The Nigerian Exchange Limited (NGX) experienced a remarkable surge in 2024, recording a total of N12.17 trillion in listings, driven by both Federal Government of Nigeria (FGN) Bonds and corporate entities. This robust performance was complemented by a statement from the Securities and Exchange Commission (SEC), signaling its plans to improve the regulatory framework surrounding government and corporate borrowing.
Dr. Emomotimi Agama, the Director General of SEC, emphasized the importance of borrowing in the financial system, stressing that regulatory enhancements were necessary to ensure sustainability in government and corporate borrowings, particularly in light of recent legal developments affecting local governments.
According to NGX data, in 2024, FGN Bonds worth N5.95 trillion were listed, while corporate listings, including corporate bonds and memorandum listings, amounted to N6.2 trillion. These listings were motivated by varying factors, such as bridging budget deficits for the government and enhancing business operations and expansions for corporate entities.
The FGN Bonds listings were notably significant, with the Debt Management Office (DMO) issuing key bonds such as the 18.50% FGN FEB 2031 and 19% FGN FEB 2034 bonds, which collectively raised substantial amounts. The participation of Pension Fund Administrators (PFAs) was particularly prominent, as they increasingly turned to FGN Bonds for stable returns amidst rising inflation.
Corporate activity on the exchange also saw strong performances, with several companies making notable contributions. For instance, Sovereign Trust Insurance Plc raised N1.43 billion through a rights issue, while Transcorp Power Plc listed N1.8 trillion in March, significantly boosting market liquidity. Other major listings included VFD Group Plc and Royal Exchange Plc, which raised N12.5 billion and N1.56 billion, respectively.
Throughout the year, several large corporations made headlines by listing significant amounts, such as Cadbury Nigeria Plc, Multi-Trex Integrated Foods Plc, and International Breweries Plc, underscoring the growing investor confidence in the market.
Analysts attributed the strong demand for FGN Bonds to attractive yields, offering high returns even in the face of global financial uncertainties. This increased demand underscored investors’ confidence in the Federal Government’s ability to meet its debt obligations.
Meanwhile, SEC has highlighted its plans to enhance the regulatory framework to accommodate the growing need for strategic borrowing. Agama pointed out that the SEC aims to ensure sustainable and efficient borrowing practices, particularly by local and state governments, in line with a new Supreme Court order that mandates direct subventions from the Federal Government to local government areas.
For corporates, the SEC is set to roll out new rules on Central Counter Parties (CCPs) in 2025, aimed at simplifying the borrowing process for Nigerian companies. Agama also revealed that the SEC is working to introduce derivatives trading to Nigeria’s capital market, an initiative poised to open new opportunities and attract a broader range of market participants.
As part of its efforts to build confidence in the market, SEC will ensure that new regulations provide a secure and predictable environment for both investors and companies. The Commission is committed to driving the growth of Nigeria’s capital market by creating an environment conducive to transparency, innovation, and capital flow.
