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Investors Swoop on FGN Bonds




In the just concluded week, the OTC FGN bond market witnessed sustained bargain hunting as investors in the fixed income security pounced on instruments worth less than their prices.

This led to the appreciation in bond prices for all the maturities.

For instance, the 20-year, 10.00% FGN JUL 2030 bond appreciated by N0.61 (yield decreased to 15.23%);10-year, 16.39% FGN JAN 2022 paper gained N1.49 (yield fell to 14.81%); the 7 year,16.00% FGN JUN 2019 bond gained N1.15 (yield decrease to 14.93%); while the 5-year, 15.10% FGN APR 2017 paper rose by N0.42 (yield declined to 19.52%).

A report by Cowry Asset Management Limited showed that on the London Stock Exchange, traded FGN Eurobonds also appreciated on resumed bargain hunting activity as the 5-year, 5.13% JUL 12, 2018 bond and the 10-year, 6.38% JUL 12, 2023 bond lost $0.66 (yield fell to 4.26%) and $2.05 (yield fell to 6.40%) respectively.

This week, Debt Management Office will issue federal government bonds (all re- openings) worth N110 billion, viz: 5-year, 14.50% FGN JUL 2021 debt worth N40 billion; 10-year, 12.50% FGN JAN 2026 bond worth N30 billion; and 20-year, 12.40% FGN MAR 2036 paper worth N40 billion.

Analysts at the Cowry Asset Management anticipated that the stop rates would mirror last Primary market auction rates in line with CBN’s drive to keep rates high as incentive to attract Foreign Portfolio Investors.

Improved buying interest were also observed across the Sub-Saharan sovereign (SSA) Eurobonds as a result of appreciating commodity prices with year-to-date return at +7.2 per cent, buoying buy sentiments in emerging markets instruments.

Yields declined on all SSA sovereign bonds save for the South African 2017 which rose 0.5 per cent week-on-week.

Forex Market

The liquidity crunch in the foreign exchange market continued last week as the nation’s currency further depreciated week-on-week.

At the interbank, spot rate hovered between N312/$1 and N317/$1 from Monday to Thursday. The interbank spot rate closed at N332.07/$1 on Friday.

According to analysts at Afrinvest West Africa, compared to the preceding week, the naira/dollar exchange rate was less volatile at the parallel market, trading at N395/$1 all week save for Wednesday and Friday when it traded at N394/$1 and N397/$1 respectively.

Sentiments in the futures FX market also weakened last week as the one-year forward rate depreciated to N349.30/$1 from N345.42/$1 the preceding week.

“We believe the exchange rate will remain pressured in the interim until autonomous players return to the market to relieve the CBN of its role of major dollar supplies at the interbank. We are of the view that the depreciation of the naira, the reforms in the FX market coupled with current attractive yield environment should buoy foreign investor sentiment in Nigerian assets and aid the vital return of foreign capital to the market,” Afrinvest stated.

In view of the current macro-economic challenges in the country, the CBN last week announced that it has granted a one-off forbearance to banks this year to write-off their fully provided for non-performing loans (NPLs) without waiting for the mandatory one year.

The CBN stated that it acknowledged the request by banks to amend the requirements of S.3.21 (a) of the Prudential Guidelines, which mandates banks to retain in their records, fully provided NPLs for a period of one year before they are written off.

“The CBN has no intention of repealing the provision of the above mentioned section of the guidelines. In view of the current macro-economic challenges, however, the CBN hereby grant a one-off forbearance this year 2016 to banks, to write-off fully provided for NPLs without waiting for the mandatory one year,” it stated in circular addressed to all banks.

In a related development, in view of what it described as the observed abuse of access to its Standing Lending Facility (SLF) by banks and other authorised dealers, the CBN last week also announced measures to correct the anomaly.

To this end, it directed all authorised dealers to refrain from accessing the discount window on the settlement date for government securities’ auctions. The securities referred to are CBN bills, Nigerian Treasury Bills and Federal Government of Nigeria bonds. It stressed that any violation of the directive would result in the denial of access to the SLF.

Meanwhile, in a separate circular yesterday, which was in furtherance to its recent directive that banks that act as agents to approved international money transfer operators (IMTO) to sell foreign currency accruing from inward money remittances to licenced Bureau De Change (BDC) operators, the central bank yesterday fixed a maximum limit of $30,000 per week as what banks can sell to the BDCs. Also, in its bid to ensure that all Nigerian customers in the diaspora get their Bank Verification Numbers (BVN), the central bank in another circular, said it has re-opened the scheme. The enrolment for diaspora customers would now run from August 1st to December 31st, 2016.

