Economy

A Welcome Initiative On Debt Restructuring

Published

9 years ago

16/08/2017

By FBNQuest Research

Last week, the FGN announced plans for a restructuring of its debt obligations and revealed that the Federal Executive Council had approved the Medium Term Expenditure Framework 2018-2020.

The market and the local media were more interested in the restructuring although both will have to be approved by the National Assembly.

The proposal is to refinance maturing NTBs with USD-denominated bonds up to three years’ tenor within an apparent ceiling of $3 billion.

The weak point of the FGN’s debt burden has long been its service rather than its stock. In May it spent N91 billion on debt service, which represented 49 percent of its retained revenue. The ratio is running ahead of (ie worse than) official projections.

The Economic Recovery & Growth Plan 2017-2020 has an annual average of 41 percent.

The rationale for the restructuring is to lower the servicing cost, and extend the average maturity of the FGN’s debt obligations.

The thinking cannot be faulted: the federal finance minister, Kemi Adeosun, pointed out in an interview on Wednesday that the FGN had borrowed externally this year at around 7 percent and was paying up to 18 percent on NTBs.

The proposal is in line with the DMO’s medium-term debt strategy to achieve a 60/40 split for the FGN’s domestic and external obligations. Its own data show a 74/26 split in March. If we make an adjustment for the $3 billion ceiling, we get nearer the target, at 68/32.

The FGN may well return to the Eurobond market in H2, which would improve the ratio. We are converting at N306 since we assume the FGN is servicing its debt at that rate.

Among other advantages of the restructuring, we highlight: the accumulation of reserves; the expected easing of pressure on yields for NTBs; its relatively quick impact, given the short-term tenor of NTBs; and peace of mind for the DMO.

These can only be enjoyed once the assembly gives its go-ahead. It is currently on holiday but the FGN will have to flesh out its marketing and distribution plans for the new USD-denominated bonds.

The one said positive from the exercise that we consider overstated is the impact on lending to the real economy.

The ceiling of $3 billion is not a game-changer in the context of the stock of banks’ loans to the private sector of N16.3 trillion ($53.5 billion) at end-May.

We are also wary of official policies intended to encourage such lending, having lost count of the number of times the calls of the monetary policy committee in this respect have gone unheeded in the past two years.

Economy

Profit-taking in Heavyweight Stocks Pulls Back Nigerian Exchange by 0.50%

Published

2 hours ago

17/06/2026

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited was further pulled back by 0.50 per cent on Tuesday as a result of profit-taking in some heavyweight stocks.

Like the preceding session, the key sectors of Customs Street were depressed yesterday, with the banking index down by 2.82 per cent. The consumer goods declined by 0.52 per cent, the insurance space lost 0.10 per cent, and the energy counter shrank by 0.03 per cent, while the industrial goods segment was flat.

Consequently, the All-Share Index (ASI) eased by 1,437.54 points to 241,984.80 points from 243,422.34 points, and the market capitalisation contracted by N922 billion to N155.204 trillion from N156.126 trillion.

The worst-performing stock was International Energy Insurance, which gave up 10.00 per cent to close at N5.76. Vitafoam dipped by 10.00 per cent to N189.00, Austin Laz crashed by 9.93 per cent to N3.90, SUNU Assurances depleted by 9.82 per cent to N3.58, and Sovereign Trust Insurance lost 8.37 per cent to finish at N2.30.

On the flip side, Conoil gained 9.79 per cent to trade at N213.00, Prestige Assurance also expanded by 9.79 per cent to N1.57, Neimeth jumped 9.74 per cent to N8.45, eTranzact chalked up 9.40 per cent to close at N16.30, and Cornerstone Insurance improved by 9.09 per cent to N5.40.

The bourse witnessed heavy sell-offs in some equities, with Sterling Holdings recording the sale of 100.9 million units worth N782.8 million to lead the activity log. UAC Nigeria transacted 49.4 million units valued at N9.1 billion, Access Holdings sold 28.8 million units for N699.3 million, Zenith Bank exchanged 29.4 million units worth N3.0 billion, and GTCO traded 20.2 million units valued at N2.7 billion.

