NSE Lists N856.5m FGN Savings Bond
By Modupe Gbadeyanka
Federal Government of Nigeria (FGN) Savings Bond worth N856.48 million has been listed on the trading floor of the Nigerian Stock Exchange (NSE) as at June 8, 2018.
Last year, the Debt Management Office (DMO), on behalf of the Federal Government of Nigeria, launched a new retail investment programme.
The FGN Savings Bond to help enhance the savings culture among Nigerians while providing all citizens irrespective of income level, an opportunity to contribute to National Development; as well as the comparatively favourable returns available in the capital market.
It was gathered that on January 8, 2018, the stock exchange listed N196.17 million each of 12.738 percent and 11.738 percent FGN Saving Bond December 2020, and 2019 respectively.
Also in March 2018, the stock market regulator listed N235.02 million, N32.82 million, N123.25 million and N73.1 million.
FGN Savings Bond is safe and backed by the full faith and credit of the Federal Government of Nigeria, with quarterly coupon payments to bondholders. The bond has a minimum subscription of N5, 000 with additions in multiple of N1,000 with a maximum of N50 million.
Fixed coupon would be paid quarterly to investors and the bond tenors range from two to three years’ tenor. The couple rate for the two–year FGN Savings Bond is 10.344 percent, while the three– year FGN Savings Bond stood at 11.344 percent and the offer is being issued on a monthly basis through an offer for subscription and with a period of five days from the date of announcement. However, investors’ participation in the FGN Savings Bond has been on a decline since its introduction in March 2017.
12-Month Treasury Bills Now 14.74% as Appetite Falls
By Dipo Olowookere
The 364-day treasury bills stop rate was raised by the Central Bank of Nigeria (CBN) at the primary market auction (PMA) on Wednesday by 5.25 per cent as appetite for the asset class waned.
The central bank, which conducted the exercise, did not record the usual hunger for the debt instrument by investors yesterday, ostensibly because of how the bank had tinkered with the rates in the previous exercises.
But the apex bank surprised subscribers at the PMA on Wednesday when it jerked the rate higher to 14.74 per cent from the 9.49 per cent it cleared in the previous PMA.
According to details of the exercise, the CBN auctioned the one-year bill worth N139.96 billion and received subscriptions valued at N165.28 billion, allotting N142.16 billion.
Business Post reports that it was not only the 12-month dated instrument that enjoyed the rate hike yesterday as the two others benefitted.
The central auctioned N3.34 billion worth of the 182-day bill during the session but had investors stake N1.56 billion on it, with N1.56 billion allotted to successful bidders at 8.00 per cent compared with the previous session’s 5.00 per cent, indicating an increase of 3.00 per cent.
As for the 91-day bill, the rate cleared at 6.00 per cent after it was moved higher by 3.45 per cent from 2.55 per cent. This was after the apex bank allotted N1.75 billion to subscribers, the same amount of bids it received from the N2.16 billion taken to the market on Wednesday.
Recall that some days ago, the Monetary Policy Committee (MPC) of Nigeria’s central bank increased the Monetary Policy Rate (MPR), which is the benchmark interest rate in the country, by 0.50 per cent to 18.00 per cent.
The team explained that the rate hike was mainly to tame rising inflation in Nigeria, which the National Bureau of Statistics (NBS) said stood at 21.91 per cent in February.
China’s Investment in Africa Has Cut Need for Loans from World Bank, IMF—Osinbajo
By Adedapo Adesanya
The Vice President of Nigeria, Mr Yemi Osinbajo, has lauded China’s investment in Africa, saying it has reduced dependency on loans from Bretton Woods, which consists of the World Bank and the International Monetary Fund (IMF).
In a statement seen by Business Post, the VP, at an event at King’s College London on March 27, 2023, stated that “China shows up where and when the West will not and or are reluctant.”
He said this was evident in the investment of the Asian giant in Africa, which he said stood at $254 billion in 2021, about four times the volume of US-Africa trade.
He also noted that, “China is the largest provider of foreign direct investment, supporting hundreds of thousands of African jobs. This is roughly double the level of U.S. foreign direct investment, adding that, “China remains by far the largest lender to African countries.”
He also noted that Chinese companies had taken the lead in exploiting minerals in Africa, many now in lithium mining in Mali, Ghana, Nigeria DRC, Zimbabwe and Namibia.
The Nigerian second-in-command said that China has always shown up for African countries while outrightly condemning Western countries in that regard.
He said, “Most African countries are rightly unapologetic about their close ties with China. China shows up where and when the west will not or are reluctant.”
He added, “And many African countries are of the view that the beware of the Chinese Trojan loans advise forming the west is wise but probably self-serving,” explaining that, “Africa needs the loans and the infrastructure. And China offers them. In any case, the history of loans from Western institutions is not great.”
Taking a step further, Mr Osinbajo sent a salvo to the World Bank and the IMF over the conditions attached to their loan facilities.
“The memory of the destructive conditionalities of the Bretton Woods loans is still fresh, and the debris is everywhere.
“And the preoccupation of western governments and media with the so-called China debt trap might well be an overreaction,” he added.
“I recommend an eye-opening lecture by Professor Deborah Brautigam about two weeks ago at Jesus College Cambridge.
“The truth, as she points out, is that all of the Chinese lendings to Africa is only 5 per cent of all outstanding public and publicly guaranteed debt in low and middle-income countries, compared to 23% held by the World Bank and other multilaterals.”
He alluded that Chinese lenders account for 12 per cent of Africa’s private and public external debt.
“And the Chinese have also been there when the debts cannot be paid. In early 2020 as COVID battered African economies, China came together with other G20 members to launch the Debt Service Suspension Initiative (DSSI).
“About 73 low-income economies benefited from the suspension of principal and interest payments. Chinese banks provided 63 per cent of the total debt relief while being only owed 30 per cent of the debt service payments due,” he quipped.
Dangote Says N300bn Bond Listing Reflects Nigerian Capital Market Depth
By Aduragbemi Omiyale
The listing of Dangote Industries Limited’s N300 billion series 1 and 2 bonds on the Nigerian Exchange (NGX) Limited has been described as an indicator of the depth of the Nigerian capital market.
The Group Chief Executive Officer of the conglomerates, Mr Olakunle Alake, said this on Wednesday when a closing gong ceremony was held to celebrate the completion of the listing of the corporate debt instrument on the local stock exchange.
Mr Alake, represented by the Group Chief Finance Officer, Mr Mustapha Ibrahim, said, “We are pleased to have showcased the depth and liquidity of the domestic capital market whilst we reflect the strong quality of the issuer, despite the current global market realities.”
According to him, the depth of the market was reflected in the successful issuance of the bond, which was the largest aggregate local currency bond issued in the capital market so far within the year.
He further noted that the listing of the bond recorded participation from a wide range of investors, including domestic pension funds, asset managers and insurance companies and further demonstrated investors’ confidence in Nigeria’s credit reality.
On his part, the Divisional Head of Capital Markets at NGX, Mr Jude Chiemeka, speaking at the event, applauded the listing of the bond, which provides corporates with the opportunity to raise capital.
“The listing of this transaction on our platform not only allows for a more liquid capital market, but it also shows our capacity to facilitate large transactions towards enabling a more robust ecosystem,” Mr Chiemeka said.
He further noted that NGX remains committed to fostering similar transactions through its digital gateways such as this and a confident market where corporates and investors can achieve their respective objectives.
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