The Debt Management Office is set to issue the first Federal Government of Nigeria Saving Bond to the investing public this week.
The move, according to the debt office, is another government effort to democratise the bond market and open it up as an investment outlet for retail investors and high network individuals alike.
It explained in a statement that the first issuance, which aimed to raise about N50bn, would be available to investors looking to invest between N5,000 and N50m. This “will open on March 13 (today) and close on Friday. The DMO intends to issue additional bonds on the first week of every month for public subscription subsequently.”
Commenting on the new FGN Savings Bond, the Managing Director/Chief Executive Officer, Asset Management Limited, Arthur Steven; and the 2nd Vice-President , Chartered Institute of Stockbroker, Mr. Olatunde Amolegbe, said the initiative was a new and innovative way of economic empowerment of the populace by the government and described it as a welcome development.
He said that for the first time in the history of the country, retail investors, with as little as N5,000, could invest in what he described as a gilt hedge instrument backed by the full faith and credit of the Federal Government.
Amolegbe also noted that the Federal Government Savings Bond was one of the safest instruments in the market as it guaranteed return of the sum invested as long as one held the instrument to maturity, adding that it offered very attractive return on investment and very liquid.
According to him, it can be easily traded on the floor of the Nigerian Stock Exchange at any time that the investor seeks to access cash from the instrument.
He urged retail investors to embrace the product as it was one of the ways by which the effect of high inflation could be ameliorated, adding, “If one is able to earn double digit return on one’s investment, that will reduce the impact of inflation on personal wealth considerably.”
The DMO has said that savings bonds of three to five years maturity will be made available for subscription at the first auction coming up this week.
The application forms, it noted, could be obtained from the office of various stockbrokers that had been pre-qualified to act as distribution agents to trade on the bond by the DMO.
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