Nigeria Monday joined the JP Morgan Government Bond Index-Emerging Markets (GBI-EM) with the listing of FGN’s bond, becoming the second African country after South Africa to be included in the widely followed index.

The JP Morgan GBI-EM indices are comprehensive emerging market debt benchmarks that track local currency bonds issued by governments of emerging market.

The index was launched in June 2005 and is the first comprehensive global local emerging markets index.
Reuters quoted JP Morgan as saying that the inclusion of FGN Bonds could translate into at least $1.5 billion of inflow to Nigeria’s bond market.

It will also raise the profile of Nigeria’s debt market, which is expected to lead to greater foreign participation, given that Nigerian yields offer a significant premium to established sovereign lenders.

On the inclusion of FGN bonds on the index, Emerging Markets Strategist, Standard Bank, Samir Gadio said: “Nigeria is now seen as a market that can’t be ignored internationally and one of the frontier markets where you need to have a position.”

The inclusion of Nigeria in the GBI-EM comes as South Africa joins Citigroup’s World Government Bond Index, although funds tracking the latter are estimated at $2 trillion compared with $180 billion for the JP Morgan index.

At some $25 billion, Nigeria’s sovereign debt market is still dwarfed by South Africa’s $100 billion market. Secondary market turnover is also around a fifth of its more developed peer south of the Sahara.

But analysts hopeful that the GBI-EM inclusion would help bolster the case for market reforms such as the introduction of securities lending and a deeper repo market.
Treasurer at Citibank Nigeria, Akin Dawodu said: “We think this will help focus minds and get that moving faster so that the legacy can be a deeper, more diverse market.”
Market analysts further added that Nigeria’s addition to the GBI-EM marks it out as one of the more accessible markets on the continent for foreign investors.

“Nigeria has done a lot of work in recent years in developing its bond market to improve liquidity,” said sub-Saharan Africa strategist at Citi, Leon Myburgh.

Myburgh added: “In most African markets, foreign participation is largely limited to the treasury bill market, but Nigeria has been able to cross the threshold and seen foreign investors enter its bond market as well.”

On this, JP Morgan Strategist for Sub-Saharan Africa, Giulia Pellegrini said: “Now I think we’ll see the people that are less familiar with this market coming through - the benchmark investors, the big real money accounts that may have taken some time to internalise this decision to include Nigeria in the index.”




http://www.thisdaylive.com/articles/nigeria-joins-jp-morgan-government-bond-index/126594/

HATERS CAN HATE BUT ONE THING IS FOR SURE NIGERIA IS MOVING FORwARD.

They must have been paid to list us . . . . . . . What a clueless Gov . . . . . .

whats the big deal,
they lost almost 3.4billion dollars 3 mths back.

watch GEJs last months in govt.

kunlekunle: whats the big deal,
they lost almost 3.4billion dollars 3 mths back.

watch GEJs last months in govt.

IT MAY NOT BE A BIG DEAL FOR A PESSIMIST LIKE YOU,BUT IS SURELY A BIG DEAL FOR A LOT OF US wHO TRUELY BELIEVE IN THE TRANSFORMATION OF THIS COUNTRY.

kunlekunle: whats the big deal,
they lost almost 3.4billion dollars 3 mths back.

watch GEJs last months in govt.

Ignorant idi.ot.

jmaine: They must have been paid to list us . . . . . . . What a clueless Gov . . . . . .

Is this the Jmaine I know or another one,hmmm I reserve my comment ooooo

karl max: Nigeria Monday joined the JP Morgan Government Bond Index-Emerging Markets (GBI-EM) with the listing of FGN’s bond, becoming the second African country after South Africa to be included in the widely followed index.


At some $25 billion, Nigeria’s sovereign debt market is still dwarfed by South Africa’s $100 billion market. Secondary market turnover is also around a fifth of its more developed peer south of the Sahara.

http://www.thisdaylive.com/articles/nigeria-joins-jp-morgan-government-bond-index/126594/

Mehn, this South Africa thing ehn, I wish everyone can see the competition the media is trying to cause... For me, I think it is a challenge worth taking... Emmm, where are those governors that want to eat up our future with their insistence on spending every single earnings... Gosh, our governors are our weakest links, not GEJ... Especially those Northern Governor Forum Goons and their South South Folks....

karl max: IT MAY NOT BE A BIG DEAL FOR A PESSIMIST LIKE YOU,BUT IS SURELY A BIG DEAL FOR A LOT OF US wHO TRUELY BELIEVE IN THE TRANSFORMATION OF THIS COUNTRY.

