The Nigeria Stock Exchange, NSE, on Thursday said the Federal Government’s Savings Bond will boost financial inclusion among Nigerian investors.The bond, which will be opened for subscription exclusively on the Nigeria Stock Exchange, is targeted at retail investors. Haruna Jalo-Waziri, the Executive Director, Capital Market Division of NSE, made this remark while commenting on the planned launch of the Sovereign Savings Bond scheduled for Monday, March 13.The retail bond, issued by the Debt Management Office, DMO, will be offered monthly in tenors of two and three years, with quarterly payment of interest to investors.
To ensure the offer reaches the last mile subscribers, the NSE said, the DMO has accredited eighty-seven (87) stockbroking firms of the Nigerian Stock Exchange to market and distribute the Savings Bond.
The minimum subscription amount, it was gathered, is N5, 000.00 with additions in multiples of N1, 000.00, subject to a maximum of N50, 000,000.00.
Commenting further, Mr. Jalo-Waziri said, “The Launch of the Federal Government 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. ”He, however, noted that after the offer closes, the bond will be listed on the NSE and can be traded on its Retail Bonds Market.
He added that 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,” Joseph Kadiri, NSE Media Officer, said in a statement on Thursday.
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 the savings bond puts Nigeria in the league of sovereigns like Sweden, Thailand, Slovenia, Indonesia, United States, and United Kingdom with savings bonds.
According to the NSE, 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,” Mr. Kadiri noted in his statement, Thursday.“With the entry level for the Savings bond, even students can afford to play in the space,” he added.