In its first month, the Barbados Optional Savings Scheme (BOSS) has performed “reasonably well” according to head of this country’s Central Bank Cleviston Haynes.
And officials are already reporting that the new investment option should perform similarly over the next two months.
In July more than half the overall cap on issuance, or some $4.6 million in bonds were issued and of that amount $1.2 million were retained by public servants.
The remaining $3.4 million were sold on the secondary market. Eighty per cent of those bonds were taken up by individuals and the remainder by institutions.
Commenting on the development on Wednesday during his economic review of the economy for the first six months, Governor of the Central Bank Cleviston Haynes said “So far I would say it has gone well.”
The Central Bank is the registrar, transfer and paying agent for the bonds.
On request of the public servant, the bank will purchase the bonds on payday and place them for sale on the secondary market.
Individuals are also allowed to sell the bonds directly to friends or family or trade them at a later date on the market.
“As I understand, it has good demand for August and into September. So, so far it has been doing reasonably well,” said Haynes.
However, he cautioned that the challenge now was to keep the interest.
“We need to keep it there in the minds of individuals as an opportunity for them to invest, and we believe that once persons recognize that our overall macroeconomic situation from a medium-term perspective is still on a sound basis, that there will be that demand for these bonds,” he predicted.
The 18-month BOSS initiative was established by the Mottley administration to help generate economic activity by shifting a portion of its spending on wages to capital works programme.
The four-year bonds, which will yield a five per cent interest rate per annum, are expected to raise a little over $150 million for capital projects.
Individuals may elect to take up to 25 per cent of their net income in bonds, subject to the overall cap on issuance of $8.5 million each month. [email protected]