Pension fund is stabilising the FGN Bond Markets – DMO

The Debt Management Office (DMO) has revealed that the pension fund investment in federal government bonds is cushioning the effect against the negative impact of foreign investors exiting the market.

“Pension Funds have contributed to the resilience of the FGN Bond Markets by providing a strong domestic investor base which moderated the impact of the exit of foreign investors in 2014” Patience Oniha, the Director, Market Development Department, the DMO.

This is due to the huge investment of the over N4.6 trillion pension assets in the bonds market by the Pension Funds Administrators (PFAs).

In 2014 PFAs were allotted N359 billion or 33 percent of the N1.1 trillion bonds on offer according to statistics from the DMO.

As at the last count, the CPS had accumulated N4.6 trillion assets from about 6.5 million contributors.”

In a recent presentation at a Stakeholder Conference on the Pension Reform Act 2014 title “Responsibilities of the Debt Management Office under the PRA 2014, Oniha said currently, “FGN Securities have the largest share of Pension Assets (estimated at 60%).”

The “implication is the pension reform has provided funding for the Government including capital projects.”

She also said “pension Funds have progressively (post 2008) become the largest holder of FGN Bonds (about 40%) and largest participant at the monthly FGN Bond Auctions.”