Bond Market Will Surpass Equity Market By 2008
August 25th, 2006 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
Ogbuotobo Chuks
The bond segment of the Nigerian capital market is at the throes of a major take–off and could surpass the overriding influence of the equity market in the next two years. This is the view of Mr Godwin Obaseki, managing director, Securities and Trust Company (Sec Trust).
According to him, the capitalization of the bond segment could within the next two years outpace the market capitalization of equities as more users of funds shift to long–term debt instruments.
Obaseki said the bonds are dominant instruments in many economies, pointing out bonds constitute up to 70 percent of the capital market capitalization of many developed economies.He pointed out that the continued success of the government bond issues in spite of competing equity issues from companies is indicative of the enormous prospect of the bond market.
Also, the recent economic reforms and stability in fiscal and monetary management have positioned the Nigerian capital market and the economy for strong growths in years ahead.
Obaseki outlined that the financial system reforms, pension reform, debt work-off of foreign debt, restructuring of domestic debt, BB-rating for Nigeria and removal of Nigeria from the list of non – cooperating countries by the financial action task force ( FATF) among other reforms have all coagulated to put Nigerian economy on the growth path.
Culled from financial standard, Monday , august 21,2006
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