Ms. Patience Oniha, Director-General of the Debt Management Office (DMO), stated that the agency nominated Stanbic IBTC as Government Stockbroker due to its extensive and diverse financial services provider position. She spoke in Abuja last week at the start of a web conference between the Office and Stanbic IBTC officials to discuss how to best carry out the latter’s duty.
She describes Stanbic IBTC as “a comprehensive, full-service financial house.” The brand is both strong and respected, and its reach is extensive. They operate in the retail, capital markets, and pension sectors. It is a name that is well-known and recognised within our customer base and target investors, and it aligns with our objectives.
“Its sheer reputation, diversification as agroup, and thefact thatthey have been in this role before,all of these qualified theorganisation for the appointmentas a Government Stockbroker.” She added that the DMO needed to select a government stockbroker in order to grow the capital market, particularly the secondary market, and raise awareness among ordinary investors about market potential.
According to her, “As you know, we collaborate with the federal government.” We issue securities on behalf of the federal government. By appointing Stanbic IBTC as a stock broker, we are truly acting on behalf of the federal government. The DMO requires a stockbroker for two reasons: “We are the greatest issuers of securities in the market, and when it comes to the fixed income market, we completely dominate it.
“But a significant point to know also isthat there is that small segment,the retail segment that we have been trying to develop from theSavings Bond and the Sukuk, which is also important to us asidesthe FGN Bonds market which isreally 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 supposed to have a stock broker with well defined roles. “We are playing in the markets,we have to complywith the roles of the market.”
Stanbic IBTC meets all of the standards, as it is a registered stock broker with both the Securities and Exchange Commission (SEC) and the Nigerian Exchange Group. ” The second aspect is the DMO’s commitment to developing the local capital market.
“We did quite a lot with wholesale investors, and it has helped us achieve diversification in the investor group for our FGN Bonds and Sukuk since previously, it was mostly the banks, but that group is pretty well diversified. “But we realised that there are smaller groups that may not have the same amount of money as the big players.” We know people can invest in entities, but providing them with fixed income instruments is also an alternative.
“For that segment, we need to be able to raise awareness of the products, particularly those aimed at them, such as the FGN Savings Bond, and also create a secondary market for them.” “So such bonds are issued for short tenors and cannot be held for as long as a pension fund or insurance company, but they must also be able to buy and sell at any moment. That is the other reason we hired a government stock broker.
