An Emirati man follows the market's movement on a monitor at the Dubai Financial Market in the Gulf emirate on November 30, 2009. Stock markets in Dubai and neighbouring Gulf emirate Abu Dhabi went into freefall as investors in the United Arab Emirates grabbed their first chance to respond to Dubai's debt crisis. AFP PHOTO/KARIM SAHIB (Photo credit should read KARIM SAHIB/AFP/Getty Images)
The debut N100 billion Sukuk offer by the Debt Management Office (DMO) was oversubscribed by 5.8% approximately 6%.
According to a statement issued by the office, investors in the bond, which has a seven-year tenor, included pension funds, banks, fund managers and retail investors.
DMO said the total subscription to the Sukuk offer was N105.88 billion.
Patience Oniha, DMO director general, said the acceptance of the offer was an indication of the viability of the instrument as an investment option as well as a demonstration of utmost faith in the economy.
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The offer for the bond, which lasted for five days, closed on September 22.
Oniha commended the federal government and in particular, Kemi Adeosun, minister of finance, for the policy support that led to the success of this initial offer.
In a previous interview, Oniha had said proceeds from the offer would be used to fund the development of 25 economic roads in the six geo-political zones in the country.
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Officials of the DMO, ministry of power, works and housing and Central Bank of Nigeria (CBN) had advertised the investment instrument in roadshows to five major cities in the country – Lagos, Port Harcourt, Kano, Abuja and Kaduna.
Investment experts are optimistic that a new instrument has been introduced to Nigeria’s capital market and has added to the variety of products available to domestic issuers and investors.
According to the statement, the bond achieved one of its aims, which was to offer new investors an opportunity to participate in Nigeria’s growing capital market.
“With this positive development, the DMO has been energised to continue its role of meeting the government’s funding needs, as well as introducing new instruments to develop Nigeria’s capital market,” it said.
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DMO also said it hoped that the proceeds would enable the ministry of power, works and housing to commence work on the roads.
The Christian Association of Nigeria (CAN) had expressed concerns over the bond, saying it was a quiet way of islamising the country.
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