Treasury Bills are government securities sold by the Central Bank of Nigeria (CBN) to the general public in return for interest payments.
Treasury Bills have a tenor of 91 days, 182 days and 364 days respectively. They are used to fund government expenditure and also used as a monetary policy tool by the CBN.
The CBN auctions treasury bills to the public every fortnight. The apex bank held its Primary Market Auction (PMA) today, 18 July 2018. A PMA means the CBN sells the bills directly, and is the opposite of a secondary sale.
In a secondary sale, investors that bought at the primary auction, sell off their holdings.
Treasury bills worth N178.44 billion was offered, while a total of N174.39 billion was subscribed for the 91 days, 182 days and 364 days, which represents 97.75% subscription rate.
A total of N107.05 billion for 91 days, 182 days and 364 days was alloted. Here is a breakdown of the allotment.
- N5.8 billion worth of 91-day bills were alloted of the N6.6 billion subscribed. Stop rate was 10%
- N26.6 billion worth of 182-day treasury bills were alloted of the N26.8 billion subscribed. Stop rate was 10.5%.
- N74.5 billion worth of 365-day treasury bills were alloted. Stop rate was 11.49%.
Nigerian stock investors lose N55.17 billion, as Zenith, GTBank and MTN finish lower
Market breadth closed in favor of the bear with 17 tickers closing in the red.
The Nigerian Stock Exchange began the first trading week on a negative note, as the All-share index fell by 0.44%. The downturn was impacted by losses recorded in large capitalized stocks.
The All-Share Index (ASI) dipped by 0.44% to 24,200.60 index points. Accordingly, Month-to-Date and Year-to-Date losses stands at -1.12% and -9.92%, respectively, while market capitalization stood at N12.624 trillion after declining by N55.17 billion.
Market activity level was inverse to the broad index, as total volume and value traded significantly improved by 75.67% and 139.55% to 231.23 million units and 2.154 billion. STERLNBK was the most traded stock by volume at 77.5million units, while MTNN finished the most traded stock by value at N1.124 billion.
Market breadth closed in favor of the bear with 17 tickers closing in the red against 14 gainers.
With the exception of the Industrial and Consumer Goods Indexes which closed 0.26% and 0.08% higher during the day due to price appreciation in NACHO, LIVESTOCK, and BUA CEMENT respectively, all other sectors were negative.
The decline in MOBIL and Eterna Oil pressured the Oil & Gas index down by 1.91%, the Banking index trailed to wane by 1.70% as a result of decline in ZENITHBANK and GTB, while losses in WAPIC, CUSTODIAN and LAW UNION prompted a 0.35% decline in the Insurance Index.
CAVERTON up 7.73% to close at N1.95, CILEASING up 6.33% to close at N4.2, AFRIPRUD up 6.25% to close at N4.25, NASCON up 5.26% to close at N10, BUACEMENT up 0.61% to close at N41.2
MOBIL down 9.97% to close at N173.4, ETERNA down 6.70% to close at N2.09, ZENITHBANK down 2.99% to close at N16.2, GUARANTY down 2.00% to close at N22, MTNN down 0.95% to close at N115.
Nigerian bourse finished on a bearish note, triggered by sell-offs in bluechip stocks. Nairametrics envisage cautious buying, as geopolitical uncertainty heightens.
Unclaimed dividend stands at N158.44 billion, over N100 billion from unclaimed shares
The figure has been on the increase despite the introduction of e-dividend.
The total value of unclaimed dividend in the Nigerian capital market closed 2019 at N158.44 billion and over N100 billion of the amount are from unclaimed shares.
This was disclosed by the Securities and Exchange Commission via a report from the News Agency of Nigeria.
The development revealed that the figure has been on the increase despite the introduction of e-dividend, which was introduced by SEC in 2015. From about N100 billion in 2017, it closed 2018 at over N120 billion.
Dividend is company’s earnings, decided and managed by the company’s board of directors, and paid to a class of its shareholders.
The earnings turned unclaimed when a shareholder fails to claim an already paid dividend after six months.
Breakdown: The components, according to the report, showed that unclaimed dividends with companies (15 months and above) stood at N119.01 billion.
The ones with registrars amounted to N14.64 billion and unclaimed dividend less than 15 months old stood at N24.77 billion.
Why the figure rises: Head, Office of the Chief Economist, SEC, Mr Okey Umeano, explained that value has been on the increase since the market has been witnessing surge in large number of unclaimed shares.
He said, “The main issue why unclaimed dividend is rising is because we have a large number of unclaimed shares.”
According to him, many investors during the banking consolidation bought shares with different names as well as other people’s names which they were yet to rectify.
“As companies declare dividend, those accounts would equally be paid, leading to increase in unclaimed dividend figure.
“The commission introduced a forbearance window for multiple accounts to enable investors that bought shares with different names to regularise their accounts in order to reduce the quantum of unclaimed dividends.
“SEC gave a window for people to come and rectify the multiple subscription thing.
“Many people have still not been able to claim their own because some of them have forgotten the names they used.
“Some have not been able to prove to their stockbrokers that they are the owners of the shares.
“So, we still have a large chunk of those shares, and anytime dividends are paid, those shares are not claimed and those people don’t get their dividends,” Umeano said.
Until the number of unclaimed shares goes down, unclaimed dividend problem will continue.
On the way forward, he assured that the commission would continue to put pressure on all the people involved in order to curb the problem of unclaimed dividends.
Umeano called on investors to go and prove ownership of their shares, noting that SEC was not prosecuting anybody.
“SEC has given them amnesty to go and claim their shares and as people are claiming those shares, unclaimed dividends number will go down,” he added.
U.S Stock futures soar high as investors await earning results
The outlooks are supposed to give investors and stock analysts more insights.
The S&P 500 index futures soared higher on Monday before the official opening of the U.S stock market, as stock traders awaited outlooks for the week from major blue-chip brands. The outlooks are supposed to give investors and stock analysts more insights about America’s economic performance.
Futures on the Dow Jones Industrial Average gained 223 points or 0.8%. The move implied an increase of 244 points at Monday’s open. S&P 500 futures added 0.7%. Nasdaq-100 futures contracts rose 0.9%.
“We think earnings are likely to recover in the second half of the year and excess liquidity will continue to support risk assets,” said Julie Fox at UBS Private Wealth Management told Bloomberg News. “We see further potential in global equities and think there’s some upside in segments of the market that have underperformed during the crisis.
Quick fact; American Stock futures are simply standardized contracts that global traders use in purchasing or selling the U.S stock in a future date. This means that the U.S stock futures give an insight into what global investors see before the market opens, or after it closes
However, Milan Cutkovic, Market Analyst at AxiCorp in a note to Nairametrics explained the growing concerns global stock traders are facing presently. He said;
“There is no need to fear summer doldrums. With a global pandemic, on-going Brexit negotiation, increasing tensions between the United States and China, and the US election campaigns, there is no shortage of topics to keep market participants occupied.”