Q1 2025: FGN Bonds Surpasses Corporates in N2.8trn New Listings

Kayode Tokede

An estimated N2.8trillion new listings was recorded on the Nigerian Exchange Limited (NGX) in first quarter 0f 2025 with FGN Bonds surpassing corporates listings in the period under review. 

FGN Bonds issued by the Debt Management Office (DMO) on behalf of the federal government are listed on the floor of the NGX.

THISDAY findings from the data obtained on the NGX showed that out of the N2.8 trillion new listings, FGN Bonds was responsible for N1.67 trillion, while corporates listed N1.2 trillion. 

The FGN bond market in Q1 2025 consistently witnessed increased participation by Pension Funds Administrators (PFAs) as double-digit inflation rate eroded investments.

In Q1 2025, NGX listed 12 FGN bonds, while corporates listing stood at 13.

Finance analysts attributed the strong demand for FGN bonds to attractive yields, which offer investors high returns on their investments, stressing that the oversubscription also revealed that investors have confidence in the Federal Government’s ability to meet its debt obligations.

The appetite for FGN bonds indicates that PFAs, and Nigerian investors prefer investment instruments with less volatility that assures them of their capital returns albeit with low yield on investment.

Under corporates new listings, banks top the chat following the banking sector recapitalisation exercise by Central Bank of Nigeria (CBN).

Recently, the Director-General of the Securities and Exchange Commission (SEC), Dr.Emomotimi Agama disclosed that Nigerian banks have so far raised N2.4 trillion through the capital market in the ongoing recapitalisation of the banking sector.

He stated that the capital market was strong enough to provide the much-needed finance for various sectors of the economy.

Agama said, “The capital market is strong enough to provide the much-needed funding needs for various sectors of the economy.It is one of the strongest you can think about, our Return on Investment (RoI) was one of the best in the world for last year.

“When you look at what the capital market has already done with the bank recapitalisation, which is still ongoing, you can agree with me that our market is strong.Today, the Nigerian capital market has been able to facilitate the raising of capital by banks to the tune of N2.4 trillion, and still counting. This has never happened in the history of this country.”

A breakdown of listings showed that Access Holdings in January 2025 listed N351.01 billion shares, while Guaranty Trust Holding Company Plc (GTCO) listed N209.41 billion shares. In the same January 2025, FCMB Group listed N144.6 billion shares.

In February 2025, Zenith Bank after a successful rights issue and public offer listed a combine N350.46 billion shares.  In addition, Fidelity Bank listed N175.85 billion shares in March 2025 after a successful rights issue and public offer as Ellah Lakes Plc listed N3.09 billion shares, arising from the  conversion of its  debt to equity at N2.80 per  share. 

In the same March 2025, Sterling Financial Holdings Company Plc listed N75 billion shares while Dangote Cement Plc, listed N38.2 billion bonds. 

Dangote Cement’s listings is on the back of 10-Year 23.50 per cent fixed rate senior unsecured bonds due 2034 under the company’s N300 billion multiinstrument issuance programme.

Professor of Finance and Capital market, Uche Uwalekehad at a conference in Lagos called on the need for the government to unlock the huge potential of long-term financing inherent in the capital market and ensure borrowings tied to infrastructure bonds.

He said this became necessary for the nation’s economy to grow steadily at 16 per cent per annum over the next six years to attain the projected $1 trillion economy by 2030.

Uwaleke stated that with the nation’s infrastructure investment need which had continued to widen, and government debt profile which is substantially high, mobilising long-term financing through the capital market and deploying domestic market borrowings into infrastructure bonds had become critical to achieving the target.

Financing this huge infrastructure gap presents a formidable challenge to the government given Nigeria’s low revenue-to-GDP ratio of less than 10 per cent making inevitable the capital market route.

However, Uwaleke pointed out that the nation’s capital market is currently beset with myriads of challenges, which had continued to constrain its full development despite giant strides achieved in the last two decades.

On his part, the Chief Executive Officer, NGX, Mr. Temi Popoola noted that the exchange had a renewed focus on listings, stressing that, “we will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements.”