Products | Capital Markets

Money Market Investments

Through our Cash Management solution, we offer you an efficient, easy to use and convenient way to manage your cash investments, importantly we do this while, providing you with highly competitive interest rates. This is a product, available both to individuals and corporates.

We are able to leverage our scale and track record as a business in order to secure a money market (CCM) account for you with our partner bank. The account listed in your or your business’s name and the fund only invests in instruments which are of investment grade. The following investment options are available to you:

• Call Money Fund CCM account which offers you same day liquidity on the full amount invested; or
• 32-day Notice Money Fund CCM which offers 30% liquidity on the funds invested;
• 60-day Notice Money Fund CCM which offers 50% liquidity on the funds invested,

The interest rates for the notice accounts will be higher than the call account however they offer lower levels of liquidity.

Cash management with the CCM account offers you a host of benefits:

• achieve favourable interest rates;
• make your money work for you while it is not tied up in working capital or prolonged projects;
• minimal transaction charges;
• full liquidity in the call product and good liquidity in the notice products;
• confidence in the underlying investments;
• detailed monthly reporting; and
• personalised services offered by our dedicated team.

Cash Management (Equity Accelerator)

If you are entering into an Asset Finance transaction with us, you may be required to provide a deposit. We can invest this deposit you place using the CCM product described above at competitive interest rates.

This adds value by:

• Create and enhance balance sheet substance for your business by way of capitalising the investment in the new asset as well as the investment in the deposit.
• Create liquidity by way of reimbursement of the deposit invested mid-term into the duration of the asset finance transaction.
• Overall enhanced cash and debt management by off-setting interest earned to interest expenditure of the debt, resulting in overall lower cost of funds and pricing of debt facilities.

It is important to note that we consume all of your credit risk under the asset finance transaction and as such we are entitled to a set-off this deposit being if there are any defaults under the Asset Finance transaction.

The rand is one of the most volatile currencies the world over, regularly reacting significantly to news events and seeing largescale price movements over short time horizons. Businesses with international exposure (be they importers or exporters), as a result, are subject a high level of exchange rate risk.

Some businesses manage this risk by implementing strict hedging policies, while others simply accept the risk. We can assist you by facilitating your FX risk management requirements and explain the various currency exposure management options that are available to you.

We can assist in managing this risk by:

• booking Forward Exchange Contracts (FECs):

FEC’s allow you to lock in an exchange rate now for a payment or receipt occurring in the future. This allows the business to avoid future fluctuation in exchange rates and thereby have price certainty. These contracts require the business to post collateral (margining).

We are also able to grant you a FEC facility, which has the added benefit of not requiring your business to post margin. In order to access this facility, we will perform a credit review of your business, which allows us to allocate trading lines to you.

• providing expert opinions on market conditions:

Our team of experienced dealers and portfolio managers will provide you with a view on the FX market, furnish you with detailed research reports and invest time in understanding your business. We try to maximise value for our clients, with customer service and satisfaction being core to our value proposition.

• making use of treasury management systems, which incorporates our custom-built risk management module:

The Risk management module helps your business track its foreign exchange exposure, measure to what extent you are covered against this exposure and whether you are in line with your businesses’ treasury risk policy (hedging policy).

The risk management module will give you insights into what your position would be (and the financial implication to your business), if exchange rates were to move by a certain percentage in either direction. These simulations provide you with a good idea of best-case and worst-case scenarios, helping you plan accordingly.

Our treasury outsourcing product allows corporates of any size, to outsource their treasury function to Merchant West Capital Markets. This not only increases efficiency and allows you to focus on your core business, but also allows you to leverage off the knowledge and skill of our experienced foreign exchange professionals.

We offer the following value-added services:

• Executing deals at superior rates, while providing you with expert advice, which allows you to enter the market at the appropriate time.
• Managing your risks, by understanding your business and advising you on the appropriate products and services that will help you manage that risk.
• Efficient back office and administrative support which assists you with payment processing, exchange control, customs and other trade documentation or foreign exchange payment related queries.
• Quick turnaround times and accuracy on deal confirmations as well as access to various statements and reporting.

Please note that there are potential risks to this option as incorrect foreign exchange management can lead to business losses and unnecessary costs.