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Debt Securities

Market Update: CBN to auction c.N110bn T-Bills upon resumption from break

Welcome to daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills, bonds, FX rates, inflation, oil price.

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Nigerian Stock Exchange, sound, C & I Leasing Plc, NSE launches factbook, Top 10 stockbroking firms, Steroids from GTBANK, ZENITH Lift Nigerian bourse, as investors gain N94.2 billion , Steroids from GTBANK, ZENITH Lift Nigerian bourse, as investors gain N94.2 billion

Welcome to daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills, bonds, FX rates, inflation, oil price.

The report is dated April 30th, 2019.

***Senate Passes N8.916trn 2019 Budget***

Key Indicators

Bonds: The Bond market remained largely order driven, with yields weakening slightly following slight sell on the short end of the curve. We also witnessed some profit taking bias on some mid and long tenured maturities, which lifted yields marginally higher by c.3bps on the day.

We expect trading activities to resume on a relatively quiet note after the May Day break, as market players carefully monitor movement in short term rates by the CBN.

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Treasury Bills: The T-bills market traded on a relatively quiet note, except for slight buying interests witnessed on the short end of the curve. Yields however weakened slightly on the mid to long end of the curve, as market players anticipate a renewed OMO offering by the CBN, in the view of the relatively boisterous sytem liquidity levels.
Upon resumption from the May Day break, the CBN will offer c.N110bn T-bills to rollover maturing NTBs on behalf of the Federal Govt. We expect rates to be relatively unchanged from their previous auction levels.

Money Market: The OBB and OVN rates fell sharply by c.10pct as system liquidity rose to c.N150bn positive, whilst market players were also able to access the CBN’s SLF window. The OBB and OVN rates consequently ended the session at 8.96% and 9.82% respectively.

We expect rates to remain relatively stable due to the relatively buoyant system liquidity levels, this is however barring a significant OMO mop up later this week by the CBN.

FX Market: At the Interbank, the Naira/USD rate was unchanged at N306.95/$ (spot) and N356.46/$ (SMIS). The NAFEX closing rate in the I&E window appreciated marginally by 0.04% to N360.63/$, as market turnover improved slightly by 6% to $176m. At the parallel market, the cash rate appreciated by 0.03% to N358.70/$, whilst the transfer rate depreciated by 0.14% to N363.50/$.

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Eurobonds: The NGERIA Sovereigns maintained a relatively flat trend, with only few interests witnessed in the belly of the curve.

The NIGERIA Corps were however significantly bullish, with demand interests most notable on the longer dated tickers – UBANL 22s, FIDBAN 22s, and ETINL 24s.

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Disclaimer:
Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment research or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision.

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Debt Securities

DMO offers N150 billion worth of FGN Bonds for subscription

FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria.

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Debt Management Office resumes FGN savings bond offer on August 10, Eurobonds, Patience Oniha, DMO, External debt servicing

The Federal Government on Tuesday, 11th August 2020, through the Debt Management Office (DMO), offered for subscription Federal Government Bonds (FGN Bonds) valued at N150 billion.

The FGN bonds are listed in four tranches that include:

  • N25,000,000,000 – 12.50% FGN JAN 2026 (10-Yr Re-opening)
  • N40,000,000,000 – 12.50% FGN MAR 2035 (15-Yr Re-opening)
  • N45,000,000,000 – 9.80% FGN JUL 2045 (25-Yr Re-opening)
  • N40,000,000,000 – 12.98% FGN MAR 2050 (30-Yr Re-opening)*

READ: UBA reports a 13.3% profit increase in audited FY 2019 financial statement

Auction Date: August 19, 2020

Settlement Date: August 21, 2020

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Summary Of The Offer

Issuer: Federal Government of Nigeria (“FGN”)

Units Of Sale: N1,000 per unit subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.

Interest rate: For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus accrued interest from the original issue date.

READ ALSO: Nigeria’s Eurobond yield hit 12.8% as investors flee emerging markets

Interest payment: Payable semi-annually.

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Redemption: Bullet repayment on the maturity date.

