debt
Markets

investors to commence trading of FGN bond

Director General of Debt Management Office, DMO, Dr. Abraham Nwankwo, has said that retail investors who are interested in the Federal Government Bond can now do that through the secondary market, with the appointment of Stanbic IBTC Stockbrokers to manage the bonds.

He disclosed this at the presentation of Stanbic IBTC Stockbrokers to the Nigerian Stock Exchange, NSE, as government stockbrokers to its bonds.

He said, “Since 2003, we have been trying to develop the sovereign bond market in Nigeria and we have been taking various steps to do that. Recently, JP Morgan included the Nigerian Bond market in its index.

“That shows that in their independent assessment, our bonds market is growing, though we still have some more challenges to deal with, but it is appreciated all over the world that we are doing the best to develop the bond market.

“So going forward, we felt we need a bond broker so that the FGN bond could be actively traded on the exchange. The FGN bond is currently being traded on the counter. Though it is good, but in every economy, you also need it to be traded on the floor of the Stock Exchange.

“What we have done by appointing Stanbic Stockbrokers as the FGN stockbroker is to ensure that the FGN bond is actively traded on the Stock Exchange. That will ensure that retail investors are mobilised to participate. This will make development inclusive.

He said this was line with the transformation agenda of the government, adding that as the government tries to transform the economy, the capital market is an integral part, and as such, it is part of government’s effort at developing the capital market.

He added that trading the bond on the NSE and OTC will make the trading more balanced and boost market liquidity.

Also, Mrs. Patience Oniha, Director, Market Development, DMO, said the idea of appointing a stockbroker is to make it eliminate the challenge that retail investors go through in trying to trade his portfolios in the primary market.

She said: “The whole idea is that some retail investors do not know they could buy at the primary market and sell at the capital market. Some who want to sell can now do it through the secondary market easily and at a fair price.

“For instance, some retail investors have bought, but because they bought in small volume, they could not sell easily. So, what we are trying to provide on the NSE is what is technically referred to as liquidity.

“Now the retail investor can buy from both the primary and secondary market, but more importantly, when he wants to dispose it off, he can do it more easily through the NSE in the same way he sells equity, and not necessarily going to the bank. This is the purpose of having a government stockbroker.”

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