By Sunday Michael Ogwu
The Managing Director of FMDQ, Mr. Bola Onadele Koko, has said the volatilities and irregularities of interest rate has been the bottleneck for the corporate bond market.
Koko who stated this during the fifth year celebration of the company, also added that the threat posed in cooperate bond market has hindered long term loans.
He said all hands must be on deck to address the menace, adding that the company was working with market players to proffer solutions.
He said: “Before a corporate comes out to issue a bond which is a long term paper, the corporate will look at the outlook of the economy.
So the set of volatilities we have had in the interest rate in the market has not encouraged corporates to take long term look of what they are doing.
“Over night it is 4 percent, today it becomes to 30 per cent. So we have created a market where players always think that it may drop tomorrow. So when interest rate drops, you may find corporates may want to lock in as fast as possible.”
He therefore called for policies that will encourage the corporates to go long term.
“How do we organize ourselves, if we want people to take long-term loans of investment in Nigeria, they will go to the corporate bond market and debt market. But the way we have done volatilities policies and interest rate, these things are not inspiring to do the corporate bond market,” he said.