Bonds Lead Capital Market Issuances, Account for N1.4trn
Bonds continued to dominate new issuances accounting for N1.364 trillion or 88 per cent of the total issuances in the capital market between January and September 2017. The acting Director General of the Securities and Exchange Commission (SEC), Dr. Abdul Zubair had disclosed at the weekend that total issuances in the market amounted to N1.55 trillion, with equities accounting for 12 per cent.
This implies that equities market recorded about N186 billion. Although it is a major jump compared to the N39 billion recorded in 2016, bonds sector remained the most patronised, recording N1.364 trillion as at September 2017. This figure is 4.1 per cent higher than the N1.31 trillion recorded for the whole of 2016.
Market operators said the high level of bond issuances does not come to them as a surprise given the apathy the new equities market is experiencing from investors. Due to high investor apathy, companies have been relying mostly on bonds until this year when more firms went for Rights Issues. However, most of the bond issuances came from the federal government. Institutional investors prefer investing in bonds due to the relatively high and stable returns with less risk.
Meanwhile, transactions in the equities secondary market rose by 78.6 per cent N1.655 trillion between 2016 and September 2017.
Meanwhile, Zubair said SEC has designed and implemented some programmes to create more awareness and further deepen the capital market.
“The commission embarked on an outreach in some area councils of the Federal Capital Territory (FCT). SEC joined its counterparts all over the world to mark the IOSCO world Investors week in Abuja and Lagos bringing together stakeholders, investors, and students to promote financial inclusion,” he said.
The DG added that there are other measures the commission is pursuing to develop the capital market in a bid to make the dream of making the market the most developed in Africa by 2025 a reality.
“In macroeconomic terms, these measures are aimed at making the liquidity money (LM) curve flatter as investors become more and more attracted to the market,” he said.
Zubair said that further to the commission’s commitments to ensure market efficiency, accountability and transparency in the capital market, the commission wishes to assure the investing public and all stakeholders of its commitment to ensuring an uninterrupted and orderly operation of the market and the regulations thereof.
“Accordingly, the commission is poised to continue to ensure the stability of the Nigerian capital market and maintain the high level of investor confidence observed in the market,” he said.