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Fed Govt Eyeing Fresh Eurobond Funds

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  • Fed Govt Eyeing Fresh Eurobond Funds

After raising $1.5 billion from the Eurobond market this year, the Federal Government is expected to access more dollars from the Global Capital Market (GCM) before December.

Report from FBN Capital, the investment arm of FBN Holdings, says the Federal Government may return to the Eurobond market, adding that the heavily-oversubscribed Iraqi sovereign issue last week without United States guarantees was a reminder of the strength of the market.

Two commercial banks – Zenith Bank and United Bank for Africa – had also raised a combined $1 billion through Eurobond in the last six months. The Federal Government raised $1 billion in February and $500 million the following month, while Zenith Bank Plc and United Bank for Africa (UBA) Plc raised $500 million each during the periods.

The Federal Government’s $1 billion Eurobond offer, the fourth since 2011, was oversubscribed by almost 800 per cent. The over-subscription surprised many pundits. The offer, which comes at $200,000 denominations and multiples of $1,000, will mature on February 15, 2032. Citigroup Global Markets Limited and Standard Chartered Bank. Stanbic IBTC Capital are the Financial Advisers.

FBN Capital said the Central Bank of Nigeria (CBN) will also be encouraged by the early signals from the investors’ and exporters’ window (NAFEX). “Turnover from its launch in late April to July 21 totals $4.9 billion. If this market was to take off as a result, for example, of GEM funds taking the plunge, we would be approaching the required critical mass and would have to revise our expectations of MCP,” it said.

The window has impacted positively on the naira. The window, where buyers and sellers are free to agree an exchange rate, was introduced to attract foreign investors and boost the supply of dollars.

The investment and research firm said Nigeria’s gross official foreign exchange reserves increased by $550 million in July to $30.8 billion, quoting data from the CBN.

Its analysis of reserves movement showed that since the recent low at end-October, there has been an accumulation of $6.9billion. Further statistics showed there was an increase of $0.5billion since end of March, when the CBN stepped up its foreign exchange interventions under its multiple currency practices (MCP).

The investment and research firm warned that with the sharp fall in imports, the forexbuffer is comfortable. “By way of warning, we should stress that the figures provided by the CBN are gross and mask the swap transactions it has entered into with banks.The pick-up in oil production has been an obvious positive for accumulation. Officials are encouraging the view that it is back at, or close to the two million barrels per day level,” it said.

FBN Capital explained that given this cushion of reserves and the evidence that core sectors, such as manufacturing, are benefiting from the regular forex interventions, we no longer think that the CBN will be revising its forex policy this year.

The CBN has since January, spent over $8.5 billion to stablise the forex market. The Investors’ & Exporters’ FX Window records about $100 million daily turnover, with the CBN contributing about 15 per cent of the transactions.

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

Ecobank To Pay Customers N5 For Every Dollar Received

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Ecobank To Pay Customers N5 For Every Dollar Received

Ecobank has implemented the CBN scheme which offers N5 for every Dollar received into domiciliary accounts or as cash over the counter. Korede Demola-Adeniyi; Head, of Consumer Banking, Ecobank Nigeria, who announced this in Lagos stated that the decision is in line with the CBN directive and fully aligns with efforts to encourage the inflow of diaspora remittances into the country.

She noted that the “CBN Naira 4 dollar scheme” is an unprecedented incentive for senders and recipients of international money transfers.

Korede Demola-Adeniyi said that the scheme takes effect from 8th March and will run till 8th May 2021. “Ecobank will pay N5 on every Dollar so beneficiaries will not only get the foreign currency sent from their family and friends abroad, but they will also get extra Naira”, she stated.

Only recently, Ecobank had a first-of-its-kind virtual Diaspora Summit to discuss opportunities for Nigerians living abroad and the various platforms available to assist them with their investment decisions and remittance needs. The event had major players in the remittance space, diaspora audience, government officials and notable stakeholders in attendance.

Further, the Managing Director, Ecobank Nigeria, Patrick Akinwuntan has disclosed that apart from consistent engagement with Nigerians in the diaspora, Ecobank is leveraging its digital technology to make remittances to Nigeria and Africa easy, convenient and affordable.

Mr. Akinwuntan stated that growing evidence has shown a positive relationship between diaspora remittances and economic growth.

“Ecobank will continue to pursue its mandate of helping to enhance the economic development and integration of Africa, through the 33 countries where the bank operates on the continent. Ecobank’s Rapidtransfer and mobile app (Ecobank Mobile) enable Africans, wherever they are, to easily and instantly send money to bank accounts, mobile wallets and agent locations across 33 African countries”, he stated.

Ecobank Nigeria, a member of the Pan African Banking Group is committed to supporting Africans in the diaspora by providing advisory services, remittance solutions, investment options and financial planning schemes. The bank also offers mortgages, treasury bills, capital market instruments, among others.

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Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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