By BABAJIDE KOMOLAFE & NKIRUKA NNOROM

Stanbic IBTC Stockbrokers has described as unfounded the claims that its appointment as government stockbroker for FGN bonds will make it possible for it to poach the customers of other stockbroking firms.

Mr. Dele Sotunbo, Managing Director, Stanbic IBTC Stockbrokers gave the assurance while presenting a paper on ‘The Role of Government Stockbrokers’ at a one day training organised by the Nigerian Stock Exchange, NSE, in preparation for the take-off of retail bonds trading on NSE and commencement of Fixed Income Market Making programme.

Sotunbo explained that being a government stockbroker will not expose the customers of other stockbroking member firms to Stanbic IBTC, adding that just like in equities market, it would conduct transaction with stockbrokers who will trade on behalf of their customers.

His words, “It is not true that because we are the government stockbroker for FGN bonds, we will have access to your clients and perhaps take over your business. Stockbrokers whose clients are interested in bidding for the FGN bonds can  submit the completed forms to either their settlement banks or any of the primary dealers which in turn submits same to DMO for onward transfer to the Central Bank of Nigeria, CBN.

It is, therefore not compulsory that such forms must be passed through Stanbic IBTC, but if a stockbroker wishes to do so, sorry, I will gladly accept because I am open for business.”

It would be recalled the DMO had in 2012 appointed Stanbic IBTC Stockbrokers its  sole dealer on FGN bonds. The engagement empowers the Stanbic IBTC to provide prices for FGN bonds on the floor of the Nigerian Stock Exchange (NSE) to enable retail investors in particular, buy or sell FGN bonds.

Director General, DMO, Mr. Abraham Nwankwo, had said during the signing ceremony that the appointment permitted the broker to act as a liaison between the DMO, NSE, stockbrokers and other market participants to ensure that all activities in FGN bonds and other FGN securities that may be listed in future are smoothly affected.

Nwankwo said: “Investors can now access FGN bonds on the NSE; the investing public can now diversify their portfolio further by introducing bonds. It will provide an opportunity for investors to earn regular income on their investments through coupons paid on FGN bonds and it will be an additional and assured means through which investors can sell their FGN bonds before maturity.”

He added that further stimulus would be introduced for the bond segment as well as higher volume of transaction, adding that both of which would benefit the capital market.

He expressed optimism that the newly-appointed government stockbroker would bring about an improved savings culture by providing access to high quality investment for a wider segment of the population and gives the retail investors the opportunity to contribute to government’s development activities including infrastructure, education and health.