FINANCIAL SERVICES REGULATORY AUTHORITY

[FSRA]

QUARTERLY STATISTICAL BULLETIN 1st APRIL 2018 – 30TH JUNE 2018

SECOND QUARTER (Q2-2018)

CAPITAL MARKETS DEVELOPMENT DIVISION

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Contents Contents ...... 2 Table of Figures ...... 3 1. INTRODUCTION ...... 4 1.1 Highlights: Overview of the Capital Market Industry ...... 4 2. Overview ...... 5 2.1 Collective Investment Scheme Managers ...... 5 2.2 Collective Investment Scheme (CIS) Asset Allocation ...... 7 2.3 Investment Advisory ...... 10 3. Domestic Securities Exchange Report...... 11 3.1 LISTED EQUITY COMPANIES ...... 11 3.2 EQUITY TURNOVER ...... Error! Bookmark not defined. 3.3 CAPITAL GAINS COMPARISON ON EQUITY PRICES ...... 12 3.4 SSX ALL SHARE INDEX TREND ...... Error! Bookmark not defined. 3.5 MARKET CAPITALISATION ...... 13 3.8 MARKET CAP. IN 2nd QUARTER 2018...... 15 3.9 GOVERNMENT DEBT ...... Error! Bookmark not defined. 3.10 CORPORATE BONDS ...... Error! Bookmark not defined. 3.11 NEW BOND ISSUANCES ...... Error! Bookmark not defined. 3.12 SSX MEMBERS ...... Error! Bookmark not defined. 3.13 CORPORATE EVENTS ON THE SSX ...... 19 4.0 LICENCED ENTITIES ...... 20

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Table of Figures Figure 1 - Evolution of Total Assets ...... 4 Figure 2: Geographical Allocation of Total Assets ...... 5 Figure 3: Source of Funds (CIS) ...... 6 Figure 4: Geographical breakdown of assets under management (CIS)...... 7 Figure 5: Assets Allocation (CIS) ...... 8 Figure 6: Money Market Asset Allocation...... 8 Figure 7: Geographical breakdown of CIS Assets ...... 9 Figure 8: Geographical breakdown of Money Market Assets ...... 10 Figure 9: Geographical breakdown of Total Assets under Advisory ...... 10 Figure 11: SSX All Share Index 2017 VS 2018 ...... Error! Bookmark not defined. Figure 12: SSX Market Capitalization 2017 VS 2018 ...... Error! Bookmark not defined. Figure 13: Government Bonds as at Q2-2018 ...... Error! Bookmark not defined.

Disclaimer: While reasonable care has been taken to prepare the Statistical Bulletin, the Authority accepts no responsibility or liability whatsoever resulting from the use of information contained herein. Note further, that the FSRA has no objection to the material contained herein being referenced, provided an acknowledgement of the same is made. Any comments and/or suggestions on any of the statistics may be sent to [email protected].

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1. INTRODUCTION

Financial data reported in the Financial Services Regulatory Authority (FSRA) quarterly Statistical Bulletin has been sourced from licensees’ statutory returns to the FSRA.

The data from the statutory returns is for the second quarter ended 30 June 2018.

All the figures reported in the statutory returns and in this bulletin are in Emalangeni.

1.1 Highlights: Overview of the Capital Market Industry

As at 30th June 2018, assets managed and advised within the capital markets industry, decreased by 1% to E 25 040 076 641.28 from the E 25 238 451 570.29 reported in Q1-2018. The assets in the capital markets industry as at 30 June 2018 represents 56% of GDP.

The assets under management for the quarter under review decreased from E6 993 153 403.96 reported in Q1-2018 to E6 037 998 339.30. This represents a 13.6% decrease in assets under management as compared to the previous period. Assets under advisory increased by1.2% from E 18 816 513 395.94 in Q1 to E 19 002 078 301.98 in Q2. Figure 1 below, depicts the growth in total assets from Q1-2015 to Q2-2018.

