Specifically, the Federal Government has announced that proceeds of Sukuk would be utilised for execution of road projects in the six geopolitical zones in Nigeria as a critical infrastructure for enhanced rapid development of the economy.
The bond attracts 11 per cent interest and minimum subscription of N10,000 in order to encourage retail investors.
A statement jointly signed by the institutes President, Mr. Olatunde Amolegbe, and the Registrar/ Chief Executive, Mr. Adedeji Ajadi, CIS advised the investing public to partner with stockbrokers to take advantage of investing in Sukuk to boost their cash flow and assist the Federal Government in in its effort to invest in road infrastructure.
The institute hereby encourages investors to approach their stockbrokers to learn more about this instrument prior to making their investment decision. Stockbrokers are very accessible and they are professionals, equipped with skills and competencies in evaluating the risk and returns associated with such an instrument and will be able to guide investors accordingly.
Sukuk Ijarah is a fixed income security backed the Federal Government. This makes it an investment without risk as repayment of investors is guaranteed by the full faith and credit of the Federal Government of Nigeria, hence, the instrument as a gild hedge. Sukuk is highly sought after by ethical investors. It provides a regular bi-annual tax-free payment for the period of the instrument while principal will be paid at the end of maturity period which is seven years the institute added
The profit to investors is pre-determined at regular intervals to enable them enjoy steady cash flow. Sukuk helps in redistribution of wealth. It is a risk management instrument which is ideal for both speculators and investors. Speculators can sell before maturity. The instrument will help the government to finance large projects.
Stockbrokers will assist investors to open accounts at the Nigerian Stock Exchange (NSE) Clearing House, Central Securities Clearing System (CSCS) to keep (warehouse) their investments with opportunities to track it on The Exchange and FMDQ in case they decide to sell before maturity, the institute added.