Investors lap up Nigeria's debut Sukuk bond, invest 105.8 bln naira

Oniha, DG DMO

Investors bought 105.88 billion naira worth in Nigeria debut Sukuk bond, indicating an oversubscription of about 5.88 billion naira against the initial offer by the debt Managment Office (DMO), the result of the auction released by the debt office has shown.
Nigeria had closed bids for its debut Islamic bond, Sukuk on Friday, where it initially offered 100 billion naira for sales to investors.
However, investors, which included pension and fund managers lapped up the initial offer and topped it with 5.88 billion extra demand in what analysts said was due to the attractive rental rate offered by the debt office.
The debt office offered 16.47 percent rental rate on the debt maturing in 2024.
The issuance of Islamic Bond has generated controversy among the country's population which was equally divided between Christians and Muslim.
Investors brushed aside sentiment expressed by some religious leaders and put their bet on the bond, analysts said.
According to the debt office official, proceeds from the bond will be channeled toward building critical road infrastructure that will enhance the living standard of Nigerian.
“A look at the investors that subscribed for the sovereign Sukuk revealed that another significant objective was achieved through the participation of over a thousand retail investors from across the nation who accounted for over four percent of the total subscription," the chief executive of DMO Patience Oniha said.
According to her, with the oversubscription, the DMO had been energised to continue with its role of meeting the government’s funding needs as well as introducing new instruments to develop Nigeria’s capital market.Africa's biggest economy, which just exited its worst recession in over two decades issue all kinds of bonds to plug the gap in its budgetary spending.
The West African country issue sovereign bond to raise naira cash monthly, treasury bond twice monthly and recently issued diaspora bond from its citizens abroad in it quest to spend its way out of recession.