Economy

CBN Tampers With Stop Rates at N400bn OMO Auction

Published

6 years ago

02/07/2019

By Dipo Olowookere

After a long hiatus, the Central Bank of Nigeria (CBN) resumed the conduct of its Open Market Operations (OMO) on Monday.

During the exercise, the apex bank offered OMO bills worth N400 billion to investors across three maturities; 101-day, 255-day and 353-day bills.

Business Post reports that the central bank auctioned to market players yesterday N50 billion worth of the 101-day bill, N150 billion worth of the 255-day instrument and N200 billion worth of the 353-day bill.

However, much of the subscriptions were for the long-tenor, which had N700.79 billion offers from investors. This forced the CBN to lower the stop rate by 0.08 percent to 12.40 percent, allotting N352.83 billion to subscribers.

For the mid-tenor, the apex received subscriptions worth N56.81 billion and its stop rate was raised by 0.21 percent to 11.84 percent, with N43.11 billion allotted to subscribers.

The short-tenor received less subscriptions from market players; N6.06 billion, with the central bank allotting only N4.06 billion and its stop rate left unchanged.

Business Post reports that at the end of the exercise, the apex bank received total subscriptions worth N763.66 billion for the N400 billion OMO bills auctioned on Monday, with N400 allotted to investors.

It was observed that CBN floated yesterday’s OMO auction after nearly a month absence so as to mop up excess system liquidity from bond maturity inflows into the system, about N351 billion worth of the Jun 2019 FGN bond.

According to Zedcrest Research, the apex bank is expected to float another OMO auction due to anticipated FAAC inflows into the system, saying, “Barring the aforementioned, yields should maintain a downtrend as market players look to fill lost out bids at the auction.”

Business Post further observed that the average treasury bills yield at the secondary market closed higher yesterday by 0.19 percent to settle at 12.16 percent.

This was caused by the rise in the yield across the maturities on Monday, with the one-month instrument recording the highest gain of 0.49 percent to close at 10.91 percent.

Yield on the three-month bill appreciated by 0.17 percent to finish at 11.80 percent, the one on the six-month bill rose by 0.02 percent to settle at 12.54 percent, while the one on the 12-month instrument rose by 0.06 percent to close at 13.39 percent.

Meanwhile, the average rates in the money market finished 4.22 percent higher on Monday to settle at 8.54 percent.

This followed the mopping up of N400 billion from the system by the apex bank yesterday via the sale of OMO bills to investors.

As a result, the Open Buy Back (OBB) rate went up by 4.14 percent to settle at 8.14 percent, while the Overnight (OVN) rate rose by 4.29 percent to close at 8.93 percent.

Barring any further OMO sale by the CBN, the rates are expected to trend lower today due to expected inflows from FAAC payments.

Economy

NASD Bourse Closes Mixed at Midweek as Paintcom Joins

Published

6 hours ago

16/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a mixed outcome on Wednesday, January 15 after it welcome a new entrant.

Paintcom Investment Nigeria Plc joined the OTC securities exchange yesterday with shares admitted at a unit price of N10.72 and a market capitalisation of N8.5 billion.

However, when trading activities closed for the session, the alternative stock exchange went down by 0.10 per cent, with the NASD Unlisted Security Index (NSI) depreciating by 3.03 points to 3,093.16 points from the 3,096.19 points recorded in the previous session.

But the value of the trading platform increased by 0.7 per cent or N7.54 billion to settle at N1.068 trillion compared with the preceding day’s N1.061 trillion.

The volume of securities traded in the session went down by 83.2 per cent to 666,494 units from the 3.97 million units recorded in the preceding session, while the value of shares traded during the session jumped by 98.2 per cent to N16.5 million from N8.3 million, with the number of deals going down by 20 per cent to 20 deals from 25 deals.

Industrial and General Insurance (IGI) Plc gained 3 Kobo to close at 30 Kobo per share versus 27 Kobo per share, Mixta Real Estate Plc increased by 23 Kobo to N2.58 per unit from N2.35 per unit, and Central Securities Clearing System (CSCS) Plc added N1.15 to settle at N23.20 per share, in contrast to Tuesday’s closing price of N22.15 per share.

Further, Afriland Properties Plc grew by 75 Kobo to N16.25 per unit from N15.50 per unit and Geo-Fluids Plc expanded by 13 Kobo to N4.79 per share from N4.66 per share.

