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Expected N351 billion FGN Bond Maturity Boosts Auction Demand

The FGN Bond market remained relatively stable, with yields slightly lower by c.4bps on the day, following renewed demand interests on the short end of the curve.

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FGN Bonds record first undersubscription in 2 years, More borrowing expected as DMO’s Oniha explains President Buhari’s thirst for loan , DMO Takes advantage of MPR cut, issues a total of N103.81 billion, DMO offers N50 million worth of FGN savings bond for subscription.

Welcome to Nairametrics‘ summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and Bonds. This is brought to you by Zedcrest.

This report is dated June 25th, 2019.

***CBN Manufacturing PMI Expands for 27th Consecutive Month***

Key Indicators

Bonds: The FGN Bond market remained relatively stable, with yields slightly lower by c.4bps on the day, following renewed demand interests on the short end of the curve.

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The DMO is set to auction a total of c.N100bn FGN bonds at the auction scheduled for tomorrow. Whilst we expect demand at the auction to be robust given the c.N351bn Jun 2019 bond maturity, we expect to stop rates at the auction to still clear above the previous auction levels, given the bearish sentiments within the FGN bond space which lifted yields higher during the month.

Treasury Bills: The T-bills market traded on a bullish note with demand interests notable across the curve, largely supported by the surplus money market liquidity and the continued absence of an OMO auction by the CBN.

We expect the mild bullish sentiments to persist over the course of the week, barring an OMO auction, which should likely resume next week due to significant inflows expected from FAAC Payments and Bond Maturities.

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[READ THIS: Naira under pressure as forex demand increases]

Money Market: Rates in the money market declined by c.3pct as there were no significant funding pressures, whilst system liquidity remained moderately robust at c.N290bn positive. The OBB and OVN rates consequently ended the session at 9.86% and 10.43% respectively.

We expect rates to remain relatively stable, as there are no significant outflows anticipated.

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Stanbic IBTC

FX Market: At the interbank, the Naira/USD rate remained stable at N306.90/$ (spot) and N357.53/$ (SMIS), whilst the NAFEX rate at the I&E window rose by 39k to N360.77/$. At the parallel market, the cash and transfer rates closed unchanged at N359.20/$ and N362.50/$ respectively.

[READ MORE: Dangote Cement announces dividend payout and AGM date]

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Eurobonds: The NIGERIA Sovereigns weakened slightly in today’s session, with yields marginally higher by c.2bps to 6.78% on average.

Demand Interests in the NIGERIA Corps remained firm, with most papers unavailable to trade in the market on the back of the significant demand from the ACCESS and FBNNL Calls. The FBNNL 21s, however, continued to weaken due to the call announcement and remained the outlier amongst the bank papers.


Contact us: Dealing Desk: 01-6311667 Email: [email protected]

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 advice 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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Tech News

Facebook Oversight Board to review decision to suspend Trump’s account

The decision to suspend Donald Trump’s Facebook and Instagram accounts will be examined by an oversight board.

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US government to ban WeChat and TikTok from app stores, Reasons why a record number of people are giving up their US citizenship, US approves chloroquine as treatment for coronavirus COVID-19, Nigeria U.S. Donald Trump-oil prices, My COVID- 19 illness, a blessing from God –Trump

Facebook’s Oversight Board has received a proposal to revisit the decision to indefinitely suspend former US President, Donald Trump’s access to Facebook and Instagram.

On January 7, Facebook suspended Trump’s account indefinitely, a decision reached when he incited a violent mob that stormed the U.S. Capitol, leaving the country shaken.

Nick Clegg, Facebook VP of Global Affairs and Communications said that the circumstances around Trump’s suspension was an unprecedented set of events that called for unprecedented action and also explained why the Oversight Board would review the case.

Our decision to suspend then-President Trump’s access was taken in extraordinary circumstances: A U.S. president actively fomenting a violent insurrection designed to thwart the peaceful transition of power; five people killed; legislators fleeing the seat of democracy,” Clegg said. “This has never happened before — and we hope it will never happen again.”

The oversight board was established last year to make the final call on some of the most difficult content decisions Facebook makes. It is an independent body and its decisions are binding — they can’t be overruled by CEO Mark Zuckerberg or anyone else at Facebook. The board itself is made up of experts and civic leaders from around the world with a wide range of backgrounds and perspectives.

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According to the Oversight Board, a five-member panel will evaluate the case soon with a decision planned within 90 days. Members will decide whether the content involved in this case violated Facebook’s Community Standards and values. They will also consider whether Facebook’s removal of the content respected international human rights standards, including freedom of expression.

Trump’s case is a big moment for how impactful the board’s decisions will really wind up being. If the board overturns Facebook’s decision, that decision would likely kick up a new firestorm of interest around Trump’s Facebook account, even as the former president recedes from the public eye.