Haba Karl
Bond transformation?

chucky234: Is this the Jmaine I know or another one,hmmm I reserve my comment ooooo

One Word ======> [size=14pt]SaRcaSm[/size]


Appears you actually supported my sarcastic post . . . .What a pity

karl max: HATERS CAN HATE BUT ONE THING IS FOR SURE NIGERIA IS MOVING FORwARD.

YOU'RE THE HATER, IF YOU TRULY LOVE NIGERIA, YOU WILL KNOW THAT NOTHING IS MOVING FORWARD IN THIS COUNTRY.

karl max: IT MAY NOT BE A BIG DEAL FOR A PESSIMIST LIKE YOU,BUT IS SURELY A BIG DEAL FOR A LOT OF US wHO TRUELY BELIEVE IN THE TRANSFORMATION OF THIS COUNTRY.

TRANSFORMATION @ 52 YEARS? BROS, IT SEEMS YOU'RE DREAMING.

Is it not the same J P Morgan that has just been dragged to court by State Prosecutors in New York? I sincerely don't think anything good will come out of this union.

By JEAN EAGLESHAM And DAN FITZPATRICK

New York's top prosecutor opened a new front in efforts to hold banks accountable for the financial crisis by filing a civil lawsuit against J.P. Morgan Chase & Co., alleging widespread fraud by the company's Bear Stearns unit in the sale of mortgage-backed securities.

Enlarge Image

Bloomberg News
The case is the first to be brought under the aegis of a group of federal and state prosecutors and regulators formed by President Barack Obama in January. If successful, the lawsuit could point the way to significantly more financial pain for the big banks, which face threatened government actions and numerous investor lawsuits tied to mortgage securities that soured in the crisis.

Since 2008, state and federal regulators have launched dozens of probes to determine whether banks broke securities laws or were simply guilty of errors of judgment. Regulators have achieved some record-breaking penalties and investors have secured some significant victories. Bank of America Corp. agreed Friday to pay $2.43 billion to settle claims it misled investors about the acquisition of Merrill Lynch & Co., in the largest shareholder class-action settlement tied to the meltdown. BofA didn't admit wrongdoing.

At the same time, regulators have been criticized for their failure to bring enforcement actions in relation to some of the biggest blowups in the crisis, such as the collapse of Lehman Brothers Holdings Inc. William Black, a former bank regulator, said Monday's civil action showed "a continuation of the failure of leading prosecutors to bring a criminal case against any of the elite players."

The complaint filed Monday in New York state court by Eric Schneiderman, the state's attorney general, seeks an unspecified amount of damages related to billions of dollars in losses. It is the first action from the Residential Mortgage-Backed Securities Working Group, which cites some $22.5 billion of losses suffered by investors in securities issued by Bear Stearns Cos. in 2006 and 2007, before the New York investment bank nearly collapsed in March 2008 and was taken over by J.P. Morgan. The lawsuit alleges that Bear Stearns defrauded investors by packaging up and selling on mortgages that it knew—or should have known—were highly likely to default.

Enlarge Image

Associated Press
Attorney General Eric Schneiderman, left, filed suit over mortgage securities.

J.P. Morgan Chase spokesman Joseph Evangelisti said the bank intends to contest the allegations, and that it is "disappointed" the New York attorney general "decided to pursue its civil action without ever offering us an opportunity to rebut the claims."

Mr. Evangelisti also noted the allegations pertain to the activities of Bear Stearns before J.P. Morgan Chase purchased the securities firm in March 2008.

The New York lawsuit takes the approach of targeting alleged fraud across the firm, rather than restricting the allegations to a single deal, as federal regulators have done in many previous cases related to the financial crisis.

The lawsuit also uses New York State's Martin Act, which doesn't require prosecutors to prove a firm intended to defraud investors to win a case. The suit draws on work by other members of the group, particularly the Justice Department and the Federal Housing Finance Agency's office of inspector general, and the plan had been to jointly announce the action Tuesday, people familiar with the group said.

