One year after the
Retail trading of bonds on the Nigerian bourse was launched
Before the introduction of retail bond trading, low net worth investors were not able to participate in the bonds market because of the huge capital requirement needed coupled with the non- existence of a secondary trading platform in bonds on the Nigerian bourse. Consequently, trading in bonds became the exclusive preserve of high net worth individuals and highly capitalised institutional investors.
However, the NSE launched the retail bond trading programme as part of efforts to deepen the market and ensure wide participation of investors.
Trading statistics obtained by THISDAY last Monday showed that within one year of running the programme, investors have staked N215.57 million on 207,055 bonds in 622 deals. This shows an increase of 2,561 per cent compared with N8.1 million invested in 18,310 units in 45 deals during the preceding year.
With the introduction of retail bond trading, an investor with N10,000 can participate in the market and reap the benefits of investing in bonds.
While launching the programme last year, the Chief Executive Officer of the NSE, Mr.
According to him, the NSE retail bonds trading platform would exist alongside the existing over the counter (OTC) market.
"The retail bond trading is very complementary to the OTC market because the OTC market is very institutional and ticket prices are bigger. What we are doing (through the retail bond trading) is to really try to bring the retail participants into the fixed income market," he said.
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.
He said 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.
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