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What
is a Treasury Bill?
What is a
Discount House?
What is a Primary Market?
What is a Secondary Market?
What instruments are actively
traded by CDH?
What do we mean by the Money Market?
How do I Invest in a
Treasury Bill?
What
is a Treasury Bill ?
A Treasury bill is a short-term
financial instrument issued by the Malawi Government through the Reserve
Bank of Malawi (RBM) to borrow funds from the general public to
finance cash-flow shortfalls in Government expenditure. Treasury Bills are
low risk and highly liquid instruments as they are re-discountable
by authorised dealers such as Continental Discount House Limited (CDH). If
for any reason the investor needs to liquidate his investment prior to
maturity, he can do so by selling the bills to CDH at the prevailing rate
for the tenor of the bills to maturity.
What is a
Discount House ?
A Discount House is a financial institution devoted to trading in money market securities in the
secondary
market.
What do we mean by the
Money Market ?
Money market is a wholesale market for low risk, highly liquid,
short-term debt instruments (usually of tenors of less than one year).
What is
the Primary Market ?
The Primary Market is where Government Securities (Treasury Bills and RBM
Bills) are issued by the Reserve Bank of Malawi to investors for fixed
tenors by means of an auction bid process. The securities are issued at
the rate bid by investors up to the marginal rate, which is determined by
the Reserve Bank of Malawi.
What is
the Secondary Market ?
The secondary market is where previously issued money market securities
are traded. An investor in these securities can buy or sell through
authorised dealers such as Continental Discount House for settlement the
same day.
What instruments are actively
traded by CDH?
CDH's main instruments of trade are Treasury Bills, RBM
Bills, Bankers Acceptances, Call Money
and Negotiable Certificates of Deposit.
Copyright
©2001 Continental Discount
House Limited. All Rights Reserved.
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