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Investors Maintain Appetite for Short-dated Instruments

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capital market - Investors King
  • Investors Maintain Appetite for Short-dated Instruments

The bond market recorded moderate activities in both the primary and secondary markets last week as investors continued to show preference for short-dated instruments.

Nonetheless, the yields on treasury bonds pared moderately by four basis points last week to settle at 15.3 per cent.

This, was due to increased buy interest on the final trading day of the week, before which yields had increased moderately by one basis points, analysts at Afrinvest Securities stated in their latest report.

They noted that the yield differential between Treasury bills would likely result in a persistence of the trend witnessed over second half 2018 to date. “Although we expect yields on FGN bonds to trend upwards over the short-term. In the Sub-Saharan Eurobond market, demand levels were sustained into this week, as the average yield declined by 36 basis points to settle at 7.8 per cent.

“There were yield declines witnessed across all bonds, save for the Mozambique Eurobond, which recorded an eight basis points increase to settle at 14.1 per cent.

“On the flip side, the largest declines in yields were recorded on the Ghana and Kenya Eurobonds, which recorded average declines in Ask-yields of 45 basis points and 40 basis points respectively, to settle at 7.8 per cent and 7.7 per cent,” it added.

Similarly, the report showed that average yield on Nigeria’s Eurobonds pared in the week’s trading by 47 basis points to settle at 7.5 per cent.

“The resurgence in interest in assets is in line with our expectations and trend in election years. We expect continued interest in US Dollar assets through to H2:2019 as investors remain wary of risk factors on the horizon that could potentially affect the value of the naira,” the report added.

In addition, it noted that the trend in the corporate Eurobonds space closely mirrored that of Sub-saharan Eurobonds, as the average yield pared by 20 basis points to settle at 7.6 per cent. There were also yield declines across all bonds save for the Diamond Bank 2019 bond, which recorded a yield increase of 162 basis points to settle at 13.1 per cent.

This was expected as investors were anticipated to take profit on the instrument given the decline in the yield of the bond following the announcement of the bank’s merger with Access Bank Plc. Also, there was significant demand for the FBNH 2021 Eurobond during the week, as the Ask-yield on the bond declined by 1.5 per cent to settle at 6.3 per cent.

“Similar to our expectations for Nigeria Sovereign Eurobonds, we project the yields on these bonds to pare over the short-term given factors stated.”

Interbank Naira Market

Activities in the money market last week were somewhat muted as system liquidity remained in the negative region.

This followed the aggressive pace of open market auctions (OMO) by the Central Bank of Nigeria (CBN) last Tuesday and Thursday in its bid to prevent speculative sentiments in the market ahead of the upcoming presidential elections.

Tuesday’s auction saw the CBN offer OMO bills worth N60 billion, although it was largely undersubscribed, at N10.7 billion despite attractive rates on the offer: 107-day (11.9%), 170-day (13.5%) and 317-day (15.0%). Furthermore, maturity expectations on OMO instruments worth N375.4 billion saw the issuance of another OMO tranche on Thursday in an offer worth N400 billion, which was also largely undersubscribed.

Only the 364-day OMO bill was 1.13x subscribed while the 91-day (11.9%) and the 189-day (13.5%) were both undersubscribed by 0.12x and 0.02x.
Direction of rates in the secondary market saw money market rates – OBB (Open Buy Back) and OVN (Overnight) – rise further from 20 per cent and 23.8 per cent at close of the preceding week to 22.7 per cent and 24.7 per cent last week.

Notably, rates surged to 26.67 per cent (OBB) and 27.67 per cent (OVN) on Wednesday, following Tuesday’s surprise OMO auction as system liquidity worsened to the negative region. In the secondary T-bills market, bullish sentiment, especially for long tenor instruments, saw average yields decline 56 basis points to 13.52 per cent on Friday from 14.1 the preceding week.
This week, central bank is scheduled to repay N429.6 billion maturing treasury bills with the same sum rolled over.

“We expect rates at the auction to remain at attractive levels in line with recent trend while we anticipate a near muted activity in the secondary market.

“Also, in line with its tight system liquidity posture, we expect conduct of OMO auctions by the CBN next week to offset maturities worth N560.9 billion.”

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.

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Herbert Wigwe Wins Banker of the Year at African Banker Awards 2021

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Herbert Wigwe, the Group Managing Director and the Chief Executive Officer of Access Bank Plc, has won African Banker of the Year at the just concluded African Banker Award 2021.

The CEO won for the second consecutive year following series of creative acquisitions and continental strategies deployed at deepening banking transactions in Africa.

Through his strategic move, Access Bank is now present in South Africa following its acquisition of Grobank. As a result of its rapid growth in the last decade, Access Bank has become one of the largest retail banks in Africa with over 40 million customers.

