Stanbic IBTC Bank announced the extension of its securities lending services to include fixed income securities in the Nigerian capital market, reports Marketforces Africa. Institutional clients, both local and international, can now borrow and lend not just equities but also fixed income securities such as Federal Government Bonds and Treasury Bills.
Babatunde Majiyagbe, head of Investor Services at Stanbic, said: “Expanding our securities lending services to include fixed income securities provides our clients with broader opportunities to generate income and enhances overall market liquidity.
“This expansion not only broadens the scope of our offerings but also provides our clients with a wider range of assets to optimize their investment strategies and achieve their business objectives, enhancing the overall liquidity and efficiency of the Nigerian capital market.”
Securities lending has been available in the Nigerian market for over a decade, with Stanbic IBTC being the only active securities lending agent throughout this period.
The inclusion of fixed income securities in the lending portfolio is poised to have a transformative impact on the market, contributing to effective market-making, increasing overall market liquidity, and enhancing the efficiency of price discovery mechanisms.
By allowing market participants to take and cover short positions as part of their market-making activity, investment and trading strategies, or for hedging purposes, securities lending supports a more dynamic and liquid market environment. This development is expected to attract more investors and stimulate further growth in the Nigerian capital market.
“In 2023 alone, we facilitated the lending of assets worth 150 million naira,” Majiyagbe said. “This reflects the growing trust and demand for our securities lending services and underscores our role in enhancing market liquidity and efficiency.”