (the redemption date). It also specifies the interest (coupon) to be paid to the investor as stated intervals during the life span of the instrument. The interest payable is usually expressed as a percentage of the principal of the instrument and can either be a fixed or variable rate.