By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) Tuesday said that its proposed Retail Bonds Trading is open to Foreign Investors.

Oscar Onyema, Chief Executive Officer (CEO) of the Nigeria’s Exchange made this affirmation in Lagos Nigeria at the Retail Bonds Trading and Fixed Income Market Making (FIMM) Workshop held in Lagos Nigeria.

Onyema while reacting to a question in the event of foreign investors hijacking the programme said the Nigerian economy is generally an open economy that allows investors to come in and invest irrespective of where they come from.

With this, he said foreign investors would be allowed to participate in its Retail Bonds Trading and FIMM.

“As you know, the Nigerian Economy generally is an open economy that allows investors to come in freely and to exit freely, we have fashioned our Market in support of that policy; because we believe that it’s a right policy.

According to Onyema, foreign investors are already in the Nigerian Capital Market; therefore, it will be wrong to exclude them from the current new investment option.

“Today, you have Foreign Investors that are already in the Market, so I think it will be wrong for us to say that these people cannot participate in this. We are going to run a fair and open Market that allows anybody that wants to participate to do so. Also, if the Local Investors wants to participate, nobody can stop them from doing so” he said.

Nigeria had in October 01 year 2012 joined a key JP Morgan Government Bond Index-Emerging Markets (GBI-EM); thus, it became the second African country after South Africa to be included the global index.

Reports have it that Nigeria’s entry into the JP Morgan GBI-EM from that day is expected to bring up to $1.5 billion into one of Africa’s most developed Debt Markets.

Also, it was reported that Nigeria will become the second sub-Saharan African country to be added to the Barclays Emerging Markets Local Currency Government Index following steps by the country to increase access to its Bond Market.

The Report further affirmed that Barclays expects approximately $14 billion in Nigerian debt to become eligible for its Emerging Market Government Bond Index at the end of the first quarter of year 2013.

The Nigeria’s Exchange had two weeks ago announced the appointment of six (6) Dealing Member Firms on its Bourse as Fixed Income Market Makers.

The names of the six (6) Dealing Members as Capital Bancorp; Cordros Capital; ESS/Dunn Loren Merrifield; FSDH Securities; Greenwich Securities and GTB Securities.

The NSE a Statement said the Companies selected went through a very rigorous process and met the additional Net Capital requirement of N500 million.

Apart from this, their compliance history was examined and their operational capabilities, technology and processes were verified by the NSE.

The programme is expected to take off on February 01, 2013 with 57 Securities.

Earlier in his opening remarks, Onyema said the NSE has consistently communicated its objective of broadening and deepening the Nigerian Capital Market (NCM) “and the development of the Retail Bond Market is clearly in line with this objective” he said.

“It is interesting to note that Government Bonds were the first Securities that traded on our Exchange in 1961 and Bonds continued to play a key role in our Market for more than two decades until the Federal Government pulled out of Bond Issuance in 1987” Onyema said.

According to him, since the first re-issuance of Bonds in 2003, Nigeria’s Debt Management Office (DMO) has raised trillions of Naira for the financing of public projects and the revival of the FGN Bond Market has spurred State Governments to raise funds via Bond Issuance.

He affirmed that the Bonds Market Capitalisation which stood at N3.74 trillion ($24.63 billion) in 2011 grew by 55.61% in 2012 to N5.82 trillion ($37.44 billion). “This figure is likely to grow even further because of the nation’s dire need for new and revamped infrastructure” he said.

Click on topics below to download presentations at the Workshop

1. Fixed Income Market Making – An Overview

2. Fixed Income Market Making-Clearing & Settlement

3. The Role of NSE FIMMs – An Introduction to Retail Bond Market

4. Market Structure for Fixed Income

5. Securities Lending & Bonds – An Overview

6. Stanbic IBTC Stockbrokers Limited as Government Stockbroker