...Developing the Fixed Income Market in Nigeria September 2010 Contents 1. Evolution – Where we are coming from 2. Status Quo – Where we are 3. Constraints – Challenges to be overcome 4. The Future – How to develop the market Evolution of the Fixed income Market in Nigeria ▲ Nigerian Government Registered Stock in 1946 ▲ Federation of Nigerian Development Loan Stock in 1946 ▲ Federal Republic of Nigeria Development Loan Stock in 1963 ▲ Suspended in 1988 ▲ Issuance rejuvenated in 2003 with 1st FGN Series ▲ Commencement of PDMM system in March 2006 ▲ Active secondary market commences in November 2006 ▲ Extension of the curve to 20 years in November 2008 The Current State of the Fixed Income Market in Nigeria ▲ The Fixed Income Market in Nigeria is made up of three major segments: Federal Government of Nigeria Bond, State Government Bond and Corporate Bond market. ▲ The Federal Government Debt Market is the largest and most developed of the segments The FGN Debt segments. Market dominates the fixed income Market in Nigeria. ▲ The amount of outstanding issuance in the Nigerian Debt Market is skewed towards Federal Government paper. The amount of FGN debt outstanding has increased from NGN1, 753 billion as at December 2006 to NGN3, 764 billion as at July 2010. NGN2,408 (63.97%) of the outstanding debt is FGN Bonds. ▲ Th FGN B d auctions are h ld under a Si l D h A i process. All bid are placed through the The Bond i held d Single Dutch Auction bids l d h h h twenty one primary...
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