K1.9b in inscribed stocks

 THE National Executive Council (NEC) has approved the issuance of more than K1.9 billion in inscribed stocks for this year.

An inscribed stock is one in which ownership information is recorded. 

The owner’s name may be placed on a certificate, but, increasingly, stocks are recorded electronically to expedite trade.

Only the owner of an inscribed stock is entitled to ownership rights.

Prime Minister Peter O’Neill (pictured) said the Cabinet in a recent meeting, agreed to advise the governor-general to authorise the Treasury Minister to issue up to K1.92 billion in inscribed stocks this year under the Loans Securities Act 1960 (Chapter 134) and align to the debt strategy.

 “NEC has also noted the minister’s decision to implement the 2014 debt issuance programmed by increasing total government debt by net of K2.35 billion which includes increasing domestic debt by a net of K1.7 bllion and foreign currency loans by a net of K647.8 million,” O’Neil said.

“The 2014 debt issuance programmed is a large financing task, similar to that of 2013. 

“The financing requirement is K2.35 billion and the level of debt projected to the gross domestic product (GDP) is expected to be 35.2%.

“This level remains consistent with the medium term fiscal strategy 2013-17 and the Fiscal Responsibility Act 2006,” he added.

The Department of Treasury has already taken the views of domestic investors and will hold monthly Inscribed Stock auctions on the 3rd Tuesday of each month starting Jan 21.

The prime minister said: “Monthly competitive auctions are best-practise as they spread the new borrowings evenly in 2014, and ensure the government borrows funds at the cheapest rate. 

“On a quarterly basis, the Treasury Department will provide an updated schedule to investors in consultation with the Central Bank (BPNG) and investors whereby it will accommodate changes that require smoothening of administrative processes relevant to the issuance and settlement of inscribed stock,”.