By Modupe Gbadeyanka
Next month, Nigeria plans to sell $2.5 billion Eurobond and proceeds from the sale would be used to fund the 2017 budget, Bloomberg reports.
Also, after the October Eurobond sale, the Federal Government will issue another $3 billion Eurobond before the end of the year, the reputable media outfit added.
This would bring to $7 billion the country has sold this year alone.
Here is the Bloomberg report
Nigeria plans to sell as much as $5.5 billion of Eurobonds in the next three months to fund capital projects and replace local-currency debt, according to the Debt Management Office. Yields on existing bonds rose to the highest in two months.
The new offers would bring the amount raised through Eurobond sales by Africa’s most-populous nation this year to more than $7 billion as President Muhammadu Buhari’s administration restructures its debt portfolio to almost double the portion of foreign borrowing in a bid to reduce financing costs.
The government wants to raise $2.5 billion in October to help fund 2017’s 7.4 trillion-naira ($20.8 billion) budget, the biggest yet, DMO Director-General Patience Oniha said on Wednesday in an interview in the capital, Abuja. It will sell the remaining $3 billion before the end of the year to replace naira-denominated debt, she said.
The government’s advisers “have told us the market is waiting,” Oniha said. “Work is already ongoing and we are just waiting for a resolution from the National Assembly to proceed.”
The yield on Nigeria’s $500 million of Eurobonds due July 2023 rose four basis points by 1:26 p.m. in London, extending Wednesday’s 15 basis-point climb, to 5.49 percent, the highest since Aug. 21. That on the nation’s dollar securities due in 2032 increased six basis points to 6.91 percent, the highest since July 18.
Citigroup Inc. and Standard Chartered Plc, which helped Nigeria sell bonds this year, will be retained as bookrunners for the $2.5 billion, and are in talks with the government to also lead the $3 billion sale, Oniha said.
Nigeria’s overall foreign debt, which includes funds from partners and the Export-Import Bank of China, stood at $15.1 billion as of June 30, while domestic debt was 14.1 trillion naira, the National Bureau of Statistics said on Sept. 19. The government wants to increase the proportion of foreign borrowing to 40 percent of total debt stock from under 30 percent currently, Oniha said.
“That will reduce the government’s borrowing costs,” she said. There is an almost 10 percentage-point spread between domestic and foreign borrowing costs and the restructuring debt plan will help save the government hundreds of million dollars in financing costs, Oniha said.
Nigeria’s Eurobonds yield an average 6 percent, compared with about 16 percent for its naira debt, according to Bloomberg indexes
The Monetary Policy Committee on Sept. 26 left its key interest rate at a record high of 14 percent, where it’s been for more than a year, to fight inflation that’s almost double the target and maintain hard-won stability in exchange rates, Governor Godwin Emefiele said. In the second quarter, the economy emerged from a 2016 slump, the deepest in more than a quarter of a century, with gross domestic product rising 0.6 percent from a year earlier.
High domestic borrowing costs are also forcing the DMO to reduce the maturity of naira debt it plans to sell so that it doesn’t lock in unfavorable interest payments over a longer period, Oniha said. “That will be reflected in our next-quarter calendar for bonds,” Oniha said. The government will instead push for more than 15-year tenure on dollar-denominated securities, she said.
“The good news about this is that Nigeria has the capacity to borrow more from the international capital market given improving fundamentals and its relatively low external debt levels, around 4-5 percent of gross domestic product,” Gaimin Nonyane, the London-based economic-research head at Ecobank International Group, said. “Some of these funds are likely to be used to finance the 2018 maturing debt of $500 million.”
While Nigeria’s debt to GDP ratio is among the lowest in Africa, its interest payments-to-revenue ratio doubled last year to 66 percent of revenue, according to the International Monetary Fund.
The government is looking to plug a 2017 budget deficit that it forecast at 2.3 trillion naira, or 2.2 percent of GDP following a revenue shortfall caused by the decline of output and price of oil, its main export. About one-third of this year’s budget will be invested in new roads, rail, ports and power as part of a wider plan to help the economy recover from a 1.6 percent contraction last year, boost growth to 7 percent, and create 15 million jobs by 2020.
BUA Cement Lists N115bn Bond on Nigerian Exchange
By Dipo Olowookere
The N115 billion 7-year series I fixed rate senior unsecured bond of BUA Cement Plc has been listed on the trading platform of the Nigerian Exchange (NGX) Limited.
The paper was admitted on the exchange on Tuesday, April 13, 2021, and to commemorate it, the CEO of BUA Cement, Mr Yusuf Haliru Binji, was honoured with the digital closing gong ceremony.