The task-force is drawing up plans to use Monday's lawsuit as a blueprint to bring other cases on a firm-wide basis, potentially targeting damages totaling tens of billions of dollars, according to one person briefed on the matter.

"We intend to follow up with similar actions against other sponsors and underwriters of" residential mortgage-backed securities, said an official in the attorney general's office.

The suit alleges that losses on residential-mortgage securities issued by Bear Stearns in 2006 and 2007 alone were "astounding," totaling more than a quarter of the original principal balance. The action asks that the company be made to pay an undisclosed amount of damages "caused, directly or indirectly, by the fraudulent and deceptive acts."


New York's attorney general filed a civil complaint against J.P. Morgan Chase alleging widespread fraud in the sale of mortgage-backed securities in the run-up to the financial crisis. WSJ's Francesco Guerrera has the details.

The lawsuit quotes from emails and messages purportedly sent within Bear Stearns that it says showed the bank was aware it was selling poor quality investments. In one, a Bear Stearns employee described one securitization in an internal email as a "sack of s***," according to the lawsuit.

The Campaign for a Fair Settlement called the suit "an encouraging first step to holding Wall Street banks accountable for [their] reckless and deceitful practices."

Many big banks still face a litany of legal challenges stemming from the mortgage meltdown. The top federal housing regulator filed lawsuits in September 2011 against 17 of the world's biggest financial institutions, saying they sold $196 billion of risky home loans over four years to Fannie Mae FNMA -0.72% and Freddie Mac FMCC 0.00% without adequately disclosing the risks. The Federal Housing Finance Agency suits included $33 billion in bond deals involving J.P. Morgan.

The Federal Deposit Insurance Corp. in August sued 11 major banks including J.P. Morgan, alleging they misled failed Colonial Bank when they sold the Alabama mortgage lender $388 million in mortgage-backed securities. Colonial, a Montgomery, Ala., unit of Colonial BancGroup Inc., failed on Aug. 14, 2009, in the biggest U.S. bank failure since the 2008 collapse of Washington Mutual Inc. WMIH -1.96%

J.P. Morgan hasn't previously commented on the FHFA or FDIC actions.

Prosecutors and regulators are battling against time in their renewed drive to bring financial crisis cases, as more potential lawsuits risk running afoul of statutes of limitations in federal and state laws. Firms can seek to have cases thrown out if the allegations relate to conduct before these cutoff points, typically five years for most federal laws.

J.P. Morgan is one of three banks that earlier this year disclosed the SEC had warned them it intended to file civil fraud charges related to these investments. One of those banks, Goldman Sachs Group Inc., said in August the SEC had decided to drop its probe against the firm without filing charges.

J.P. Morgan shares dropped 37 cents, or 0.9%, in after-hours trading Monday to $40.60, after rising 1.2% in regular trading. The shares have traded above $40 in recent weeks for the first time since the company disclosed in May that it faced billions of dollars in losses on a trade placed by London-based employees of its cash-managing Chief Investment Office, including one known as the London whale for his outsize trading positions.

Write to Jean Eaglesham at jean.eaglesham@wsj.com and Dan Fitzpatrick at dan.fitzpatrick@wsj.com

WSJ Archives

J.P. Morgan Rankled by Risk 8/30/12
Whale's Tail Hits Bank on Buyback 8/9/12
J.P. Morgan Hits Executive Reset Button 7/27/12
' Whale' Report Signals Deeper Problem 7/14/12
J.P. Morgan Knew of Risks 6/12/12
J.P. Morgan's $2 Billion Blunder 5/11/12
'London Whale' Rattles Debt Market 4/6/12
A version of this article appeared October 2, 2012, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: J.P. Morgan Sued on Mortgage Bonds.

online.wsj.com/article/SB10000872396390444138104578030903731665328.html

karl max: HATERS CAN HATE BUT ONE THING IS FOR SURE NIGERIA IS MOVING FORwARD.

karl max: IT MAY NOT BE A BIG DEAL FOR A PESSIMIST LIKE YOU,BUT IS SURELY A BIG DEAL FOR A LOT OF US wHO TRUELY BELIEVE IN THE TRANSFORMATION OF THIS COUNTRY.