Below is a Complete List of African Banker Award Winners 

Sustainable bank of the year
Commercial International Bank (CIB) Egypt

Infrastructure deal of the year
Tanzania Standard Gauge Railway $1.46bn loan facility
Nedbank | Standard Chartered | TDB

Deal of the year – Equity
Privatisation of Afam Power Plc and Afam Three Fast Power Ltd
FBNQuest

Deal of the year – Debt
African Export-Import Bank, COVID-19 Support Facility
MUFG Bank, Mitsubishi UFJ Financial Group

Award for financial inclusion
Trust Merchant Bank, DRC

African Banker Icon
Charlie Robertson, Chief Economist, Renaissance Capital

Finance Minister of the year
H.E Mohammed Benchaâboun, Minister for Economy and Finance, Morocco

Award for Innovation for Financial Services
Bank of Industry, Government Enterprise Empowerment Programme

Energy deal of the year
Nkhotakota Solar Power Plant in Malawi / 7.5 MW Solar PV Power Plant in Burundi
African Trade Insurance Agency (ATI)

Agriculture deal of the year
USD 400m Revolving Trade Finance Facility in favour of ETC Group
African Export-Import Bank (Afreximbank)

African SME Bank of the Year
Ecobank

Best Regional Bank in Africa
North: Attijariwafa Bank, Morocco
West: Banque de Développement du Mali
East: Equity Bank, Kenya
Central: BGFI, Gabon
Southern: Mozabanco, Mozambique

Investment Bank of the Year
ABSA

Central Bank Governor of the Year
H.E. Lesetja Kganyago, Governor Reserve Bank of South Africa

Lifetime Achievement
Felix Bikpo

African Bank of the Year
Standard Bank Group

African Banker of the Year
Herbert Wigwe, Group CEO, Access Bank

For more on the African Banker Awards, please visit: www.africanbankerawards.comAfr

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Banking Sector

Innovation and Resilience Common Themes Amongst Winners of African Banker Awards 2021

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African Banker Awards 2021 - Investors King

Winners of the 2021 edition of the African Banker Awards were announced today at a virtual awards ceremony. The Awards, since 2013, are held during the Annual meetings of the African Development Bank, the event’s High patron, which are taking place also virtually between 23rd and 25th June.

The Awards have become the most respected and recognised industry event celebrating African banking achievements. The organisers this year put an emphasis to recognise and reward institutions that contributed to the real economy which has suffered from the impact of Covid-19 as well as contributed to women empowerment on the continent.

Herbert Wigwe won for the second consecutive year African Banker of the Year. Access Bank is now present in South Africa following its acquisition of Grobank. As a result of its rapid growth the last decade, Access Bank has become one of the largest retail banks in Africa with over 40 million customers.

Morocco’s Minister of Economy and Finance, Mohammed Benchaâboun, won Finance Minister of the Year. He was recognised for the exceptional work of his ministry which coordinated an exemplary response to the economic impact from the crisis, helping to protect both lives and livelihoods. The fiscal stimulus provided has cushioned the impact of the pandemic. The ministry managed to crowd in both public and private sector resources that were used to support the most needy.

Lesetja Kganyago, Governor of the Reserve Bank of South Africa, was awarded the Central Bank Governor of the year. Under his leadership, the Reserve Bank has managed to act decisively but also, the Committee noted, in a measured way, managing both upside and downside risk.

Felix Bikpo earned the Life Achievement Award for his long and distinguished career. When asked for his outlook on the future of the continent, he remained upbeat saying technological developments and also the human capabilities that we have developed in Africa are cause for optimism.

Charlie Robertson, chief economist at international investment bank Renaissance Capital won the African Banker icon category. In his remarks he noted that it was important to drive up savings rates to help spur greater investments on the continent, if Africa is to replicate the Asian miracle.

Omar Ben Yedder, Group Publisher of African Banker said: “I was really impressed by the entries this year. It showed that the banking sector is healthy and resilient which will be critical if it is to support the economic recovery post-COVID. What will be fundamental to our recovery is the support of the real economy, especially SMEs, and also a focus on more equity investments and investments in general. For that, as our African Banker Icon suggested, we will also need to increase our savings rate across the continent. If I had one comment on the winners, it was dominated by men this year. However I should add that the institutions that were recognised in our ceremony all had strong gender programmes, both in terms of supporting women-led businesses but also strong programmes to promote women and have women leaders within their organisations.”

This year the Awards were sponsored by the African Guarantee Fund, Bank of Industry (Nigeria), Banque du Développement du Mali and technology partner TagPay.

