Economy
CBN to Sell N847bn T-Bills to Local, Foreign Investors Q1 2020
By Modupe Gbadeyanka
The banking industry watchdog, Central Bank of Nigeria (CBN), has announced plans to auction treasury bills valued at N847.4 billion to investors in the first quarter of 2020.
The apex bank, in a circular released on Wednesday, stated that the debt instrument would be offered in the usual three maturities; 91-day, 182-day and 364-day bills.
The sale would be done via the primary market auction (PMA) and would be open to both local and offshore investors. It further said the same amount of the T-bills would be maturing in the period under review.
Some weeks ago, the nation’s banking industry regulator announced in a circular to banks that it was restricting the sale of its OMO bills only to foreign investors. This move was seen to make funds available to the real sector of the economy through loans.
In the calendar obtained by Business Post, the CBN said the exercise, which would be done in seven different auctions during the period under review, would have one unit of the bill sold at N1,000 subject to change at short notice.
From the analysis, the central bank it would issue N75.6 billion worth of the 91-day bill, N141.0 billion worth of the 182-day bill and N630.8 billion worth of the 364-day bill.
However, in the first three months of next year, N86.6 billion worth of the 91-day instrument would be maturing, N163.0 billion worth of the 182-day instrument would mature, while N597.8 billion of the 364-day bill is expected to mature.
For the first exercise to be conducted next Wednesday, the apex bank hopes to sell N5 billion of the 91-day bill, N10 billion of the 182-day bill and N30 billion worth of the 364-day bill, while a week later, it would sell N2 billion of the 91-day bill, another N2 billion of the 182-day bill and N3 billion of the 364-day bill.
In recent times, stop rates of treasury bills sold by the CBN have fallen to single digit unlike the OMO bills, which are still offered at double digits so as to attract foreign investors to keep their funds in the system.
See the calendar below
By Adedapo Adesanya
The Naira improved its value against the United States Dollar by N2.78 or 0.21 per cent to N1,347.63/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, August 20, from the previous day’s N1,350.41/$1.
Also, the domestic currency gained 43 Kobo against the Pound Sterling in the official market yesterday to trade at N1,838.70/£1 compared with the preceding session’s N1,839.13/£1, but lost 66 Kobo against the Euro to finish at N1,574.97/€1, in contrast to Wednesday’s N1,574.31/€1.
At the GTBank forex counter, the Naira depreciated against the US Dollar yesterday by N1 to close at N1,358/$1 versus the previous session’s N1,357/$1, while at the parallel market, it remained unchanged at N1,390/$1.
Daily FX update released by the Central Bank of Nigeria (CBN) showed that interbank turnover at the official window increased by 0.22 per cent to $371.788 million from $370.98 million, with the number of deals up to 134 from 100.
Transactions were consummated between N1,347 and N1,351.5000 during the trading session.
As for the cryptocurrency market, Bitcoin (BTC) topped $75,000 in the latest rally amid euphoria over a US Treasury liquidity signal from the buyback plan, rising by 8.8 per cent to $75,371.36.
The US Treasury Department has decided to at least double liquidity-support buyback operations for longer-dated nominal coupon securities. This applies in the 10- to 30-year segment.
Additional catalysts included the latest crypto proposal by the US Securities and Exchange Commission (SEC), while President Donald Trump, after meeting with prominent crypto executives, urged Congress to pass what he calls a fair version of the Clarity Act before year-end.
Further, Ripple (XRP) rose by 18.7 per cent to $1.30, Cardano (ADA) grew by 13.9 per cent to $0.2086, Dogecoin (DOGE) improved by 10.8 per cent to $0.0826, Solana (SOL) expanded by 6.5 per cent to $90.37, Binance Coin (BNB) soared by 6.3 per cent to $664.00, Ethereum (ETH) jumped by 5.2 per cent to $2,363.26, and TRON (TRX) climbed by 1.5 per cent to $0.3379, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Dipo Olowookere
For the eighth straight session, the Nigerian Exchange (NGX) closed lower, losing 0.32 per cent at the close of business on Thursday as a result of continued sell-offs.
