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Debt Securities

Nigerian Treasury Bills real interest rate falls to -12%

The latest data from the Central Bank of Nigeria revealed that the Nigeria’s 364-day treasury bills have fallen to 4.6%

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Nigerian Treasury Bills falls to 3.05% per annum, Nigerian money markets

The latest data from the Central Bank of Nigeria revealed that the Nigeria’s 364-day treasury bills have fallen to 4.6%. While the 90-day treasury bills current stop rate sold for 2.3%, the 182- day treasury bills sold for 3.4%.

The National Bureau of Statistics latest consumer price index revealed Nigeria’s inflation rate was 12.2%, the highest in years. At 12.2% inflation rate Nigeria’s inflation adjusted real return for the 90-day treasury bills is about -11.9%.

Meanwhile, several Nigerians, especially stakeholders in the financial market, can not wait for the Monetary Policy Committee to meet from next Monday, March 20. No doubt, some of the burning issues that would inform certain decisions that would be taken are the crash of crude oil price, coronavirus and the Treasury Bills market among others.

Already, there are speculations that the MPC may review the decision the Central Bank of Nigeria took last October, when it banned individuals from operating in the Open Market Operations (OMO).

Why it matters: The Treasury Bill’s market has remained subdued with the bulk of the attention on the Primary Market Auction. Consequently, rates remained relatively unchanged to end the session.

READ ALSO: UPDATED: Nigeria Inflation rate hits 12.2% as food index rises

The total amount on offer for 364-day bills was N37.17 billion with investors staking about N92.36 billion. The total amount on offer for 182 and 91-day were N8.36 billion and N2 billion, while investors staked N27.35 billion and N8.94 billion respectively.

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Money Markets
Interbank rates eased further as system liquidity was supported by FGN coupon payment inflows of c.N90 billion over the last two days. OBB and overnight rates declined by 131 bps and 144 bps to close at 10.40% and 11.20% respectively. System liquidity is estimated to be c.N300 billion according to market sources.

Bonds
The Bond market witnessed minimal activity in today’s trading session. We saw mixed sentiments across the different maturities albeit with minimal volumes traded. Consequently, yields rose by 6 bps on average across the curve.

FX Market
At the parallel market, the naira remained unchanged against the dollar and the Euro at $1/₦380 and €1/₦415 respectively, while it depreciated against the Pound Sterling by N5.00 to close at ₤1/₦490.

At the Investors and Exporters’ FX Window, the local currency depreciated against the US dollar by ₦0.45 to close at $1/₦368.02 from $1/₦367.57.

 

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Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Business

DMO reveals what infrastructure Sukuk Fund is financing

The Debt Management Office revealed that Sukuk funding is currently rehabilitating the Outer Marina Road in Lagos.

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The Debt Management Office revealed that Sukuk funding is currently rehabilitating the Outer Marina Road which is a major road connecting Lagos Island to Victoria Island, Falomo and Ikoyi.

The DMO disclosed this in a statement on Wednesday evening.

“While the Outer Marina Road is a major artery on its own, It will also be instrumental to easing the traffic in Lagos during the repair of Falomo Bridge. Thanks to the SUKUK, we are able to rebuild Nigeria one infrastructure at a time,” it said.

READ: Investors scramble for DMO sovereign sukuk as it records 446% oversubscription

READ: Abigail Johnson is the world’s richest in finance, manages a $5 trillion investment company

What you should know 

The Debt Management Office (DMO) announced last month that it listed its third sovereign Sukuk, N162.557bn 7-year 11.200% AL Ijarah Sovereign Sukuk due 2027, on the Nigerian Stock Exchange and the FMDQ Securities Exchange.

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Debt Securities

FG moves to issue Eurobonds, to select advisers through open bid

The amount to be raised is expected to be within the external borrowing plans for 2021.

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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 has concluded plans to issue Eurobonds for 2021 and is going to pick advisers to the transaction through an open bid process.

The amount to be raised is expected to be within the external borrowing plans for 2021. The Federal Government in 2021 plans to raise $6.14 billion (N2.34 trillion) from foreign sources.

This disclosure was made by the Director-General of the Debt Management Office (DMO), Patience Oniha, during a chat with Reuters on Wednesday, April 7, 2021.

The Federal Government, who had earlier planned a Eurobond issue early last year after its sixth sale in 2018 where it raised $2.86 billion, deferred such plans due to the disruptions caused by the outbreak of the coronavirus pandemic.

The DMO boss at an investors conference with the Federal Government put together by Citibank, last year, said that the Federal Government had no plans to source debt from Eurobond in 2020 as it is going to shift its focus to domestic borrowing and sourcing from concessionary sources.

Earlier this year, Nigeria reduced its external borrowings in a new debt strategy after it redeemed its 6.75% $500 million Eurobond in January with Oniha saying that the DMO was monitoring international markets for new issues by frontier countries.

What you should know

  • Ghana had some time last week raised $3 billion from Eurobonds, a year after the outbreak of the coronavirus pandemic, which disrupted economic activities globally.
  • This will be a huge boost for Nigeria especially at a time the Federal Government is still struggling to get approval for the $1.5 billion loan from the World Bank due to issues on currency reforms.
  • The Institute of International Finance had said it expected African governments to return to capital markets this year to sell bonds as investors embrace more risk.

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