At present, Maldivian Government Securities can be bought in the Primary Market. Prospective investors are required to submit the registered documents in order to become a registered participant.
T-bills denominated in Maldivian Rufiyaa are usually offered on a weekly basis and sometimes on private placement basis whereby the terms are privately negotiated between the subscriber and the Government.
For weekly MVR T-bills, Ministry publishes an Invitation to Subscribe which states the Sale Date, the Settlement Date, the tenures and other terms of the securities to be issued during the respective week. On the Sale Date, participants are required to submit the completed Subscription Form and the Maldives Real-Time Gross Settlement (MRTGS) message to Ministry by the submission deadline. Since T-bills are discounted securities, subscribers shall pay the Purchase Value of the subscription amount. The Purchase Value is calculated as follows:
|Purchase Value||=||Total Value of the Subscription Amount|
|Face Value||=||Total Subscription Amount|
|Maturity Days||=||Number of Calendar Days Until Maturity Date|
For instance, to calculate the purchase price of a 28 day T-bill with a face value of MVR 100,000 assuming a discount rate of 3.50% per annum is calculated as follows:
In this example:
FV = MVR 100,000
R = 3.50%
Number of days = 28
Since the above formula for the Purchase Value may return slightly different values for different participants due to rounding issues, for practical purposes, the following steps are taken to arrive at the Purchase Value:
The Purchase Prices for the respective tenures are always provided in the Invitation to Subscribe. Therefore, if the Subscriber wishes to invest in a T-bill with MVR 100,000 Face Value, the Purchase Value (Settlement Price) would be MVR 99,732.23. This is the amount that the Subscriber must pay on issuance.
Reverse Dual Currency or RDC T-bills pay the discount in Maldivian Rufiyaa and the Purchase Value in United States Dollars. The Purchase Value of the subscription amount for RDC USD-MVR T-bills is calculated with the same formula used for MVR T-bills. The RDC USD-MVR T-bills are currently issued on private placement basis only.
MVR T-bonds are currently issued as bullet bonds for medium to long term tenures. They carry coupon payments (quarterly, semi-annually or annually) throughout the life of the security. The face value of the T-bond is paid with the final coupon amount on maturity. The MVR T-bonds are currently issued on private placement basis only.
A Mudharabah Certificate is a short-term Islamic security based on the Shari’ah concept of Mudharabah (money management partnership). Mudharabah means a contract whereby a capital owner (Rabb al Mal) provides his capital to be used by an entrepreneur/manager (Mudharib). Any profit derived from the business is shared by both parties according to their pre-agreed conditions. Any financial loss shall be borne entirely by the capital owner while loss of effort shall be borne by the entrepreneur/manager. The money given under this concept can only be used for a Shariáh-compliant purpose which is notified to the Rabb al Mal or the capital provider. The Mudharabah Certificates are currently issued on private placement basis only.
A Murabahah Certificate is a short-term Islamic security based on the Shariáh concept of Murabahah (cost plus profit sale). Murabahah means a contract whereby an asset(s) is sold for cost price plus profit by one party to another party after it is acquired from the owner by the first party. The cost price of the asset shall be disclosed in the sale as it is a form of trust sale. The payment of the Murabahah Price of the asset(s) can be made in a lump-sum or on installment basis and the monies received shall only be used to acquire Shariáh compliant asset(s) as stated in the Invitation. The Murabahah Certificates are currently issued on private placement basis only.
Wakalah Bi Al-Istithmar Certificate is a short-term Islamic Security based on the Shariáh concept of wakalah (agency contract). Wakalah Bi Al-Istithmar refers to investment agency, whereby a principal (Muwakkil) provides his capital to an agent (Wakil) for a pre-determined Shariáh compliant investment with or without imposition of a fee. The Wakil undertakes fiduciary duties (amanah) towards the Muwakkil and executes the investment within what the limits the Wakil has been authorized with. The Wakalah Bi Al-Istithmar Certificate is currently issued on private placement basis only.
Sukuk Murabahah is a medium to long-term Islamic security which follows the same concept as a Murabahah Certificate. They are currently issued on private placement basis only.