@Kausha. You have good points...
@kizee. How do banks innovate when it comes to govt. bonds? Banks already own primaries...And how are brokers supposed to innovate...the fews brokers on leverage can only raise limited capital...if the issue is commissions, lobby to lower them...why don't the commercial banks just buy brokers? (and everything that comes with them...dealers, analysts, etc...)

Who comprises the membership of otc, who are the stakeholders and how can it be structured so as not to promote a cartel, if it's gonna self-regulate who takes on the role of the CMA?

@kausha - Nonsense...

1) What exactly is 'buyside'...

2) 0.04% is too high... The lower the commissions, the higher the volume... the better the liquidity... Any margin goes... as long as it is a NET gain...

3) The issue is not whether banks can trade equities but the usurious rates we have to pay those lousy no-good brokers who add little value! The NSE & CMA are too stupid to realize that fixed commissions can spur volumes making the NSE much more attractive

@Kizee
The OTC in Nigeria is there because the bond market was poorly developed. The only thing affording them discipline is that almost all banks and insurers own asset managers who do most of their trading. As the NSE gets more fixed income listings the market is becoming the main trading place while OTC is largely used for PTs.

And as for value addition, the reason why bank's struggle to receive value from brokers is because they actually don't know how to trade bonds, they want brokers to produce magic, the kind they are able to reproduce at forex markets where buyers are forced to pay because there are no options which is a classic case of what an OTC does. You find the US $ is going for say 76.84 mean rate at CBK. You walk into Stanchart it goes for 79 ask, 73 buy, Barclays 78.9 ask 73.2 buy, KCB 79.2 ask 73.8 buy. You query why the stupid spreads you are told cost of buying yap, yap!,trade margins, blah, blah, granted some business margin makes sense but not those kind of spreads from daily intermediation! Imagine is you traded both ways simoultaneously, it's theft by banks. Now the same dealers want the stock broker to fix /get for them simmilar ridiculous margins by say finding a buyer for an IFB3 8yr at 8.95%....the broker calls fund managers and is made to look very duft because this kind of offer is akin to the broker calling the fund manager to market to them Barclays shares at 75 yet in all honesty we know its unlikely to be worth that unless something fundamental changes in the next 3 years although at 55 it makes sense for instance. Obviously this doesn't fly, its moronic at the very least. The dealers get frustrated and argue the broker is not adding value because they bought the bond at the auction last week at 9.5% and want to sell it at 8.95 10 days latter and they want a nyani in the market to buy it at that price, you ask them why, it's worth that they can't tell you much. You call the same dealer for deposit placement they offer you 8.5% cash deposit rates yet they want you to also buy 8 yr paper at 8.5% yield. I seriously believe bank dealers don't understand bond trading that well. Now at OTC they reckon they can do what they do with forex trading which is transluscent trading reported on NSE, Bloomberg/ reuters and hoping to attract unsuspecting buyers. How is it that fund managers dont complain about value addition by brokers?

@VVS - a guy you heckle unnecessarily at times..how can you be one of the loudest wazuans on the investment section and you don't know what is buyside......anyone else i would explaing to but you i can't just go figure! and certain margins amount to churning aka working for the broker aka inflating your trading costs which you should consider in your trading strategy prior to execution.

Kausha/Scubidu- u need to realise that some Wazurians payuka for effect. Ati OTC gives tighter liquidity? Have you ever heard of a financial instrument looking for tighter liquidity?
My friends even financial instruments that are hardly bought by normal banks such as CDS are being forced from OTCs onto someform of exchange. And I can tell you its not because of commissions.
The issue of commissions will be become past tense once NSE demutualises especially if CMA is smarter and allows more brokers...

Who said "OTC gives tighter liquidity?"

What a load of crap... Financial instruments thrive on liquidity - Of course, it can also bite ya in the ass!

vvs

all i can say is the bill to ammend sec 31 of the cma act is already with uhuru...otc is coming...kausha scubidu and anyone else who has a problem will just have to live with this fact

hey...im soooo out of this argument...cant waste any more of my time

@madebe;
Before end of next week