This Day (Lagos)

13 February 2013

Nigeria: Secondary Trading Will Boost Nigerian Bonds Market, Says Rencap

The Chairman and Co-Chief Executive Officer, Renaissance Capital, Mr. John Hyman and Chief Executive Officer West Africa, Renaissance Capital, Ms. Yvonne Ike, are upbeat on the Nigerian bonds market, saying it would witness more foreign and domestic participation if there is robust secondary trading facility.

Speaking at a press conference in Lagos last Monday, Hyman said that there was a general shift in investors' focus to Africa with Nigeria attracting more attention from both issuers and investors.

According to him, all the market dynamics and fundamentals look healthier in Nigeria. He noted that this increasing interest would be boosted if there was a process that would make it easier to own and trade these securities.

"There is a general shift in investors' focus to Africa generally and Nigeria in particular. If efforts are made on financial infrastructure to make it easier to own and trade these securities, we will see continued increase. The number of big government bonds and credit investors who want to get more serious about Africa or Nigeria is long list of people. They see Nigeria and other countries as good market. All the dynamics and fundamentals are healthier here in Nigeria," Hyman said.

Speaking in the same vein, Ike said the Nigerian bonds market would continue to be active because the requirement for capital was surpassing issuance.

"The requirement for capital is surpassing the issuance we have in place today. So, as long as the environment continues to improve, as long as we have right financial market, the will the demand increasing significantly over the near term," she said.

The Nigerian bonds market witnessed the first non-resident issuer in Nigeria's domestic market last week, the private sector arm of the World Bank, International Finance Corporation (IFC) issued N12 billion ($75 million) worth of its debut naira bonds known as Naija Bond with a yield of 10.2 per cent.

High demand for the bonds led to an oversubscription of 150 per cent as total subscription for the five-year IFC paper was around N20billion, compared to the initial N8 billion equivalent they had initially planned to raise.

Vice-President and Treasurer of IFC, Mr. Jingdong Hua, had explained that the bonds, which is the first by a non-resident issuer in Nigeria's domestic market, was tagged Naija Bond to represent the spirit of Nigerian people who are hardworking, confident and optimistic of the future.

According to him, the proceeds would be deployed first, for financing our pipeline projects when there are ready and also for the general funding purposes of IFC. This is a start of many more issues to come in the future."

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