The Debt Management Office (DMO) says Kano has the highest number of subscribers in the Federal Government of Nigeria (FGN) Sovereign Sukuk offers.
Patience Oniha, the Director-General of DMO, said this on Tuesday in Kano, at the FGN Securities Issuance Awareness Programme organised by DMO in collaboration with CSL Stockbrokers Limited.
Oniha, who was represented by Hadi Barkun, DMO’s Director, Legal Services, urged Nigerians to take advantage of the investment opportunities in FGN securities.
“After this awareness programme, which will be beneficial to all, I urge residents of Kano to embrace all the available products,” she said.
According to Muhammed Bara, Team Head, Securities Issuance, the minimum investable amount for the Sovereign Sukuk is N10,000, while there is no maximum.
Bara said that the DMO gave priority to retail investors in the instance that the Sukuk offer was oversubscribed.
He said that the Federal Government borrowing money from the local capital market through the various FGN securities was safer, though more expensive.
“Just like individuals are advised to diversify their investment portfolios, it is also advisable for the federal government to diversify its source of funding.
“Although, the risk in local borrowing is less, but the interest is higher,” he said.
Earlier, Ifeoma Ukwunna, Head, Retail Business of CSL Stockbrokers Limited, said that CSL was collaborating with the DMO to sensitise Nigerians on ways to diversify their investment portfolios.
Ukwunna said that the various attractive incentives provided by FGN securities were to encourage Nigerians to invest.
“FGN securities provide an opportunity for Nigerians to diversify their investment portfolios and to invest monies that are, otherwise, idle.
“Asides equities, real estate, agriculture and other investment opportunities, Nigerians are encouraged to also invest in FGN securities.
“There is safety, there is no threat of default and they are viable collateral for bank loans,” she said.
According to Ukwunna, if all resources are invested in one platform, it is exposed to risk.
“FGN securities provide opportunity for diversification of investment portfolio provides steady income and they are liquid assets which are easily convertible to cash,” she said.
According to her, FGN securities are structured to meet easy investment needs of Nigerians.
She assured that interest payments remained constant, irrespective of the amount invested.
“For example, in the last FGN bond offer, interest rate was fixed at eight per cent per annum. This is applicable to those who invested N5,000 as well as those who invested N50million,” she said.
She said that payment of interest, as well as the principal sum at maturity was usually prompt.
“If there is delay in interest payment or bullet payment, investors shall contact CSL Stockbrokers Limited. The federal government pays on time,” she said.
A stockbroker, Sam Onabanjo, said that diversification of investment portfolio was required to dilute risky investments.
“A portfolio is a collection of individual securities. Equities are risky while government bonds are risk-free.
“Diversification of portfolios will dilute the risky investment. It is about reducing your average risk,” he said.
