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Investors Renew Demand for Long Tenured FGN Bonds

This is the summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and FGN Bonds.

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FGN Bonds, bond, DMO set to auction N150 billion in FGN Bonds to investors , FGN Bond for February 2020 oversubscribed by investors, DMO suspends April 2020 FGN savings bond offer

This is the summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and FGN Bonds.

This report is dated July 29th.

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***FG spends N851.4bn on JV oil assets***

Bonds: The FGN Bond market traded on a slightly weaker note, as spreads widened on the short end of the curve, following a slowdown in client demand interests. We, however, witnessed renewed interests for the long-tenured bonds, with significant demand witnessed especially on the 2037 bonds which declined by c.20bps on the day. Overall, yields were marginally higher by c.4bps on the day.

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We expect yields to remain relatively stable in the near term, as investors maintain hunt for yields on the long end of the sovereign curve.

Treasury Bills: The T-bills market opened on a weaker note, as the depressed system liquidity levels forced some selloffs on the short end of the curve. The Market however improved slightly towards the close of the session, as inflows from FAAC payments during the session bolstered system liquidity into positive territory.

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We expect yields to trend lower tomorrow, due to the improved system liquidity in the money market.

Money Market: Rates in the money fell by c.9pct as inflows from FAAC payments bolstered system liquidity. The OBB and OVN rates consequently ended the session at 13.14% and 14.29%, with system liquidity now estimated at c.N220bn positive.

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We expect rates to trend lower tomorrow, due to the improved system liquidity levels.

FX Market: At the interbank, the Naira/USD rate declined by 5k to N306.85/$ at the spot market and by 2k to N357.68/$ in the SMIS window. The NAFEX closing rate at the I&E window declined by 10k to N361.87/$, whilst the cash and transfer rates at the parallel market remained stable at N357.50/$ and N362.00/$ respectively.

[READ: How Wealth.ng is breaking the barriers to investing in Nigeria]

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Eurobonds: The NIGERIA Sovereigns weakened further in today’s session, with yields trending higher by c.8bps on the day.

The NIGERIA Corps remained relatively stable, with demand still firm across most tickers.


 

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.

[READ FURTHER: NIBSS reveals new TAT for reversals, transfers, and transaction timeouts]

Patricia
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Corporate deals

Uber expands food delivery business in a $2.65 billion acquisition 

This deal would help Uber expand its market share against privately held DoorDash Inc.

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Uber to pay drivers diagnose with Coronavirus, suspend riders, drivers accounts, Uber to temporarily shut down operation in Nigeria as FG locks down revenue-driven routes, Uber partners Unilever to ensure compliance to health guidelines

The multinational ride-hailing service company, Uber has agreed on a deal aimed at expanding its food delivery business with the acquisition of food delivery app, Postmates Inc, in a $2.65 billion all-stock take over which is expected to be announced as soon as Monday, July 6, 2020. 

According to Bloomberg, the deal which has been approved by the board of directors of Uber, will have the head of Uber’s food delivery business, Pierre-Dimitri Gore-Coty, to continue to run the combined delivery business. Under the agreement, Postmates Chief Executive Officer, Bastian Lehmann and his team will continue to manage Postmates as a separate service. 

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This deal would help Uber expand its market share against privately held DoorDash Inc, the current market leader in US food delivery business. While Postmates lags behind DoorDash in the race for market share, it has still been able to maintain a strong position in Los Angeles and the American Southwest, both of which could be available to Uber eats. 

Uber and Postmates who have been in discussion for about 4 years, intensified the acquisition talk about a week ago, after an approach by Uber. This move is coming on the heels of the failed bid by Uber to acquire publicly quoted GrubHub Inc, which was bought over by Europe’s Just Eat Takeaway.com NV for $7.3 billion. 

Postmates’ valuation was last put at $2.4 billion when it raised $225 million in a private fundraising around last September. According to analytics firm, Second Measure, they account for 8% of the US meal delivery market in May.  

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Postmates, which was founded in 2011 was one of the first to let customers in the U.S. order meal delivery using a mobile app. However, competition has intensified in recent years and Postmates has fallen to a distant fourth. The company said in February 2019 that it had filed paperwork confidentially for an initial public offering but never went public.  

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Financial Services

Cornerstone Insurance’s board will meet July 22nd to consider 2 important issues

Directors typically meet to consider/approve financial statements before they are released.

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Cornerstone Insurance Plc

Cornerstone Insurance Plc’s board of directors will meet on July 22nd to deliberate on two important company issues.

