Economy
Details of How to Purchase/Subscribe FGN Savings Bond
By Dipo Olowookere
The FGN savings bond was created by the federal government a few years ago to meet the investment demands of low-income earners in the country.
Before the introduction of the financial asset, Nigerians had the opportunity to invest in treasury bills for as low as N10,000, but the Central Bank of Nigeria (CBN), which sells T-bills on behalf the Debt Management Office (DMO), raised the minimum subscription for the bills to N50 million.
This development made nearly it impossible for low-income earners to invest in government securities and the sovereign bonds available also required high minimum subscription to partake in them.
This made the debt office to design the FGN savings bond to attract retail investors, who wish to earn steady revenue by lending money to the government to carry out some critical infrastructure in the country. The minimum subscription for this was pegged at N5,000.
Since its introduction, investors have been embracing the papers and in the first week of every month, the DMO auctions the bonds in two different maturities; 2-year and 3-year.
For the month of December 2020, the offer opened on Monday, December 7 and will close on Friday, December 11.
However, not many people know how to go about purchasing this bond targeted at retail investors with a maximum subscription of N50 million. This is what this article hopes to help readers with.
To buy the FGN savings bond, an investor needs to open a stockbroker’s account and this should be with the notable names. In fact, not all brokerage firms are accredited to sell the notes.
Opening a stockbroker’s account is cheap and can be done for as low as N10,000. You can read about the favourite brokerage companies among Nigerian investors HERE.
After you have opened the account, you are good to go. You just have to request for the FGN savings subscription form, where you will be required to supply some details like your biodata, account details, including the BVN, which is a must for every financial transaction done in Nigeria.
A sample of the subscription form is in this article for guidance.
After all the information is supplied, the next stage is to make payment to the stockbroker’s account and the payment details, proof of payment, sent to the broker for confirmation. This can be done via an email or the chatbox if the company has one.
These are all the things needed to buy the FGN savings bond.
It is important to state that interests paid on the investment vary almost every month. For this month, the DMO is offering the 2-year paper at 1.32 per cent and the 3-year at 1.82 per cent per annum. The interest, which is also called the coupon, is paid four times a year.
On Wednesday, December 16, 2020, the federal government will credit the CSCS accounts of subscribers with the volume of bonds bought.
In the event you intend to sell your FGN savings bond before maturity to use the funds for emergencies, there is always an opening for that because the bonds are traded at the secondary market on the Nigerian Stock Exchange (NSE).
Do you require any additional information, please feel free to use the comment box, I will be readily available to respond to your questions.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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