Chinwendu Obienyi
After recording a mixed performance, supplementary issuances by the Federal Government lifted the bond market capitalization by 34 per cent year-on-year (YoY) from N6.925 trillion in 2016 to N9.291 trillion in 2017.
Speaking recently, the Chief Executive Officer of the Nigerian Stock Exchange(NSE), Oscar Onyema, said the NSE fixed income market recorded moderate performance as bond yields declined.
He stated: “New bond issuances increased over the previous year, while bond yields gradually moderated from 2016 levels amidst easing inflation and greater FX stability while yields across various tenors declined between 0.4 and 1.5 per cent respectively.
“Consequently, market turnover declined by 24 per cent in 2017, as investors sought higher returns in alternative product classes. However, supplementary issuances by the Federal Government saw bond market capitalization increase by 34 per cent year-on-year”, he explained.
Due to government’s economic reforms, prospects were high in 2017 for the sustained development of the Nigerian bonds market as a viable tool for financing Nigeria’s infrastructure development, which led to issuances and listings on both local and foreign markets.
For instance, the $1 billion Federal Government of Nigeria Eurobond was listed on the NSE and FMDQ and the 15-year Sovereign Eurobond was issued at a coupon of 7.875 per cent per annum, being the first foreign currency denominated security to be listed and traded in the Nigerian capital market.
Commenting on the bond listing, Former Director General, Debt Management Office (DMO), Dr Abraham Nwankwo, said that the listing of domestic Sovereign Eurobond reinforces FGN’s commitment to deepen and grow the Nigerian capital market, adding that developing the domestic market can help bridge the infrastructure deficit constraining economic growth.