FGN Bonds: DMO To Attracts Wider Range Of Investors Through The OTC Platform

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The official listing on Monday of outstanding FGN Bonds amounting to N4.847trillion and Nigerian Treasury Bills (NTBs) of N2.804trillion on the FMDQ Over-The-Counter (OTC) platform will attract a broader range of investors  in FGN securities on account of the value addition from the activities of the OTC debt capital market.
 
At the listing ceremony, Abraham Nwankwo, director-general, Debt Management Office (DMO) assured investors of its commitment to fulfilling the listing rules already handed to DMO by FMDQ, saying that the debt office “will continue to direct its efforts towards ensuring that the country sustains a vibrant and viable domestic debt securities market that will be the envy of its peers”.
 
With the listing of these Federal Government securities on the OTC platform, it is expected that FMDQ will continue to provide a robust and credible OTC platform for the listed FGN securities to the public.
 
It is further expected to continuously work to improve market transparency and price discovery; monitor the activities of dealers to ensure accountability and publish relevant market data and information, as and when due, to guide investors in their investment decisions.
 
The listing of FGN Bonds and NTBs on FMDQ OTC plc is another attestation of the commitment of the Federal Government to further develop and deepen the domestic debt market to enhance its performance of the pivotal role of financial intermediation – generating savings and investments necessary for economic growth.
 
“Listing of these FGN securities on FMDQ OTC is to identify with the laudable initiative of market operators and regulators in introducing the FMDQ E-Bond Platform, thereby upgrading trading in fixed income securities,” Nwankwo said.
 
He said: “The enviable achievements recorded in the development of the FGN Bonds market, which include an active secondary market, creation of sovereign yield curve with tenor of up to 20 years, diversification of the investor base for fixed income securities have, among others, earned international recognitions for the FGN Bond market.
 
“The most laudable of these recognitions are the inclusion of the FGN Bonds in the widely used J.P. Morgan’s Government Bond Index-Emerging Markets (GBI-EM) and Barclays Capital’s Emerging Markets-Local Currency Government Bond Index (EM-LCBI).”
 
Bola Onadele. Koko, MD/CEO at FMDQ who observed that this was yet another feat for FMDQ, reiterated the commitment of the OTC securities exchange to be innovative and credible in support of the Nigerian economy.
 
Koko further said that FMDQ, in providing an efficient platform for the registration, listing, quotation and valuation of debt securities, has significantly improved transparency, integrating the domestic and international markets through enhanced trade visibility, improved market surveillance, global presence and competitiveness, enhanced secondary market liquidity and effective price formation.
 
He added that by listing, quoting and trading the FGN Bonds and Nigeria T-Bills on FMDQ’s Platform, the first of its kind in the nation, the securities gain access to the full complement of an FMDQ listings and quotations service; which include global visibility through their inclusion on the FMDQ Bloomberg E-bond trading system and on the quotations page of the FMDQ website.        
 
Phillips Oduoza, chairman, board listings and quotations committee, said the listing of these FGN securities on FMDQ OTC platform would lead to improved secondary market liquidity. “I believe that more bonds will also be listed on this OTC platform. We urge issuers to come and list bonds on FMDQ”, Oduoza added.
 
Aigboje Aig-Imoukhuede, former chairman, FMDQ OTC plc said, “FMDQ has a value proposition that resounds the market. The level of acceptance of the OTC market for debt capital is a testimony of the work the FMDQ board has done”.
 
Bolaji Balogun, CEO, ChapelHill Advisory Partners  Limited said “FMDQ from inception has played a crucial role in restoring Nigeria’s debt securities market. This market  will bring greater liquidity and price discovery to FGN bonds”
 
Chapel Hill Advisory Partners Limited (Chapel Hill) is the listings and quotations sponsor appointed to handle the relevant liaison in respect of these listed FGN securities on the OTC platform.
 
Balogun said “Chapel Hill Denham is privileged to be the Listings and Quotations Sponsor of the Federal Government of Nigeria’s return to listing and quoting on domestic capital markets, through the FMDQ. This listing and quotation will bring greater transparency and liquidity to the Government market and is ultimately beneficial to the Federal Government of Nigeria, in pricing future issuances”
 
 
Credits: businessdayonline.com
 
 

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