Mr Binji thanked the management of NGX Limited for the invitation to bring trading activities to a close, describing it as “another key milestone on our journey to becoming the preferred cement manufacturer in Africa.”
He explained that the cement maker accessed the debt capital market to source for N100 billion “as part of our growth strategy.”
The BUA Cement chief said the decision to raise more than N100 billion in the first tranche of the firm’s N200 billion programme was due to the “overwhelming response and in accordance with the Securities and Exchange Commission’s guidelines.”
“For us, this was a clear assessment of our viable business model, strong financial performance, and the strength of our product offerings,” Mr Binji stated.
Speaking on behalf of the parties to the transaction, the CEO of Stanbic IBTC Capital, Mr Funso Akere, expressed the delight of the organisation at being the adviser to BUA Cement Plc on the transaction “where they took advantage of very supportive conditions in the debt capital market to raise long term funding.”
“On behalf of Stanbic IBTC Capital Limited, Tiddo Securities and Union Capital, we would like to thank BUA Cement for giving us a freehand to guide them and the commitment showed to make the transaction a phenomenal success. We would also like to thank NGX for giving us a platform to list the bonds,” Mr Akere said.
On his part, the Divisional Head of Listings Business at NGX Limited, Mr Olumide Bolumole, stated that the exchange was “excited about BUA Cement’s debut bond offering which was oversubscribed by 37 per cent to the tune of N137.82 billion and represents the largest amount raised by a corporate issuer in the history of Nigeria’s debt capital market.”
“Without a doubt, this is a testament to the high level of confidence placed on this reputable brand by its investors and the entire market,” he said.
Mr Bolumole added that, “In line with its commitment to support Nigeria’s economic growth by providing a liquid, efficient, and multi-asset securities exchange hub, NGX Limited continues to provide a platform that offers investors varied options including equity, fixed income, Exchanged Traded Products (ETPs) and other funds.”
NGX Group Shares Now Available for Trading on NASD
By Adedapo Adesanya
NASD Plc, which operates the NASD Over-the-Counter (OTC) Securities Exchange, has announced the admission of the shares of the Nigerian Exchange Group PLC (NGX) for trading on its platform.
In an announcement on Tuesday, April 13, the only OTC bourse in the country noted that the move comes after the successful demutualisation of the Nigerian Stock Exchange (NSE) now known as the NGX Group PLC.
NGX Group shares became available for trading by licensed participating institutions or authorised traders registered on the NASD platform from Tuesday.
The demutualisation of the exchange has led to the emergence of the NGX Group Plc and three subsidiaries; Nigerian Exchange (NGX) Limited, NGX Regulation (NGX RegCo) Limited and NGX Real Estate (NGX RelCo) Limited.
Mr Temi Popoola is the CEO of NGX Limited, while Ms Tinuade Awe was appointed as the CEO of NGX RegCo Limited.
Speaking earlier this month after the completion of his tenure as the CEO of the old NSE, Mr Oscar Onyema, honoured with the digital closing gong ceremony as he set to continue in his new capacity as the GCEO, NGX Group Plc, noted thus, “I arrived at The Nigerian Stock Exchange when the stock market was in the doldrums, investors’ confidence low, mono-product and the bourse under regulatory administration. With tunnel vision collaboration with stakeholders in the financial system and perseverance, we have been able to surmount almost all of the challenges.
“I am delighted to have worked with the astute members of the National Council, visionary leaders in the Executive Committee and expert crop of staff at The Exchange to have delivered excellent results. We have come a long way from where we used to be and I am excited about the opportunities demutualisation has opened for us in the coming years.
“I must reiterate my commitment to ensuring that the NGX Group Plc and its subsidiaries deliver on the mandate to become Africa’s leading capital market infrastructure provider. I look forward to deepening partnerships with existing stakeholders and exploring new collaborations locally and globally to bring this to bear.”
Business Post had reported that NGX launched its new corporate brand identity and website rendering the previous nse.com.ng obsolete.
The NGX brand identity follows a monolithic brand architecture, which will facilitate the formation of any new subsidiary by leveraging existing brand equity. The identity is inspired by the arrows of the stock exchange ticker tape as well as monetary exchange between a buyer and seller. These arrows are stylised to form an ‘N’ and denote the act of collaboration.
Together with the new vibrant, modern and responsive website, NGX Group offers an enriched user experience. Accessible via ngxgroup.com, information about the group and the various subsidiaries are independently situated but featured as one website.
CSCS, VFD Group Sustain Growth at NASD OTC Exchange
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its bullish run to six days as it mounted a 0.75 per cent gain following positive price movement from VFD Group Plc and Central Securities Clearing Systems (CSCS) Plc on Tuesday, April 13.
The run, which started after the Easter holidays last week, has seen the bull hold down the fort at the unlisted securities market, which has so far marked an impressive run this year.
