LEADTRADER ASSET MANAGEMENT FAQS
A bond is a long-term financial obligation (debt) of an entity that promises to pay a specified sum of money at specified future dates. Bonds are fixed income securities.
Federal Government bonds are long-term debt instruments of the Federal Government of Nigeria with tenors of up to 10 years. FGN bonds are issued by the DMO on behalf of the governments through authorized primary market dealers. If you are an investor looking at investing money for a period longer than 1 year, or tend to have deposits or placements that have been running for more than a year, FGN bond investment will likely suit your investment appetite.
FGN bonds provide a desirable savings or investment vehicle for many reasons. They tend to be safer than stocks because if you hold bonds until the maturity date, you don’t risk the principal. However if you need to sell your bond before its maturity date, you may lose or gain a bit depending on the ruling price at the point of exit. Without exiting prematurely, FGN bonds provide a regular, steady source of income (typically, interest payments are received every 6 months).
Every investor has equal access to invest in the FGN bonds. There are however two avenues through which such investments can be done (Primary or Secondary Market) Notices of primary issues auction are placed a week to the auction in most of the daily newspapers, informing the public about the various tenors of bonds available for sale.
To participate in the auction, all that is needed is for you to fund your account with LEAD SECURITIES & INVESTMENT LIMITED or any of the other 19 Primary Dealers/ Market Makers (PDMMs), and fill the bid form which can be downloaded, or picked up at our offices. The bid can then be submitted through LEAD SECURITIES & INVESTMENT LIMITEDS or any of the other PDMMs.
At the secondary market, LEAD SECURITIES & INVESTMENT LIMITED or any of the other 19 PDMMs can be called for quotes (Bid & Offer) and once a favorable price/yield is available, deals can be sealed.
There is no limit to how often to participate; the auction is open at advertised times for regular participation.
At LEAD SECURITIES & INVESTMENT LIMITED, any of our bond dealers will be willing to offer advice on market expectation and to give historical data on bonds in issue. The investor will finally make the decision regarding what rate to buy after evaluating available information.
Usually results are communicated a day after the auction and accounts are expected to be funded on or before the settlement date (which is two days after the auction).
Bonds are redeemed at maturity but can be sold at any time through a Dealer such as LEAD SECURITIES & INVESTMENT LIMITED.
A minimum value of N5,000.00 and multiples of N1,000 thereafter can be invested. An investment of a minimum value of N1,000,000.00 is however encouraged.
Investments in FGN bonds are classified as risk free. This is because the issues are based on the full faith of the Federal Government of Nigeria, and is charged upon the general assets of the Federal Republic of Nigeria.
- Is it possible to have my interest paid monthly?
- Coupon (interest) payments are semi-annual for now and as such interest is paid twice yearly
The Central Bank of Nigeria who is the Registrar for FGN Bond, post coupons (interest) to the address stipulated on the bid form or on the bond transfer form (where bond is bought from the secondary market). However, interest could be paid to the investor through an Authorized Dealer if that is the investor’s desire. The Dealer is expected to credit the investor’s account or draw a cheque in the investor’s favor. Principal amount is received through the same way.
We can buy bonds both from a primary auction and the secondary market for you. We provide all the necessary support from the opening of a bond CSCS account or keeping the securities in our custody for your benefit if you do not want to open one. We also provide research support to help you organize your bond portfolios.
Simply inform us and our financial consultants and portfolio managers will sit with you to determine your risk appetite and the best way to invest your funds. A monthly update will be sent to you to intimate you on how your portfolio is performing and the circumstances will be done with you in order to ensure that your portfolio is in line with your current financial position.
We have an equity mutual fund, which provide an alternative exposure to equities while relieving you of the hassles of determining which stocks to buy and when to sell. We also have other mutual funds that provides exposure to other asset classes to help diversify your investments and reduce the risk of holding only one asset class.
Our financial consultants and portfolio managers will provide you with regular financial report that will help you in making investment decisions. They can also visit you frequently to discuss various investment strategies which will help you make a well informed decision on how to manage your financial assets.
Please Contact Lead Securities & Investment Limited head office. You may reach our customer service mailbox: firstname.lastname@example.org or call: +234 – 1- 2715254, 9049317.