Figure 1 - Evolution of Total Assets

Figure1-Evolution of Total Assets As At 30 June 2018 30 000 000 000,00

25 000 000 000,00

20 000 000 000,00

15 000 000 000,00

10 000 000 000,00

5 000 000 000,00

- Q1 - Q2 - Q3 - Q4 - Q1 - Q2 - Q3 - Q4 - Q1 - Q2 - Q3 - Q4 - Q1- Q2 - 2016 2016 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018

Source: FSRA 2018

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Figure 2 below illustrates the geographic asset allocation of all assets within the capital markets industry. As seen in the graph, 26% are invested domestically; 60% are invested within the Common Monetary Area (CMA), excluding Swaziland; and 14% is invested offshore (Outside of CMA). It is worth noting that currently, Investment Advisors do not have a local asset requirement, hence they tend to skew the geographic asset allocation away from domestic assets.

Figure 2: Geographical Allocation of Total Assets

Figure 2- Geographical Allocation Of Total Assets As At 30 June 2018

Domestic - 26% CMA - 60% Offshore - 14%

Source: FSRA 2018

2. Overview 2.1 Collective Investment Scheme Managers The total assets under management for the quarter under review were E 6 037 998 339.30. The source of funds of these assets are depicted in figure 3 with 46% from pension funds 19% from companies while retail investors accounted for 17%.

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Figure 3: Source of Funds (CIS)

Collective investments scheme source of funds

Retail -17% Professional Investors/High Net Worth -4% Institutional-Pension - 46% Institutional-Medical Aid Scheme - 1% Institutional-Insurance short term - 1% Institutional-Insurance long term - 2% Unit Trust Schemes - 8% Companies - 19% Institutional-SACCO - 0% Institutional-Other- 2%

Source: FSRA 2018

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On aggregate, the 50% local asset requirement was met by the Collective Investment Scheme Managers, having invested 57% of their assets in local () assets, as illustrated by figure 4.

Figure 4: Geographical breakdown of assets under management (CIS)

Figure 4- Geographical Breakdown Assets Under Management as at 30 June 2018

Domestic -57% CMA-30% Offshore-13%

Source: FSRA 2018

2.2 Collective Investment Scheme (CIS) Asset Allocation

Figure 5 gives an overview of the types of assets that are being invested in. As at 30 June 2018, 41% were money markets, 13% were collective investment schemes, 7% were equities and 31% were other portfolio assets. Collective Investment Schemes represents assets that are re- invested in foreign collective investment schemes. Other portfolio assets consist of financial derivatives and money market funds of asset managers in the common monetary area (CMA) and offshore.

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Figure 5: Assets Allocation (CIS)

Figure 5- Structure Of Assets As At 30 June 2018

Corporate Bonds - 3% Bonds/ Debentures - 5% Equities - 7% Collective Investment Schemes - 13% Real Estate -0% Other Portfolio Assets - 31% Money Markets - 41%

Source: FSRA 2018

The money markets are further broken down with the aggregate holdings shown in figure 6, 0% were in commercial paper, 18% were treasury bills, 51% were cash holdings in banks and 30% were in certificates of deposits.

Figure 6: Money Market Asset Allocation

Figure 6- Money Market As At 30 June 2018

Treasury Bills -18% Negotiable Certificate of Deposit - 30% Commercial Paper - 0% Banks - 51%

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Source: FSRA 2018

Figure 7 gives a geographical breakdown of the aggregate investment holdings. In the quarter under review, 41% of fund holdings were in the money markets. This suggests that collective investment scheme managers may have repatriated funds to Eswatini to comply with the local asset requirement, however, there is still concern that almost half of the fund assets are held in cash and cash equivalents instead of being invested in long term investments. Figure 8 shows further geographical breakdown of the money market assets.

Figure 7: Geographical breakdown of CIS Assets

Figure 7- Geographical Breakdown of Fund Assets As At 30 June 2018 5 000 000 000,00

4 000 000 000,00

3 000 000 000,00

2 000 000 000,00

1 000 000 000,00

- Domestic CMA Offshore Total

Corporate Bonds-3% Bonds/ Debentures-5% Equities-9% Collective Investment Schemes-11% Real Estate-0% Other Portfolio Assets-27% Money Market-41%

Source: FSRA 2018

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Figure 8: Geographical breakdown of Money Market Assets

Figure 8- Geographical Breakdown Of Money Market Assets As At 30 June 2018 800 000 000,00 700 000 000,00 600 000 000,00 500 000 000,00 400 000 000,00 300 000 000,00 200 000 000,00 100 000 000,00 - Domestic CMA Offshore

Treasury Bills-20% Negotiable Certificate of Deposit -33% Commercial Paper-0% Banks -48%

Source: FSRA 2018

2.3 Investment Advisory Assets under advisory are shown in figure 9 and are broken down geographically. These are funds for which investment advisor licence holders offer advisory services to clients through segregated mandates. Figure 9 shows that 69% of the funds are channelled to the CMA, 16% of the funds are channelled to domestic assets and 15% are offshore.

