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Afreximbank Seeks to Tap from Investors with $300m Depositary Receipts

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Afreximbank
  • Afreximbank Seeks to Tap from Investors with $300m Depositary Receipts

The African Export-Import Bank (Afreximbank) yesterday announced the launch of its $300million equity offering, using Depositary Receipts (DRs).

Addressing journalists in Lagos wednesday, the President of Afreximbank, Dr. Benedict Oramah, said the private placement,which would last till September 22nd, 2017, would provide investors all over the world, with exposure to a truly supranational African bank involved in trade finance as well as to allow them to benefit from the growing trade opportunities between Africa and the rest of the world.

The instrument would be listed on the Stock Exchange of Mauritius.

“As part of its current strategy, the Bank is targeting to mobiliseequity of up to $1billion in the next five years from new and existing investors. The $300 million equity offering in the Republic of Mauritius is backed by the Bank’s Class ‘D’ shares. This is the first by a multilateral institution, the first to be listed on the Mauritius Stock Exchange.

“Afreximbank’s shares are currently not listed on any stock exchange. This DR issuance will therefore facilitate indirect listing of its Class ‘D’ shares and will provide investors with a liquid instrument. This DRs will provide an opportunity for the Bank to broaden its shareholder base as well as to raise additional capital.

“We want to use this market-based instrument to attract the capital that we need to develop Africa. We are here in Nigeria because we believe Nigerians should have the opportunity to take advantage of this instrument,” he added.

The Chairman of State Bank of Mauritius Group (SBM), the lead arranger of the offer, Mr. Kee Chong Li Kwong Wing, described the issue as landmark, saying the proceeds would help fill the financing gap to finance intra and inter African trade in the continent.

The SBM boss, who disclosed that the minimum investment is $30,000, said the Bank would be looking to tap from pension funds and other institutional investors in the region.

“For those who invest more than $500,000, you will have the benefit of a permanent resident in Mauritius for you and your family,” he added.

Oramah, while commenting on the Bank’s intervention in Nigeria, said over $20 billion had been disbursed in the country, saying “there is no bank that has not benefited in terms of credit line from Afreximbank.”

Furthermore, he said Afreximbank played a crucial role in supporting Nigerian bank during the period of acute foreign exchange in the country to the tune of $2 billion.

“Today loans outstanding to Nigerian firms in manufacturing, banking, etc, is about $3.5 billion.”

According to him, trade finance in Nigeria had been much easier because of the support banks in the country have countries to receive from the multilateral finance service agency.

He revealed that the Bank was financing an Oncology Centre in Abuja, which would be the best in the sub-region and improve access to healthcare, two industrial parks, as well as other developmental initiatives in Nigeria.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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