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Fixed Income

Official: Nigerian Treasury bills calendar for September – November 2019

Official: Nigerian Treasury bills calendar for September – November 2019

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Treasury, bills, calendar, Central Bank

The Central Bank of Nigeria Published its Treasury Bills program for September – November of 2019, indicating that it plans to raise about ₦1 trillion in cash.

Check out: CBN says commercial banks can invest in Treasury Bills for now(Opens in a new browser tab)

The Central Bank sells treasury bills on a bi-weekly basis to investors and is one of the safest investments available. Interests are paid upfront and the principal paid in full upon maturity.

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Learn to invest in treasury bills here

 

Treasury bills calendar, Treasury, bills, calendar, CBN

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3rd quarter of 2019

Treasury bills calendar, Treasury, bills, calendar, CBN

2nd quarter of 2019

Treasury bills calendar, Treasury, bills, calendar, CBN

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Fixed Income

United Capital Plc raises N10billion in Series 1 Bond Issuance

The bond issuance adds to itsbimpressive portfolio of innovative and landmark transactions it has structured, and it once again highlights its capabilities in the successful execution of novel debt capital market transactions.

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United Capital: The good and the bad

United Capital Plc, has raised N10 billion in its Series 1 Bond issuance under a N50 billion Medium-Term Debt Programme registered with the Securities & Exchange Commission (SEC).
The capital raise places the company as the first Issuing House to issue a Corporate Bond in the history of the Nigerian Capital market.

The company’s Group CEO, Peter Ashade, explained that this action, being a first for any investment bank in the history of the Nigerian Capital market, strengthens United Capital’s track record as a force to reckon with in the investment banking terrain.

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READ ALSO: Reports: China may defer loans owed by Nigeria and others

He said, “With an oversubscription of 24% investor, we believe this milestone accentuates the confidence in our Institution, and its ability to diversify our corporate funding sources, provide innovative financial solutions and our unwavering commitment to our esteemed clients.”

In line with the company’s goals for the year 2020, it served as a book runner on the deal, advising on the transaction structure, securing relevant regulatory approvals, and implementing a marketing strategy for the bonds. Its role also included making a compelling business case for the issuance, amongst others.

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Babatunde Obaniyi, Managing Director, Investment Banking, said, “the bond issuance adds to the impressive portfolio of innovative and landmark transactions we have structured, and it once again highlights our capabilities in the successful execution of novel debt capital market transactions.”

READ ALSO: United Capital records 2% profit increase in Q3 2019

The transaction having a tenor of 5 years, scored a 124% subscription, “with huge commitments from a diversified institutional investors’ base including Pension Fund Administrators and other players in the financial service space.”

He also explained how the strong outcome of the transaction re-affirms the confidence of its buy-side investors’ as well as its leadership in the financial services landscape.

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Fixed Income

Here’s what should be expected in Nigeria’s fixed income market this week

“Going into next week, there is an OMO maturity coming in. So, that will help to ensure balance.”

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Fixed Income, Interbank Rates

The Nigerian fixed income market is expected to witness a moderate activity as well as moderate liquidity during the new week. This is according to Nkem Azinge, a Currency Trader at UBA who spoke to CNBC Africa.

According to her, the market is expected to witness an OMO maturity during the week which, by the way, is going to be a short trading week due to public holidays on Monday and Tuesday. The OMO maturity will help maintain balance, even as liquidity in the system will just be moderate.

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READ MORE: Banking: Surprise hike in CRR-Implications for banks   

“Going into next week, there is an OMO maturity coming in. So, that will help to ensure balance. It is a short trading week. So, liquidity will just be moderate,” she said.

Earlier on during the interview, Azinge explained why there was also relative activity in the fixed income last week. According to her, the OMO market witnessed “buying activity as offshore players looked to deploy idle cash. We also saw banks buy as the market opened liquid.”

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However, the trend reversed by Thursday because investors took advantage of lower yield in the market to “take profit in anticipation of the PRR debit that was expected” and CBN’s FX auction.

On the other hand, the bond market witnessed mixed sentiments last week. This is because while a number of people took profit on their auction, others sold off in anticipation of a possible increase in supply.

In the FX market, the CBN re-opened its whole bill auction by pumping as much as $72 million into the market. This helped to ensure liquidity in the market.

READ ALSO: Global oil supply to drop by 12 million b/d to 9 year low, covid-19 resurgence still a concern – IEA

Azinge noted that it had been more than two months since such an auction occurred, a situation that led to very limited supply in the FX market. Therefore, the auction was a welcome development even as it indicated that the apex bank is now ready to meet growing dollar demands by Nigerians.

