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The stock exchange is basically a market for long term capital through issuance of securities. It provides a link between economic agents in need of finance and investors seeking profitable investment 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.
The ESE aims to provide the right kind of products to suit investors and issuers so that it meets growing customer demands and challenges of the globalisation of financial markets. This can be achieved through product innovation and diversification.Three types of securities currently listed on the ESE namely:
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.CORPORATE AND GOVERNMENT BONDS
Bonds are risk free long-term debt instruments (3, 5, 7, 8, 9, 10 years). When bought they cannot be cashed before maturity but can be sold in the secondary market to a primary dealer. They are recognised as collateral by registered financial institutions. Currently Government bonds are traded at the Central Bank of Eswatini (CBE).THE ESWATINI STOCK EXCHANGE HAS TWO MAIN FUNCTIONS/MANDATES TO FULFIL:
Most securities are brought to the market through an IPO (Initial Public Offering). The Primary Market plays a crucial function of facilitating the capital formation within the economy.
The secondary market provides a better opportunity for small investors to purchase the securities because in most cases they are excluded from the IPO. Anyone is eligible to purchase securities on the secondary market so long as they are able to pay the asking price.THE ESWATINI STOCK EXCHANGE OFFERS THE BELOW:
We provide a critical link between companies that need funds to set up new business or expand their current operations, and investors that have excess funds to invest in such companies.
We provide a regulated marketplace for buying and selling of shares at prices determined by supply and demand, notwithstanding other macro-economic fundamentals.
The ESE provides a properly constructed and regulated environment that ensures integrity and fairness among stock market participants.
We supervise and monitor the trading process to ensure transparency in the market and that no unfair practices are done to manipulate the market. Any off-market deals and any unethical criminal activities are dealt with within the framework of the rules and regulations governing stock market transactions in Eswatini. Only authorised stockbrokers and dealers are allowed to transact in securities on behalf of the public.