Figure 9: Geographical breakdown of Total Assets under Advisory

Figure 9-Geographical Breakdown of Assets Under Advisory As At 30 June 2018

Domestic - 16% CMA - 69% Offshore - 15%

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3. Domestic Securities Exchange Report 3.1 LISTED EQUITY COMPANIES There were no new listings in the period under review. Listed companies remained at 7 (seven) on the SSX Main Board, and none on the SME Board. TABLE 1: LISTED EQUITY COMPANIES

Mar 2017 Apr 2017 May 2017 Jun 2017 Total companies listed 7 7 7 7 New entrants/listings 0 0 0 0 Domestic Companies 7 7 7 7 Foreign Companies 0 0 0 0 No. of Broking Firms 2 2 2 2 No. of Exempt Dealers 4 4 4 4

No. of Debt Sponsors 1 1 1 1

EQUITY TURNOVER

A total turnover of E97 144.71 was recorded from a sale of 24,405 shares over a total of five (5) trades concluded over the 2nd quarter of 2018. In comparison to the 1st quarter of 2018, turnover decreased by a whopping 98.97%, down from E9 474 078.00 in the previous quarter, as investors were anticipating dividend payments from companies whose stock had performed well. Trades conducted in the 2nd quarter were as follows: SBC Ltd (2 Trades) and Greystone Partners LTD (3 Trades).

TABLE 2: VALUE TRADED SUMMARY 2nd QUARTER 2018

Company Number of Share price Emalangeni Date Shares SBC Ltd 2 000 800 16 000.00 27/04/2018 Greystone 1 000 285 2 850.00 27/04/2018 Greystone 10 000 295 29 500.00 16/05/2018 SBC Ltd 3 000 800 24 000.00 06/06/2018 Greystone 8 405 295 24 794,75 06/06/2018 TOTAL 97 144.75 Source: SSX Trading Statistics, 2018

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Figure 10: VALUE TRADED ’17 vs ’18

CAPITAL GAINS COMPARISION ON EQUITY PRICES

Below are the listed companies and their respective share prices (cents per share), compared on an end of quarter basis:

TABLE 3: SHARE PRICE QUARTER COMPARISON AS AT 30 JUNE 2018

SHARE SHARE COMPANY PRICE PRICE (%) MKT CAP (SZL) NAME JUN 17 JUN 18 GAINS Limited 1000 1080 8.00% 258 137 593 RSSC 1370 1400 2.19% 1 348 851 280 SEL 3100 3255 4.90% 602 175 000 139 551 900 Swaprop 545 600 10.09% Swazispa Holdings 600 600 0.00% 41 966 964 Greystone Partners 235 295 25.53% 418 417 560 SBC Limited 735 800 8.84% 771 920 000

Source: SSX Trading Statistics, 2018

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SSX ALL SHARE INDEX TREND

The SSX All Share Index increased to 415.30, representing a 0.40% increase from the previous quarter’s close of 413.66. Trading during the 2nd quarter remained rather subdued, as evidenced by the few trades that were brought on to the market. Furthermore, the few trades did not translate into significant increases in the All Share Index, as it increased marginally by 0.40%. The increase in the All Share Index was due to increases in the prices of two (2) equities, these consisting of a 2.56% increase in the SBC Ltd share price and a 3.51% increase in the Greystone Partners Ltd share price. Year-on-Year, the All Share Index realised a gain of 7.10% .

Figure 11: SSX ALL SHARE INDEX ’17 vs ’18

Source: SSX Trading Statistics 2018

MARKET CAPITALISATION

SSX Market Capitalisation ended the 2nd quarter with a value of E3.581 billion. This saw the market capitalisation increase by 0.40%, from the previous quarter’s close of E3.567 billion. Growth in the market capitalisation was attributable to gains in the share prices of SBC Ltd (2.56% ), and Greystone Partners Ltd (3.51% ). Year-on-year, the Market Capitalisation realised a 7.10% gain from E3.344 billion in the 2nd quarter in 2017 to E3.581 billion at the end of the 2nd quarter in 2018.

