…Sets to attract young Nigerians

Emma Ujah,  Abuja Bureau Chief 

The Debt Management Office (DMO) has peaked it digital bond subscription Innovation to attract more investors, especially young Nigerians to the sub-sector of the capital market.

The Director-General of the DMO, Ms. Patience Oniha, disclosed this at the engagement with Distribution Agents and Market Stakeholders for Final Demonstration of the FGN Securities Subscription Portal, in Lagos, yesterday. 

Ms. Oniha said that DMO would work closely with the CSCS to deploy technology as a major strategy for attracting more investors to the bond market. 

According to her, “The strategy is to deploy technology to the process to make the subscription fast, easy and overall, more convenient. 

“The CSCS has developed a Portal through which investors can subscribe for FGNSB.

” The DMO has worked with the CSCS to develop the Portal and it has been tested with Distribution agents for the FGNSB.

“The presentation of the Portal is to expose it to a wider group of stakeholders to acquaint you with the portal and obtain your comments,”p to enable the DMO and CSCS.”

The D-G added that Information and Communications Technology (ICT) has provided very convenient means of doing business and that as such the DMO would  leverage on the portal to attract move investors to the securities market.

She said that young Nigerians would be particularly targeted in that regard, as according to her, the market must move with latest smart technologies to remain relevant and attractive. 

“Working with the CSCS, we are adopting strategies to improve investment in the FGN Savings Bond.  We want to elevate the FGNSB to make subscription easy, fast and more convenient,” the DMO boss stated.

According to her, “Since its introduction in March 2017, the FGNSB has performed relatively well. Total Subscription from 2017 to December 2022 was N45.135 billion with investors coming from the six (6) geo-political zones and the Federal Capital Territory.”

The D-G said that working with the Central Securities Clearing System (CSCS), the portal would be launched in about one-month’s time.

She said that the FGBSB had great potential to attract more retail investors and driving the secondary bond market.

Her words, “The DMO believes that the product has more potential than what has been achieved so far and has for now, identified two (2) ways to achieve much higher volumes and numbers of investors.    

“In 2022 we embarked on investor sensitization programmes across a number of cities in Nigeria, this strategy proved successful as total subscription almost doubled from N8.396 billion in 2021 to N16.589 billion in 2022.

“Given this outcome, the DMO plans more of such sensitization, as well as wider publicity.”

The DMO introduced the FGNSB in March 2017, to enable retail investors participate in the FGN securities market and to  promote financial inclusion. 

 Primary Dealers Market Makers, Central Bank of Nigeria, Securities and Exchange Commission, Nigeria Exchange Limited and stockbroking firms participated in the stakeholders’ meeting.

In his remarks,, the Managing Director/Chief Executive Officer of Central Securities Clearing System (CSCS) Mr. Haruna Jalo-Waziri, challenged brokerage firms to set up Apps for their organisations, as that would even further attract young investors to the capital market. 

A presentation on the FGNSB ‘s journey so far, indicated that subscribers’ base had hit 31, 675 as at end of 2022.

The analysis of the developments in the sub-sector also showed a higher appetite for the 3-year bond , as against the 2-year tenured bond.

In addition, it revealed a strong interest in the FGNSB by Diaspora Nigerians who have been investing heavily in the instrument.

The DMO indicated, however, that the continued demand for higher coupons has been a challenge. 

The semi-manual subscription process; weak secondary market liquidity; and inadequate investor/stakeholder sensitization were identified as challenges facing the FGNSB requiring urgent actions.