One of the companies responsible for this is the proprietary investment company, VFD Group Plc, which has refused to release its foothold on the accelerator as it continued its impressive bullish run at the bourse.
On Tuesday, it further gained N32.90 or 10 per cent to close the session at N361.82 per share in contrast to N328.92 per share it traded on Monday.
Securities depository company, CSCS Plc, recorded a marginal gain of 25 kobo or 1.6 per cent to close at N16.25 per unit as against N16 per unit of the previous session.
The appreciation in both stocks improved the market capitalisation of the bourse by N4.04 billion to close the day at a new Year-to-Date (YTD) high of N543.53 billion from N539.49 billion.
Following the same trend, the NASD Unlisted Security Index (NSI) grew by 5.68 points to finish at 764.67 points in contrast to 758.99 points recorded at the previous session.
Business Post gathered that a total of 2.1 million units of shares were transacted at the NASD OTC market on Tuesday, 84.3 per cent higher than the 1.2 million units recorded on Tuesday.
These trades were made in four deals, 33.3 per cent lower than the six deals recorded on Monday.
The value of the transactions amounted to N21.5 million, 15.2 per cent lower than the N25.3 million achieved at the preceding session.
UBN Property Plc remained as the most active stock by volume (year-to-date) for trading 21.9 million units of its shares for N24.6 million. CSCS Plc was in second place with 8.9 million units worth N139.1 million, while FrieslandCampina WAMCO Nigeria Plc held the third position with 3.5 million units of its shares worth N435.4 million.
In terms of value, Niger Delta Exploration and Production (NDEP) Plc was the most traded stock on a year-to-date basis with 2.2 million units worth N694.4 million. Friesland trailed with its 3.5 million units for N435.4 million, while VFD Group Plc was in third place with 1.3 million units valued at N219.6 million.
Naira Depreciates at I&E as Cryptos Record Surge
By Adedapo Adesanya
The Naira lost N1.25 against the US Dollar at the Investors and Exporters (I&E) segment of the foreign exchange market on Tuesday, April 13.
Business Post reports that during the trading day, the domestic currency depreciated to N411/$1 from N409.75/$1 it closed at the first session of the week.
According to data obtained from the FMDQ Securities Exchange, the 17.6 per cent or $7.98 million increase in the turnover for the day may have been responsible for the decline in the value of the country’s currency.
Yesterday, at the special FX window for investors, transactions valued at $53.33 million were carried out compared with $45.35 million recorded on Monday. This increase put pressure on the Naira as forex dealers did not have enough supply to meet the demands of customers.
But at the parallel market, the Naira retained its previous closing rate against the trio of the US Dollar, the Pound Sterling and the Euro, selling at N485/$1, N670/£1, and N570/€1 respectively.
In the same vein, at the interbank segment of the market, the Nigerian Naira sustained its stability against its American counterpart at N379/$1.
Cryptos Bullish as Coinbase Set to List on Wall Street
At the cryptocurrency market yesterday, there was a generally positive outcome among the seven digital coins tracked by Business Post.
In one of the most obvious signs of growing acceptance of cryptocurrencies, Coinbase, an American cryptocurrency exchange platform, said it will list on the Nasdaq on Wednesday, April 14 at a valuation of about $100 billion.
In what points as a big win for the digital asset, which has come under scrutiny even going on to warrant an embargo in Nigeria, analysts said the Coinbase debut is driving interest in the entire crypto universe, luring in new investors and likely encouraging other entities related to the market to issue their own stock.
The most popular digital currency in the world, Bitcoin (BTC), climbed to an all-time high on the news and was trading around N31,376,000, 7.3 per cent higher than its previous day’s value.
Ripple (XRP) on its part appreciated on Tuesday by 30.6 per cent to sell at N913.99, Ethereum (ETH) made a 7.1 per cent gain to sell at N1,121,959.49 while Litecoin (LTC) added 4.9 per cent to trade at N130,086.73.
Also, the Dash (DASH) recorded a 5.4 per cent appreciation to sell at N148,087.84, Tron (TRX) pulled a 7.8 per cent appreciation to sell at N73.29.
Strong Chinese Data, Demand Growth Lift Oil Market
By Adedapo Adesanya
The oil market witnessed growth on Tuesday as a string of positive news eased the recent pressures coming from the coronavirus pandemic.
At the market yesterday, the price of the Brent crude futures rose by 63 cents or 1.01 per cent to $63.91 per barrel, while the price of the West Texas Intermediate (WTI) crude futures improved by 71 cents or 1.19 per cent to trade at $60.41 per barrel.
The day’s major support was from China as data showed that exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide COVID-19 vaccinations.