A public notice that was signed by the Company Secretary and issued to the Nigerian Stock Exchange (NSE), noted that the two main talking points at this meeting are the company’s unaudited Q2 2020 financial statements, and the proposed issuance of bonus shares to the company’s existing shareholders.

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As you may well know, board members of many companies listed on the NSE are all scheduled to meet later this month, ahead of the release of these companies half-year 2020 earnings reports. Directors typically meet to consider/approve financial statements before they are released.

Meanwhile, between the time a company’s board of directors meet over their financial statements and the actual release of said financial statements, there is what is called “a closed period”. During this closed period, all persons with insider knowledge of the company’s affairs are prohibited from trading in the company’s stock.

In the case of Cornerstone Insurance Plc, a closed period on its stock will start from tomorrow (July 7th, 2020) and will remain effective until 24 hours after the release of the company’s Q2 2020 financial statements. Note that no date was given for the release of the Q2 financial report.

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“Accordingly, in line with the provisions of Rule 17.17: Closed Period, Rulebook of The Exchange, 2015 (Issuers’ Rule) and which has been incorporated into Sections 5 and 6 of the Company’s Securities Trading Policy, all Directors, Persons discharging managerial responsibility, Adviser(s) of the Company, or their connected persons shall not trade in the Company’s shares from Tuesday, July 7th, 2020 until 24 hours after the release of the Company’s Unaudited Financial Statements for the Second Quarter ended June 30, 2020 to the NSE and the general public,” part of the statement by the company said.

Recall that Nairametrics reported some months ago that Cornerstone Insurance Plc was in merger talks with some insurance companies ahead of the recapitalization deadline set by the National Insurance Commission (NAICOM). The company’s Group Managing Director, Ganiyu Musa, disclosed that consolidation is a more viable option towards meeting NAICOM’s recapitalisation requirement.

It is uncertain, at this point, if the company is still considering a merger as a viable option. This is because in March 2020, Nairametrics reported that Cornerstone Insurance Plc is one of the insurance firms that have resorted to selling off their real estate properties in order to raise money. The reported had quoted the MD discussing how his company “took the big decision to sell the property which we did at a very handsome price. And just in one fell swoop, it resolved many issues. We now have a significant amount of liquidity, we do not have the headache of recapitalisation and we have done what the regulator wants, which is to convert any property to cash.”  

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Meanwhile, NAICOM has since postponed the recapitalisation deadline to September 2021 due to the economic challenges posed by the COVID-19 pandemic.

Note that the company reported a gross premium income of N4.6 billion in Q1 2020, compared to N4.8 billion in Q1 2019. However, profit for the period stood at N475.1 million, as against a loss after tax of N98.4 million during the comparable period in 2019.

The company’s stock opened today’s trading on the Nigerian Stock Exchange with a share price of N0.50. Year to date, the stock has gained roughly about 20%.

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Appointments

PwC admits 8 Nigerians, 16 others as partners across Africa 

PwC has about 400 partners and over 9,000 people spread across 34 countries in Africa.  

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PricewaterhouseCoopers (PwC) has admitted 24 professionals in Africa, including 8 Nigerians, into the firm’s partnership.

Akinyemi Akingbade, Chioma Obaro, Yinka Yusuf, Wura Olowofoyeku, Tosin Labeodan, and Rukaiya El-Rufai were all admitted into the firm’s Assurance practice, while Kunle Amida and Olusola Adewale were appointed into Advisory.

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From South Africa, nine partners were also admitted; Lumko Sihiya, Mary-Jane Mberi, Nitassha Somai, Erik Booysen, Dale Stonebridge, and David Hill, into Assurance.

Kerin Wood and Gavin Johnston have admitted partners into Advisory, and Michael Butler into the Tax and Regulatory Services.

In Zambia, the partners admitted include George Chitwa, Tax, and Martin Bamukunde in Assurance.

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Andre Burger was admitted Partner, Assurance in Namibia; Mwangi Karanja, Partner Assurance in Kenya; and Icho Molebatsi, Partner Assurance, in Botswana.

Two partners were admitted in Ghana, Richard Ansong in Assurance; and Kingsford Arthur in Advisory.

READ MORE: Dual citizenship firm opens office in Nigeria for millionaires, charges over $1 million

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About PwC

PricewaterhouseCoopers is a multinational professional services network of firms headquartered in London, United Kingdom, operating as partnerships in several countries under the PwC brand.

PwC has about 400 partners and over 9,000 people spread across 34 countries in Africa.

 

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