L-R: Mr Charles Egbunonwo, a Council Member of Association of Securities Dealing Houses of Nigeria (ASHON), representing Mr Oluwaseun Afolabi, ASHON Chairman; Mr Oluwaseun Afolabi, Head, Market Architecture, FMDQ Securities Exchange Limited; Mr Dayo Obisan, Executive Commissioner Operations, the Securities and Exchange Commission representing Director-General, Mr Lamido Yuguda Lamido; Mrs Chinyere Joel-Nwokeoma, CAMCAN Chairman, Ms Patience Oniha, the Director-General, Debt Management Office, Mrs Irene Robinson-Ayanwale, Divisional Head, Business Support Services, Nigerian Exchange Limited and Mr Oluropo Dada, 1st Vice President, Chartered Institute of Stockbrokers representing, Mr Oluwole Adeosun, President at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2022 annual conference
BY NKECHI NAECHE-ESEZOBOR— FMDQ Securities Exchange Limited, said it plans to launch of Exchange Traded Derivative (ETD) products that will enable the government raise funds at a cheaper cost.
According to him such as the Federal Government of Nigeria Bonds and Treasury Bills to aid hedging and risk management by investors in these securities.
The Head, Market Architecture, FMDQ, Mr Oluwaseun Afolabi, disclosed this at the 2022 Capital Market Correspondents Association of Nigeria (CAMCAN) annual conference in Lagos.
“A useful benefit of these ETD products is that they could help spur investors’ interest in the underlying sovereign securities thereby possibly reducing the government’s cost of capital.
“The Nigerian debt market organised by FMDQ Exchange is fairly developed enough to facilitate the raising of debt capital by the government and corporate issuers.
“The FMDQ Exchange markets facilitate the issuance and secondary market activity in a range of debt securities, as well as having the optimised matrix of financial market intermediaries/participants and most importantly supported by robust financial market infrastructures (FMIs) across the secondary market value chain,” he said.
He said FMDQ has helped in deepening the Nigerian debt market, Afolabi said that the company in its capacity as a market organiser and self-regulatory organisation, has over the years pioneered and led various initiatives geared at deepening and promoting liquidity in the Nigerian debt markets.
These initiatives, according to him, range from those targeted at spurring activity in the primary markets for money market debt securities such as Commercial Papers (CPs) and facilitating the issuance of short-term bonds.
Afolabi added that the company engage in secondary market initiatives such as market making, securities valuation, benchmark development and administration and expansion of the bouquet of debt securities and other financial instruments onboarded on the Exchange.
“FMDQ Exchange is at the forefront of regulatory advocacy and stakeholder engagements targeted at driving collective action by all relevant stakeholders towards deepening the Nigerian debt market.
“This is evidenced by its activities and collaboration with various financial market regulators such as the Securities and Exchange Commission, Central Bank of Nigeria, the Debt Management Office (DMO), and the National Pension Commission on various initiatives and programmes focused on developing the Nigerian debt markets.
Speaking on the success and acceptability of CPs in the country, Afolabi noted that CPs have become acceptable in the Nigerian financial market as evidenced by the milestones recorded by FMDQ Exchange in the Nigerian CP market.
“Since the entry of FMDQ Exchange into the CP market, the Nigerian CP market has grown from near zero levels about a decade ago in terms of capital raised to a market where about N3.17 trillion has been raised via CP issuances since the entry of FMDQ Exchange to date.