In addition, import growth surged to the highest in four years.
Crude oil imports into China jumped 21 per cent in March from a low base of comparison a year earlier as refiners ramped up operations.
It continued gain caused by trouble caused by Yemen’s Iran-aligned Houthi movement which fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Saudi oil facilities.
The rise in geopolitical tension only has a notable bullish impact on oil prices if it is coupled with actual physical supply disruption but this was not the case.
Positive oil demand forecast also helped the market on Tuesday as the Organisation of the Petroleum Exporting Countries (OPEC) in its monthly report raised its forecast for 2021 oil demand growth by 70,000 barrels per day from its previous forecast of 5.95 million barrels per day or 6.6 per cent.
Also supporting prices ahead of weekly data, US crude oil stockpiles were expected to have fallen last week for a third straight week. This will be confirmed by the Energy Information Administration (EIA), the statistical arm of the US Department of Energy, on Wednesday.
However, the market will be studying the latest development following pauses on the Johnson & Johnson vaccine which could delay economic recovery and limit oil demand growth.
The US Center for Disease Control and Prevention and the US Food and Drug Administration recommended that the United States pause the use of J&J’s COVID-19 vaccine over six reported US cases of a “rare and severe” type of blood clot.
The six reported cases were among more than 6.8 million doses of the Johnson & Johnson vaccine administered in the United States.
The company has now decided to hold its rollout in Europe, a region that is already behind in vaccination plans.
Guinness Nigeria, 17 Others Intoxicate Stock Market by 0.29%
By Dipo Olowookere
The reign of the bears at the Nigerian Exchange (NGX) was stretched to another day on the back of sustained profit-taking, which left the market further weakened by 0.29 per cent on Tuesday.
Investors continued to rebalance their portfolios and trim their holding in some mid and high-cap equities that have yielded considerable returns in the past days.
These stocks cut across the key sectors of the market but at the close of transactions yesterday, the insurance index improved by 0.59 per cent, while the banking counter managed to rise by 0.03 per cent.
For the consumer goods index, it went down by 0.37 per cent. The energy space dropped 0.20 per cent, while the industrial goods sector depreciated by 0.05 per cent.
The losses posted by these three sectors contributed to the 110.72 points decline in the All-Share Index (ASI), closing at 38,601.83 points in contrast to 38,712.55 points it finished on Monday.
In the same vein, the market capitalisation reduced by N59 billion to settle at N20.201 trillion compared with N20.260 trillion it closed at the preceding day.
Guinness Nigeria suffered the highest loss at the stock market yesterday as its equity price went down by 9.91 per cent to N24.10 and was trailed by Tripple G, which lost 9.72 per cent to close at 65 kobo.
NCR Nigeria depreciated by 9.68 per cent to N2.52, Champion Breweries declined by 9.09 per cent to N2.00, while Jaiz Bank dropped 7.69 per cent to trade at 60 kobo.
On the other hand, Japaul finished stronger by 8.70 per cent to trade at 75 kobo and was followed by NAHCO, which gained 7.39 per cent to close at N2.18.
Sterling Bank appreciated by 7.14 per cent to N1.80, Stanbic IBTC gained 5.75 per cent to sell for N46.00, while Chams grew by 5.00 per cent to 21 kobo.
At the market on Tuesday, apart from the number of deals which went down by 6.44 per cent to 4,011 deals from 4,287 deals, the volume of shares transacted increased by 7.64 per cent to 208.8 million units from 194.0 million units, while the value of trades rose by 113.29 per cent to N2.9 billion from N1.4 billion.
The blockchain brings new financing options to the business market. For example, Bitcoin Cash casino has adapted to only using cryptocurrency. This way, it makes it easier for their customers to deposit and withdraw in a BCH casino. Entrepreneurs have taken note of this and are looking to invest more in crypto than in fiat markets.
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Latest News on Business Post
- BUA Cement Lists N115bn Bond on Nigerian Exchange April 14, 2021
- NGX Group Shares Now Available for Trading on NASD April 14, 2021
- CSCS, VFD Group Sustain Growth at NASD OTC Exchange April 14, 2021
- Naira Depreciates at I&E as Cryptos Record Surge April 14, 2021
- Strong Chinese Data, Demand Growth Lift Oil Market April 14, 2021
- Guinness Nigeria, 17 Others Intoxicate Stock Market by 0.29% April 14, 2021
- SEC Holds First CMC Meeting in 2021 Thursday April 13, 2021
- Company Registration With CAC to Take 3 Hours April 13, 2021
- OPEC Raises 2021 Oil Demand by 6.6% to 5.95 bpd April 13, 2021
- DPR Denies Revoking Refining Licences of BUA, 31 Others April 13, 2021
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