J.P. Morgan, a leading global financial services firm, has readmitted Federal Government of Nigeria bonds in its newly created global bond index for emerging markets, a development expected to attract about $17.5 billion into Nigeria’s debt market.
This was disclosed by Nigeria’s Finance Minister, Taiwo Oyedele, while delivering his remarks at the signing ceremony of the NBET Finance Company Series 2 Bond in Abuja on Monday.
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The Minister described the development as significant for the country’s capital market.
According to the Minister, J.P. Morgan’s indices are among the most widely tracked by global investors, making Nigeria’s return to the index potentially significant for investment flows into the country.
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“We’ve been off the list for 11 years,” he said.
The inclusion is expected to attract approximately $17.5 billion into Nigeria’s debt market and could bring down bond yields by up to 200 basis points, the official said.
“So this is significant,” the minister added, before delivering his remarks at the NBET event, explaining that the development could also benefit investors who subscribed to the Federal Government of Nigeria’s Series 2 bond.
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“And to those who have invested in FGN Series 2, that’s the silver lining,” the official said.
Mr Oyedele suggested that the new development could have implications for borrowing costs, saying, “If it had been allowed tomorrow, the rates would not have gone up.”
The inclusion comes as Nigeria seeks to deepen its domestic capital market, attract investment and reduce the cost of borrowing.
It is also expected to increase the visibility of Nigerian government securities among international fixed-income investors and potentially improve liquidity in the country’s debt market.
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