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Figure 12: SSX MARKET CAPITALISATION ’17 vs ’18

Source: SSX Trading Statistics 2018

Figure 13: OVERALL MARKET CAPITALISATION BY COMPANY AS AT 30 JUNE 2018

Source: SSX Trading Statistics 2018

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TABLE 4: MARKET CAPITALISATION QUARTER COMPARISON

Company Name Q1 2018 Q2 2018 Royal Swaziland Sugar Corporation (RSSC) 39% 38% Nedbank 7% 7% Swazispa Holdings 1% 1% SWD Empowerment Limited (SEL) 16% 17% SWAPROP 4% 4% Greystone Partners Limited 11% 12% SBC Limited 22% 21% Source: SSX Trading Statistics 2018

RSSC continues to have the highest market capitalisation figure, commanding a 38%, even though it lost 1% share of the overall market capitalisation of listed entities. SEL and Greystone Partners gained 1%, while SBC Limited lost 1%. RSSC’s business is that of processing sugar and ethanol products located in the north-eastern Lowveld. RSSC has two sugar mills in Simunye and Mhlume as well as an ethanol plant.

 SBC LTD (21%) – Holding Company  SWD Empowerment Limited (17%) – Holding Company  Greystone Partners (12%) – Private Equity  Nedbank (7%) – Banking  SWAPROP (4%) – Real Estate  Swazispa Holdings (1%) – Hospitality

GOVERNMENT DEBT

During the period under review, Government through the of Swaziland (CBS) maintained 18 bonds with different maturities, ranging from 3, 5, 7 and 10 years. The total outstanding bonds as at June 30, 2018 stood at E2.932 billion, reflecting a 6.35% increase from the total outstanding as at the end of the 1st quarter of 2018 which stood at E2.757 billion. Year-on-year, total government bonds outstanding increased by 27.3% . This significant increase saw government raise an additional E300 million in the local bond market, through Infrastructure bonds SGIFB004 and SGIFB005 whose nominal values stood at E150 million each, respectively. During the course of the 2nd quarter of 2018, government bond SG021 matured, whose value was E125 million. The total outstanding bonds as at June 30, 2018

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were as outlined below:-

Figure 14: GOVERNMENT BONDS AS AT 30 JUNE 2018

Source: SSX Trading Statistics, 2018

MATURED/REDEEMED GOVERNMENT BONDS

TABLE 6: MATURED/REDEEMED GOVERNMENT BONDS Bond Name ISIN Code Coupon Maturity Date Nominal Value (SZL) SG021 SZG000441199 8.25 30-June-18 125 000 000 Source: SSX Trading Statistics 2018

NEW GOVERNMENT BOND ISSUANCES

TABLE 7: NEW GOVERNMENT BOND ISSUANCES

Bond Name ISIN Code Coupon Maturity Date Nominal Value (SZL)

SGIFB004 SZG000441348 10.00 29-Mar-28 150 000 000

SGIFB005 SZG000441356 9.75 31-May-26 150 000 000

Source: SSX Trading Statistics 2018

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CORPORATE BONDS

Figure 15: CORPORATE BONDS 2ND QUARTER 2018

Source: SSX Trading Statistics, 2018

The 2nd quarter of 2018 realised 5 notes maturing, these being SML400, SML401, FIN010, FIN106 and FIN113. SELECT LTD returned to the market in the second quarter to raise an additional E21.92 million, E24.2 million and E5 million through SML605, SML606 and SML607, while an additional E48 million, E24.2 million and E5 million were raised in the second quarter by FINCORP with Notes FIN202, FIN203 and FIN204. This saw the cumulative corporate bonds outstanding as of June 30, 2018 increase to E1.098 Billion, from the previous quarter’s outstanding amount of E1.038 Billion. This marked a 5.78% increase in total bonds outstanding. Year-on-year, total corporate bonds outstanding increased by 41.67% .

