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The Historic Listing of $1bn Eurobond on NSE



  • The Historic Listing of $1bn Eurobond on NSE

The Federal Government recently achieved remarkable success with the issuance of its first FX-denominated bonds.

The bond, issued under Nigeria’s newly established Global Medium Term Note programme, is the third in the series after the ones in 2011 and 2013. The Notes will bear interest at a rate of 7.875 per cent and will mature on February 16, 2032, with a bullet repayment of the principal.

The Eurobond, which is part of federal government’s funding strategy for its 2016 capital expenditure plan will be utilised to fund key infrastructure projects, in line with its economic plan. The Notes were approximately eight times oversubscribed with orders in excess of US$7.8 billion compared to a pre-issuance target of US$ 1.0 billion.

Following the massive 780 per cent subscription to the bonds, it was admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market. Many analysts have attributed this huge oversubscription rate to a buoyant investor appetite for building exposure to Nigeria and the demonstration of international capital markets confidence in the Nigeria’s economic reform agenda.

The Notes were issued following a successful one-week roadshow led by the Minister of Finance, Mrs. Kemi Adeosun, to key global financial centres – London, Los Angeles, Boston and New York. Other members of the delegation include Minister of Budget and National Planning, Senator Udoma Udo Udoma; Governor of the Central Bank of Nigeria; Godwin Emefiele, Director-General of the Debt Management Office (DMO),Dr. Abraham Nwankwo; and Director General of the Budget Office, Ben Akabueze,

In line with federal government’s commitment to the development of the domestic capital market, Debt Management Office (DMO) last Thursday, listed the $1 billion (FGN) Eurobond on the floor of The Nigerian Stock Exchange.

The 15-year Sovereign is the first foreign currency denominated security to be listed and traded in the Nigerian capital market. The minimum denomination to participate in the bond is USD200,000 and increment of USD 1000.

First, DMO DG, Dr. Abraham Nwankwo, and parties to the listing were hosted to a pre-listing meeting at the council of the exchange where the Executive Director, Market Operations and Technology, Mr. Ade Bajomo, received the team. In his brief remarks at the pre-listing event, Dr Nwankwo described NSE “a great stock exchange, the pride of Nigeria.”

At the Facts Behind the Listing presentation at the stock exchange, Nwankwo noted that, “The listing of domestic Sovereign Eurobond on the local bourse reinforces FGN’s commitment to deepen and grow the Nigerian capital market. Developing the domestic market can help bridge the infrastructure deficit constraining economic growth.”

Also speaking on the listing, the Executive Director, Market Operations and Technology, Mr. Ade Bajomo, commended the DMO for listing the Eurobond on the nation’s bourse. He noted that the domestic listing would diversify its investors’ base by giving Nigerian institutional investors access to the bond.

Bajomo further remarked that, “The listing of the dollar-denominated bond on the exchange will boost price discovery and liquidity in the local market as well as help attract reliable long term foreign currency denominated funds into the financial market. It would also set the foundation for raising and listing more foreign denominated securities in Nigeria which will open up additional capital raising options for issuers and portfolio diversification opportunities to investors”.

To ensure seamless trading and settlement of the Eurobond, the Exchange, in collaboration with Central Securities Clearing System (CSCS), developed a framework to facilitate onshore and cross border trade and settlement process in line with robust market practices.

At its 2016 NSE Market Recap & 2017 Outlook, the Exchange’s Chief Executive Officer, Mr Oscar N. Onyema, had raised hopes of a possible buoyant capital market in 2017. He stated that, “There will be a revival of supplementary listings, return of the new issuance market, and potentially one IPO since the equity market is a forward indicator of the economy. We are cautiously optimistic, as consensus estimates suggest a moderate recovery for Nigeria in 2017, provided that policy makers implement the right combination of policy measures.”

To reinforce this, NSE has gone on a listing spree from the beginning of the year. To date, it has listed the Stanbic IBTC Asset Management Limited listed Pension ETF 40, Top Services Limited listed a Real Estate Investment Trust, Forte Oil listed a N9 Billion Bond etc. With the listing of two companies by introduction at the beginning of the year, Medview Airline and Jaiz Bank added N14.65billion and N36.83billion respectively to the bourse’s market capitalisation.

It would be recalled that MTN, the telecommunications giant, had indicated interest to list on the exchange by 2017. According to experts, MTN listing on the Nigerian Stock Exchange would increase the market capitalisation by about 22 per cent.

The Securities and Exchange Commission (SEC) and NSE have been consistent in its advocacy to the federal government to encourage multinational companies operating in the country to list on the exchange, to give Nigerians the opportunity to benefit from their investments.

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

Banking Sector

Wema Bank, MOD Launch Scheme For International Students



Wema Bank Logo

Wema Bank has launched an advisory and loan scheme, the Education Advisory Service, in partnership with MOD Education for young Nigerians wishing to study abroad.

Following foreign exchange control measures introduced by the government, parents and guardians have experienced difficulties paying tuition fees for their children and wards studying abroad. Some who have the money don’t know the requirements for foreign admission and waste lots of time and resources in fruitless searches.

But to help them surmount these challenges, Wema Bank has partnered with MOD Education, a professional student advisory, marketing, recruitment and placement company for the advisory services and school fees advance facility. The partnership, which was launched on Friday, April 9 at Eko Hotels, Victoria Island, will see both organizations providing innovative education advisory services and funds for international students.

