Business News
Nigerian Treasury Bills fall to 5.2% per annum
The latest data from the Central Bank of Nigeria reveals Nigeria’s 364-day treasury bills have fallen to 5.2%.
The latest data from the Central Bank of Nigeria reveals Nigeria’s 364-day treasury bills have fallen to 5.2%. This is the lowest we have seen in almost a decade indicative of the major disconnect in financial markets.
182-day bills went for stop rates of 4.9% and 91-day rates 3.5% per annum respectively. The total amount on offer for 364-day bills was N44.8 billion with investors staking about N105.9 billion. Bids for 182 and 91-day also outstripped offers by a combined N35 billion.
Why this matters: The massive disparity between the subscriptions and the offers suggests investors are willing to earn a negative real return (treasury bills rate less inflation rate) than take higher risk in other assets such as stocks and real estates.
The increase in demand for treasury bills compared to supply is largely due to a dearth in investable funds available to investors. Back in October, the Central Bank restricted investments in its lucrative OMO bills to commercial banks and foreign investors leaving hundreds of billions of naira in cash in the dust.
[READ ALSO: T-bills Trade Bullish to Close the Week as CBN Stalls on OMO Auction(Opens in a new browser tab)]
Before now, the OMO market was seen by investors such as Pension Funds, Insurance Companies, FinTEchs, etc. as a viable option for investing free cash flow. The restriction now leaves them with very little options. Most investors surveyed by Nairametrics complain that they will rather continue to invest in safe havens like the CBN’s treasury bills rather than investing in stocks despite their perceived low valuations.
Retail investors have also shown interest in buying dollars preferring to earn as low as 4% in the greenback as against holding the naira at 6%. However, if yields continue to be this low most investors could fall prey to Ponzi schemes which typically thrive in low yield environments.
Reliable sources also inform Nairametrics that the CBN is keeping a close watch on investor reactions to the low yield environment and considers this a temporary situation. Rates may pick up if the pressure triggers a spike in the demand for dollars.
The Federal Government has announced the official hand over of the National Arts Theatre Complex at Iganmu Lagos, to the Central Bank of Nigeria (CBN) and the Banks under the aegis of the Bankers’ Committee, in order to commence the renovation of the facility.
This was contained in a tweet post by the Presidential Aide to President Muhammadu Buhari on New Media, Tolu Ogunlesi, on his official Twitter handle on Sunday, July 12, 2020.
UPDATE: The event has taken place.
“@NigeriaGov on Sunday officially handed over the National Theatre complex in Lagos to @cenbank and Banks under the aegis of the Bankers’ Committee, to commence the RENOVATION of the facility.” https://t.co/h2aWfuHyF8
— tolu ogunlesi (@toluogunlesi) July 12, 2020
During the event which was attended by the Minister for Information and Culture, Lai Mohammed and the Lagos State Governor, Babajide Sanwo-Olu, the CBN Governor, Godwin Emefiele, said the bankers were targeting 1 million jobs from this project in the next 5 years.
Details later…
Economy & Politics
FG disburses N349.5m in Conditional Cash transfer to poor households in Kaduna
The disbursement was done under the federal government’s Conditional Cash Transfer.
The Federal Government has successfully disbursed a total of N349.5 million to 34,946 poor and vulnerable households in Kaduna State, under the conditional cash transfer programme.
According to the Head of Cash Transfer Unit in the State, Hajiya Hauwa Abdulrazaq, the disbursement lasted a period of 10 days, from July 1 to July 10.
Speaking in an interview with the News Agency of Nigeria (NAN) on Sunday, Abdulrazaq explained that the benefiting households were drawn from 9 local government areas in the state – 4,470 from Kajuru; 8,032 in Birnin Gwari; 1,963 in Kauru; 1,406 in Sanga, 4,380 in Lere, 2,021 in Kachia; 5,478 in Ikara; 2,784 in Chikun, and 4,412 in Kubau LGAs.
She noted that the disbursement was done under the federal government’s Conditional Cash Transfer, a Households Uplifting Programme targeting poorest of the poor households in the country, and that each of the households received N10,000 each, being payment for the months of May and June at N5,000 per month.
“The households uplifting programme is one of the national social investment programmes which implementation began in September 2016,” she said.
NAN reports that the programme began in 2017 in Kaduna state with about 10,000 beneficiaries, but expanded to 22,380 in April 2020.
In May, a total of 12,566 new beneficiaries were added summing the figures to 34,956 beneficiaries in the state.
The state government had also commenced the process of capturing poor and vulnerable households into the social register in the remaining 14 LGAs, from which beneficiaries of the cash transfer would be extracted in subsequent months.
Coronavirus
Evacuation: 247 Nigerians arrive home from Malaysia, Thailand
The returnees were evacuated with a chartered Air Peace flight APK-7813.
The Federal Government of Nigeria has safely evacuated and returned home, two hundred and forty-seven Nigerians who were stranded in Malaysia and Thailand.
