- FG to Borrow N430bn via Bonds in Q1
The Federal Government is planning to borrow between N340bn and N430bn of local currency bonds during the first quarter, the Debt Management Office has said.
In a data posted on its website on Friday, the DMO said that it would auction N110bn to N140bn worth of bonds maturing in 2021 and N85bn to N105bn in debt maturing in 2026.
It will also sell N45bn to N55bn in bonds maturing in 2027 and N100bn to N130bn of the 2036 debt.
According to the debt issuance calendar, the 2027 bond will be a new issue in March. The rest will re-open previously issued debts, starting after January 18.
The country has proposed a budget deficit of N2.36tn for this year, with the government hoping to fund it by borrowing N1.254tn domestically and N1.067tn from abroad.
The government struggled to fund the 2016 budget after a planned Eurobond sale and World Bank loan were delayed.
The Central Bank of Nigeria sold N172.85bn ($550m) at its first Treasury bill sale of the year on Wednesday, with yields unchanged from the previous auction held on December 21, 2016.
The CBN sold N115.85bn of one-year debt at a rate of 18.68 percent, the same as the previous auction, the traders said.
They said the central bank also sold N35bn of 91-day paper at 14 percent and N22bn of six-month bills at 17.5 per cent, unchanged from the previous auction.
Subscription at the auction came to N194.12bn, well up from N42.68bn at the previous auction.
The CBN issues Treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to help the government fund its budget.
The central bank had on December 21 raised N39.72bn ($130.57m) at a Treasury bill sale, with yields unchanged on the previous auction.
It sold N13.17bn of three-month paper at 14 percent, the same yield as on December 14, and sold N26.55bn of the six-month paper also at an unchanged 17.5 per cent.
The auction was sparsely subscribed with total demand of N42.68bn.
Meanwhile, the Kenyan shilling is expected to remain under pressure with the central bank likely to sell dollars to smooth out any volatility, according to traders.
Reuters reports that the Ugandan shilling is seen weaker, pressured by commercial banks picking up dollars in anticipation of a surge in demand from importers.
The Tanzanian shilling is expected to come under pressure in the coming days, weighed down by strong demand for greenbacks from the energy and manufacturing sectors.
The kwacha is likely to make marginal gains against the dollar next week as companies start preparing to pay taxes due on January 14.
Ghana’s cedi is seen steady next week amid expectations that the central bank will resume its fortnightly dollar sales to commercial banks, an analyst said.
The local unit declined by 11 percent at the end of December compared to 18 per cent depreciation in the previous year.
FG Borrows N2.36 Trillion from Capital Market in 2020
Mr. Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange, said the Federal Government borrowed N2.36 trillion from the nation’s capital market in 2020.
The CEO disclosed this at the 2020 market recap/2021 outlook held on Tuesday.
He said the Federal Government issuances account for 92 percent of the total bond issued in the market in the year.
Onyema further explained that corporate organisations leveraged on low yield environment to expand and embark on debt refinancing, raising a total of N192 billion,
“Capital-raising activities in the fixed income market increased significantly in 2020. The NSE’s bond market capitalisation rose by 35.52 per cent from N12.92tn in 2019 to N17.50tn,” he said.
Onyema noted that “The year 2020 was indeed a historic one for global capital markets. Facing buffeting headwinds, world markets saw sharp swings and steep losses, but largely remained resilient and orderly amid rising uncertainty.
“For The Exchange, renewed investor optimism coupled with improved economic conditions and low fixed income yields, propelled a year end bull run. Of 93 global equity indices tracked by Bloomberg, the NSE All Share Index emerged the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent) and other global and African market indexes, to post a one-year return of +50.03 per cent.”
Speaking on product results for the year, the CEO said, “The Nigerian equities market got off to a strong start in 2020, returning 10.4 per cent by the eighth trading session. By October, the equities market entered a much-awaited bull run.
“Buoyed by the formal declaration of the US president-elect, unattractive fixed income yields and better-than-expected corporate earnings, the NSE ASI recovered from Q1’20, to close the year at 40,270.72 (+50.03 per cent) and erase losses of -14.90 per cent recorded in 2019.
“During its remarkable year end run, the ASI gained 6.23 per cent in a single trading session which triggered a 30-minute halt of trading on all stocks for the first time since the NSE Circuit Breaker was introduced in 2016 to safeguard market integrity in periods of extraordinary volatility.
“At the close of the year, the NSE’s equity market capitalisation was up by 62.42 per cent, from N12.97tn in 2019 to N21.06tn in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96tn in 2019 to N1.03Tn in 2020.
“Although Initial Public Offering activity was mute, the value of supplementary issues increased dramatically from 2019, rising by 851.37 per cent to N1.42tn, from N148.77bn.
“Also noteworthy is that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value (retail: 44.98 per cent; institutional: 55.02 per cent) while foreign portfolio investors accounted for 34.72 per cent.”
Airtel to Announce Financial Results for Nine Months Ended December 31, 2020 on 29 January 2021
Airtel Africa, one of the leading telecommunications companies in Africa, on Wednesday announced it will report its financial statements for the nine months ended December 31, 2020 on January 29, 2021.
The telecom giant disclosed in a statement signed by Simon O’Hara, Group Company Secretary.
The statement reads “Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, will announce its results for the nine months to 31 December 2020 on 29 January 2021.
“Management will host a conference call on the day of results for analysts and investors at 2:00pm GMT.
“Participants are requested to pre-register for the call by navigating to:
“Once registered, participants will receive a calendar invitation with the dial in details for the call.”
Global Credit Rating Affirms Sovereign Trust Insurance A Rating
Global Credit Rating, an international rating agency based in South Africa, has affirmed Sovereign Trust Insurance Plc A rating in its latest report released for the month of December 2020.
In a statement released through the Nigerian Stock Exchange (NSE), Global Credit Rating noted “that the Company has shown a great deal of consistency in her claims paying obligations to her numerous customers spread all over the country.
The Report further stated that “the listing of the Rights Issue in 2019 helped in increasing the Shareholders’ funds of the Company by 33.8%, to N7.8b by the end of the Financial year in 2019 as against the figure of N5.8b in 2018.
“Subsequently, by the third quarter of 2020, the Shareholders’ funds had increased to N8.2b which also translated to a 31% increase in the corresponding period of 2019 with a figure of N6.3b. In the Rating Agency’s opinion, Sovereign Trust Insurance Plc is strong in liquidity with more than adequate claims coverage that compares well to industry averages.
“The capital adequacy of the Underwriting Firm is considered strong according to the rating report and this is underpinned by the sizeable capital base catering for the quantum of insurance and market risks assumed. In this regard, the ratio of Shareholders’ funds to NEP, (Net Earned Premium) improved to 189.2% in the Q3 of 2020 as against 130.9% in the corresponding quarter of 2019.
In terms of peer-to-peer performance comparison, “Sovereign Trust Insurance Plc did very well when compared with other selected insurers in terms of Capital, Total Assets, Gross Premium Income (GPI) and Net Premium Income (NPI).”
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