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FG to Repay N198bn Treasury Bills

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FG Borrows
  • FG to Repay N198bn Treasury Bills

The Federal Government will in the next one week redeem N198.03bn worth of Treasury bills that will mature between Thursday and December 21, the Debt Management Office has said.

The DMO confirmed this in a statement made available to our correspondent in Abuja on Tuesday.

Details provided by the office showed that N131.42bn and N66.62bn of the NTBs would mature on December 14 and December 21, respectively.

The redemption of the treasury bills on maturity is a departure from the practice in the past as the DMO usually rolled over the NTBs on maturity.

The planned redemption of the treasury bills is in tandem with the Federal Government’s plan to refinance some maturing local debts with foreign loans.

The Federal Government had announced a plan to refinance $3bn maturing domestic debt with external borrowing as part of its overall debt management strategy of reducing debt service costs.

Other objectives of the strategy, according to the DMO, are to free up space in the domestic market for other borrowers and achieve a more sustainable debt portfolio mix of 60 per cent domestic and 40 per cent external.

In addition, the redemption overtime is expected to help reduce the refinancing risk associated with short-term borrowings through the NTBs with tenure of 91, 182 and 365 days.

As of September 30, the NTBs accounted for 30.23 per cent of the Federal Government’s domestic debt of N12.5tn. The DMO plans to reduce this to a maximum of 25 per cent.

According to the DMO, the maturing NTBs will be redeemed using proceeds of the $500m raised through an Eurobond issued by the Federal Government in November.

Nigeria had issued a dual-tranche $3bn on Eurobond in November out of which $2.5bn was earmarked to finance deficit in the 2017 budget and the balance of $500m for refinancing of domestic debt.

The DMO said by redeeming the N198.03bn NTBs, the government was not only implementing its debt management strategy but also providing liquidity to the financial system to enable the private sector to access credit from banks and issue securities in the domestic market to raise funds.

It said it also expected operators in the market to use the opportunity offered by the redemption of the NTBs to develop the other segments of the debt capital market such as corporate bonds.

It added that the strategy of enabling the private sector to access funds and possibly at a lower cost than was hitherto possible was consistent with the government’s policy of a private sector-led growth.

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

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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Banking Sector

Dennis Olisa Invests N53.6 Million in Zenith Bank

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Executive Director of Zenith Bank Plc Buys 2 Million Shares of Zenith Bank at N53.6 Million

Executive Director of Zenith Bank Plc, Dennis Olisa, has invested a combined N53.58 million in shares of Zenith Bank.

The leading financial institution stated in a disclosure statement filed with the Nigerian Stock Exchange (NSE) on Monday.

Olisa carried out the purchase in two different transactions on February 24, 2021 at the Nigerian Stock Exchange in Lagos, Nigeria.

He purchased 1 million units of Zenith Bank at N26.60 each and another 1 million shares at N26.50 per share.

On aggregate, Olisa purchased 2 million shares of Zenith Bank at N26.79 per share or N53.58 million. See the details below.

Dennis Olisa was appointed as Zenith Bank’s executive director three years ago.

Prior to his appointment, Mr. Olisa was the Chief Inspector at Zenith Bank Plc and served as its Director from March 3, 2017 until March 16, 2017.

He also served as General Manager and Heads of the Energy Oil & Gas Group at Zenith Bank Plc and served as its Deputy General Manager. He served as Head of Internal Control & Audit Group at Zenith Bank Plc

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