On the flip side, 11 Plc fell by N27.74 to close at N253.10 per unit compared with the previous session’s N280.84 per unit and FrieslandCampina Wamco Nigeria Plc lost 55 Kobo to finish at N38.95 per share versus N39.50 per share.

FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 3.4 million units worth N134.9 million, followed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and Afriland Properties Plc with 690,825 sold for N11.1 million.

IGI Plc closed the day as the most active stock by volume (year-to-date) with 23.5 million units sold for N5.3 million, trailed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and FrieslandCampina Wamco Nigeria Plc with 3.4 million units worth N134.9 million.

Economy

Naira Crashes to N1,551/$1 at Official Market Amid Inflationary Pressures

Published

7 hours ago

16/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated on the American currency in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, January 15 by 0.09 per cent or N1.45 to close at N1,551.10/$1 compared with the preceding day’s N1,549.65/$1.

It was the fourth straight session the local currency was losing value on the greenback in the official forex market as the deadline to end the access of Bureaux De Change (BDCs) to the official trading platform nears.

Also, Nigeria’s inflation neared a 29-year high as it rose for the fourth straight month to 34.80 per cent in December 2024 spurred by high festive activities.

On the British currency, which is the Pound Sterling, the domestic currency depreciated by N24.79 to wrap the session at N1,904.43/£1 versus the previous day’s N1,879.64/£1 and against the Euro, it weakened by N14.74 to sell for N1,600.79 per Euro versus N1,586.05/€1.

At the parallel market, the Nigerian Naira traded flat against the US Dollar yesterday at N1,650/$1, according to data obtained by Business Post.

In the cryptocurrency market, most of the tokens gained as the anticipation of Mr Donald Trump’s inauguration as US president is building bullish sentiment for the market, which was also encouraged by a highly anticipated CPI inflation data report in the US.

Litecoin (LTC) grew by 17.7 per cent to quote at $119.82, Ripple (XRP) expanded by 9.0 per cent to a six-year high of $3.10, Solana (SOL) appreciated by 7.2 per cent to trade at $202.81, Dogecoin (DOGE) rose by 5.3 per cent to finish at $0.3789, Ethereum (ETH) increased its value by 4.7 per cent to end at $3,376.28, and Cardano jumped by 3.3 per cent to settle at $1.06, Bitcoin (BTC) gained 2.8 per cent to close at $99,707.22, and Binance Coin (BNB) improved by 1.6 per cent to trade at $710.31, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Oil Market Rallies on US Crude Drop, Russian Sanctions

Published

8 hours ago

16/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The oil market rose more than 2 per cent on Wednesday, supported by a large draw in US crude stockpiles and potential supply disruptions caused by new US sanctions on Russia.

Brent crude futures appreciated by $2.11 or 2.64 per cent to $82.03 a barrel and the US West Texas Intermediate (WTI) crude grew by $2.54 or 3.28 per cent to close at $80.04 a barrel.

The US Energy Information Administration (EIA) reported an inventory dip of 2 million barrels for the second week of the year.

The change estimated by the EIA compared with a modest draw of around 1 million barrels for the previous week, which also saw sizable fuel inventories build that dragged oil prices lower.

For the week to January 10, the EIA estimated an inventory build of 5.9 million in gasoline, with production averaging 9.3 million barrels daily. This compared with a build of as much as 6.3 million barrels for the previous week when production averaged 8.9 million barrels daily. That build was the second sizable weekly one after 2024 ended with a build of 7.7 million barrels in gasoline inventories.

The latest round of US sanctions on Russian oil could disrupt Russian oil supply and distribution significantly, the International Energy Agency (IEA) said in its monthly oil market report.

The Paris-based agency said that the sanctions on Iran and Russia cover entities that handled more than a third of Russian and Iranian crude exports in 2024, adding that the market will be in surplus this year as supply growth led by countries outside the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ exceeds subdued expansion in world demand.

This aligns with an earlier projection by the EIA which assumes that OPEC+ would roll back its production cuts and that non-OPEC production would continue leaping forward.

Limiting the gains was fresh developments in the Middle East as Israel and Hamas agreed to a deal to halt fighting in Gaza and exchange Israeli hostages for Palestinian prisoners.

OPEC in its monthly oil report on Wednesday forecast stronger demand growth than the IEA of 1.45 million barrels per day this year and, in its first look at 2026, predicted a similar expansion of 1.43 million barrels per day next year.

OPEC expects global oil demand to rise by 1.43 million barrels per day in 2026, maintaining a similar growth rate to 2025.