- Cost of Funds Drops on Improved Naira Liquidity
The overnight lending rate dropped to 26 per cent on Friday, from 65 per cent a day earlier after the Central Bank of Nigeria (CBN) refunded excess naira offered in an earlier dollar sale to commercial lenders, injecting liquidity back into the money market.
Traders said that a cash squeeze on the money markets on Thursday after lenders provided naira to participate in a central bank currency intervention had pushed the overnight rate sharply higher.
The banking system’s cash balance with the central bank stood at N24.61 billion early on Friday before the central bank refund, Reuters disclosed.
“We see rates easing further next week. We anticipate about N200 billion would be disbursed to government,” one currency trader said.
The central bank sells hard currency regularly on the interbank market to boost dollar liquidity but in turn mop-up the naira. If it does not take up all offers, the excess naira is returned to lenders.
In the just concluded week, CBN auctioned treasury bills via primary market, viz: 91-day bills worth N32.436 billion, as Stop Rate (SR), fell to 13.50 per cent from 13.598 per cent; 182-day bills worth N22.824 billion, SR fell to 17.149 per cent from 17.40 per cent; and 364-day bills worth N55.683 billion as SR fell to 18.70 per cent from 18.98 per cent, which was more than offset by matured treasury bills worth N122.51 billion.
According to Cowry Asset Management Limited, a breakdown of the matured treasury bills showed 91-day bills worth N32.436 billion, 182-day bills worth N34.39 billion and 364-day bills worth N55.683 billion.
“However, interbank rates increased across all the tenor buckets amid sustained liquidity squeeze, in line with our expectation. This week, 282-day treasury bills worth N7 billion will mature. Hence, we expect slight improvement in financial system liquidity and resultant moderation in interbank rates,” Cowry Asset added.
Last week, the naira appreciated week-on-week at the Bureau De Change (BDC) and parallel market segments by 2.60 per cent and 2.31 per cent to close at N375/$ and N381/$ respectively. Meanwhile, the Cowry Asset Management Limited disclosed in a report that weekly movements in most dated forward contracts at the interbank OTC segment suggested future appreciation of the naira viz-a-viz the US greenback despite decrease in the foreign exchange reserves.
The external reserves decreased week-on-week by 0.60 per cent to $30.723 billion as at Wednesday, 17 May 2017. But the one-month, three-month, six-month and 12-month forward contracts appreciated week-on-week by 0.11 per cent, 0.11 per cent, 0.11 per cent and 0.12 per cent to N319.69/$, N327.76/$, N336.24/$ and N353.70/$ respectively.
Furthermore, the spot rate appreciated by 0.05 per cent to N305.45/$ amid the $7.5 million in intervention sales by the Central Bank of Nigeria (CBN) to banks.
In the current week, we expect further stability in the foreign exchange market with possible appreciation against the dollar subject to CBN’s level of intervention
In the bond market, FGN bonds traded at the OTC segment depreciated across all the maturities amid sell pressure, in line with analysts’ expectation.
In fact, the 20-year, 10.00% FGN JULY 2030 debt, the 10-year 16.39 per cent FGN JAN 2022 debt and the 7-year 16.00% FGN JUN 2019 debt depreciated by N0.16, N0.46 and N0.25 respectively; just as their corresponding yields rose to 16.08% (from 16.04%), 16.23% (from 16.09%) and 16.48% (from 16.33%) respectively.
Elsewhere, FGN Eurobonds traded on the London Stock Exchange increased in value across most of the maturities amid bargain hunting. The 10-year, 6.75% JAN 28, 2021 bond and the 10-year, 6.38% JUL 12, 2023 bond appreciated by $0.14 (yield fell to 4.908%) and $0.20 (yield fell to 5.80%) respectively.
This week, analysts anticipate resumed bargain hunting in the OTC market on the back of expected boost in financial system liquidity.
For three consecutive months, the Consumer Price Index (CPI), which measures inflation rate continued to decline, figures released by the National Bureau of Statistics (NBS) have indicated. The NBS said the CPI or inflation rate dropped to 17.24 per cent (year-on-year) in April, declining by 0.02 per cent from the figures recorded in March, 2017. The rate had dropped from 17.78 per cent in February to 17.26 in March, having stood at 18.72 per cent in January
“This is the third consecutive month of a decline in the headline CPI rate, exhibiting effects of some easing in already high food and non-food prices, as well as favourable base effects over 2016 prices.
“Increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yield the Headline Index. The top items to have recorded the highest year- on-year increases across all the divisions were solid fuels, bread and cereals, meat, liquid fuels, clothing materials, other articles of clothing and clothing accessories, and fish,” the statistical agency said in its inflation report for April, 2017.
However, on a month-on-month basis, the headline index increased by 1.60 per cent in April 2017, a 0.12 per cent points lower than the rate recorded in March (1.72 per cent).
The NBS figures indicated that the highest price increases were recorded more in the food items segment such as coffee, tea and cocoa, potato, yam and tubers, bread and cereals, milk cheese and eggs as well and meat and fish. The data showed that the rate for food year-on-year was 18.44 per cent in March and 19.30 per cent in April.
FG’s February Revenue
Nigeria’s gross federally-collected revenue rose by 20.4 per cent in February 2017 to N545.05 billion, as against the N433.86 billion recorded in January 2017, the CBN’s economic report for February 2017 showed. The increase relative to the preceding month level was attributed to the rise in receipts from both oil and non-oil components.
But, the revenue receipt recorded in February, fell short of the 2017 provisional monthly budget estimate of N792.71 billion by 31.2 per cent, according to the report. Gross oil receipts, at N292.82 billion or 53.7 per cent of total revenue, fell below the provisional monthly budget estimate by 0.6 per cent. But, it was 37.9 per cent higher than the receipts in January 2017. The increase in oil revenue relative to the preceding month reflected the significant rise in receipts from domestic crude oil/gas sales and PPT/Royalties. According to the report, at N252.24 billion or 46.3 per cent of the total revenue, gross non-oil revenue was below the 2017 provisional monthly budget estimate of N498.14 billion by 49.4 per cent. It, however, exceeded the receipts in January 2017 by 4.9 per cent. The poor performance relative to the provisional budget reflected the shortfall in most of the components due to the low economic activities in the country during the review period.
Items Valid for Forex
Following misconceptions and enquiries across the market about items valid for accessing foreign exchange from the interbank market, the CBN last week listed the eligible items that are valid.
The CBN, in a circular signed by its Director, Trade and Exchange Department, W.D. Gotring, a copy of which was posted on its website, listed 35 set of items valid for forex, and urged authorised dealers to ensure compliance. The misconception was triggered by a recent central bank circular.
According to the latest circular, the items included animal or vegetable fats and oil fractions, hydrogenated (not including palm oil/Olein and margarine,); prepared glues and adhesive based on polymers of headings 39.01 to 39.13 or on rubber; other plates, sheets, film, foil and strip of polymers of ethylene printed (only for pharmaceutical manufacturing); and bobbins, spools, cops and similar supports of paperboard …..of kind used for winding textile yarn.
Some others listed were uncoated Kraft paper and board in rolls; synthetic filament yarn, textured yarn of nylon or other polyamides measuring per single yarn more than 50 text; woven fabrics of synthetic filament yarn, including woven fabrics obtained from material…polypropylene fabrics of the type used as carpet backing; laboratory – hygienic or pharmaceutical glassware; and other articles of plastics and articles of other matter (only for pharmaceutical manufacturing).
CBN Freezes Another 194 Accounts of firms, BDCs, Others
The Central Bank of Nigeria on Thursday said it got orders from the Federal High Court, Abuja division, to freeze 194 bank accounts belonging to firms and Bureaux de Change to enable it to conduct investigations into suspicious activities.
It disclosed this on Thursday in three separate documents on its website.
In one of the documents, the CBN said it got an order to freeze 60 bank accounts of Bluebeam Capital Limited.
The accounts were domiciled in 13 different banks, the CBN as the plaintiff stated.
Bluebeam, as the respondent had eight accounts each in Access Bank and Keystone Bank; seven each in First Bank and Ecobank; five each in UBA and GTBank; four each in Fidelity Bank, FCMB and Sterling Bank; three accounts in Polaris Bank; two each in Wema Bank and Heritage Bank; and one in Providus Bank.
In another document, the CBN said it got an order to freeze 84 accounts in 17 banks.
The third document revealed that the banking regulator had the court order to freeze 50 accounts domiciled in different banks.
The motions exparte which were signed on different dates sought the orders of the court to direct the banks to freeze all other bank accounts of the defendants for a period of 180 days, pending the outcome of investigation and inquiry being conducted by the CBN.
In the document signed by the Presiding Judge, A.R. Mohammed, the court empowered the CBN to direct the banks to freeze all the bank accounts for a period of 45 days only, pending the outcome of the investigation.
It added that the order may be extended upon good reasons shown.
