Economy
Nigerian Green Bond Market Grows to N49.19bn
By Dipo Olowookere
In three years, the Nigerian green bond market grew by N49.19 billion from the scratch, giving local investors alternative investment opportunities and deepening the ecosystem, Business Post reports.
Before 2017, the space was untapped but the desire by the regulators, including the Securities and Exchange Commission (SEC), the Debt Management Office (DMO) and the Nigerian Exchange (NGX) Limited, spurred the creation of the market in Nigeria.
A total of four issuances have been recorded in the country from 2017 to 2019. Nigeria has not recorded any since the last two years and one of the major reasons could be the COVID-19 pandemic of last year.
In 2017, the Federal Government of Nigeria (FGN) issued the debut N10.69 billion, 13.48% 5-year sovereign green bond; followed by the N15 billion 15.5% 5-year fixed-rate senior unsecured green bond issued by Access Bank Plc; the N8.5 billion 15.6% 15-year guaranteed fixed-rate senior green infrastructure bond by North-South Power (NSP) Company; and the Series II N15 billion 14.5% FGN 7-year sovereign green bond in 2019, which recorded a 220 per cent subscription rate (oversubscribed by N17.93 billion).
In the view of the CEO of NGX Limited, Mr Temi Popoola, the local green bond market as well as the Sukuk market, have huge potentials to deepen the capital market.
“The potential for Sukuk and green bonds remains immense and is likely to expand over the years underpinned by new markets, products and issuers and healthy investor investors’ appetite,” he said at a webinar held on Tuesday on Green Bonds: More Than Just Investing.
Speaking further, Mr Popoola assured that, “The exchange will continue to provide an efficient and liquid market for investors and businesses in Africa, to save and access ethical and SDG compliant capital and investments.”
“We promise to continue our collaboration with all market stakeholders, to collectively contribute towards the enhancement of this exciting asset class, and ultimately towards the growth of green and Sukuk bonds in Nigeria and Africa at large,” he further assured.
The summit was held as part of efforts to drive the development and promotion of retail participation in the Nigerian capital market. It was put together in collaboration with APT Securities and Funds Limited, with different stakeholders in attendance.
In his presentation, the Director-General of SEC, Mr Lamido Yuguda, represented by Mr Abdulkabir Abass, lauded the organisers, saying “educational programmes such as this” were in line with his agency’s determination to build “capacity and growth the depth and breadth of the market.”
“This is particularly noteworthy in the emerging segments of non-interest and socially responsible investment.
“As the apex regulator, the SEC has the dual responsibility of regulation and market development. Forums like this, therefore, afford us the opportunity to educate retail investors on the gain of investing in the Nigerian capital market through green and Sukuk bonds.
“These segments of the market are quite unique and boast full potential that can facilitate the deepening of financial systems while spurring the growth of the economy, making this deliberation indeed timely,” he added.
The webinar featured a presentation on Harnessing Green Bond as a Tool for Personal Growth by the Assistant Director, Securities Issuance Unit, DMO, Mr Adamu Mohammed, who pointed out that investors were increasingly demanding socially responsible investment and have expressed a strong appetite for green bonds evidenced by subscription rates in Nigeria’s sovereign green bonds increasing to 220 per cent in 2019 over the 110 per cent at the debut issuance.
The Managing Director/CEO APT Securities, Mr Kasimu Garba Kurfi, used the occasion to provide insights on bridging the gap between ethical investing and socio-economic development, before going on to feature in a panel session alongside Ms Ummahani Ahmad Amin, Board Member, NGX; and Dr Afolabi Olowookere, Head, Economic Research and Policy Management Division, SEC.
By Adedapo Adesanya
Foreign Exchange (FX) demand pressure eased on the Naira on Wednesday, April 8, in the Nigerian Autonomous Foreign Exchange Market (NAFEX) after gaining N14.84 or 1.07 per cent against the greenback to quote at N1,371.82/$1 compared with the previous day’s N1,386.66/$1.
Also, the local currency appreciated against the Euro in the same market window at midweek by N1.54 to close at N1,604.07/€1 versus Tuesday’s closing rate of N1,605.61/€1, but lost N6.26 against the Pound Sterling to trade at N1,844.83/£1 versus N1,838.57/£1.
In the parallel market, the exchange rate of the Naira to the US Dollar remained unchanged yesterday at N1,410/$1, according to data sourced by Business Post.
There were indicators that the official FX market experienced a liquidity surge, which eased worries around the dominant US Dollar on Wednesday, as the Central Bank of Nigeria (CBN) revealed interbank deals rose to 220 from 71 reported the previous day.
The domestic currency has been in strong demand from foreign portfolio investors seeking to purchase OMO bills and other fixed-income instruments.
Forecasts also show that the local currency will remain relatively stable during the second quarter of the year, trading within the N1,340 to N1,430 per Dollar band on improved FX liquidity, stronger oil earnings, and rising external reserves, which have climbed above 50 billion dollars.
