Fed Govt’s savings bonds record N13.5bn investments – TheNigerialawyer

THE Federal Government’s savings bonds have recorded N13.5
billion worth of investments since inception in March 2017, the
Debt Management Office (DMO) said on Tuesday.

DMO’s Head, Market Development Monday Usiade made this known at
a Retail Bond Workshop organised by DMO in partnership with the
Nigerian Stock Exchange (NSE) and Stanbic IBTC Stockbrokers Limited
in Lagos.

A breakdown of the data indicated that N2.07 billion, N2.69
billion, N1.55 billion and N891 million worth of investments were
recorded in the first, second, third and fourth quarters of 2017,
respectively.

N583 million was recorded in Q1, N740 million in Q2, N1.21
billion in Q3 and N1.02 billion in Q4 of 2018, respectively.

Usiade said a breakdown of the transactions showed that 432
corporate investors invested a total of N1.75 billion, while 15,822
individuals accounted for N11.75 billion, bringing the total
investment to N13.5 billion.

Usiade, represented by Ms Bose Olafisoye from DMO Market
Development, said individual investors accounted for 87.06 per cent
of the total investment.

He said 87.06 per cent was still below expectation, noting that
DMO would embrace strategies aimed at attracting more investors to
increase the figure.

Usiade noted that 77 per cent of the individual investors were
from the South-West.

He added that further breakdown of the geographical distribution
of investors showed that eight per cent of investors were from the
Federal Capital Territory and South-South, respectively.

According to him, four per cent of the investors came from
South-East and outside the country, and three per cent 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.

“Eleven Distribution Agents (DAs) have not remitted any amount
to the DMO from inception.

“Such DAs that are yet to submit subscriptions in all the
auctions as well as other DAs with marginal returns till the end of
the year may be de-registered.

“Given the analysis of the performance of the DAs, there is need
for them to improve on their performance in order to meet stated
objectives,” he said,

Usiade said though modest progress had been made, the FGN
savings bonds were far from achieving the stated objectives.

Also speaking, Mr Oscar Onyema, NSE’s Chief Executive Officer,
said the partnership of NSE with the DMO towards creating
investment opportunities for retail investors in the debt market
dated to the launch of NSE’s Retail Bond Market in 2012.

“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,” Onyema
said.

He explained that prior to that time, investing in listed debt
instruments had been dominated by institutional investors trading
in wholesale denominations.

Onyema said in March 2017, the exchange in collaboration with
the DMO, launched the FGN Savings Bond having recognised the
opportunity presented by the Nigerian demographic to diversify
government’s funding sources and enhance national savings
culture.

“Since its debut issuance of NGN2.067bn, retail investors from
across the six geo-political zones and the diaspora have invested
in the FGN Savings Bonds with the DMO raising over ?13 billion from
2-year and 3-year bond maturities as at July 2019.

“Despite these teeming efforts, only about three per cent of
Nigeria’s adult population currently participate in the Nigerian
capital market.

“This is an indication that there is need for increased
collaborative efforts in promoting higher levels of financial
inclusion in Nigeria.

“In achieving our strategic vision to become the preferred
Exchange hub in Africa, we will continue to pursue initiatives that
seek to increase domestic participation in capital market through
increased access to investment solutions,” Onyema added.

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