Kindly educate me, how does listing of FGN bonds on some index, or even the issuance of new bonds or trading of existing bonds, whether for the participation of local or foreign investors, mean that Nigeria is surely moving forward?

Pukkah:



Kindly educate me, how does listing of FGN bonds on some index, or even the issuance of new bonds or trading of existing bonds, whether for the participation of local or foreign investors, mean that Nigeria is surely moving forward?

GOD BLESS YOU SIR!

I confuse die! I thought I was missing something!

karl max: HATERS CAN HATE BUT ONE THING IS FOR SURE NIGERIA IS MOVING FORwARD.

Without mincing words, in what way will this move us forward. We could get 1.5bn dolls in inflow by reason of this, who says Nigerians don't have 150bn dolls to lend to the govt if they are willing to borrow.

What you should be looking at is what those monies were used for, and like you and i know, they were mostly stolen. I share the opinion of the guy that said nothing is working in this country and this is especially true with the govt. They take these monies, loot them without any meaningful project to show for it and leave the future generation to pay for these debts.

I might be wrong, in which case you'll have to explain what you mean by Nigeria is moving forward.

@Pukkah
...and while at it, he can also tell you how TI rating of Nigeria or Nigeria global competitive index or child mortality rate or even GDP translate to Nigeria moving forward...

Frank-C:
@Pukkah
...and while at it, he can also tell you how TI rating of Nigeria or Nigeria global competitive index or child mortality rate or even GDP translate to Nigeria moving forward...

Abi! How does this improve the standard of living of Nigerians?

How many of these guys know the difference between the growth rate of an economy and the increase or improvement in the standard of living of the citizens of the country?

It is on this note that the issue raised by the poster below is pertinent:

omaojo1:

What you should be looking at is what those monies were used for, and like you and i know, they were mostly stolen.

Between January and August 2012 alone, Nigeria earned N5.5 trillion! Yes, N5.5 trillion. http://tribune.com.ng/index.php/news/48497-nigeria-earned-n55trn-in-8-months

Yes, the economy is growing (in their pockets) but has the standard of living of Nigerians improved? How has it translated into development?

jmaine: They must have been paid to list us . . . . . . . What a clueless Gov . . . . . .

Too bleeding ignorant, just STFU if you don't understand

All this $hit is for the top 1%. How the fu<k does the common man benefit?

xcubed:

Too bleeding ignorant, just STFU if you don't understand

Apparently, you're attacking not knowing who Jmaine is,

Let me reiterate him again, ONE WORD - SARCASM.


IMO, while I support the efforts of the current government, I'm very reluctant when it comes to debt. Listing of local bonds on the international index doesn't necessarily translate into "moving forward" nor growth/development,; there's no direct relationship between debt and growth, nonetheless, however, it's a foot in the door for faster access into foreign finance. Nigeria can only move forward if aggressive infrastructures AND capital are in place, and its ONLY a dedicated govt that can provide infrastructures (at least 50%) for Nigerians, then with local financing, Nigeria can move forward.

Rossikk:

Ignorant idi.ot.

GEJ is better than you, since he was clueless.
what do you think is happening in Europe and America,
All your oil money would go down the drain over night.

Jug head try amd think and dont jump at the thunderous sound its gonna rain.

All these finacial fixings and targings is how oyinbos rope africans intio what they dont understand and eternal finacial slavery. Who the Bleep is morgan to decide how the economy of the people should progress?

The progress of an economy depends on the people's abilities to satisfy their needs,by being resourceful,productive,less greedy and communal.The old school iluminati ways of dog eat dogs are all in the paper,they are not practical,not for the people.True africans should shove it up their albino asses.

karl max: IT MAY NOT BE A BIG DEAL FOR A PESSIMIST LIKE YOU,BUT IS SURELY A BIG DEAL FOR A LOT OF US wHO TRUELY BELIEVE IN THE TRANSFORMATION OF THIS COUNTRY.

you only think you are seeing transformation,
you ll soon see economic nightmare.

@Goldcircle, Gods blessings man...the handful of NLs believe anything good will eventually come out of this but the international bankers are not here to make wealth for you but rather for the one world government pockets...Goldman sachs, JP morgan chase, IMF, World Bank and Merilyn and Co etc...Obasanjo had a more tricky move to outsmart them by looting the funds to himself....in as much they pressed our govt for loans the senate stopped GEJ and then fuel subidy failed them, Wealth sovereign fund didn't give them the much target they needed bc senate stopped it again they restrategized for the 5000 naira note it failed them..now here is another avenue...

