FGN bonds market rises by 22.20%, hits N16.9 trillion

THeassociation of Issuing Houses of Nigeria (AIHN), has announced that the total value of trading in the FGN Bonds market rose by 22.20 per cent to N16.877 trillion in 2017, from N13.811 trillion achieved in the cor- responding period in 2016.

Also, numbers of deals within the same period grew from 50,427 to 63,031, representing an increase of 24.99 per cent.

The President of the Association, Sonnie Ayere, while speaking at the s year- ly general meeting in Lagos, yesterday, explained that FGN bonds dominated primary bond market activities in 2017, following the introduction of the FGN Savings Bond, Sovereign Sukuk, and Green Bonds into the domestic market.

According to him, the bond market capitalisation increased to N9.29 trillion as at December 31, 2017, from N6.93 trillion recorded in the previous year. “The new bonds: FGN Savings Bond, Sovereign Sukuk ,and Green Bonds are valued at N7.2 billion, N100.00 billion, and N10.69 billion, respectively. The DMO redeemed a total of N198.032 billion worth of Nigeria Treasury Bills (NTBS) in December 2017, with $500 million, out of the $3.0 billion Eurobond issued in November 2017. “In the corporate bond market, there was a decline in activity in 2017, relative to 2016. Corporate bonds issuance for 2017 stood at N23.15 billion by three companies: Dufil Prima Foods Plc, Viathan Funding Plc, and LAPO Micro Finance Bank SPV Plc, compared to N108.04 billion issued by nine corporates in 2016, representing a decrease of 78.57 per cent. The decline in the issuance by corporate bonds was attribued to the high borrowing cost prevalent in the domestic capital market in 2017.”

On the achievement during the year under review, Ayere said the association’s push for enhanced liquidity to finance business operations for investment banking firms has yielded a reasonable result, as the Central Bank of Nigeria accepted to allow Capital Market Operators (CMOS) to purchase government bonds and CBN securities directly from the apex bank. “We were involved in a number of capital market and capacity building programmes with the Securities and Exchange Commission (SEC); one of such activities was a roundtable aimed at having a responsive Commission and a more efficient capital market.

“The Association also threw its weight behind the propos- al by the National Assembly Joint Committee on Capital Market and Institutions, for the demutualisation of the NSE, all things being equal; we expect this to materialise next year.”

Reviewing its performance, Ayere said the association sustained its growth trajectory, as total income grew by 19.9 per cent to N52.91 million, higher than N44.12 million posted in the previous year.

The sum of N22.15 million was realised from members’ subscriptions during the period under review compared to N19.65 million posted in 2016, while total expenses dropped to N19.18 million from N20.56 million.