FGNSB get listed on Stock Exchange


As part of the Federal Government’s efforts to mobilise funds locally to fund its budget deficit, the Nigerian Stock Exchange (NSE) yesterday approved the listing of N2.067 billion Federal Government of Nigeria (FGN) Savings Bond on its Lagos floor.

Chief Executive Officer of the NSE, Oscar Onyema, who approved the listing when a team from the Debt Management Office (DMO), visited its trading floor, commended the DMO for its commitment to growing the savings bond market even at a time activities in the sector remained low due to harsh economic head winds. He said the savings bond presents an opportunity for retail investors to participate in the nation’s bond market.

Also speaking, the DMO Director General, Dr. Abraham Nwankwo, who sounded the closing gong at the NSE, said approval for the bonds listing, which comes with 13.01 per cent coupon was key to empowering the grassroots into achieving sustainable wealth creation.

Nwankwo said: “It’s an exciting day for Nigeria and the DMO in particular. We were given the opportunity to introduce a savings bond and we thank the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and other relevant agencies for supporting our efforts.”

He said the Federal Government wants to ensure that progress being witnessed in the economy gets to the grassroots.

The DMO boss said that out of the 2,555 people that subscribed to the offer, over 95 per cent were individuals consisting of ordinary Nigerians on the streets, including barbers, hairdressers, vulcanisers, teachers and motor park workers, among others.

“These are the people that subscribed to the offer. We are so excited and happy that Nigeria has broken the jinx to make sure that everybody in the country is part and parcel of activities in the capital market. And that is very consistent with the plan of the Federal Government. I repeat that whatever progress Nigeria is making should be inclusive and ordinary people should be part and parcel of it so we are happy that this aspect of the change agenda has been implemented and this will continue every month,” Nwankwo said.

He assured that the funds realised from the offer will be used to fund the budget deficit and refinance matured existing/domestic bonds.

Nwankwo said the bond refinancing makes it possible for the FGN Savings Bond to continue in perpetuity, and on monthly basis.

“The April 2017 offer will coming up on April 3, and it will continue every first week of the month. Nigerians will continue to benefit from the FGN Bonds. We congratulate the NSE for its continued initiative and operation for helping to make the listing a success,” he said.

He said the FGN Savings Bond has helped the ordinary Nigerians to participate in the capital market with great benefits that will accrue to their investments.

“What the Federal Government has done through the FGN Savings Bond is to make this opportunity available, not only for the big investors from pension firms or banks to be part of it, but also for the ordinary man on the street to participate.

“Another benefit here is to give every Nigerian opportunity to participate in the capital market and it is an inclusive programme that allows everyone to be part and parcel of it. The bond can also be used as collateral to borrow money from banks, more importantly, the bond is liquid,” he said.

He explained that for investors that invested in the two-year bond, such investors can sell their bonds before the maturity if they have urgent need for money because the offer is listed on the Stock Exchange.

“There will be continuous campaign, advertisement and interactive sessions and we expect the media to play a big role in disseminating this information of the FGN Savings Bond so that more Nigerians will be part and parcel of this movement. The Federal Government and the DMO will continue to do all it can to ensure information is disseminated concerning the offer,” he said.

Nwankwo said that over 120 stock brokers are actively marketing the bond in the nooks and crannies of Nigeria to make sure people partake in this bond.

The FGN Savings Bonds are debt instruments offered by sovereigns to mobilise resources from the general public, especially individuals and small savers. It offers guarantees that help to stimulate and deepen the savings culture among households, assists in the diversification of funding sources for the government and establishes benchmarks for other issuers. It equally encourages financial inclusion across the social and economic strata.

The bonds will be “good for savings towards retirement, marriage, school fees, house projects,” the DMO said. According to the debt office, issuance of the bond will sustain the development of other segments of the bond market and support government’s financing needs in the years ahead.

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