Status:

  1. Qualifies as securities in which trustees can invest under the Trustee Investment Act
  2. Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds amongst other investors
  3. Listed on the Nigerian Stock Exchange
  4. All FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks

Security: FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria

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Understanding Bonds: A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental).

A bond could be thought of as an I.O.U. between the lender and the borrower that includes the details of the loan and its payments.

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A bond has an end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments that will be made by the borrower.

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Debt Securities

DMO announces August 2020 FGN Savings Bond offer for subscription

The FGN Savings Bond is backed by the full faith of the Federal Government of Nigeria.

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Debt management office, DMO,Nigeria's Debt to revenue ratio, DMO suspends April 2020 FGN savings bond offer

The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria, recently offered for Subscription the August 2020 Federal Government of Nigeria Savings Bond.

The Federal Government of Nigeria Savings Bond is an investment product issued through the Debt Management Office (DMO) on behalf of the Federal Government.

The FGN Savings Bond is backed by the full faith of the Federal Government of Nigeria. As such, it is deemed to hold no default risk (Zero-Based Risk).

READ MORE: FG makes U-turn on Eurobonds, says it will issue some more

This is, therefore, to inform you that the Federal Government of Nigeria Savings Bond offer(s) for the month of August – 2020 has commenced on the 10th of August, 2020. It will close on the 14th of August, 2020.

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It consists of two (2) tenors:

2-Year FGN Savings Bond due August 12, 2022: 3.61% per annum

3-Year FGN Savings Bond due August 12, 2023: 4.61% per annum

Please find below additional information to guide your application:

Unit of Sale: N1,000 per unit subject to a minimum subscription of N5,000.00 and in multiples of N1,000.00 thereafter, subject to a maximum subscription of N50,000,000.00.

READ ALSO: Nigeria needs $100 billion annually to fix infrastructural deficit – Finance Minister 

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Coupon Payment: Payable every quarter with principal repayment at maturity.

Settlement Date: August 19, 2020.

Coupon Payment Date: November 19, February 19, May 19, August 19

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Security: The Federal Government of Nigeria Savings Bond is backed by the full faith and credit of the Federal Government of Nigeria (FGN).

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Debt Securities

Debt Management Office resumes FGN savings bond offer on August 10

The DMO assured that the Bond offers were going to resume when the conditions change.

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Debt Management Office resumes FGN savings bond offer on August 10, Eurobonds, Patience Oniha, DMO, External debt servicing

The Debt Management Office (DMO) has announced the resumption of its Federal Government of Nigeria (FGN) Savings Bond Offer with effect from August 10, 2020.

This disclosure was made in a press statement by the Debt Management Office to the general public.

The DMO was earlier forced to suspend the monthly offers of the FGN Savings Bond in April 2020, due to the lockdown and restrictions placed on social and economic activities as part of measures implemented by government to contain the spread of the Coronavirus pandemic.

READ ALSO: FG responsible for 80% of Nigeria’s N25.7 trillion debt profile 

The statement from the Debt Management Office said:

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“The DMO wishes to announce the resumption of its offer of the federal government of Nigeria savings bond (FGN savings bond) effective August 2020.

“The DMO was constrained to suspend the monthly offers of the FGN savings bond in April 2020 due to the restrictions on activities and movement as part of measures adopted by the government to curtail the spread of COVID-19.

“The offer for subscription will open on Monday, August 10, 2020 and close on Friday, August 14, 2020.’’

READ ALSO: State Governors parted with N33.9 billion to external debt deductions

The statement also encouraged investors to continue to save through the FGN Savings Bond. This is because FGN Savings Bonds attract good returns and are secure, being a Sovereign instrument. They also contribute to national development.

Nairametrics had on April 4, 2020, reported the suspension of the FGN Savings Bond offer by DMO which was scheduled for April 6 –April 10., due to the restrictions caused by the coronavirus pandemic.

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The DMO assured that the Bond offers were going to resume when the conditions change.

The DMO, however, noted that the suspension of the April 2020 Offer would not affect Coupon Payments due to investors for already issued FGN Securities, as arrangements had been made to ensure that all Coupon Payments for and redemptions of FGN Securities were made as and when due to investors’ designated accounts.

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