The Federal Government of Nigeria has appointed Stanbic IBTC Bank as stockbroker for its debt, a move intended to increase activity in government bond issues to retail investors.
Nigeria is Africa’s second-biggest economy, and it issues tens of billions of naira (hundreds of millions of dollars) in sovereign bonds each month to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
Reuters quoted an official at the Debt Management Office (DMO), saying, “We are expanding into the retail market … for the bonds and we need a reputable stock broking firm to assist in secondary marketing”.
The DMO said last month Nigeria plans to raise between 160 billion naira ($1 billion) and 240 billion naira via sovereign bonds ranging between 5 and 10 years in the fourth quarter of the year.St
The announcement will see Stanbic assisting to facilitate the listing of bonds as soon as they are issued, provide competitive pricing and make a market for retail clients to get involved, he said.
Although they are listed, Nigeria’s bonds are currently traded by local banks over the counter and mainly sold to pension funds and foreign portfolio investors. Adding retail clients would help boost liquidity, the DMO official said.