Any person aggrieved by this order could apply to the court to have the order set aside, discharged or have the order reviewed upon good reasons without waiting for the 45 days to lapse, the document stated.
The CBN on Wednesday disclosed it got an order to freeze 11 bank accounts to enable it conduct investigations into suspicious activities.
It had listed the names of the defendants/respondents as Albert Austin Ugochukwu with two bank accounts; Belfour Energy & Allied Services; Belfour Oil and Gas Limited with three bank accounts; Circle Flow Integrated Services; Kacynaus Reality Nigeria Limited with three bank accounts; and Tasmara Integrated Services.
Insider Dealing: Henry Oroh, An Executive Director of Zenith Bank, Acquires N46.982 Million Worth of Zenith Bank Shares
Henry Oro, an executive director of Zenith Bank Plc, has dumped N46.982 million on shares of Zenith Bank, according to the latest filing with the Nigerian Stock Exchange.
The executive director purchased Zenith Bank’s shares of 724,527 on April 1st, 2021 at N22.05 each or N15.976 million.
On April 6th, Oroh added 612,573 shares at N22 a unit and another 400,000 units at N21.90 per share.
On the same day, he purchased another 400,000 units at N21.90 a share. Bringing aggregate purchase on April 6th to 1,412,573 at an average price of N21.95 a unit or N31.006 million.
Henry Oroh has spent a total of N46.982 million on Zenith shares in April.
Henry Oroh was appointed as Zenith Bank’s executive director on September 1st, 2019 and holds a Bachelor’s Degree in Accounting from the University of Benin, Edo State and an MBA from the Lagos State University as well as an LLB Degree from the University of London.
He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and an honorary member of the Chartered Institute of Bankers (CIBN), Nigeria.
He has over two decades of banking experience. He began his banking career in 1992 at Citibank where he served for seven (7) years in Operations, Treasury and Marketing.
He joined Zenith Bank in February 1999 and has worked in various Groups and Departments within the Zenith Group Office. His expertise spans Operations, Information Technology, Treasury, Marketing, including the Manufacturing, Food and Beverages, Pharmaceuticals, Oil and Gas, Public Sector, Consumer, as well as Corporate Banking and Business Development.
In April 2012, he was seconded to Zenith Bank Ghana Limited as an Executive Director and became the Managing Director/ Chief Executive in February 2016, where he successfully spearheaded the phenomenal growth of the Zenith Brand both within the Ghana market and the West African sub-region.
Henry has attended several Leadership Programmes and Executive Management Courses at the Harvard Business School, Columbia Business School, New York, University of Chicago, University of Pennsylvania, HEC Paris, JP Morgan Chase, UK and the Lagos Business School.
He comes to the Board of Zenith Bank Plc with strong competencies in Credit & Marketing, Operations, Information Technology, Treasury and impressive Leadership skills.
Access Bank Lagos City Marathon Adopts Virtual Audience For 10km Runners
In a bid to ensure the health and safety of all runners and essential service workers amid the global COVID-19 pandemic, the title sponsors of the Access Bank Lagos City Marathon, Access Bank PLC, has announced that the Lagos City Marathon will be held virtually for interested 10km runners this year.
The marathon, scheduled for April 10, 2021 can only accommodate 300 runners in line with the guidelines provided by the World Health Organisation (WHO), World Athletics and the Lagos State Ministry of Health.
Speaking on the development, Access Bank’s Executive Director of Retail Banking, Victor Etuokwu said, “Our primary consideration is the health and safety of participants, attendees and staff that will be a part of the Lagos City Marathon. This is why we decided to have an exclusive virtual event – that allows participants from all over the world to run the race wherever they are.
‘’While we regret that we can’t host the live 10km race and fanfare that have become synonymous with the Access Bank Lagos City Marathon, we continue to stand with the other sponsors to preserve public health as we look forward to hosting a successful marathon. We implore all well-meaning Lagosians to please adhere to the movement guidelines put in place by the Lagos State Government to ensure that the marathon fulfills its purpose of positively placing Lagos and indeed the whole of Africa on the global map,” he concluded.
Though audience participation may have changed, the organisers have also announced that the race route will largely remain the same. Runners will begin the race from the National Stadium, Surulere, opposite Teslim Balogun Stadium and finish at the Eko Atlantic City, Victoria Island.
Now in its sixth edition, the Silver – Labelled Access Bank Lagos City Marathon has featured over 200,000 registered athletes from over 12 participating countries collectively covering a distance of 42,000 kilometers.
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