What you should know

  • Following the violent attack of the US Capitol building by Trump supporters, Facebook announced the suspension of Trump’s account indefinitely, on allegations of inciting his supporters.
  • YouTube also suspended Trump’s channel and removed new content uploaded by Trump’s campaign, citing potential threats of violence.
  • Twitter announced it has permanently suspended Trump, citing the risk of further incitement of violence.
  • Jack Dorsey, the CEO and founder of Twitter, in his statement, said that the decision to ban Trump from the social network was the right decision, but one that sets a dangerous precedent.

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Coronavirus

Covid-19: Buhari approves N6.45 billion to set up 38 oxygen production plants

President Buhari has approved the sum of N6.45 billion for the set-up of 38 oxygen production plants across the country.

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Buhari sacks DG National Directorate of Employment, Nasiru Argungu

President Muhammadu Buhari has announced his approval of N6.45 billion for the set-up of 38 oxygen production plants across the country, in a bid to contain the second wave of Covid-19.

The President disclosed this in a statement on Thursday evening after the first National Economic Council meeting of the year presided over by Vice President Yemi Osinbajo, SAN, with State Governors, Federal Capital Territory Minister, Central Bank Governor, and other senior government officials in attendance.

READ: Covid-19: FG directs universities to suspend academic activities till further notice

“As part of efforts to contain the second wave of Covid-19, we’re setting up new oxygen production plants in 38 locations across Nigeria—to enhance the management of patients in need of oxygen.

“I have equally approved funding for the rehabilitation of oxygen plants in 5 hospitals,” Buhari said.

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The Minister of Finance, Budget and National Planning, Zainab Ahmed said the President said the fund’s release was necessitated by the rising cases of Covid-19 in the country with patients needing oxygen.

READ: Toyota suspends operations in China over Coronavirus outbreak 

What you should know 

  • Recall Nairametrics reported that the Lagos State Governor, Babajide Sanwo-Olu, warned that the rising second wave of the pandemic in Lagos had seen the demand for oxygen rise 5 times from 70 six-liter cylinders per day to 350 six-liter cylinders at Yaba Mainland Hospital alone.
  • He added that the state government had the decentralized provision of oxygen and other services needed for Covid-19 patients, citing the provision of oxygen kiosks.

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Economy & Politics

FG says Excess Crude Account balance now stands at $72.4 million

The Federal Ministry of Finance has told the NEC that the Excess Crude Account (ECA) now stands at $72.4 million as at January 20, 2021.

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land borders to be reopened soon, Finance, Ministaer, vow to recover AMCON debt through issuance of promissory notes, FG reiterates stance on IPPIS as ASUU threatens strike, Finance Minister, Zainab Ahmed identifies capital market as key driver for economic growth , Nigeria has paid $1.09 billion to service its debts in 2019  , Dividends on oil proceeds will be taxed - FG , State governments own most bad roads - Finance Minister says, Budget deficit increases by N351.98 billion, as FG misses revenue target, Economy: Funding MSMEs in Nigeria , Finance Bill: New tax regime to take effect from Jan 2 - FG , Again, Finance Minister argues that Nigeria is not in debt distress , ECOWAS: Single currency regime not kicking off in 2020  , FG: CBN holds N43 billion stamp duty charges collected by banks , FG may shift deadline to deactivate bank accounts without tax verification, Confusion as ministry and presidency disagree over Finance Act start date, 7.5% VAT: Implementation to begin Feb 1 – FG , Finance Minister: Nigeria to go into recession if ..., Foreign tech companies that will now pay tax to FGN: see the criteria

The Federal Government has announced that Nigeria’s Excess Crude Account (ECA) balance as at 20th January 2021 is $72,411,197.80.

This was disclosed by the Minister of Finance, Budget and National Planning, Zainab Ahmed at the first National Economic Council meeting of the year presided over by Vice President Yemi Osinbajo, SAN, with State Governors, Federal Capital Territory Minister, Central Bank Governor and other senior government officials in attendance.

READ: Nigeria’s growing current account deficit fans devaluation flames 

The FG said, “the ECA balance as at 20th January, 2021, $72,411,197.80; Stabilization Account, balance as at 19th January, 2021, N28, 800, 711,295.37; Natural Resources Development Fund Account, balance as at 19th January 2021, N95, 830,729,470.82.”

READ: Nigerians spend $9.01 billion on foreign travels in 2019 

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What you should know

  • In August 2015, during the early days of the Buhari administration, the ECA stood at $2.2 billion. It was $3.6 billion in February 2014, one of the highest balances on record.
  • According to the Central Bank of Nigeria’s annual report for 2018, Nigeria’s excess crude account fell from $2.45 billion in 2017 to $480 million as of December 2018.
  • In 2019, Nairametrics reported Nigeria’s Excess Crude Account had dropped to $480 million. This is as controversy continued to trail the $1 billion military spendings which was withdrawn from Nigeria’s Excess Crude Account.
  • Nairametrics reported in July 2020 that the  ECA had fallen by about 98% within the last 5 years to $72 million.
  • Nigeria has two Sovereign Wealth Funds: the Excess Crude Account and the Nigeria Sovereign Investment Authority (NSIA). Note that these two are funded by the savings earned when oil prices are at their peak.

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