The value of retail trading in bonds on the Nigerian bourse has soared by 2, 400 per cent 10 months after the Nigerian Stock Exchange (NSE) launched the programme in the capital market.
Retail trading of bonds on the Nigerian bourse was launched in February, thereby opening a widow for low networth investors to enjoy the benefits of investing in bonds.
Before February, retail investors lacked access to and could not participate in the bonds market because of the huge capital requirement needed coupled with the non- existence of a secondary trading platform in bonds on the Nigerian bourse. These factors rendered trading in bonds the exclusive preserve of high networth individuals and capitalised institutional investors.
However, the NSE launched the window for the retail trading, giving investors access the bonds market with a minimum of N10,000 and enjoy regular returns on investment among other benefits.
THISDAY checks showed that 10 months after the introduction of the programme, value of retail bonds traded on the Nigerian bourse had risen to N200 million, compared with N8 million transacted for the whole of last year.
The Head, Product Management, NSE, Mr. Dipo Omotoso, who confirmed this development to THISDAY said, it was an encouraging trend.
“The introduction of retail bonds trading has had positive impact so far. We recorded N8million last year but so far, we have done about N200 million worth of trades this year,” Omotoso said.
Speaking on the commencement of the retail bonds trading the Chief Executive Officer of the NSE, Mr. Oscar Onyema, had expressed satisfaction that the exchange had been able to activate a platform that would allow retail investors participate in fixed income securities market.
He explained that the NSE retail bonds trading platform would exist alongside the existing over the counter (OTC) market.
“The retail bonds trading is very complementary to the OTC market because the OTC market is very institutional and ticket prices are bigger. What we are doing (through the retail bonds trading) is to really try to bring the retail participants into the fixed income market,” he said.
Onyema explained that the days bonds were considered exclusive preserve of institutional Investors and high networth individuals were over, saying low networth investors would now have access to bonds on the floors of the exchange.
According to him, investors buying the bonds would enjoy low risk, fixed and regular income, access to various types of bonds including governments and corporate bonds, capital appreciation and opportunity of free entry and exit.