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Note that the CBN’s Monetary Policy Committee (MPC) meeting is slated to take place on Thursday. This is also expected to influence activities in the fixed income market during the new week.

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Watch Azinge’s entire interview with CNBC Africa by clicking here.

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Anchoria Fixed Income Monitor: T-bills Stop Rates increase first time in 3 months

The T-bills secondary market closed on a bullish note last week as the average yield fell by 38bps to close at 2.28% compared to 2.66% the previous week due to the trading activity in the market following the auction held during the week.

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Treasury Bills, CBN

Money Market:

The average money market rate fell significantly last week by 4.79% to settle at 3.09% from 7.88% in the previous week. This is attributable to the inflow from OMO maturities of N209.05 billion and NTB Maturity of N38.00 billion during the week.

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Notable outflows for the week included weekly FX wholesale SMIS of $210mn and NTB auction of N142.76bn. The CBN declared OMO auction held during the week No Sale.

We expect the system liquidity to be slightly buoyant with N17.87 billion FGN Bond coupon payments expected during the week

Forex: USD/NGN

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During the week the foreign reserve rose by 2.87% to $34.44 billion due to the inflow of $3.4 billion Emergency Loan from IMF. In light of this, the I&E FX window rose by 0.32% to close at N386.00/$ while the CBN official rate remained stable at N361.00/$.

Despite the inflow from the IMF, there is still volatility in the currency market as Foreign Investors and Importers continually increase their demand for the greenback.

We expect continuous fluctuations in the rates in the foreign market as the pandemic continues to pose a threat to the economy.

(READ MORE: Fixed Income Market Monitor (Monday, 06-Friday, 10 May 2019))

Bond: FGN

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The secondary sovereign Bond market closed bearish last week as the average yield rose by 33bps to close at 10.55% compared to 10.22% in the previous week. The highest yield increase was witnessed in the MAR-2024 issuance which rose by 122bps to close at 9.61% while the highest yield decline was witnessed in the MAR-2027, fell by 21bps to close at 10.97% from 11.18%.

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Why Forex trading is becoming popular in Nigeria, Anchoria Fixed Income Monitor: T-bills Stop Rates increase First time in 3 Months

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The Sovereign Eurobond market closed on strongly bullish as the average yield fell by 302bps to close at 7.38% compared to 10.40% the previous week. This can be traced to the highest increase in Crude Oil Price since March and the increase in the country’s external reserve while the Corporate Eurobond market closed bullish as the average yield fell by 498bps to close at 8.72% compared to 13.70% the previous week.

We expect to widen in bond yield as investors anticipate the upcoming Bond auction worth N60.00 billion by the DMO

Treasury Bills

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The T-bills secondary market closed on a bullish note last week as the average yield fell by 38bps to close at 2.28% compared to 2.66% the previous week due to the trading activity in the market following the auction held during the week. In the same vein, OMO bills fell by 163bps to close at 8.45% compared to 10.08% the previous week.

At the T-bills auctions, the DMO allotted 142.76 billion worth of bills. 91 day – N19.78 billion, N40.09 billion for 182-day, and N82.89 billion for the 364 days. The stop rates closed at 2.50%, 2.85%, and 3.84% respectively.

(READ MORE: Nigeria’s external reserves increased by $1.36 billion in 13 days)

Commodities

Brent oil rose by 17.13% to close at $32.50 compared to $30.97 last week while WTI rose by 18.96% to close at $29.43. The increase is due to the growing demand for fuel, as nations around the globe eased travel restrictions, which they had imposed to limit the spread of the COVID-19 pandemic. The reopening of the economies had a beneficial effect on oil prices.

Treasury Bill Investment: Ghana Vs Nigeria, Further rate decline expected as N405 billion worth of treasury bills mature , CBN’s N225.45 billion T-bills auction records oversubscription, as rate fall below 5% , Nigeria’s 364-day treasury bills falls to 3.84% per annum, Anchoria Fixed Income Monitor: T-bills Stop Rates increase First time in 3 Months

 

Another contributory factor in oil price rise is the surprise crude inventory drawn by the Energy Information Administration. In gasoline, the EIA reported an inventory draw of 3.5 million barrels while distillate fuels, the EIA reported an inventory rise of 3.5 million barrels for last week.

You may download the full report by clicking here.


CONTACTS: Anchoria Asset Management Limited 5th Floor, Elephant House 214, Broad Street Marina Lagos
Investment Research research@anchoriaam.com +234 908 720 6076

Wealth Advisory investor-relations@anchoriaam.com +234 818 889 9455

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