The Nigerian Exchange Limited (NGX) has listed N888.213 million federal government of Nigeria (FGN) savings bonds issued for the month of August 2021 on its platform.
The FGN savings bond is an investment instrument targeted at retail investors with a minimum subscription of N5,000. It encourages savings and allows investors to earn more income compared to traditional savings accounts, with interest paid every quarter and the principal paid at maturity.
In a notification on the NGX website, it was reported that the amount issued under the 8.864 per cent bond August 2023 was N204.965 million at 204,965 units with a two-year tenor and maturity date at August 11 2023.
The amount issued under bond for August 2024 was N603.248 million at 603,248 units with a three-year tenure and maturity date at August 11 2024. The coupon payment for the issued FGN savings bond will be 11 November, 11 February, 11 May and 11 August.
The Exchange said it remains a multi-asset securities exchange providing investors access to equities, diverse fixed income securities, Exchange Traded Products (ETPs), Mutual and other investment funds.
Capital market analysts said, the federal government saving bond is issued monthly in tenors of two and three years. The bonds are issued to assist the government finance its budget deficit, helps in promoting savings culture and enhancing financial inclusion in the country as income earned from it is exempted from taxes. The FGN savings bond guarantees quarterly interest payments and repayment of the principal at maturity
They said, until now, only big investors and companies could afford to purchase FGN Bonds, adding that, this is because of the minimum purchase value.
The managing director of HighCap Securities Limited, Mr David Adonri said, the issuance of bonds no doubt will bring both local and foreign investors into the market and will step up government’s efforts to raise the funds needed for infrastructure development, among other projects.
According to him, with government’s economic reforms, prospects were high for the sustained development of the Nigerian bond market, as a tool for deepening the domestic capital market.
He, however, noted that the performance of the bond market has been shaped by recent happenings in the domestic and global market space.