A market operator, Mr. Abiodun Adeniran, has called on capital market regulators to ensure that the bond market is attractive to investors.
Adeniran, who was speaking during the Nigerian Stock Exchange Retail Bonds Trading and Fixed Income Market Making Practicum in Lagos on Tuesday, said at present, activities in the retail bond market were not getting as much patronage as it should.
He explained that only the FGN Bonds seemed to be attracting investors, adding that the regulators should do more to ensure increase patronage in the other segments of the retail bond market.
He said, “A critical look at the bond market shows that the FGN bonds have been enjoying reasonable patronage levels from investors; however, this is not the same story with other bond classes.
“The state and corporate bonds are not enjoying this kind of activity, and so, I believe the regulators should make the state government bonds and the corporate bonds to be more attractive to investors.
“There is the need for the Securities and Exchange Commission and the NSE to come together to review the transaction prices of such bonds so that investors will patronise them more.
Meanwhile, the NSE has assured stakeholders in the capital market that active participation in bonds by retail investors would facilitate infrastructure development and accelerate rapid economic development
Speaking at the same forum, the Chief Executive Officer, NSE, Mr. Oscar Onyema, explained that with more investment in local bonds being floated by the government, funds would be available for infrastructure development and the education sectors, which are the main drivers of any thriving economy
He said to further create avenues for small investors to shore up their investments, the NSE had provided the platform that would enable retail investors as against what had been obtained in the Over-the-Counter Trade market in government bond issue.
Onyema explained that the NSE welcomed the participation of foreign investors in the retail bond market, adding that this would also help to deepen the market. The NSE boss said the appointment of the Fixed Income Market Makers, more investors would have the opportunity to explore the market.
He said, “We will not shut our doors against foreign investors who want to participate in the securities market, no matter the level of their involvement. A new investment opportunity is now available to all investors on the NSE.
“The FIMM programme will increase accessibility of the bond market to the investing public. Until now, the bond market was mainly accessible to the institutional, corporate and high net worth individuals through the Over-the-Counter market.
“But with the introduction of the FIMM scheme, all investors will now have easy access to the bond market through their brokers/dealers via the NSE Automated Trading System.”