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CBN to Auction N58.5bn Treasury Bills This Week

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FG Borrows
  • CBN to Auction N58.5bn Treasury Bills This Week

The Central Bank of Nigeria will conduct a primary market auction on Treasury bills this week, offering a total of N58.5bn across the 91-day (N5.8bn), 182-day (N29.2bn) and 364-day (N23.4bn) tenors.

The 91-day tenor recorded the last stop rate of 10.29 per cent on Friday, the 182-day tenor recorded the last stop rate of 12.6 per cent, while the 364-day tenor had the last stop rate of 12.85 per cent.

The Treasury bills secondary market sustained its bullish run into the second trading week of the second quarter of 2019.

Analysts at Afrinvest Securities Limited said the bullish trend was sustained due to the absence of Open Market Operation auctions as well as N33bn worth of maturities that bolstered the system last week.

Consequently, average yields across all tenors declined by seven basis points week-on-week to settle at 13.3 per cent from 13.4 per cent the previous week.

Although buying interests were witnessed across all tenors, more investors positioned at the shorter end of the curve, causing yields on short-term instruments to contract by 20bps week-on-week, while the medium- and long-term bills depreciated by 17bps and 10bps week-on-week, respectively.

Analysts at Afrinvest said, “Going into the week, we expect to see a boost in system liquidity on the back of OMO and T-bills maturities worth N107.4bn and N58.5bn, respectively.

“On the back of these inflows, we anticipate that the CBN will resume its liquidity management via OMO auctions, which will keep yields around current levels across the curve.”

Investors were advised to take advantage of T-bills with attractive yields, as well as available OMO bill offerings.

In view of the moderating T-bills yields, the commercial papers from corporates resumed last week as Nigerian Breweries Plc announced its plan to raise N15bn in the first and second series of its N100bn commercial paper programme to support its short-term funding requirements.

Meanwhile, activities in the bond market maintained a bearish outlook as the average yield trended northwards by 12bps to settle at 14.2 per cent last week due to sell-offs experienced across most segments of the curve.

However, major sell-offs persisted on the May-19 and Jul-21 instruments.

Analysts said a quiet trading session in the bond market was anticipated as investors await clearer policy directions.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Ecobank Pays Off $500 Million Eurobond

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Ecobank - Investors King

Ecobank Transnational Incorporated (ETI) has announced the successful repayment of its $500 million Eurobond.

The Eurobond, issued in April 2019 with a coupon rate of 9.5%, matured on April 18, 2024, and was listed on the London Stock Exchange.

The repayment, totaling $524 million inclusive of principal and interest, underscores Ecobank’s commitment to financial prudence and investor confidence.

The bond garnered substantial support from a diverse group of global investors, including development banks, FMO, and Proparco, serving as anchor investors.

Mr. Ayo Adepoju, Ecobank’s Group CFO, emphasized the significance of the inaugural bond in broadening the institution’s investor base and enhancing its visibility in global capital markets.

Despite challenges in the operating environment, such as disruptions in the global supply chain and financial markets, Ecobank has demonstrated resilience through robust liquidity, a solid balance sheet, and effective leadership.

This repayment marks Ecobank’s commitment to fulfilling its financial obligations and maintaining strong relationships with investors.

While this Eurobond repayment closes a significant chapter, it also reflects Ecobank’s ongoing efforts to navigate challenges and sustain its position as a leading financial institution in Africa.

As Ecobank clears this debt, it reinforces its reputation for financial stability and prudent management, setting a positive trajectory for future growth and continued success in the dynamic global financial landscape.

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Finance

SEC to Guard Against Illicit Funds Influx Amid Banking Recapitalisation

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Securities and Exchange Commission

In response to the recent banking recapitalization exercise announced by the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) has reiterated its commitment to safeguarding the integrity of the capital market against the influx of illicit funds.

This announcement came during a symposium organized by the Association of Capital Market Academics of Nigeria, where the Executive Director (Operations) of SEC, Dayo Obisan, addressed stakeholders on the implications of the banking sector recapitalization for the Nigerian capital market.

Obisan expressed the commission’s determination to collaborate with stakeholders to prevent the entry of laundered funds into the capital market.

He stressed the need for fund verification exercises to ensure transparency and accountability in capital inflows.

While acknowledging that fund verification is not typically within SEC’s purview, Obisan stated the commission’s willingness to collaborate with other regulators to prevent the entry of illicit funds into the market.

He said it is important to engage institutions such as the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU) in verifying the legitimacy of funds entering the market.

Obisan also announced regulatory engagements aimed at enhancing the quality of filings and ensuring compliance with anti-money laundering regulations. These engagements seek to streamline the application process and mitigate the risk of illicit fund inflows from the onset.

Meanwhile, the President of the Chartered Institute of Stockbrokers, Oluwole Adeosun, maintained that the capital market can support the fresh capitalisation exercise.

He said, “The market is able and has expanded in the last ten years to be able to withstand any challenges with this capital raising exercise. It is important to know that investors have started to position themselves in the stocks of Tier 1 banks with the announcement of the planned recapitalisation last year.”

Adeosun also called on the banks to consider other options beyond the right issues, as had been seen in recent days in the sector, given the size of the funds needed to be raised as well as to bring in a fresh set of investors into the market.

“There should be more than a rights issue. We believe that some of them should go by private offer and public offer because the capital is huge so that we can bring in more shareholders into the market. We believe it is another opportunity for Gen Zs and millennial investors to come into the market.

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Finance

Nigerian Ports Authority Secures $700m Loan from Citibank for Lagos Ports Rehabilitation

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Nigerian ports authority

The Nigerian Ports Authority (NPA) has successfully secured a $700 million loan from Citibank to facilitate the rehabilitation of the Lagos ports.

The finance was facilitated by the UK Export Finance to revitalize the Apapa and Tincan Island Ports, two pivotal gateways for maritime trade in Nigeria.

The announcement was made during a signing ceremony held in Lagos, marking a pivotal moment in Nigeria’s efforts to modernize its port infrastructure.

Mohammed Bello-Koko, the Managing Director of the NPA, expressed optimism regarding the prompt commencement of the reconstruction efforts following the finalization of the funding agreement.

The rehabilitation project is expected to address longstanding challenges faced by the Apapa and Tincan Island Ports, including congestion, inadequate infrastructure, and operational inefficiencies. By modernizing these key maritime hubs, Nigeria aims to bolster its trade capabilities, enhance port efficiency, and stimulate economic growth.

Speaking at the ceremony, Bello-Koko highlighted the strategic significance of the Citibank Facility, citing its favorable terms and affordable interest rates as key advantages for the NPA.

Bello-Koko outlined the NPA’s broader strategy to upgrade port facilities beyond Lagos, with discussions underway to secure additional funding for the enhancement of Eastern Ports such as Calabar, Warri, Onne, and Rivers Ports, as well as the reconstruction of Escravos Breakwater.

The collaboration between the NPA and Citibank underscores the importance of public-private partnerships in driving infrastructural development.

Ireti Samuel-Ogbu, Managing Director of Citibank Nigeria Limited, reaffirmed the bank’s commitment to supporting the NPA and the Federal Government in bridging the infrastructural gap.

Samuel-Ogbu commended the NPA’s strategic initiative and underscored Citibank’s dedication to facilitating the project’s success.

 

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