Speaking about the partnership, Divisional Head, Retail Business, Wema Bank, Dotun Ifebogun, explained that the initiative would aid hundreds of thousands of Nigerians requiring advisory and financial support to pay for their wards in foreign schools.

He explained that Wema Bank does not want the aspirations of Nigerians desirous of foreign education truncated, hence the support.

“We are interested in everything that concerns our customers, and education is one of them. Some parents and guardians desire a certain quality of education for their wards outside the shores of Nigeria, and we would be able to assist them with this product. Our school fees advance loan results from the requests of parents and guardians who need to get short term financial support to meet the tuition obligation of their wards irrespective of the constant increase in fees.

“There’s nothing as heartbreaking as withdrawing a child already in a foreign university or being unable to raise the requisite forex for a child offered admission in a top-rated foreign institution of higher learning. But our school fees advance loan will take care of this problem and help secure the futures of such students – both undergraduates and postgraduates. The fact that you get counsel from the right sources at any particular time is another benefit of this product.

Also, the Managing Director, MOD Education, Michael Dosunmu, expressed gratitude to Wema Bank for the partnership. “Wema Bank has been supportive to us as a business and it was just a natural marriage. We trust the bank enough to bank with them, and our trust is enough to recommend it to others.”

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NAIC Pays N1.7bn Claims to Farmers




The Nigerian Agricultural Insurance Corporation (NAIC) said it paid a total of N1.7 billion claims to over 5,000 farmers in the past two years.

NAIC, which is the only federal government owned insurance company authorised to offer agric insurance services to farmers at subsidised rate, said a breakdown of the paid claims showed that it paid N856 million to insured farmers in 2019 and N848 million in 2020.

Commenting on the development, NAIC Managing Director, Mrs. Folashade Joseph, said the claims were paid to the farmers to cover losses incurred in the course of doing business.

Joseph, enjoined agricultural investors and lending institutions to continue to partner NAIC by taking agricultural insurance cover that will enable them remain firm in business despite unforeseen circumstances from weather conditions and other risks in order to realise the food security agenda of President Muhammadu Buhari.

She said the above-mentioned amount was shared among five million farmers who suffered various setbacks in their farms as a result of natural course.

According to her, the NAIC Agric Insurance Scheme was launched in 1987 by federal government to restore the confidence and productivity of Nigerian farmers who suffered losses as a result of natural disaster such as flood, drought, pest and diseases.

The NAIC boss explained that the essence of the sensitisation campaign embarked by the corporation was to let the farmers know and understand exactly what NAIC does, the importance of insurance, and make them understand how insurance works, how they can access NAIC products and services, how to process their claims, as well as what insurance stands to do for them.

“Agribusiness is evolving fast and so many risks are being thrown up, many new participants are coming into the business of agriculture, and the risks are on the increase if you look at them across the value chain, there is no so many participants so we need to keep sensitising the farmers and let them know we are serving them, and we need to know from them how to serve them,” she explained.

Speaking further, she said, “our assurance to farmers is that when they are insured and they suffer losses covered by any of the policies they purchased, including natural disasters and whatever, they will get paid for their losses, and that is the purpose of insurance and setting up NAIC.

“Our motor is ‘Plowing the Farmer Back to Business, Plowing the Farmers into Prosperity’, and we settle claims.”

She said NAIC currently deals with thousands of farmers (Small, Medium, and Large scale farmers) across the country, adding that the corporation serves farmers with investment as little as N100, 000, and at the same time serves multinational farmers.

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Banking Sector

UBA Organises Capacity Building Forum



UBA Insider dealings

As part of its commitment to support the growth and sustainability of micro, small and medium-scale enterprises (MSME) in the continent, the United Bank for Africa (UBA) Plc, is set to organise the next edition of its UBA Business Series.

The UBA Business Series which is a monthly event, is an MSME Workshop as well as a capacity building initiative of the bank where business leaders and professionals share well-researched insights on best practices for running successful businesses, especially in the face of the difficult operating environment that dominates the African business landscape.

Through this initiative, UBA has been assisting with essential tips to help businesses re-examine their models and strategies and ensure that they stay afloat and remain thriving, a statement from the bank explained.

The topic for the next edition of the series is, “Managing Performance for Business Growth,” and it will be held today, via Microsoft Teams.

At this session, the Managing Director, Secure ID Limited, Mrs Kofo Akinkugbe, will be sharing useful tips and insights on the key strategies of performance management to boost business growth.

Akinkugbe is the founder of SecureID Nigeria, a MasterCard, VISA and Verve certified Smartcard Personalization Bureau and Digital Technology company. She currently serves as the Managing Director/CEO, Secure Card Manufacturing, – a Smartcard manufacturing plant producing high security identity cards and documents for the Banking, Telecoms and Public sectors across Africa and beyond.

UBA’s Head, SME Banking, Sampson Aneke said of Akinkugbe, “with her vast experience garnered over the years from various sectors, she will help business owners understand how performance management strategies can be effectively implemented to ensure business growth.”

He emphasised UBA’s commitment and deep passion for small businesses, which according to him, remains the engine of any developing economy adding, “We know small businesses are the backbone of the economy in every country. In many climes, businesses with fewer than 100 employees account for 98.2 per cent of all businesses. This no doubt captures the importance of SMEs to a thriving economy which is why UBA is committed to seeing them flourish.”

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