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CBN to Auction N110.9bn Treasury Bills

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FG Borrows
  • CBN to Auction N110.9bn Treasury Bills

The Central Bank of Nigeria (CBN) will this week conduct treasury bills auction of N110.9 billion on 91-day, 182-day and 364-day instruments.

But the impact on liquidity is expected to be muted by a scheduled maturity of the same amount.

Analysts at Afrinvest West Africa Limited, who revealed this in their weekly report, also anticipate that debits from successful bids at the foreign exchange (FX) wholesale intervention action as well as open market operations (OMO) auctions would impact on liquidity conditions and keep money market rates around current levels.

Performance in the treasury bills market was bearish last week as average rates trended upward on 3 of 5 trading days with minimal activities witnessed across all instruments.

The week opened with average rate up 11 basis points (bps) from Friday’s previous close of 18.4 per cent as investors sold-off on short term instruments. By mid-week, rates moderated marginally by 1bp to18.6% owing to improved interest on the shorter end of the curve before settling at 18.6% on Friday, up 20bps week-on-week (W-o-W).

But financial system liquidity trended higher all week. As such, there was a downtrend in money market rates on all trading days of the week save for Wednesday and Friday owing to a debit from the May bond auction conducted by the Debt Management Office (DMO).

Furthermore, the report showed that financial system liquidity opened the week at a positive balance of N165 billion, up from the previous Friday’s close of N91.1 billion, thus Open Buy Back and Overnight Rate settled at 16.7 per cent and 17.9 per cent respectively on Monday, down 1.5 per cent and 1.4 per cent.

The Central Bank of Nigeria (CBN) in its drive to boost dollar liquidity and ensure a convergence in FX rates, conducted wholesale intervention auctions with an offer amount of US$100 million last week and also announced a special secondary market intervention sales for the clearance of some backlogs, specifically for matured FX obligations – raw materials and machineries, agriculture, airlines and petroleum products while stating that FX obligations for petroleum products must have matured on or before January 31, 2017.

In the FX market last week, activities in the different segments of the market remained stable. NAFEX rates as published by FMDQ stood at N378.87/US$1 by start of the week while slightly appreciating by mid-week. However, a reversal of trend saw rates inch back to N378.87/US$1, indicating a flattish W-o-W close.

Also, the CBN with its daily interventions continued to keep rates stable at the official market. Rates opened the week at N304.70/US$1 and appreciated to N304.60/US$1 by Friday. At the parallel market segment, rates opened the week at N390/US$1 and remained unchanged on four of five trading days save for Friday where rates appreciated to N386.00/US$1.

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

Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary

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stanbic IBTC Insurance

Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).

In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.

“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.

“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”

 

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World Bank to Discuss New $1.5 Billion Loan Request From Nigeria

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Zainab Ahmed

The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.

The minister disclosed this on Bloomberg TV.

She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.

In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.

Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.

Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.

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Nigeria Realises Over N400 Billion from Company Income Tax in the Third Quarter of 2020

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The Federal Government realised N416.01 billion from Company Income Tax (CIT) in the third quarter of the year, according to the latest report from the National Bureau of Statistics (NBS).

This was 3.48 percent higher than the N402.03 billion generated in the second quarter of the year and represents a decline of 20.13 percent year-on-year from N520.89 billion realised in the third quarter of 2019.

A breakdown of the report showed the professional services sector including the telecoms generated the highest amount of CIT at N55.52 billion during the quarter, while the manufacturing sector followed with N42.03 billion.

The banking and financial institutions realised N24.05 billion while the mining generated the least and closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million and N321.72 million generated, respectively.

The report added that out of the total amount realised during the quarter under review, a sum of N244.70 billion was generated as CIT locally. The federal government collected N70.34 billion as foreign CIT payment and the remain N100.97 billion was received as CIT from other payments.

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