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FMDQ Lists N16.79bn UPDC Plc Commercial Paper

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FMDQ

The FMDQ OTC Securities Exchange yesterday admitted the UACN Property Development Company (UPDC) N16.799 billion commercial paper (CP) on its platform.

This followed the successfully meeting of the FMDQ OTC listing requirements by UPDC.

This CP represents series 1 under the UPDC’s N24 billion CP Issuance Programme.

In his remark, Managing Director/CEO, FMDQ, Mr. Bola Onadele.Koko, congratulated UPDC Plc, saying that the quotation of this real sector CP, was evidence of the positive progression in the Nigerian CP market, serving to instill confidence in the possibilities of the Nigerian financial market. He stated that FMDQ, as the market organiser, desirous of building a sustainable CP market in the Nigerian financial market space, promotes credibility for quoted CPs, through a highly efficient registration process and the provision of invaluable information, instituting financial market infrastructures, in line with global standards, to drive, among others, transparency, governance, market oversight, integrity and market liquidity with a view to protecting stakeholder interests.

In his address MD, UPDC, Mr. Hakeem Ogunniran, acknowledged that the CP issuance had afforded the company a better opportunity to successfully diversify its short-term funding sources at a 25 per cent reduced cost, thereby enhancing their value-creating capability for UPDC’s various stakeholders.

Also speaking, Mr. Kayode Akinkugbe of FBN Capital Limited, noted, “the remarkable success of the UPDC CP issuance is an affirmation of the growth of the CP market in recent years. We are indeed pleased to have partnered with UPDC in establishing its inaugural CP Programme and achieving the significant oversubscription recorded at its debut launch. The success of the deal was influenced by the innovative credit enhancement features developed by FBN Capital Limited and Coronation Merchant Bank Limited.

Speaking in the same vein, Mr. Abubakar Jimoh of Coronation Merchant Bank said the bank is happy to be part of this landmark and novel transaction.

“We successfully offered our superior transaction structuring capabilities to UPDC by jointly providing a liquidity back-stop facility to enhance the CP offering alongside the partial corporate guarantee provided by UACN, (UPDC’s parent company),” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

OPEC Agrees to Increase Oil Supply by 500,000 Barrels Per Day Ahead of Surge in Demand

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Nigeria's economic Productivity

OPEC and allies finally agreed to ease their 7.7 million barrels per day production cut by 500,000 barrels per day starting from January 2021.

This will now bring the oil cartel’s total production cuts to 7.2 million barrels per day starting from next year.

Oil prices rose after the news as the market believed the approval of Pfizer COVID-19 in the United Kingdom will kick start a series of approvals and helped restore confidence, increase business activities and demand for the commodity across the globe.

After the outcome of the meeting was made public on Thursday, Brent Crude Oil against which Nigerian oil is priced gained 1.35 percent on Friday after gaining 1.4 percent on Thursday to $49.37 per barrel at 11.35 am Nigerian time on Friday.

The US West Texas Intermediate gained 1.29 percent to $46.23 barrel on Friday.

500,000 bpd from January is not the nightmare scenario that the market feared, but it is not what was really expected weeks ago,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu. “Markets are now reacting positively and prices are recording a small increase as 500,000 of extra supply is not deadly for balances,” she added.

Investors King increased business sentiment in the energy sector to boost investment, increase activity in the sector and most important improve crude oil demand enough to accommodate the 500,000 barrels per day extra that would be hitting the global market starting from January.

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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