Retail Bonds Trading Commences on Exchange
NSE DG, Mr. Oscar Onyema
History was, again, made in the stock market last Friday as retail trading of bonds on the Nigerian bourse commenced thereby opening a widow for low networth investors to enjoy the benefits of investing in bonds.
Before now, retail investors have been locked out of trading in bonds due the huge sums required and absence of secondary trading platform. Only high networth and institutional investors have been enjoying benefits of bonds investment.
However, retail investors can now access the bonds market with a minimum sum of N10,000 and enjoy regular returns on investments among other benefits.
Speaking on the commencement of the retail bonds trading on the floor of the Nigerian Stock Exchange (NSE), its chief executive officer, Mr. Oscar Onyema, expressed satisfaction that the exchange has been able to activate a platform that would allow retail investors participate in fixed income securities market.
According him, on the first day of trading, there were 13 trades that involved 510,000 units of bonds worth N600,000.
“Although it is a small beginning but it has proved the concept that people can trade bond with small amount and investors can take position because it cut across market makers and brokers-dealers on the floor. Today (last Friday) is the beginning and we expect bigger volume and value traded as we go along,” Onyema said.
He explained that the NSE retail bonds trading platform would exist alongside the existing over the counter (OTC) market.
“The retail bond trading is very complementary to the OTC market because the OTC market is very institutional and ticket prices are bigger. What we are doing (through the retail bond trading) is to really try to bring the retail participants into the fixed income market,” he said.
Listing the benefit of the platform, the NSE CEO said it would allow investors to diversify their portfolio and hence manage the risk of exposure into the market using well established channels.