The Federal Government of Nigeria (FGN) Savings Bond which will open for subscription exclusively on the Nigeria Stock Exchange (NSE) will boost financial inclusion says the Executive Director, Capital Market Division of NSE.
The NSE key official made this remark while commenting on the planned launch of the sovereign savings bond which is scheduled for Monday, March 13, 2017 and targeted at retail investors.
To ensure the offer reaches the last mile subscribers, the DMO has accredited eighty-seven (87) stockbroking firms of the Nigerian Stock Exchange to market and distribute the Savings Bond.
The retail bond, issued by the Debt management Office will be offered monthly in tenors of 2 and 3 years, with quarterly payment of interest to investors.
The minimum subscription amount is
N5, 000.00 with additions in multiples of N1, 000.00, subject to a maximum of N50, 000,000.00.
Backed by the full faith and credit of the Federal Government of Nigeria, the bond, amongst several objectives was purposed to deepen the national savings culture, provide opportunity to all citizens irrespective of income level to contribute to National Development, enable all citizens
participate in and benefit from the favorable returns available in the capital market and more importantly diversify funding sources for the Government.
The debut of this savings bond puts Nigeria in the league of sovereigns like Sweden, Thailand, Slovenia, Indonesia, United States, and United Kingdom with savings bonds.
Already, capital market operators are excited about the product and believe it can act as a fillip to lift the capital market particularly that has seen many retail investors depart since the downward. Prior to now, the bond market is predominantly available to high net worth investors to the detriment of low
income investors. With the entry level for the savings bond, even students can afford to play in the space.
Jalo-Waziri further said, “NSE Retail Bond Market was launched in 2012 with the aim of providing retail investors access to high quality debt instruments, as well as afford them portfolio diversification opportunities in an efficient and reliable way. The Launch of the Federal Government National Savings Bonds is consistent with the NSE’s commitment to grow domestic investor participation in the Nigerian Capital Market, and it is our pleasure to have worked with
the DMO and the Dealing Member community to deliver yet another innovative product that will foster financial inclusion in Nigeria. After the offer closes, the bond will be listed on the NSE and can be traded on our Retail Bonds Market.
“DMO Accredited Distribution Agents and the Government Broker will provide liquidity by continuously making 2-way quotes throughout the trading session”.
With an estimated population in excess of 150million, if the targeted audience successfully off take this product, we shall be seeing yet another paradigm shift where ordinary Nigerians irrespective of their income levels can pool resources to boost Government’s effort to mobilize domestic capital required to fund priority sectors of the economy and ultimately serve as a
catalyst for economic growth.
The launch of this savings bond offer is coming on the back of recent innovative capital market instruments deployed by the Federal Government of Nigeria (FGN) having listed the first FX denominated bonds, Eurobond on local bourses, firstly at NSE and to the delight of many capital
In this month, investors will also witness the introduction of the first sovereign green bond as stated by erstwhile Minister of Environment, Mrs Amina Mohammed at the first ever Green Bonds Conference themed “Green Bonds: Investing in Nigeria’s Sustainable Development” and organized by the Federal Ministry Environment in collaboration with Federal Ministry of Finance and Debt Management Office. The event was headlined by the Acting
President, Professor Yemi Osinbajo. Proceeds from the green bonds will fund identified projects in Energy, Agriculture, Transport (FCT) and Environment with international investors and business leaders expected to lead at the event.