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Investors Stake N82.4tr on Currencies, Fixed Income Securities in 9 Months

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  • Investors Stake N82.4tr on Currencies, Fixed Income Securities in 9 Months

Investors have found the fixed income and currency market attractive and have invested a total of N82.35 trillion in the market in the past nine months.

According to trading data made available on Monday, N10.85 trillion was invested in the month of September alone, showing a growth of 11.3 per cent above the N9.75 trillion staked on securities in August.

A breakdown of the performance for the nine months showed that investors staked N71. 5 trillion between January and August while N10.85 trillion was invested in September.

The performance indicated that in the month of September, activities in the foreign exchange (FX) accounted for 25.74 per cent, while FGN bonds and Unsecured Placements/Takings accounted for 7.16 per cent. Treasury bills (T.bills) transactions accounted for 36.85 per cent while Secured Money Market [Repurchase Agreements (Repos)/Buy-Backs] accounted for 28.24 per cent.

Transactions in the FX market settled at $7.19 billion in September, an increase of 33.10 per cent compared with the value recorded in August. The third Naira-settled OTC FX Futures contract, NGUS September 28 2016, with a total outstanding amount of $179.93 million priced at $/N296, matured and was settled within the month.

The Central Bank of Nigeria (CBN) revised the rates on all outstanding OTC FX Futures contracts, whilst a new 12-month contract – NGUS SEP 20 2017 was introduced at$1/2N243.50.

Member-member trades stood at $1.05 billion in the month of September, an increase of 97.15 per cent compared with trades recorded in August and 41.53 per cent, while member-client trades also increased by 26.08 per cent ($1.27 billion) from the previous month and 17.91 per cent ($1.34 billion).

In the month under review, the Naira appreciated by 1.46 per cent to close at $/N311.62 in the inter-bank market, whilst it depreciated by 13.10 per cent to close at $/N475.00 in the parallel market.

Turnover in the fixed income market in September settled at N4.78 trillion, 6.42 per cent below the previous month’s value, with transactions in the T.bills market accounting for 83.74 per cent of the fixed Income market turnover. Outstanding T.bills at the end of the month amounted to N7.01 trillion (August – N6.62 trillion) whilst FGN bonds outstanding volume increased by 1.91 per cent to close at N6.45trn in the period under review

Trading intensity in the fixed income market settled at 0.60 and 0.12 for T.bills and FGN bonds respectively, with maturities between six months – one year being the most actively traded (N1.82 trillion. The short end yields of the FGN bond yield curve gained an average of 2.38 per cent, whilst yields across the medium and long ends declined by an average of 0.12 per cent and 0.09 per cent respectively.

Activities in the secured money market (repos/buy-backs) settled at N3.07trn, 14.21 per cent below the value recorded in August. Unsecured Placements/Takings declined by 46.14 per cent to close the month at a turnover of N0.21 trillion.

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.

Finance

Global Deal Activity Down by 4.5% in October 2020

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A total of 6,304 deals were announced globally during October 2020, which is a decrease of 4.5% over the 6,598 deals announced during September, according to GlobalData, a leading data, and analytics company. An analysis of GlobalData’s Financial Deals Database revealed that the deal volume during October remained below the monthly average of Q3 2020.

Aurojyoti Bose, the Lead Analyst at GlobalData, comments: “After demonstrating growth for four consecutive months, the deal volume shrank in October. The decline in deal activity could be attributed to inconsistencies across different regions. The APAC region remained a weak spot, while deal activity remained mostly flat in North America, and the Middle East and Africa (MEA) region witnessed growth in deal activity.”

North America attracted the highest number of investments, followed by APAC, Europe, the MEA, and South, and Central America.

The uncertain global economic landscape lowered the deal volume in October for major markets such as the US, Germany, Australia, France, India, and China compared to the previous month. On the contrary, the UK, Japan, South Korea, and Canada saw growth of 15.6%,14.9%, 3.8%, and 2.2%, respectively, in October as compared to September’s deal volume.

Bose continued: “Most of the deal types witnessed a decline in volume during October compared to the previous month. Private equity, equity offerings, venture financing, debt offerings, and partnership deals volume decreased by a respective 2.4%, 9.1%, 9.8%, 14.6%, and 24.6% – while the deal volume for mergers and acquisitions (M&A) increased by 7.2%.”

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Investment

Japaul to Invest in Chinese Firm H&H to Deepen Mining and Exploration Business

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Japaul Gold & Ventures Plc (Japaul), formerly known as Japaul Oil and Maritime Services Plc, announced it has gotten approval in principle from H&H Mines Limited to invest in or acquire shares in the company once it concluded its fundraising exercise.

According to a statement released through the Nigerian Stock Exchange (NSE), H&H Mines Limited has several licenses, which include two major Mining Leases for 25 years renewable.

The statement noted that extensive exploration has been done on the Mining properties and the last lap of the exploration works is core drilling. This, it said will allow Japaul knows the measured Minerals Reserve contained in the Mine, which it claimed contain Gold, Silver, Lead, Zinc, etc.

Japaul further explained that the need to get the drilling done was what led H&H Mining to engage the services of Xiang Hui International Mining Company Nigeria.

“Since Japaul will eventually be part of H&H Mines Limited, it was necessary that Japaul is carried along on the kind of Contract of Drilling to be entered into, and that was why the signing of the Drilling Contract between the Chinese Company and H&H Mines Limited was concluded at Japaul’s Head Office,” the company stated.

The drilling is expected to be concluded in the next 12 months and within this time, Japaul is expected to have concluded the Fund Raising and formalise her involvement in the Mining.

The company added that Canadian reports revealed that there are huge gold, silver, lead, etc deposits, but it is drilling that will show the actual reserve.

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Africa Investment Forum (AIF) Rescheduled to Hold in 2021 – AfDB

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Investment Forum to Now Hold in 2021 in a Bid to Curb Possible Second Wave of COVID-19  

The Africa Investment Forum scheduled to hold in November 2020 in Johannesburg, South Africa has been rescheduled to hold in2021 as a result of the ongoing global health pandemic.

This announcement was made in a statement by AfDB on Wednesday. The African Development Bank (AfDB) and the Africa Investment Forum founding partners agreed to the postponement of the annual three-day investment market place.

Considering the negative effect of Covid-19 on the global economy, agreement by the two bodies was made after a careful assessment of the impact of COVID-19 on global travels, investments, observing the social distancing rules and curbing the likely possible risk of a second wave.

In the statement, the bank stated that through the forum innovative digital platforms, it would track investments, source for new deals, progress on financial closure of transactions and other existing deals.

“At the 2019 Africa Investment Forum, 57 deals valued at $67.7bn were tabled for discussions. Fifty-two deals worth $40.1bn secured investment interest.

“In July this year, the AIF Founding partners pledged to strengthen strategic partnership engagement and commitments for Africa Investment Forum Market Days 2021, to help ‘reboot investments in Africa.’ They underscored the need to boost local manufacturing while leveraging the continent’s vast resources to unlock investment.”

In the statement, Africa Investment Forum objectives are achieved through the forum’s four pillars; Closing, Connecting, Engaging and Investment Tracking.

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