Money Market

The money market opened last week opened with aggregate system liquidity in negative N75.1billion. Consequently, Open Buy Back (OBB) and overnight rates remained in double digits (18.3 per cent and 19.4 per cent respectively) last Monday as a result of liquidity dynamics. The OBB and overnight however surged to 22.5 per cent and 24.8 per cent on Friday, up three per cent and 4.2 per cent week-on-week as the CBN mopped up N256.4 billion in an OMO auction at marginal rate of 18 per cent. Activities in treasury bills market were mixed. Average rate inched 0.1 per cent, up on Friday to close the week at 17.1 per cent (down 0.3% week-on-week). The auction was five times oversubscribed with bids ranging from 17 per cent to 18 per cent. The stop rate at the auction was 18.0% and as a result all subscriptions were successful.

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.


FG Includes Emirates Airlines in Restricted Flights



Emirates Airline

FG Restricts Emirates Airlines From Flying Nigeria

The Federal Government on Friday said it has included Emirates Airlines in the list of airlines not allowed to fly into Nigeria as part of measures to contain the spread of COVID-19 in Nigeria.

Hadi Sirika, the Minister of Aviation, disclosed this via his official Twitter handle on Friday.

According to him, the decision was taken after a meeting between members of the Presidential Task Force on COVID-19 and European Union ambassadors.

The minister said the ban would take effect on Monday, September 21, 2020.

The PTF sub-committee met today with EU Ambassadors to discuss Lufthansa, Air France/KLM ban. The meeting progressed well. Emirates Airlines’s situation was reviewed & they are consequently included in the list of those not approved, with effect from Monday the 21st September 2020,” Hadi Sirika tweeted.

“The PTF sub committee met today with EU Ambassadors to discuss Lufthansa, Air France/KLM ban. The meeting progressed well. Emirates Airlines’s situation was reviewed & they are consequently included in the list of those not approved, with effect from Monday the 21st Sept. 2020.

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FG to Absorb Exited N-power Beneficiaries into New Program



Exited N-power Beneficiaries to Be Absorbed into Another Program

The Federal Government has commenced plans to absorb exited N-power beneficiaries into a new program in an effort to help them eke a living.

Sadiya Umar Farouq, the Minister of Humanitarian Affairs, Disaster Management and Social Development, made the statement at an interactive forum with state focal persons of the National Social Investment Programmes in Abuja.

She said: “As we renew our commitment to the service of humanity, I will like to cease this opportunity to once again state that we have successfully exited Batch A and B of the N-Power beneficiaries in June and July respectively and we are still working towards ensuring a transition plan that will further engage or absorb them into other programmes.

Sadiya also stated that the selection process of the Batch C N-power application will be thorough and base on merit.

We have also received over 5 million applications from proposed N-Power Batch C and we are currently in the process of selecting the qualified beneficiaries coming into the programme.

“I assure all the applicants and Nigerians that the selection process will be transparent,” she said.

She added that, “I wish to reiterate that I have given approval for the payment of stipends for the exited beneficiaries of batches A and B up to the month of June 2020 including that of the independent monitors. Also, the final payment of stipend for Batch B is almost ready for transmission to the office of the Accountant General of the Federation for final checks and payment.

The minister urged state coordinators to discharge their duties diligently and not let her down.

It is against this background that I urge everyone of you to continue to give in your best to ensure the lives of those we are called to serve are made better.

“We must not lose sight of the fact that each one of the vulnerable persons are not mere numbers or statistics but real people with dreams, hopes, aspirations and a desire to live decent lives in peace and safety,” he submitted.

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FG Says All Airports Are Now Open for Domestic Flight Operations



Aero Contractors Airlines

All Airports Are Now Open for Domestic Flight Operations Says FG

The Federal Government on Monday said all airports in the country are officially open for domestic flight operations.

This was disclosed by the Minister of Aviation, Hadi Sirika, during the briefing of the Presidential Task Force on COVID-19 on Monday in Abuja.

Hadi, however, noted that operators flying into private-owned airports must know the status of such airports.

Speaking at the PTF Briefing, the minister said there is no need for flight approval within Nigeria again as all airports are now opened for domestic operations.

He said, “All airports in Nigeria are now open for domestic flights, including those that are for private charter operations.

“They (operators) will no longer need approvals from us to operate domestically within government-owned airports. However, for the private airports, operators should check their safety status with the Nigerian Civil Aviation Authority.

“Such airports are Jalingo, Uyo, Asaba, Gombe, Nasarawa, Damaturu, Osubi, etc. So you don’t need any approval from the minister, but you should check the status of these airports with the NCAA.”

Commenting on international chartered flights, the minister said they need approvals to flight out of the country.

He said, “All flights out of the country that are private charter will still need approvals for those kind of flights, including technical stops.

“So with this, it means that the approvals that are sent via the NCAA, NAMA and myself will cease and if there is any change, it will be so advised accordingly.”

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