First City Monument Bank Suspends N30 Billion Proposed Commercial Paper

First City Monument Bank Limited, a subsidiary of FCMB Group Plc, on Monday announced it has suspended the proposed N30 billion Commercial Paper due to a price discovery issue.

The bank disclosed this in a statement signed by Mrs. Olufunmilayo Adedibu, Company Secretary, FCMB Group.

Earlier this month, the lender had announced it was issuing N30 billion commercial paper under its N100 billion CP programme to finance short term needs.

However, the issuance was suspended due to the Nigerian Treasury Bills auctioned on December 9 that made it impossible to determine the Commercial Paper price.

The bank said the suspension was “as a result of the Nigerian Treasury Bills auction of Wednesday, 9 December 2020, which distorted price discovery.”

Price discovery is the process or method of determining the price of a security, commodity, asset, or even currency through the interactions of buyers and sellers.

Therefore, it appears that the surged in capital outflow from the Nigerian stock market suddenly increase the attractiveness of the Nigerian Treasury Bills and made it difficult for FCMB to lure investors to its CP or determine an appropriate price to do so.