Lagos, Nigeria - Ahead of the launch of Retail Bonds trading on the Nigerian Stock Exchange (NSE), six newly selected Fixed Income Market Makers (FIMMs) were Tuesday unveiled on the trading floor by the NSE Chief, Oscar Onyema.
The Dealing Members selected are Capital Bancorp; Cordros Capital; ESS/Dunn Loren Merrifield; FSDH Securities; Greenwich Securities and GTB Securities. They were selected from 14 applicants after rigorous screening.
A market maker is a company or individual that quotes both buying and selling prices in a financial instrument held in inventory, hoping to make a profit on the bid and Fixed income refers to any type of investment under which the borrower/issuer is obliged to make payments of a fixed amount on a fixed schedule.
At the ceremony, Onyema said: “The minimum capital we were looking for is 500 million naira and if you are already an equity market maker your 500 million naira did not count. You have to get up with a new 500 million naira. We also look at the operational readiness, the risk management in place and we examined their compliance history, technology and other processes.
'After the selection, the next stage is to work with them from Wednesday but trading will start from 1 February.'
PANA recalls that In April 2012, the NSE named 10 market makers for equities trading, as a way of boosting the market and providing liquidity.
While the 10 market makers are operating in the equity market, the six newly selected dealing houses will operate on the Bond market from 1 February.
Onyema said as part of investors' education, the exchange will organize a workshop for the investing community in order to sensitize them on how fixed income can be used as a way of diversification of investments portfolio.
Also speaking at the ceremony, the Executive Director, Business Development of the Exchange, Haruna Jalo-Waziri, said: “This is a great milestone and a major step in turning the market around as this will make the market more liquid in the retail side as well as promote portfolio diversification”.
Some market operators on the floor of the exchange also described the unveiling of the six companies as a major step towards making fixed income securities accessible to the investing public.
A spokesperson for the selected market makers, Sonny Ayere, expressed gratitude to the exchange for the opportunities, saying 'this will help deepen the market by moving it forward and into profitability for investors and dealing companies.'
Pana 17/01/2013