The blind will always remain blind.

manny4life:

Apparently, you're attacking not knowing who Jmaine is,

Let me reiterate him again, ONE WORD - SARCASM.


IMO, while I support the efforts of the current government, I'm very reluctant when it comes to debt. Listing of local bonds on the international index doesn't necessarily translate into "moving forward" nor growth/development,; there's no direct relationship between debt and growth, nonetheless, however, it's a foot in the door for faster access into foreign finance. Nigeria can only move forward if aggressive infrastructures AND capital are in place, and its ONLY a dedicated govt that can provide infrastructures (at least 50%) for Nigerians, then with local financing, Nigeria can move forward.

Thank you! But has the country even demonstrated that it needs access to more finance?

The more the access to finance they get (through increases in IGR, oil revenues - increasing prices and quantity of barrels pumped per day, FIRS and Customs revenues,local banks' debts, contractors' debts, bonds, etc) the more they steal. That's about where the direct relationship stops.

When one looks at the front page of Nairaland today and sees headlines like 'All Federal Roads In The South-East Are Dilapidated' and 'Did Jonathan Lie In His Independence Day Speech?' together with the Tribune news item of 'Nigeria earned N5.5trn in 8 months'; all of which give an indication of decaying infrastructure, even when revenues are going up, amidst a weak and lack-lustre fight against corruption, you may want to ask yourself:

does a wasteful/corrupt government really need more access or less access to finance?

Pukkah:

Thank you! But has the country even demonstrated that it needs access to more finance?

The more the access to finance they get (through increases in IGR, oil revenues - increasing prices and quantity of barrels pumped per day, FIRS and Customs revenues,local banks' debts, contractors' debts, bonds, etc) the more they steal. That's about where the direct relationship stops.

When one looks at the front page of Nairaland today and sees headlines like 'All Federal Roads In The South-East Are Dilapidated' and 'Did Jonathan Lie In His Independence Day Speech?' together with the Tribune news item of 'Nigeria earned N5.5trn in 8 months'; all of which give an indication of decaying infrastructure, even when revenues are going up, amidst a weak and lack-lustre fight against corruption, you may want to ask yourself:

does a wasteful/corrupt government really need more access or less access to finance?

Word.. you have said it all. Bless you. "does a wasteful/corrupt government really need more access or less access to finance?"

karl max: HATERS CAN HATE BUT ONE THING IS FOR SURE NIGERIA IS MOVING FORwARD.

No doubt !

Pukkah:

Abi! How does this improve the standard of living of Nigerians?

How many of these guys know the difference between the growth rate of an economy and the increase or improvement in the standard of living of the citizens of the country?
It is on this note that the issue raised by the poster below is pertinent:
Between January and August 2012 alone, Nigeria earned N5.5 trillion! Yes, N5.5 trillion. http://tribune.com.ng/index.php/news/48497-nigeria-earned-n55trn-in-8-months
Yes, the economy is growing (in their pockets) but has the standard of living of Nigerians improved? How has it translated into development?

If only you understood the meaning of sarcasm. I don't understand how an enlightened mind will argue the implication of major economic/development indicators all in an effort to spite the government. If you can't measure it, you can't control it but some folks prefer to measure temperature with their fingers since according to them, 'thermometer is invented by the white man to control how the black man feels heat'. I think this is the argument of the people dismissing Nigeria appearance on the radar of positive economic development.

All the lies and misinformation going on today to spite GEJ rubs off on us all. People hate MTN for making too much profit but are ready to dismiss power sector reforms that will likely throw up another MTN. I only pity the uninformed who listen to some of you because they stand to lose out in the long run. I pity the unemployed who mock the cassava bread policy with agents of some political parties. I pity those who chose to stand on the sideline while Nigeria move forward. They hate MTN for making profit, GEJ for being the President, JTF for killing 'innocent' Boko Haram, Otedola and Dangote for having too much money...they hate everything coming from GEJ and his government even when it is meant to serve their children interest.

