09.20.2010 

The Head, Wealth Management, ited, Malcolm Gilroy, has attributed the weak nature of the non-government debt market to poor corporate governance and called for a repositioning of the market. Gilroy, who stated this in a report titled, “Risk Management and Money Laundering,” declared that the bond market is currently the most liquid in the Nigerian financial market.He also disclosed that the there have been a lot of foreign involvement in the Primary Dealer and Market Maker (PDMM) system of the market.

“To date, this has held firm depending on interest rates. However, the market as a whole has returned a very good cost of funds to the borrower (government), but less attractive returns to the investor, particularly when viewed against inflation,” Gilroy said.The analyst described the structure of the Nigerian financial market as “work in progress,” insisting that there are only three investible and tradable markets available to investors.He listed the investment markets as equity, money market and Federal Government of Nigeria (FGN) bond market.

He said: “All these are cash markets as currently there are no derivative markets in any asset class. The Nigerian Stock Exchange (NSE) index returns have barely kept pace with inflation over the past decade. This is partially due to the poor reputation the country has for good corporate governance, into which money laundering is a major subset.”“Most of these ills are caused by corrupt practices at senior levels and ultimately they have been made possible by the fact that money was easy to launder,” he said.

Source:ThisDay