The Federal Government listed savings bonds valued at N278 billion on the Nigerian Stock Exchange (NSE) on Tuesday, July 23, 2019. The bonds were offered between Monday, July 1, 2019, to Friday, July 5, 2019.
Breakdown: The bonds listed in separate tranches saw the series 56 bonds, which is expected to mature by July 2021 listed at a rate of 11.195%, while the series 57 bonds, which is expected to mature by July 2022 was listed at 12.195%.
While the series 56 bonds listed 78,722 number of units, the series 57 listed 198,964 number of units.
Market: The FGN Bond market traded on a significantly bullish note, with yields lower by c.20bps on Monday, July 22, 2019, as coupon payments on the FGN 2026 Bond further boosted demand interests, whilst market players maintained a firm bullish bias ahead of the CBN’s interest rate decision.
Nairametrics had also reported that the Debt Management Office (DMO), listed N100 billion Sukuk bonds on the nation’s bourse.
Reacting to the bond listing, Jude Chiemeka, Head, Trading Business Division of the NSE, said, “At the Exchange, we believe enhancing access to capital for the Federal Government and the private sector is key to national economic growth. This is the motivation behind our commitment to promote and support the growth of the debt market in Nigeria.
“Our efforts are geared towards expanding the NSE’s position as the multi-asset hub, creating ample possibilities for our key stakeholders, while delivering a transparent and liquid market to investors.
“The emerging and frontier markets can expect greater traction in their quest to continually unlock dormant pools of capital. This listing is particularly important in scaling development for these economies characterized by daunting growth in infrastructure and also has a strong bias for Islamic Finance.”
Understanding Bonds: A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and the borrower that includes the details of the loan and its payments. A bond has an end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments that will be made by the borrower.