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Capital Market

FG borrows N716. 8bn through bonds in eight months



The Federal Government raised N716. 8 billion through bonds issued between January and October, the Securities and Exchange Commission (SEC) said on Friday.

Dr Afolabi Olowookere, SEC Divisional Head, Research and Policy Management, Office of the Chief Economist, made the disclosure at 2018 SEC Journalist Academy in Uyo with the theme: The capital market masterplan: The journey so far.

Olowookere said the figure was lower compared with N1.55 trillion FGN Bonds issued in 2017 due to government’s decision to float an Euro bond to finance the 2018 budget.

He said the corporate bonds segment improved to N150.6 billion higher than N23.2 billion recorded for the whole of 2017.

Olowookere stated that equities issued during the period under review amounted to N135. 3 billion against N306.5 billion in 2017 due to downturn being experienced in the market ahead of 2019 general elections.

Speaking on the topic: Capital market performance (2016 -2018): Things to look out for in reporting performance, he said securities worth N132.32 trillion were traded on the FMDQ securities exchange between January and September.

Olowookere said foreigners accounted for about 50 per cent of transactions on the stock market.

He stated that domestic institutional investors comprising pension funds, insurance, among other accounted for about 30 per cent, while domestic retail investors accounted for about 20 per cent.

Olowookere stressed the need for developing domestic retail investor base to boost the depth and liquidity of the market.

“We need to encourage domestic investors to do more in our market. We need to develop local capacity.

“We need to have companies that are representative of our economy listed on the Nigerian Stock Exchange,” Olowookere said.

He noted that in the last five years, foreign investment outflows had been more than inflows, except for 2017, same year the market returned 42 per cent.

Olowookere said foreign outflows between January and September stood at N513. 5 billion against foreign inflows of N477. 7 billion.

He added that foreign inflows in 2017 stood at N772. 3 billion compared with foreign inflows of N435. 2 billion in the same period under review.

Olowookere said investors should be made to understand that investment in the stock market was long-term by nature, noting that the equity market would rise in the long run.

Also speaking, Dr Hassan Suleiman, SEC’s Principal Manager, Strategy Division, said the commission was committed to the full implementation of the masterplan to enhance the growth and development of the market.

Suleiman said the masterplan was aimed at developing a highly competitive market in terms of size.


He said Nigeria needed a capital market that would speed up its economic development. (NAN)

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