30 January 2013

Nigeria: NSE Lists Benefits of Retail Bonds As Market Rebounds

Retail trading in bonds, which will commence this Friday on the Nigerian bourse, will enable low networth investors enjoy the numerous benefits of investing in bonds, the Chief Executive Officer (CEO) of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, has said.

Onyema stated this yesterday just as Nigerian equities surged to new highs as the market rebounded after receding the previous day.

The NSE spoke at a one-day workshop on 'Retail Bonds Trading and Fixed Income Market Making' organised in Lagos by the exchange preparatory to the rollout of the retail bonds trading on Friday.

While bonds are considered a more secured class of investment assets than equities, retail investors have not been able to participate in the trading of bonds due to the huge sums required and absence of secondary trading platform.

But the NSE, two weeks ago, appointed six market makers that will facilitate retail trading in bonds on the exchange.

Onyema explained that the days bonds were considered exclusive preserve of institutional Investors and high net worth individuals were over, saying low net worth investors would now have access to bonds on the floors of the exchange.

According to him, investors buying the bonds would enjoy low risk, fixed and regular income, access to various types of bonds including governments and corporate bonds, capital appreciation and opportunity of free entry and exit.

He said the fixed market making platform would allow debt markets participants to trade NSE listed debt instruments issued by government and corporations transparently, stressing that it would complement the over-the-counter(OTC) bonds market that had been existing in the country.

Meanwhile, the Nigerian Stock Exchange (NSE) All-Share Index (ASI), appreciated by 0.30 per cent to hit a new week high of 31,571.44. The bulls virtually overran the market as bargain hunters took advantage of the attractive valuations of most equities ahead of expected corporate actions from companies for the 2012 financial year.

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