The Director-General of the Debt Management Office (DMO), Ms. Patience Oniha, has said that the agency appointed Stanbic IBTC as Government Stockbroker owing to its comprehensive, diversified financial services-provider status.
She spoke, in Abuja, last week, at the opening of a web-meeting between the Office and officials of Stanbic IBTC on how best to achieve the latter’s mandate.
According to her, “Stanbic IBTC is a comprehensive, full Financial House. The brand is both strong and respected and the reach is very wide. They are in the retail business, in the capital market and in the pension business.
“It is a name that is familiar and much respected among our client base and target investors and that matches what our needs are in terms of what we want to` do.
“Its sheer reputation, diversification as a group, and the fact that they have been in this role before, all of these qualified the organisation for the appointment as a Government Stockbroker.”
She explained that the DMO needed to appoint a Government Stockbroker in order deepen the capital market, especially the secondary market and increase sensitization among retail investors on the opportunities in the market.
According to her, “As you know, we work with the federal government. We issue securities on behalf of the federal government. In appointing Stanbic IBTC as stock broker, we really are doing that on behalf of the federal government. There are two reasons why the DMO needs a stock broker.
“We are the largest issuers of securities in the market, and when we take it further to the fixed income market, we entirely, almost dominate that market.
“But a significant point to know also is that there is that small segment, the retail segment that we have been trying to develop from the Savings Bond and the Sukuk, which is also important to us asides the FGN Bonds market which is really for big players.
“So the first reason for having a government stock broker is obviously a compliance issue with the Nigerian Exchange Group, we are expected to have a stock broker whose functions are clearly defined.
“We are playing in the markets, we have to comply with the roles of the market.
“Stanbic IBTC meets all the requirements, being a registered stock broker with the Securities and Exchange Commission (SEC) and also by the Nigerian exchange group.
“The second point is the DMO’s commitment to deepening the domestic capital market.
“We did quite a lot with wholesale investors, and that has helped us to achieve diversification in the investor group for our FGN Bonds, and the Sukuk because previously, it was the banks mainly but that group is very well diversified
“But we realized that there are the smaller groups who may not have the kind of money that the big players have. We know they can invest in entities, but giving them fixed income securities is also one option.
“For that segment, we need to be able to make them aware of the products, particularly those targeted at them, the FGN Savings Bond, and also create a secondary market for them.
“So those bonds are issued for short tenors and they can’t hold foe a long time as a pension fund, or insurance companies would, but they also need to be able to buy and sell whenever they want to. That segment is the other reason we have appointed a government stock broker’’.
SOURCE: VANGUARD