MATURED/REDEEMED CORPORATE BONDS

TABLE 8: MATURED/REDEEMED CORPORATE BONDS Bond Name ISIN Code Coupon Maturity Date Nominal Value (E) SML400 SZD000551646 10.00 04-May-18 11 130 000 SML401 SZD000551654 12.50 08-Apr-18 20 000 000 FIN010 SZD000551507 10.30 01-Apr-18 10 000 000 FIN106 SZD000551678 10.00 04-May-18 20 000 000 FIN113 SZD000551878 11.85 29-Jun-18 7 229 800 TOTAL 68 359 800 Source: SSX Trading Statistics, 2018

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NEW CORPORATE BOND ISSUANCES

TABLE 9: NEW CORPORATE BONDS

Bond Name ISIN Code Coupon Maturity Date Nominal Value (E) SML605 SZD000552042 13.25 10-Apr-21 21 920 000 SML606 SZD000552048 11.75 04-May-20 24 200 000 SML607 SZD000552076 12.25 06-Jun-20 5 000 000 FIN202 SZD000552034 14.00 30-Mar-23 48 000 000 FIN203 SZD000552040 11.75 04-May-20 24 200 000 FIN204 SZD000552084 12.50 06-Jun-21 5 000 000 TOTAL 128 320 000 Source: SSX Trading Statistics, 2018

CORPORATE EVENTS ON THE SSX

1. Corporate bonds SML400 and FIN010 matured during the month of April 2018.

2. Corporate bond SML605 worth E21.92 million started trading during April 2018.

3. Corporate bonds SML401 and FIN106 matured during the month of May 2018.

4. FIN203 and SML606 worth E24.2 million each, commenced trading in the month of May 2018.

5. The SSX Staff was invited to attend the Royal Swazi Spa Annual General Meeting which was held at the Royal Swazi Convention Centre on May 24, 2018.

6. Corporate bond FIN113 worth E7,229,800 matured during the month of June 2018.

7. FIN204 and SML607 worth E5 million each, commenced trading in the month of June 2018.

8. Government Infrastructure Bond SGIFB004 worth SZL150 million commenced trading on the SSX in the month of April 2018.

9. Government Infrastructure Bond SGIFB005 worth SZL150 million commenced trading on the SSX in the month of June 2018.

10. Government bond SG021 worth SZL125 million matured in the month of June 2018.

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SSX MEMBERS

Two (2) Stockbroking companies are currently licensed as Dealing Members of the SSX. These are:-

· Swaziland Stockbrokers Limited (SSL)

· African Alliance Swaziland Securities Limited (AASSL)

Four (4) banks are currently recognised as Exempt Dealers by the SSX. These are:-

· Nedbank Swaziland

· Standard Bank Swaziland

· First National Bank Swaziland

· Swaziland Development and Savings Bank

One (1) institution is recognised as a Debt Sponsor for Swaziland Government Bonds by the SSX. This is:-

· The Central Bank of eSwatini (CBS)

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4.0 LICENCED ENTITIES Table 1: FSRA Licensed Entities within Capital Markets Development Division

License Type Entity Name License Number African Alliance Swaziland CISM/009/13 Management Company Sanlam Swaziland CISM/015/13 Collective Investment Stanlib Swaziland CISM/010/13 Scheme Manager JM Busha CISM/012/13 Inhlonhla CISM/022/17

Old Mutual Unit Trust CISM/013/13 Swaziland Ecsponent Limited CISM/003/17

License Type Entity Name License Number Inhlonhla IA/018/13 Imbewu Yesive IA/005/13 Allan Gray Swaziland IA/007/13 Ecsponent Swaziland IA/020/14 African Alliance Swaziland IA/003/13 Management Company African Alliance Swaziland IA/002/13 Investment Advisor Limited Sanlam Swaziland IA/014/13 Stanlib Swaziland IA/001/13 Old Mutual Investment IA/008/13 Group Swaziland Momentum Asset IA/013/13 Management Swaziland

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BLZI IA/004/13 MB Financial Consultants IA/021/16

Swaziland Employee IA/023/16 Benefit Consultants Insika Financial Services IA/022/16

Pan African Asset IA/024/17 Management Swaziland Swaziland Employee IA/023/16 Benefit Consultants Umelusi Capital IA/025/18

Aluwani Capital Partners IA/026/18 Swaziland

License Type Entity Name License Number Stock Broker African Alliance Securities STB/016/13 Swaziland Stock Brokers STB/017/13 Limited

License Type Entity Name License Number Trustee Nedbank Swaziland TR/002/13 Standard Bank TR/004/15

License Type Entity Name License Number Dealer Swaziland Savings and DR/001/13 Development Bank Capital Markets Regulated Entities as at 31 March 2018

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