THE 2021 AFRICAN BANKER AWARD WINNERS 

Sustainable bank of the year
Commercial International Bank (CIB) Egypt

Infrastructure deal of the year
Tanzania Standard Gauge Railway $1.46bn loan facility
Nedbank | Standard Chartered | TDB

Deal of the year – Equity
Privatisation of Afam Power Plc and Afam Three Fast Power Ltd
FBNQuest

Deal of the year – Debt
African Export-Import Bank, COVID-19 Support Facility
MUFG Bank, Mitsubishi UFJ Financial Group

Award for financial inclusion
Trust Merchant Bank, DRC

African Banker Icon
Charlie Robertson, Chief Economist, Renaissance Capital

Finance Minister of the year
H.E Mohammed Benchaâboun, Minister for Economy and Finance, Morocco

Award for Innovation for Financial Services
Bank of Industry, Government Enterprise Empowerment Programme

Energy deal of the year
Nkhotakota Solar Power Plant in Malawi / 7.5 MW Solar PV Power Plant in Burundi
African Trade Insurance Agency (ATI)

Agriculture deal of the year
USD 400m Revolving Trade Finance Facility in favour of ETC Group
African Export-Import Bank (Afreximbank)

African SME Bank of the Year
Ecobank

Best Regional Bank in Africa
North: Attijariwafa Bank, Morocco
West: Banque de Développement du Mali
East: Equity Bank, Kenya
Central: BGFI, Gabon
Southern: Mozabanco, Mozambique

Investment Bank of the Year
ABSA

Central Bank Governor of the Year
H.E. Lesetja Kganyago, Governor Reserve Bank of South Africa

Lifetime Achievement
Felix Bikpo

African Bank of the Year
Standard Bank Group

African Banker of the Year
Herbert Wigwe, Group CEO, Access Bank

For more on the African Banker Awards, please visit: www.africanbankerawards.com

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Banking Sector

Standard Bank Group to Bring Together Over 600 delegates in Search For Africa’s Next Phase of Growth

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Standard Bank Group is bringing together international investors, policymakers and top African corporates to look ahead to the opportunities in a growing Africa. The 11th Africa Investors’ Conference (AIC), held in collaboration with ICBC Standard Bank, is being held over 5 days from 21-25 June.

Standard Bank Group has partnered with Microsoft to power the conference’s virtual format, using the Teams platform to host over 3,000 meetings between African corporates and institutional investors over the five-day period. Attendees will hear a keynote address from Samer Abu-Ltaif, Corporate Vice President and President, Microsoft MEA, on why Africa’s speedy adoption of tech will help to drive growth on the continent.

Continuing on from the successful approach pioneered at last year’s conference, the virtual format enables record numbers of individuals to participate. In 2020, a total of over 2,800 meetings which attracted over 40 corporates were facilitated. This year is set to be the biggest yet, with at least 25 percent more African corporates confirmed to attend.

Further enhanced by the attendance of some of Africa’s leading policymakers and speakers from prominent organisations in Africa and globally, the agenda-setting conference provides a virtual platform for equity investors such as AIG, Jefferies and JP Morgan to meet in select groups and identify investment opportunities with some of the continent’s most successful corporates, including Nampak, MTN, Anglo American Platform, Liberty Holdings and many more.

Key insights will be delivered during the conference’s flagship plenary sessions which will feature His Excellency, the Vice President of Ghana, Mahamudu Bawumia, Dr. Vera Songwe, UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, Lesetja Kganyago, Governor, South African Reserve Bank and Standard Bank Group CEO Sim Tshabalala.

With the impact of the COVID-19 crisis in mind, this year’s conference is distinctly forward looking, and will track the opportunities on offer to investors and corporates under the themes of Africa’s People, Progress and Potential. Topics to be covered will range from digital infrastructure, sustainable technology advances, the African Continental Free-Trade Area (AfCFTA), specific opportunities within Mozambique, Ghana and South Africa, as well as economic overviews for many African countries.

The policymaker country sessions will cover the latest monetary and fiscal policy reforms while the thought-leadership sessions will cover countries, sectors, current issues and trends to showcase the opportunity for investment and growth across Africa.

“Despite the trying and unique circumstances last year, we were able to bring together a wealth of policymakers, corporates and investors committed to the long-term prosperity of Africa. We are confident of similarly strong engagement this year and looking forward to facilitating productive conversations regarding the investment opportunities across the continent,” says Kenny Fihla, CEO of Wholesale Clients, Standard Bank Group.

The conference will highlight the rapid acceleration of Africa’s fintech capabilities. Managing Director of Zeepay, Andrew Takyi-Appiah, and Tony van den Berge, Managing Director EMEA Emerging Markets, Amazon Web Services, will deliver insights on the technological growth of Ghana and South Africa.

This year’s event is the first since the ratification of the AfCFTA. Representatives from Standard Bank Group, the United Nations and leading African corporates will join a session analysing the transformative effect the AfCFTA will have on intra-Africa trade and the long-term prosperity of the continent.

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