FMDQ Adopts S&P Nigeria Sovereign Bond Index


Obinna Chima

As part of effort to improve price discovery and transparency in the Nigerian financial markets, FMDQ OTC Securities Exchange has formalised its partnership with S&P Dow Jones Indices (SPDJI) through the signing of a memorandum of understanding (MoU) for the development and publication of co-branded fixed income indices in the Nigerian financial market.

FMDQ embarked on the journey towards providing reliable and credible benchmarks in 2014 with the launch of the FMDQ FGN Bond Index. Following the launch, the OTC Securities Exchange continued to identify ways to improve the existing index and align it with international best standards as set out in the International Organisation of Securities Commission (IOSCO) Principles for Financial Benchmarks.

This, it said necessitated numerous engagements with stakeholders including but not limited to fund/asset managers and financial services regulators, who all identified the governance of the index as a very critical value-add for the successful delivery of the aforementioned mandate.

SPDJI is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500 and the Dow Jones Industrial Average.
Managing Director/CEO, FMDQ OTC Securities Exchange, , Mr. Bola Onadele. Koko, while speaking on the partnership, was quoted in a statement to have said: “This is indeed a landmark achievement as the development of these co-branded fixed income indices aims to revolutionise the face of the Nigerian financial markets by providing investors with a consistent, credible and objective measure for the performance of their investments in the Nigerian financial markets.

“This will likewise serve as an acceptable benchmark for the fixed income market and provide transparent and credible information to the investing public and other persons with interest in the Nigerian financial market.”

On his part, the Chief Executive Officer, S&P Dow Jones Indices, Mr. Alex Matturri said: “S&P Dow Jones Indices has been calculating Nigerian indices for a number of years and we have more recently expanded our offering to include dividend and fixed income indices. We’re delighted to officially sign the memorandum of understanding between S&P Dow Jones Indices and FMDQ and the adoption of the S&P Nigeria Sovereign Bond Index.

“As the Nigerian financial market develops and FMDQ establishes its position as the foremost debt capital securities exchange, we’re pleased to be able to bring greater index-based solutions, research and analysis to the Nigerian market. Following the adoption of the S&P Nigeria Sovereign Bond Index and our partnership with FMDQ, we’re looking forward to meeting the evolving needs of investors for benchmarks that will continue to define the way investors measure and trade the market.”