IFC, a member of the World Bank Group, in co-operation with the Reserve Bank of Fiji (RBF) is working with industry representatives to develop Fiji’s corporate bond market. As a key step in the process, IFC, along with the RBF and the South Pacific Stock Exchange, is holding a forum today, inviting potential issuers, investors and advisers.
The move follows an IFC study, supported by the Australian Government, which looked at ways to develop Fiji’s corporate bond market. While the government bond portfolio in Fiji is relatively large, there have been no issuances of corporate bonds in the market in recent years.
“Fiji’s corporate bond market is filled with untapped potential and provides an opportunity to address the capital needs of corporates seeking alternatives to borrowing from a single financial institution,” said RBF Governor Ariff Ali. “For this reason, the Reserve Bank continues to support the development of the corporate bond market in Fiji.”
“We hope that following Fiji’s successful sovereign green bond, the private sector will now start issuing corporate bonds to raise money for their medium to long- term financing needs,” said Australia’s High Commissioner to Fiji, John Feakes.
The IFC review identified at least 10 companies that could be potential issuers of corporate bonds, where key investors already have equity in or loans to many of the companies.
“There’s a significant amount of funds available for investment in Fiji, held by institutional investors looking for opportunities to diversify their investments,” said IFC’s resident representative in Fiji, Deva De Silva. “We’ve seen interest from pension funds as well as insurance companies and managed funds who could all be potential investors in corporate bonds, and hopefully in the future, we’ll see the public also investing in corporate bonds.”
The IFC review found gaps in the legal and regulatory environment which need to be addressed in order to deliver on the potential of a functioning corporate bond market. The forum aims to lay the groundwork for a streamlined process to spur corporate bond activity.
The RBF is the central bank of the Republic of Fiji established under the Reserve Bank of Fiji Act 1983. The principal purposes of the Bank are to regulate the issue of currency and the supply, availability and international exchange of money, to promote monetary stability, to promote a sound financial structure, to foster credit and exchange conditions conducive to the orderly and balanced economic development of the nation, and to regulate the capital markets and insurance industry.
IFC’s work in Fiji is guided by the Fiji Partnership. Australia and IFC are working together through the Partnership to stimulate private sector investment and reduce poverty in Fiji.
Source Pacific Scoop