FGN bonds record N13.44 billion investment in two years

Head, Market Operations, the Nigerian Stock Exchange (NSE), Kenneth Nwafor (left); Chief Executive Officer, NSE, Oscar Onyema; Director General, Debt Management Office (DMO), Patience Oniha; and Director Portfolio Management (DMO), Afolabi Oladele, during the 2019 Retail Bond Workshop at the Exchange… yesterday.

The Debt Management Office (DMO), has announced that the Federal Government (FGN) savings bond established in May 2017, has recorded a total of N13.44 billion investment.

A breakdown showed that so far in 2019, N1.02 billion and N1.72 billion were recorded in the first and second quarters (Q1, Q2), respectively.

Last year, the bonds achieved N583 million in Q1, N740 million in Q2, N1.21 billion in Q3, and N1.02 billion in Q4.
At the inception of the offers in 2017, about N2.07 billion, N2.69billion, N1.55 billion, and N891million worth of investments were recorded in Q1, Q2, Q3, and Q4, respectively.

Further analysis showed that 431 corporates invested N1.75 billion while 15,822 individuals invested N11.75 billion, bringing the total amount to N13.5 billion.

The Head, Market Development, DMO, Monday Usiade, while addressing participants during the NSE, DMO, Stanbic IBTC Stockbrokers 2019 Retail Bond Workshop, in Lagos, on Tuesday, expressed dissatisfaction with individual investors’ patronage of the bond, saying a lot needed to be done to attract more investors into the net.

Usiade, who was represented by Ms. Bose Olafisoye, said 77 per cent of the investors were from the Southwest while eight per cent were from the Federal Capital Territory, and South-South, respectively.

Furthermore, he said four per cent came from the South-East and foreign investors, respectively, while the remaining three per cent were from North-East and North Central.

Usiade added that Jigawa and Yobe states recorded zero subscriptions, while Lagos, FCT, Oyo and Ogun contributed 75.54 per cent of the total investment.

This comes as the Nigerian Stock Exchange (NSE), also disclosed that only about three per cent of Nigerian adult population currently participates in the capital market.

According to the Exchange, this is an indication that there is a need for increased collaborative efforts in promoting higher levels of financial inclusion in Nigeria.

NSE’s Chief Executive Officer, Oscar Onyema, while addressing participants during the NSE, DMO, Stanbic IBTC Stockbrokers 2019 Retail Bond Workshop, in Lagos, yesterday, reiterated the Exchange’s commitment towards pursuing initiatives that will increase domestic participation in local bourse.

The Exchange said it intends to achieve greater inclusion through increased access to investment solutions, as well as support government to achieve inclusive growth and sustainable development.

Onyema noted that since the FGN Savings Bond (FGN bond)  debut issuance of N2.067 billion, retail investors and Diaspora Nigerians have invested in the bond,  with the DMO raising over ₦13 billion from two-year and three-year bond maturities as at July 2019.

“Our partnership with the DMO towards creating investment opportunities for retail investors in the Debt Market dates to the launch of the NSE Retail Bond Market in 2012; when the DMO appointed a government Stockbroker to provide liquidity in FGN bonds on our bourse.”

He said the Exchange has revolutionised into a multi-asset hub with a N12.47 trillion debt market providing investors access to a wide range of investment opportunities in the domestic and international capital market through the listing of sovereign, sub-national, corporate, and supranational debt issues.

“Our partnership with the DMO towards creating investment opportunities for retail investors in the Debt Market dates to the launch of the NSE Retail Bond Market in 2012; when the DMO appointed a Government Stockbroker to provide liquidity in FGN bonds on our bourse.
“With the launch of the NSE Retail Bond Market, the Exchange sought to promote financial inclusion, while stimulating retail investor participation in the Nigerian Debt market.

“Prior to that time, investing in listed debt instruments had been dominated by institutional investors trading in wholesale denominations. The Exchange promises to continue its collaboration with the Government and market stakeholders to collectively enhance market depth and domestic participation in the Nigerian capital market.”

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