Securities and Exchange Commission (SEC) has put the total capitalisation figure of the nation’s bond market at N9.95 trillion.
This figure, according to Ms Arunma Oteh, director general of SEC, comprises of N4.10 trillion of FGN bonds, N4.35 trillion of Asset Management Company of Nigeria (AMCON) bonds and N1.5 trillion state government and corporate bond.
Oteh explained that the domestic bond market is attracting different categories of issuers, including state governments, government agencies and companies.
She said the market is also attracting triple-A rated issuers like the African Development Bank (AFDB) and the International Finance Corporation (IFC), adding that the two institutions have issued Naira-denominated bonds.
“With benchmark yielded curve of up to 20 years, the domestic bond market is well positioned to serve as an important source of capital to tackle Nigeria’s infrastructure deficit estimated at $3.9 trillion over the next 30 years,” she said.
According to her, the bond market has a lot of room for growth with debt-to-GDP ratio at only 11 per cent compared to over 200 percent in Japan, 110 percent in Singapore, 103 percent in the United Kingdom, 103 percent in the United States (US) and over 60 percent in China.
She pointed out that all round, liquidity needs to improve well beyond its current level, adding that the ratio of net asset value (NAV) to GDP in Nigeria is only 0.2 percent compared to 77 per cent in the US, 30 percent in South Africa and five percent in India.
“We need to focus on collective investment schemes to enable a lot more Nigerians participate in market growth. Our market today has more than doubled in size since the crisis and is also a lot less concentrated as the share of the banking sector has reduced from about 60 percent to about 25 percent of total capitalization. Industrial goods, consumer goods and oil and gas have become important components.
“The historic dual listing of Seplat Petroleum on the Nigerian Stock Exchange and the London Stock Exchange is a good case in point of the growing importance of other sectors. Our stock market over the last two years was among the 10 best performing in the world returning 35 per cent in 2012 and 47 per cent in 2013.”
Oteh stressed that the management at the NSE is leading a transformation exercise, aimed at boosting listings, becoming a full member of the World Federation of Exchanges (WFE) and rolling out Africa’s most robust trading engine – the X-GEN – amongst other initiatives.
“We have equally supported the Central Securities Clearing System in its reform of our settlement and clearing system, notably the implementation of SWIFT and straight-through-processing,” she said.