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FMDQ to Start Listing of Short-Term Bonds

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  • FMDQ to Start Listing of Short-Term Bonds

FMDQ OTC Securities Exchange has introduced short-term bonds to the Nigerian fixed income market.

The Exchange, on Wednesday, said this was achieved through its various engagements and the subsequent approval of the action by the Securities and Exchange Commission.

As an innovation-driven Exchange focused on powering growth, through product and market development, the FMDQ confirmed that it carried out extensive consultations with stakeholders in the Nigerian financial market space before introducing the STBs.

The STBs are short-term debt instruments issued by corporate entities for tenors of between one year and three years.

In addition to bridging the funding gap between short- and medium- to long-term debt instruments, the STBs are designed to serve the liquidity needs of the medium to large creditworthy corporates and commercial entities by providing an alternative/competitive source of financing to bank loans.

“The STBs are beneficial to the debt capital market as they will serve to boost the investment product bouquet for the buy-side (which comprises, amongst others, the Pension Fund Administrators), offshore investors and other market participants,” the statement added.

Furthermore, SEC also approved the FMDQ short-term bonds registration process and listing rules, which were developed in furtherance of the FMDQ’s commitment to provide effective market regulation and governance for the markets under its purview.

The STB rules served as a guide to issuers, the STB sponsors and the investing public, among others, the statement said.

It also stated, “The rules outline the governance structure for the STB issuances as well as the procedure for the registration of prospective STB issuances.

“As a consequence of SEC’s approval of the STB rules, the FMDQ will serve as the Exchange through which the primary due diligence for all the STB issuances, consequently ensuring an expedited time to market, shall be conducted and also provide its efficient platform for the registration and listing of all STBs.”

With the recently launched naira-settled OTC Foreign Exchange Futures product in its 4th successful trading month and about $4bn worth of contracts traded on the FMDQ, the Exchange said it had continued to articulate ways to improve the performance of the market.

“The importance of a fully functional and efficient DCM in powering the growth and development of Nigeria cannot be overemphasised. Even in the light of the present economic climate, the FMDQ remains keen and unrelenting in its efforts to actively work with relevant stakeholders to deliver on its agenda of making the Nigerian financial market globally competitive, operationally excellent, liquid and diverse,” the statement noted.

 

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.

Crude Oil

A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

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Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.

Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.

A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.

One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.

However, Saudi authorities are yet to confirm or respond to the story.

 

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Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday

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Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

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Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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