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FG Plans N110bn Bond Auction This Month



  • FG Plans N110bn Bond Auction This Month

The Federal Government, through the Debt Management Office, is scheduled to hold the last bond auction for the year on December 13, 2017.

The amount on offer is expected to be within the range of N90bn and N110bn. Two instruments which are both re-opening, the FGN July-2021 (five-year) and the FGN March- 2027 (10-year), will be on offer as 14.50 per cent FGN July 2021 (five-year e-opening) N45bn-N55bn 16.2884 per cent FGN March-2027 (10-year re-opening) N45bn-N55bn.

The Treasury bonds market has remained bullish since the last auction held on the November 22, as the average bond yield declined by 0.25 per cent to close at 14.70 per cent on December 7, 2017.

However, investors’ appetite towards the FGN June-2019 and FGN October- 2019 instruments remained bearish, as they were the only instruments to record yield advancements of 0.20 per cent and 0.04 per cent, respectively.

During the same period, the National Bureau of Statistics released the third quarter 2017 Gross Domestic Product result, which showed improved economic growth of 1.40 per cent, driven by increase in crude oil price and production.

“We note that this growth, coupled with improvements in other macroeconomic variables, has strengthened investor confidence, evidenced in the increased participation in the domestic market,” analysts at Meristem Securities said on Friday.

On December 5, the House of Representatives passed the revised Medium Term Expenditure Framework with an increase in the oil benchmark from $45 to $47 per barrel and adopted the projected non-oil revenue of N5.279tn.

The MTEF provides a long-term view of the Federal Government’s objectives and ensures all plans and policies are in line with the long-term goals of the government.

This move, according to the analysts, will further improve investor confidence and participation in the Nigerian economy.

Since the absence of the 20-year bond at the primary auctions, the 10-year bond has received significant participation, causing a moderation in the marginal rates across tenors. Given the current liquidity levels in the market, driven by persistent Open Market Operation auctions and foreign exchange supply, we expect yields to remain around the same levels at this auction.

On Thursday, activities in the Treasury bills space, remained largely bullish, as the average T-bills yield declined further by 0.63 per cent to close at 16.23 per cent, reaching an eight-month low.

The yields on the one-month, three-month, six-month, nine-month and 12-month instruments recorded respective declines of 0.08 per cent, 0.43 per cent , 0.41 per cent, 1.41 per cent and 0.84 per cent.

The open buyback and overnight rates declined to 6.33 per cent and 7.33 per cent, respectively. Thus, the average money market rate slipped further by 7.50 per cent to settle at 6.83 per cent.

In the same vein, buy pressures were witnessed in the secondary market for Treasury bonds. The yield on nine tenors recorded declines, while other instruments traded flat. Consequently, the average bond yield settled at 14.70 per cent, representing a further decline of 0.06 per cent from the previous trading day.

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.


Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth



Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans




CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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FMDQ Approves Valency Agro’s N5.12bn Commercial Paper




FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

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