At the close of transactions, market participants bought and sold 535.5 million shares worth N36.8 billion in 55,123 deals compared with 569.1 million shares valued at N31.4 billion traded in 77,652 deals on Monday. This implied that the trading value went up by 17.20 per cent, while the trading volume and the number of deals went down by 5.90 per cent and 29.01 per cent, respectively.

Economy

MRS Oil, FrieslandCampina, CSCS Plunge NASD Index by 0.48%

Published

2 hours ago

17/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange was further down by 0.48 per cent on Monday, June 16, as a result of the losses printed by three bellwethers, led by MRS Oil Plc, which fell by N15.80 to N142.20 per unit from N158.00 per unit.

Further, FrieslandCampina Wamco Nigeria Plc dipped by N2.94 to close at N180.14 per share versus the previous day’s N183.08 per share, and Central Securities Clearing System (CSCS) Plc crumbled by 38 Kobo to N80.24 per share from N80.62 per share.

Consequently, the market capitalisation of the trading platform moderated by N12.55 billion to N2.605 trillion from N2.605 trillion, while the NASD Unlisted Security Index (NSI) weakened by 20.98 points to 4,333.35 points from 4,354.33 points.

During the trading day, the value of transactions surged by 16.5 per cent to N45.6 million from the preceding session’s N39.2 million, and the number of deals soared by 34.8 per cent to 31 deals from 23 deals, while the volume of securities declined by 30.6 per cent to 688,290 units from 992,164 units.

At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis with a turnover of 3.4 billion units valued at N8.4 billion. The second spot was occupied by Infrastructure Credit Guarantee (Infracredit) Plc, with 2.3 billion sold for N6.5 billion, and the third position was taken by CSCS Plc, with 66.9 million units exchanged for N4.6 billion.

GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.

Economy

Naira Weakens to N1,357/$1 at Official Market, N1,385/$1 at Black Market

Published

3 hours ago

17/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira suffered a 0.55 per cent or 91 Kobo loss against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, June 16, closing at N1,357.18 /$1 compared with the previous day’s N1,356.27/$1.

It also weakened against the Pound Sterling at the official market during the session by N11.53 to trade at N1,820.39/£1 versus Monday’s rate of N1,808.86/£1, but appreciated against the Euro by N2.06 to quote at N1,573.79/€1 versus the preceding session’s N1,575.85/€1.

In the black market, the Nigerian currency crashed against the Dollar yesterday by N5 to sell for N1,385/$1, in contrast to the N1,380/$1 it was traded a day earlier, and at the GTBank FX desk, it traded flat at N1,373/$1.

Nigeria’s gross external reserves surged to $50.505 billion, the highest international Dollar balance since January 2009, affirming expectations that the local currency will remain along a stable band. The FX reserves position was buoyed by inflows from oil sales.

In its Article IV consultation report on Nigeria, the International Monetary Fund (IMF) said that the Naira remains significantly undervalued despite recent gains from FX reforms. It noted that its Real Effective Exchange Rate (REER) assessment showed the local currency was still trading below levels supported by the country’s economic fundamentals, saying the Naira should have traded around N1,142.04/$1 using the end-of-2025 exchange rate benchmark, or N1,130.88/$1 when calculated using the average exchange rate for the year.

As for the cryptocurrency market, prices showed renewed risk appetite as total 24-hour trading volume jumped 51 per cent to $207 billion, open interest rose 2.4 per cent to $113.41 billion, and liquidations surged 64 per cent to $561 million, with shorts accounting for the bulk of the forced exits, according to Coindesk data.

Cardano (ADA) slid 2.7 per cent to $0.1731, Binance Coin (BNB) slumped 1.6 per cent to $605.80, Ripple (XRP) declined by 1.5 per cent to $1.22, Bitcoin (BTC) fell 0.8 per cent to $65,739.70, Dogecoin (DOGE) also tumbled by 0.6 per cent to $0.0873, and TRON (TRX) depreciated by 0.6 per cent to $0.3166.

However, Ethereum (ETH) grew by 0.5 per cent to $1,795.40, and Solana (SOL) rose by 0.2 per cent to $73.81, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.