DMO Rakes N13.5bn From FGN Savings Bond Since 2017

• May Deregister 11 Agents Over Poor Performance
The Nigerian Stock Exchange (NSE), on Tuesday in Lagos hosted the 2019 edition of the Retail Bond Workshop organized in collaboration with the Debt Management Office (DMO) and Stanbic IBTC Stockbrokers.
Experts from the DMO, Stanbic IBTC and the Central Securities Clearing System (CSCS Plc) reviewed the performance of the FGN Savings Bond with total remittances of N13.498bn from 135 registered distribution agents since the debut issuance of N2.067bn in March 2017.
Mrs. Bose Olafisoye, who represented the head of the market department at the DMO, however, lamented that “a lot of (135 registered) Distribution Agents have not brought (pooled) in any funds since inception” of the FGN Savings Bond programme.
Such agents, 11 of them, remained inactive and are “yet to submit subscription in all the Auctions from inception to date, as well as other DAs with marginal returns, at the end of the year,” she explained.
A further breakdown showed that the top 32 distribution agents attracted N10.587bn or 78.44% of total subscription so far; while the top 15 recorded N7.905bn or 58.57%, at N250m and above on the average. Another 17 attracted N2.682bn or 19.87% at N100m and N249m; while 22 agents at between N50m and N99m remittances accounted for N1.555bn or 11.52%.
Continuing, Olafisore said 32 agents however recorded between N20m and N49m, totaling N1.025bn or 7.59%; followed by a majority of 38 registered agents who attracted N20m and less, amounting to N330.566m, or 2.45%
Still on the top-15 agents, FSDH Securities Limited was the most active with N1.034bn, or 13.08% of total; followed by Signet Investments & Securities, N869.604m, or 11.13%; Stanbic IBTC Stockbrokers, N729.305m or 9.23%; FBN Securities, N703.706m or 8.9%; and CSL Stockbrokers, N638.985m, or 8.08%. Zenith Securities followed with N632.389m or 8%; Meristem Stockbrokers, N502.786m, or 6.36%; Cashcraft Securities, N493.748m, or 6.25%; Nigerian Stockbrokers Limited, N438.477m, or 5.55%; and Bestworth Assets & Trusts in the 10th position with N385.26m or 4.87%.
Olafisoye noted that although the FGN Savings Bond has made modest progress, it “is far from achieving most of its stated objectives,” challenging the agents to improve on their performance, particularly in the area of increasing the investor base for the programme.
Giving a breakdown of the issuance so far, she noted that a total of N2.067bn was received as highest amount in March 207; while total amount issued for the entire year stood at N7.197bn at an average interest rate of 13.348%. This was followed by N3.553bn issuance in 2018 at an average interest rate of 11.515%; a higher 9% error rate; and a marked low performance by the agents, resulting in the first evaluation. So far, in the first seven months of 2019, the DMO said total amount issued stands at N3.025bn at an average interest rate of 12.133% which is higher than that of Nigerian Treasury Bills, while error rate is on the rise.
Going forward the DMO says it is working towards ensuring higher volume, dealing with the issue of non-performing agents and a reduction in error rates.
Also making a presentation, representative listed common errors as the mismatch between what the prospective client completes in his/her form and the CSCS database; in addition to wrong phone numbers, email addresses and bank details.
Such errors, he noted, is to blame for the delay in distribution, payment of a commission, leading to frustrations among investors, following which appetite begins to wane gradually.
Welcoming participants at the workshop, Oscar Onyema, chief executive of the NSE said the NSE, as part of its strategy of becoming “the preferred Exchange hub in Africa, we will continue to pursue initiatives that seek to increase domestic participation in capital market through increased access to investment solutions, as well as support the government to achieve inclusive growth and sustainable development.”
The workshop, he stressed, is part of awareness creation on opportunities in federal government securities and to resolve issues around “the purchase of FGN securities, payments of coupons, complaint resolution with a view to increasing retail participation in FGN securities and Debt Capital Market as a whole.”

Photo caption: From left, Kenneth Nwafor, Head, Market Operations, The Nigerian Stock Exchange (NSE); Oscar N. Onyema, OON, Chief Executive Officer, NSE; Patience Oniha, Director-General, Debt Management Office (DMO) and Afolabi Oladele, Director Portfolio Management, DMO during the 2019 Retail Bond Workshop at the Exchange on Tuesday, August 6, 2019.