The returnees were evacuated with a chartered Air Peace flight APK-7813 which arrived the Nnamdi Azikiwe International Airport, Abuja at about 11p.m. on Saturday.
EVACUATION UPDATE.
Chartered @airpeace flight APK-7813 conveying 247 stranded Nigerians from Malaysia and Thailand arrived Nnamdi Azikiwe International Airport, Abuja at exactly 2300HRS, 11th of July 2020.
Some passengers disembarked in Abuja..
1/2 pic.twitter.com/rAWrIBa69N— Nigerians in Diaspora Commission (@nidcom_gov) July 12, 2020
According to Mr Gabriel Odu, the Head of Media and Public Relations Unit of the Nigerians in Diaspora Commission (NiDCOM) who spoke to NAN, some of the returnees disembarked in Abuja, while the others proceeded to Murtala Muhammed International Airport, Lagos.
READ ALSO: Nigerians willing to travel abroad will wait a bit longer – Aviation Ministry
In line with the protocols announced by the Presidential Task Force on COVID-19, all of the returnees presented a negative COVID-19 test result before boarding the evacuation flight, and upon arriving Nigeria, are expected to proceed on a 14-day self-isolation.
Since four weeks ago, from the federal government, through the ministry of Foreign Affairs announced the resumption of evacuation flights, hundreds of stranded Nigerians have been returned home to their families from different countries including the United States of America, United Kingdom, Egypt, Malaysia and Thailand.
READ ALSO: COVID-19 could impoverish additional 5 million Nigerians – World Bank
The returnees bear the cost of their flight tickets and are expected to self-isolate for four weeks, upon their return to Nigeria. Returnees who receive a clean bill of health after the isolation, are given their passports and allowed to go home.
FG hands over National Theatre to CBN, Bankers Committee, to create 1 million jobs
FG disburses N349.5m in Conditional Cash transfer to poor households in Kaduna
Evacuation: 247 Nigerians arrive home from Malaysia, Thailand
Katsina State records fastest growth in mobile internet subscribers in Nigeria
COVID-19: Minister of Power instructs contractors back to site as lockdown eases
COVID-19 Update in Nigeria
How to become a successful Bitcoin trader
Magu probe: New facts suggest case is about re-looting of previously stolen funds
Tax on rents and Certificate of Occupancy is valid – Akabueze
Crypto: Elrond gives investors 1,735.54% since its inception
Anonymous
January 3, 2020 at 8:42 am
The risk on government securities is low, so the high interest rates on T-Bills is the actual absurdity. In my opinion, this is long overdue.
Jonathan
January 21, 2020 at 1:14 pm
what? all that matters is the inflation rate relative to the treasury bill rate.
this negative yield now implies that you now have to pay the govt for the pleasure of holding your money. its insane.
Toni
January 3, 2020 at 2:45 pm
developed countries like America and uk has an incredibly low returns for decades and i always wondered why Nigeria consistently offer 10-12%, can you elaborate on this Admin? Will be greatly appreciated.
Jonathan
January 21, 2020 at 1:18 pm
theyre always devaluing the currency, so they inflate it to make it seem more. its a trick. the real value of the currency is constantly depreciating.
Stanley
January 3, 2020 at 5:06 pm
I believe portfolio managers can still invest part of their funds in the stock market with some success. Those investors who are staying away from the stock market now due to the current low prices/returns are the same who would likely jump in later after prices have risen again, buying the bubble and risking losses due to profit taking by early investors. Good investors are known for taking calculated risks after diligent analysis and taking their positions early, not just following the crowd. One of the problems we have with investment as Nigerians is that we want very quick returns, hence our repeated vulnerability to ponzi schemes. This is also another reason (besides poor macro-economy) our stock market is still underdeveloped, as we cannot invest consistently in the stock market over a long time. We always wait for foreign investors to spark a rally, then local investors jump in and when the foreigners withdraw their funds, we also follow suit depressing prices below pre-rally levels taking us back to square one.
CEO Nimo Investment
January 8, 2020 at 5:30 pm
Well there is always up and down in any investment or business and Nigeria can’t be exceptional I believed this is a temporary situation because our economy is still not strong for this.
Ayodeji
January 19, 2020 at 7:30 am
Dear Nairametrics,
My 365 days investment in TB matured some days ago. To my surprise, firstbank rolled over without my permission and paid me about 65,000 Naira on 3 million Naira. Am not happy about rollover without my conscience and the interest is ridiculous. Kindly advise if this rate is official and if not, what can I do to seek redress? I now live in Osun state but carried out the investement when I was in Lagos.
Ayodeji
Nairametrics
January 19, 2020 at 10:03 am
Hello Ayodeji,
It’s an official rate. However, why not approach your bank and have them terminate it. Rgds
Chichi paul
January 31, 2020 at 9:07 am
Good day Admin. Pls can you advice me on where to invest since T-bills and Fixed deposit rate is very low now. Thanks
Anonymous
February 23, 2020 at 3:32 am
Where one invest since this isn’t working again
Onwuanyiam Azuka
March 5, 2020 at 4:33 pm
Where will one invest