Economy
364-Day Treasury Bills Stop Rate Rises to 8%
By Dipo Olowookere
The treasury bills space continued its gradual recovery on Wednesday, especially at the long-end of the curve, moving closer to the double-digit region.
The Central Bank of Nigeria (CBN), in order to discourage the dumping of funds in the fixed-income market to earn a higher profit, started to slice the stop rates of the investment asset and it even went below one per cent at a point.
According to the CBN, it wanted money to be used for activities that could stimulate economic growth in the country like in manufacturing and other businesses, which could generate jobs and trigger spending.
But when Nigeria slipped into a recession in the third quarter of last year, the central bank started to relax its policy stance and began to gradually raise the rates.
Yesterday, the CBN was at the primary market to sell some T-bills and at the exercise, it raised the stop rate for the 364-day treasury bills by one per cent but left the 91-day and 182-days unchanged.
According to the details of the sales obtained by Business Post, the apex bank auctioned N10.0 billion worth of the short-dated tenor, N17.6 billion worth of the mid-dated tenor and N68.1 billion worth of the long-dated tenor, totalling N95.7 billion.
When the subscriptions were analysed, investors’ appetite for the short and mid-term maturities was not as it used to be as the bills were undersubscribed.
Traders staked N9.4 billion on the 91-day instrument and N12.7 billion on the 182-day instrument, while the 364-day instrument received bids valued at N190.4 billion, indicating a subscription level of 279.6 per cent.
This helped to boost the total value of the subscriptions received from the market participants yesterday at N212.5 billion, N116.8 billion or 122.1 per cent higher than the amount offered for sale by the apex bank for the Debt Management Office (DMO) on behalf of the federal government.
At the close of the exercise, the apex bank allotted N2.9 billion for the 91-day bill at a static rate of 2.00 per cent, N3.2 billion was sold for the 182-day bill at the previous rate of 3.50 per cent, while N138.7 billion was allotted for the 364-day bill at 8.00 per cent compared with the previous 7.00 per cent.
The total amount of the treasury bills sold yesterday at the primary market auction (PMA) by the central bank stood at N144.8 billion, N49.1 billion or 51.3 per cent higher than the N95.7 billion brought to the market.
By Modupe Gbadeyanka
The National Bureau of Statistics (NBS) has disclosed that Nigeria’s tax to Gross Domestic Product (GDP) ratio has been upwardly reviewed to 10.86 per cent from the 6 per cent earlier reported to reflect better data sources and improved estimation using the Organisation for Economic Co-operation and Development (OECD) manual.
The OECD manual is an improvement over the System of National Accounts (SNA 2008) classification of taxes.
Although the System of National Accounts conceptual framework and its definitions of the various sectors of the economy are reflected in the OECD’s classification of taxes, the OECD classifications provide the maximum disaggregation of statistical data on what is generally regarded as taxes by tax administrations.
In a disclosure, the statistics office said the country’s total tax revenue compared with its GDP was at that level in 2021, higher than 8.40 per cent in 2020, which was impacted by the COVID-19 pandemic.
In the previous year, the ratio was 10.20 per cent, marginally lower than the 10.36 per cent recorded in 2018 but higher than the 9.02 per cent in 2017.
The NBS said the revised computation considered more comprehensive coverage of data at the federal, state, and local government levels and revenue items not previously included in the computations, particularly relevant revenue collected by other government agencies.
The review of the tax-to-GDP ratio was initiated by the Federal Inland Revenue Service, which collaborated with the Federal Ministry of Finance and the NBS for better measurement of the ratio.
The data used were sourced from the Office of the Accountant General of the Federation (OAGF), FIRS, NBS, the Nigeria Customs Service (NCS), the Joint Tax Board (JTB), and other relevant agencies of government that collect revenue.
By Adedapo Adesanya
VFD Group Plc has announced its intention to list its shares on the Nigerian Exchange Group (NGX) after leaving the NASD Over-the-Counter Securities Exchange, where it has been trading its stocks for the past three years.
This development, according to analysts, is a strategic move that would allow the company to gain access to public equity markets, increase its visibility, and strengthen its financial position.
VFD Group Plc is a leading proprietary investment company with a proven track record of generating attractive returns for its investors through a variety of investment strategies.
The company has a diverse portfolio of investments in various sectors, including banking, technology, media, energy, and real estate. The group has been listed on the NASD OTC Securities Exchange since 2020.
Speaking on this big step, Mr Nonso Okpala, Group Managing Director of VFD Group, stated, “We are excited to take this next step in the evolution of our company.”
“Listing on a major stock exchange will give us access to a larger pool of investors, enhance our profile, and provide superior returns to our investors,” he added.
With the intention of listing on the NGX, the company will delist from the NASD and is subject to regulatory approvals and market conditions.
VFD Group noted that it would provide additional updates as the listing process progresses.
At the close of business on Tuesday, the securities of the organisation closed on the NASD OTC exchange at N244.88 per unit, the same rate they finished in the preceding trading session.
Business Post reports that the NASD was created to provide an avenue for public companies to transition smoothly into the country’s main stock exchange.
However, it has witnessed the movement of firms from the NGX to the NASD, especially due to the very strict regulatory requirements by the former.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange registered a 0.28 per cent drop on Tuesday, June 6, as the duo of Niger Delta Exploration and Production (NDEP) Plc and FrieslandCampina WAMCO Nigeria Plc made losses.
FrieslandCampina Wamco Nigeria Plc lost N1.26 in value to trade at N69.74 per unit versus N71.00 per unit, as NDEP Plc depreciated by N1.06 to close at N245.15 per unit compared with the previous day’s N246.21 per unit.
The duo suppressed the 1 Kobo price appreciation reported by Acorn Petroleum Plc, closing at 16 Kobo per share compared with the preceding session’s 15 Kobo per share.
This development weakened the market capitalisation of the NASD OTC bourse by N2.78 billion to wrap the day at N1.005 trillion compared with Monday’s N1.008 trillion, as the NASD Unlisted Securities Index (NSI) moved down by 2.00 points to 726.86 points from 728.86 points.
At the market yesterday, the trading value slumped by 75.0 per cent as a total of N35.7 million stocks were transacted in comparison to Tuesday’s N142.9 million worth of securities.
At the close of business, the trading volume slid by 93.9 per cent to 1.4 million units from the previous day’s 22.7 million, as the number of deals carried out during the session decreased by 43.8 per cent to 27 deals from the 48 deals executed in the previous session.
Geo-Fluids Plc remained the most traded stock by volume on a year-to-date basis with a turnover of 832.1 million units valued at N1.3 billion, Industrial and General Insurance (IGI) Plc has transacted 628.3 units worth N49.5 million, while UBN Property Plc has traded 395.9 million units valued at N336.6 million.
On its part, VFD Group Plc remained the most traded stock by value on a year-to-date basis with 11.0 million units worth N2.5 billion, Geo-Fluids Plc has exchanged 832.1 million units worth N1.3 billion, and FrieslandCampina Wamco Nigeria Plc has sold 17.5 million units for N1.2 billion.
