Connect with us


FSDH Expects Firms to Issue More Commercial Papers



capital market
  • FSDH Expects Firms to Issue More Commercial Papers

Financial analysts at FSDH Research, an arm of FSDH Merchant Bank Limited, have said the issuance of commercial papers by firms in the country will increase in the second half of the year.

A commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities.

The analysts, in their latest monthly economic and financial market report, noted that the Monetary Policy Committee of the Central Bank of Nigeria maintained rates at the end of its July 2018 meeting, including the Monetary Policy Rate, also known as the benchmark interest rate, at 14 per cent.

They, however, said the MPC intended to deploy unconventional strategies to boost credit creation and economic growth.

“The MPC is encouraging large corporations to issue commercial papers, which may be bought by the CBN if necessary. FSDH Research believes this measure will increase the issuance of CPs in Nigeria in HY2 2018,” the Head of Research and Strategy, FSDH Merchant Bank, Mr Ayodele Akinwunmi, said.

He said the yields on the CP might also drop or trail the yields on the Nigerian Treasury Bills, adding, that the measure would reduce the finance cost for large corporates and increase their profitability.

The report noted that the CBN planned to implement measures to direct Cash Reserve Requirement funds to the manufacturing and agriculture sectors of the economy at nine per cent interest rate with a minimum tenure of seven years and moratorium period of two years.

It said, “Meanwhile, the data from the CBN show that net domestic credit decreased marginally by 0.57 per cent to N25.72tn in May 2018, from N25.86tn in December 2017. The net credit to the private sector shrank marginally by 0.37 per cent to N22.21tn during the same period.

“FSDH Research believes that these measures may increase credit creation and business expansion to stimulate growth. However, complementary fiscal measures are required to de-risk the economy.

The FSDH Research predicted a further drop in nation’s inflation rate to 11.01 per cent in July, adding that the prevailing crisis in the food-producing states in the country was putting an upward pressure on food prices.

“This is a major risk to the achievement of a single digit inflation rate in 2018,” the analysts said.

The FSDH Research said its analysis of the nation’s balance of payments position as of the first quarter of 2018 confirmed its view that the external position remained strong but vulnerable to developments in the crude oil and gas market.

It said, “The provisional BOP figures for Q1 2018 published by the CBN indicates that the overall BOP for Nigeria shows a surplus of $7.32bn in Q1 2018, an increase from a surplus of $2.98bn in Q1 2017. The overall BOP as a percentage of Gross Domestic Product grew to 7.85 per cent in Q1 2018 from 3.49 per cent in Q1 2017.”

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.

Continue Reading

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.

Continue Reading


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.”

Continue Reading