It is so unfortunate that many Nigerians are so blinded with hatred for the Government that they just do not see anything good come out of it, no matter what. It does not matter what they do, everything gets twisted and anything positive turns negative.

Pukkah:

Kindly educate me, how does listing of FGN bonds on some index, or even the issuance of new bonds or trading of existing bonds, whether for the participation of local or foreign investors, mean that Nigeria is surely moving forward?

Let me explain the deal with JP Morgan in as simple terms as possible. JP Morgan runs an International Government Bond Index that includes the sovereign bonds of most developed economies and selected emerging economies. Nigeria met up with all their necessary criteria and the size of the Nigerian FGN bond in the Index is going to be between 0.5% - 1.0%. Nigeria is NOT going to issue bonds (or debt) for JP Morgan to be purchased. JP Morgan will come to Nigeria and buy the bonds from the Nigerian bond market just the same way foreign investors come to buy stocks on the Nigerian Stock Exchange. This Bond Index is run by JP Morgan and held passively by investors who want to have international exposure in their portfolios. This Index is not available for everyone so many other international financial houses try to mimic the Index by copying or replicating any purchase, sale or rebalancing that JP Morgan does.

Because of this inclusion, international investors will be forced to take a closer look at Nigeria and the potentials available in other sectors. This will also force the Nigerian Government to be more accountable as global economic lenses are focused on Nigeria. It is not a silver bullet that will solve our problems but it is a very good start.

Why is it a good start? The main problems we have in Nigeria is infrastructure deficit in the region of N100 trillion to N125 trillion. Nigeria does not have the capacity to finance this. We have a budget of just N5 trillion per year and even if we spend 100% of it in bridging the gap, we are looking at 20 - 25 years. This does not factor in inflation. And this also means university lecturers, doctors, perm secs, senators, presidents and all those that depend on Govt will not be paid for 20 years or more. The only way to bridge this gap is to attract foreign investments. And if you think Nigerian banks can finance infrastructure, let me remind you that all the bank assets in Nigeria are just N10 trillion. We just don't have the money to do this on our own.

Perhaps the inclusion of Nigeria in the JP Morgan International Bond Index might just help us. Maybe.

Frank-C:
@Pukkah
...and while at it, he can also tell you how TI rating of Nigeria or Nigeria global competitive index or child mortality rate or even GDP translate to Nigeria moving forward...

All the ratings you noted above does not have anything to do with this purely financial transaction. The Indexes JP Morgan saw are those that are ignored by opposition politicians, which even the Government is silent on because they know Nigerians will not understand them. I will spell some of them out.

The total debt to GDP ratio in Nigeria is just 18%; global emerging market average is about 60%. Greece is almost 150% and Italy is about 120% and the US is 100%. This means the debt Nigeria holds is not enough to bring the country to a standstill if we have to liquidate them in one week.

The Nigerian budget deficit is just about 2% of GDP. The global average is about 10 - 15%, which means Nigeria borrows very little to finance her budget when compared with other economies.

While the Naira has depreciated over a very long time, it has been stable for two years with very little volatility. It is also the best performing currency in Africa gaining 2% to the US dollars year to date.

All these figures give foreign investors confidence. They might not make a lot of sense to you but I can assure you that it is a very good start. A good one. And there is hope for Nigeria.

Isale_eko:

Perhaps the inclusion of Nigeria in the JP Morgan International Bond Index might just help us. Maybe.

You've already answered the question. Perhaps. May be. Now, I ask you, is this worth applauding? Need I say anything more?

Nigeria is so attractive potentially because if its huge market and infrastructural deficit so much that the country does not necessarily need any listing to attract foreign investment or investors.

Do you know what is putting so many investors that don't even need a dime from the government at bay? Corruption. You sound like an analyst but I don't know how much of the workings of government or the real frustrations to business you are familiar with. But, I tell you, corrupt government officials that demand for cuts and gratification are the ones killing the economy and it's not the listing of bonds on the index that will solve that.

Right now in Nigeria, who is fighting corruption? Or we expect that Index listing will somehow fight it for us because by then the global market/investors would look at Nigeria very well? The Oil and Gas sector that has witnessed foreign investment is an example.

Of course banks will be happy about this because they will get more fee income, whether or not the bonds proceeds are used for the purpose intended.