As for the cryptocurrency market, it fell after an initial ceasefire-fueled rally, with markets retracing Wednesday’s “ceasefire euphoria” as cracks emerge in the US-Iran truce while the Strait of Hormuz remains effectively closed.
Global risk assets face renewed pressure as geopolitical uncertainty combines with what analysts call “uncoordinated tightening” by major central banks, reinforcing higher-for-longer interest-rate expectations.
The price of Cardano (ADA) fell by 4.7 per cent to $0.2500, Ripple (XRP) slumped 3.7 per cent to $1.33, Dogecoin (DOGE) shrank by 3.5 per cent to $0.0915, Binance Coin (BNB) slipped 2.6 per cent to $600.02, Ethereum (ETH) went down by 2.5 per cent to $2,183.82, Solana (SOL) dipped 2.5 per cent to $82.24, and Bitcoin (BTC) depreciated by 1.1 per cent to $70,995.20.
However, TRON (TRX) appreciated by 0.4 per cent to $0.3173, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited rallied by 0.28 per cent on Wednesday despite weak investor sentiment, as the bourse ended with 18 price gainers and 38 price losers, implying a negative market breadth index.
The growth recorded yesterday by Customs Street was influenced by the 2.11 per cent rise posted by the energy index, and the 1.79 per cent jump achieved by the banking sector.
The other sectors experienced profit-taking, with the consumer goods losing 1.07 per cent, the insurance counter down by 0.36 per cent, and the industrial goods space down by 0.19 per cent.
Universal Insurance chalked up 10.00 per cent to sell for N1.21, Omatek improved by 9.78 per cent to N2.47, VFD Group expanded by 9.71 per cent to N11.30, CWG appreciated by 9.64 per cent to N21.05, and Livestock Feeds gained 9.56 per cent to close at N7.45.
On the flip side, UPDC REIT lost 10.00 per cent to settle at N6.75, Fortis Global Insurance shed 9.92 per cent to quote at N1.18, Deap Capital depreciated by 9.85 per cent to N5.40, Chams went down by 9.47 per cent to N3.06, and Japaul declined by 8.82 per cent to N3.10.
Yesterday, the All-Share Index (ASI) went up by 562.43 points to 202,585.53 points from 202,023.10 points, and the market capitalisation advanced by N389 billion to N130.404 trillion from N130.015 trillion.
During the session, 1.0 billion stocks worth N40.6 billion exchanged hands in 52,723 deals compared with the 1.1 billion stocks valued at N40.3 billion executed in 78,006 deals a day earlier, indicating an uptick in the trading value by 0.74 per cent, and a shortfall in the trading volume and number of deals by 9.09 per cent and 32.41 per cent apiece.
The activity chart was led by Access Holdings, which sold 233.0 million units valued at N6.1 billion, Fidelity Bank exchanged 113.1 million units worth N2.2 billion, Wema Bank recorded a turnover of 103.3 million units valued at N2.7 billion, Zenith Bank transacted 60.6 million units for N6.5 billion, and Chams traded 47.5 million units worth N154.6 million.
By Adedapo Adesanya
Crude oil plummeted on Wednesday on hopes of the reopening of the Strait of Hormuz after US President Donald Trump agreed to a two-week ceasefire with Iran.
Brent crude futures moderated to $94.75 a barrel, while the US West Texas Intermediate (WTI) crude eased to $94.41 a barrel.
President Trump said on Wednesday that the US will work closely with Iran and will be talking about tariff and sanctions relief with Iran.
However, analysts cautioned that the ceasefire is a temporary two-week reprieve rather than a permanent resolution, and the global energy system remains fragile due to structural damage to regional infrastructure.
Reuters reported that Iran could open the strait in a limited and controlled way on Thursday or Friday ahead of a meeting between U.S. and Iranian officials in Pakistan.
Agence France-Presse (AFP) reported that two ships appeared to have transited the Strait of Hormuz since the US-Iran ceasefire deal. A Greek-owned bulk carrier and a Liberia-flagged vessel both transited the waterway early on Wednesday.
Meanwhile, Israel carried out its heaviest strikes on Lebanon since the conflict with Hezbollah broke out last month, even as the Iran-aligned group paused attacks on northern Israel and Israeli troops in Lebanon under the ceasefire.
Also, Saudi Arabia’s East-West Pipeline, a critical artery bypassing the Strait of Hormuz, was reportedly hit in an Iranian drone attack. Prior to the attack, the pipeline was pumping at its emergency capacity of 7 million barrels per day to bypass the shuttered strait.
The strikes occurred just hours after a US-Iran ceasefire announcement, which has so far failed to halt regional hostilities. Other facilities in the kingdom were also targeted in the wave of strikes, which the Islamic Revolutionary Guard Corps (IRGC) claimed included oil facilities owned by American companies in Yanbu.
US crude stocks rose by 3.1 million barrels to 464.7 million barrels during the week ended April 3, the Energy Information Administration (EIA) said.
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