The Securities and Exchange Commission’s (SEC)
recent consent for bond listing and quotation on the FMDQ platform has affirmed
it as an integrated OTC exchange.
BusinessDay further learnt that the
securities exchange is positioned to provide the same value-add and development
to fixed income mutual funds, which will also be listed on FMDQ.
Analysts said at the weekend, that SEC’s
decision for bonds to be listed on FMDQ OTC plc will help usher visibility,
transparency, liquidity and efficiency to the Nigerian debt capital
market (DCM) participants and also offer bond issuers an alternative platform
for listing.
Recently, the buying bias remained strong in
Nigeria’s bond market, as investors seek reinvestment opportunities for new
funds from treasury bill (T-Bills) maturities.
“Expectation of December bond auction in the
week ahead, may douse investor appetite for secondary market trades,” said
market analysts at Lagos-based Associated Discount House Limited.
The DMO is offering N10 billion, N30 billion
and N25 billion of the 13.05% FGN August 2016, 14.20% FGN March 2024 and
12.1493% FGN July 2034 bonds in its forthcoming auction on December 17, 2014.
With the FMDQ now as an alternative platform for bond listing, analysts said
the new development will impact positively on bonds listing fees, which they
expect will drop as bond issuers are now provided with a regulatory backed
choice.
“This
commendable act by the SEC is in line with its mission to develop and regulate
a capital market that is dynamic, fair, transparent and efficient to contribute
to the nation’s economic development, as the Nigerian bond market prepares
itself for revolutionary transformation,” said Bola Onadele, managing
director/CEO, FMDQ OTC plc.
According to him, “The debt capital market is
now provided with choice, which will no doubt have a positive impact on the
participants in this market (both domestic and international) and the nation as
a whole.”
“FMDQ is set to bring about the much needed
transformation in the Nigerian debt capital market by taking the necessary
steps to address the issues facing its proper development. The debt-focused
securities exchange will be engaging in initiatives that will bring visibility,
transparency, liquidity and efficiency to the Nigerian bond market, essentially
providing world-class listing and quotation services to the market,” he added.
Listing and quotation on FMDQ will provide a
whole host of benefits across the debt market value chain, positively impacting
the debt capital market stakeholders
– issuers, investors, issuing houses, market makers and regulators.
“FMDQ’s value-add to the debt capital market
includes visibility and transparency to the listed/quoted debts, improved
secondary market liquidity, benchmark pricing and price formation, among
others, resulting in a more
globally competitive Nigerian capital market,” a bond market analyst said.
Iheanyi Nwachukwu
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