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Today, 21 March 2010

› Malema: Beware of journalists

› Lukewarm hospitality

› Sharpeville: 50 years on

› Something is rotten...

› Bennett meets with Zuma

Yesterday, 20 March 2010

› Malema in 'danger' - ANC

› Zille cheers 'engagement'

› Zille set to swallow ID

› 'Eskom imported labourers'

› ANCYL shreds protest

The Treasury on Friday released details of its the new RSA Government Retail Bond, the first of which will be issued on 24 May 2004.

The Treasury said the two-year retail bond would hold a fixed interest rate of 9.25 percent; the three-year bond's interest rate would be 9.50 percent fixed; and the five-year bond would have a fixed interest rate of 10.0 percent. Interest will be paid only on March 31 and September 30.

The first retail bond was a five-year bond bought by President Thabo Mbeki while the second was bought by Finance Minister Trevor Manuel, who jokingly said there would be a large need for the retail bond in order to fund the soccer infrastructure after South Africa wins the bid to host the 2010 Soccer World Cup.

Launching the retail bond, Phakamani Hadebe, head of assets and liability management at National Treasury, said that the government was launching the retail bond to give the South African public an opportunity to take control of their financial future as well as diversifying the government's funding sources.

The initial target group are the living standards measure (LSM) group five to eight, which is an upper to middle income group, which total 11 million South Africans. The target is to achieve 10 percent of total debt over the medium to long term equivalent to roughly R40-billion.

Communications campaign

Treasury operations officer Logan Wort said there would be a huge communication campaign to reach the majority of South Africans, to show that the retail bonds should be part of their savings portfolio as the personal savings rate has dropped from nine percent in the 1970s to current levels just above three percent.

Manuel quipped that "just as the Belgium dentist was the stereotype for the buy and hold retail bond investor in Europe, so too should the South African taxi driver be the stereotype for the emerging market retail bond investor".

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