Yesterday, the financial and energy sectors came under selling pressure as investors’ appetite for domestic equities waned, with attention turning to the 2027 presidential campaigns, which kicked off on Wednesday.
The energy index shed 2.49 per cent, the insurance sector depreciated by 0.79 per cent, and the banking segment declined by 0.41 per cent. But the consumer goods space gained 0.10 per cent, while the industrial goods counter closed flat.
When the market closed for the day, the All-Share Index (ASI) contracted by 712.67 points to 240,037.80 points from 240,750.47 points, and the market capitalisation decreased by N439 billion to N154.978 trillion from N155.417 trillion.
International Energy Insurance slumped by 9.85 per cent to N4.30, Coronation Insurance dropped 9.84 per cent to trade at N2.20, Fortis Global slipped by 9.76 per cent to N1.85, AVA Capital crashed by 7.89 per cent to N7.00, and Zichis shrank by 7.36 per cent to N17.00.
On the other side, Haldane McCall rose by 9.38 per cent to N3.85, Trans-Nationwide Express jumped by 8.90 per cent to N3.06, McNichols appreciated by 8.33 per cent to N5.20, Cutix gained 2.56 per cent to close at N2.40, and Veritas Kapital expanded by 1.52 per cent to N1.34.
Business Post reports that Customs Street recorded 14 advancing stocks and 29 declining stocks, representing a negative market breadth index and weak investor sentiment.
A total of 2.9 billion shares worth N34.0 billion were transacted in 34,725 deals during the session versus the 1.2 billion shares valued at N37.8 billion traded in 34,546 deals at midweek. This showed that the trading value moderated by 10.05 per cent, while the trading volume and number of deals increased by 141.67 per cent and 0.59 per cent apiece.
Fortis Global Insurance was on top of the activity chart yesterday, with a turnover of 2.6 billion equities valued at N5.2 billion. Sterling Holdings exchanged 28.1 million shares worth N211.4 million, Trans-Nationwide Express transacted 21.7 million stocks for N66.2 million, UBA sold 17.9 million equities worth N803.7 million, and First Holdco traded 15.7 million shares valued at N2.0 billion.
By Adedapo Adesanya
Oil jumped more than 2 per cent on Thursday to its highest level in nearly a month, after US President Donald Trump warned of retaliation against nations supporting Iran.
Brent crude futures gained $2.16 or 2.4 per cent to trade at $93.78 a barrel, while the US West Texas Intermediate (WTI) crude futures for September rose by $2 or 2.3 per cent to $87.83 a barrel.
President Trump has threatened sweeping economic measures against Iran, warning countries that provide Iran with “any type of lifeline” that they could face severe consequences.
The American President described the planned campaign as “economic warfare and isolation on an unprecedented scale,” as the US seeks to intensify pressure on Tehran nearly six months into the conflict.
US Treasury Secretary Scott Bessent said the Trump-led administration would impose what he called the “toughest sanctions in history” on Iran and urged China and other countries to cooperate with the campaign.
Mr Bessent said he would hold a press conference on Monday to provide details of the measures, which he said would complement the US blockade of Iran.
Concerns about stricter sanctions enforcement against Iran added to anxiety about the risk to supply in the Middle East.
The economic offensive comes as the war, which began on February 28 after the US and Israel launched military strikes on Iran, has killed thousands of people and severely disrupted energy supplies.
Iran’s blockade of the Strait of Hormuz, a key route for global oil and gas shipments, and attacks on energy infrastructure across the Middle East have sharply reduced the flow of energy to international markets.
The latest US threats mark an escalation in the US’s economic pressure on Iran, with Trump also warning countries that continue to trade with or support Iran that they could face punitive measures. Iran has dismissed the campaign as “economic terrorism” and a continuation of failed US policies.
Shipping traffic through the Strait of Hormuz remains far below pre-war levels, according to the latest shipping data. Prior to the Iran war, shipments equal to about one-fifth of global consumption moved through the waterway.
This week, the United Arab Emirates suspended all financial and economic transactions with Iran until further notice, highlighting the fraught ties between the major Gulf Arab oil producer and Iran. The war has also impacted the supply of refined fuels and drawn down inventories, with less crude available to refiners.
