The Nigerian Stock Exchange, Tuesday, announced names of selected Fixed Income Market Makers (FIMMs), in preparation for a forthcoming launch of Retail Bonds trading in the Nigerian Capital Market.
The Nigerian Bourse announced the names of the selected Fixed Income Market Makers (FIMMs) on the trading floor of The Nigerian Stock Exchange (NSE) on Tuesday.
The six Dealing Members selected were: Capital Bancorp; Cordros Capital; ESS/Dunn Loren Merrifield; FSDH Securities; Greenwich Securities and GTB Securities.
Haruna Jalo-Waziri, Executive Director, Business Development of The Exchange, described the unveiling of the six companies selected as a major step towards making fixed income securities accessible to the investing public.
“This is a great milestone and a major step in turning the market around as this will make the market more liquid in the retail side as well as promote portfolio diversification,” he said.
The Executive Director added that the companies selected went through a very rigorous process and met the additional net capital requirement of N500 million.
“We also examined their compliance history and looked into their operational capabilities, technology and processes. The selected firms were taken through exercises, debated the appropriate market structure to be used and The Exchange further went through the approval of the Securities and Exchange Commission (SEC) in the selection process”, Mr. Waziri added.
Meanwhile, the Stock Exchange has not specified when the retail bonds trading would be launched.
With the expected launch, the Nigerian Stock Exchange will be treading the paths of other foreign stock exchanges, that trade in retail bonds.
Retail bonds are medium-term, subordinated, debt obligation usually issued by multinationals and corporate organisations. They can be purchased directly from the issuer at par with perhaps, no accrued interest or added markups, or from financial intermediaries such as brokers.
Usually, they pay a fixed interest rate for some agreed months, after which the rates may vary.
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