Debt Securities
DMO announces April 2021 FGN Savings Bond offer for subscription
The DMO, on behalf of the Federal Government of Nigeria, has offered for subscription, the April 2021 FGN Savings Bond.
Published
1 week agoon
The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria has offered for subscription, the April 2021 Federal Government of Nigeria Savings Bond.
This is contained in a notification seen by Nairametrics on the website of the DMO on Monday. According to the notification, the savings bond offer comes in two tranches:
- 2-Year FGN Savings Bond due April 14, 2023: 5.522% per annum
- 3-year FGN Savings Bond due April 14, 2024: 6.522% per annum
READ: What you get if you buy this month’s FGN Savings Bond
Details
- Opening Date: April 6, 2021
- Closing Date: April 9, 2021
- Settlement Date: April 14, 2021
- Coupon Payment Dates: July 14, October 14, January 14, and April 14
- Units of sale: N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
According to the circular, the offer is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.
Interested investors were however advised to visit their website in order to get the list of stockbroking firms appointed as distribution agents.
READ: DMO reacts to alleged N1.08 billion corruption scandal rocking the agency
What you should know
- Nairametrics had reported the offer for subscription of a similar Savings Bond in March 2021 with interest rates of 5.181% and 6.181% per annum for 2 years and 3 years tenor respectively.
- The interest rate for the latest offer is higher than the offer announced in the previous month. This could be a move to attract more investors to subscribe to the securities.
- This is evidently seen in the equities market as investors sell-off their shares in order to buy into less risky assets, amid high bond yields.
- The FGN Savings Bond is an investment product issued through the Debt Management Office (DMO) on behalf of the Federal Government.
Debt Securities
DMO to auction N150 billion bonds for April on behalf of FG
It also states that the interest is payable semi-annually with the redemption expected to be in bullet payment on the maturity date.
Published
1 day agoon
April 15, 2021
The Debt Management Office (DMO) has announced the offer of N150 billion bonds for subscription by auction in the month of April on behalf of the Federal Government.
A breakdown of the bonds shows that a 10-year reopening bond is to be offered at the rate of 16.2884% with a maturity date in March 2027; a 15- year reopening bond will be offered at 12.5% with a maturity date in March 2035; and the third and longest bond which is a 25-year reopening bond will be offered at 9.8% and mature in July 2045.
This disclosure is contained in a circular issued by the DMO on April 14, 2021, and can be seen on its website.
The circular states that the bonds which would be auctioned on April 21, 2021, have a settlement date of April 23, 2021, adding that the unit of sale is N1,000 per unit subject to a minimum subscription of N50,000 and in multiples of N1,000 thereafter.
It also states that the interest is payable semi-annually with the redemption expected to be in bullet payment on the maturity date.
READ: OPEC, NSE, MTN, other developments and how they affect your pocket
In case you missed it
- The DMO had earlier disclosed that the Federal Government’s bonds for March worth N150bn which were auctioned were oversubscribed by N183.48bn.
- The total subscription received from investors for the bonds was N333.48bn comprising N65.25bn for 16.2884% FGN March 2027 bonds; N110.19bn for 12.5% FGN March 2035 bonds; and N158.04bn for 9.8% FGN July 2045 bonds.
- The auction result added that out of 82, 125 and 215 total bids for the tenures, 48, 88 and 176 were successful.
- It stated that a total of N262.1bn was allotted, comprising of N44.01bn, N86.29bn and N131.80bn respectively.
Debt Securities
The Nigerian treasury bills hits 9%
This increase is supposed to have a substantial impact on the Nigerian Stock exchange market.
Published
1 day agoon
April 15, 2021
According to the primary market auction result, Nigerian Treasury Bills Yield held the 91-day and 182-day constant at 2.00% and 3.50% respectively.
The 364-days Bill increased by 100 base point to 9.00% from its previous 8.00% interest. This increase is supposed to have a substantial impact on the Nigerian Stock exchange market.
READ: Why interest rates on treasury bills, bonds crashed
The 91-day and 182-day bills have remained relatively constant for the 4th consecutive auction. This increase in the 364-days Treasury Bill Yield may be seen to have a negative correlation in the stock exchange market as investors sell off their volatile positions and buy risk-free assets like treasury bills.
Some analysts believe that the increase is in direct response to inflationary concerns as the CBN attempts to curb inflation without detouring growth.
READ: CBN introduces “Special Bills” as part of efforts to control money supply in the economy
What this means
- An increase in Treasury Bill Yield may cause a drop in the Stock exchange market as analysts expect selloffs to continue towards the end of the week.
- Persistent inflation concerns may lead the CBN to take more aggressive steps and increase the treasury bills rates even higher.
- The banking sector is expected to benefit from the increase as they shift their focus from stock to fixed income.
- Analysts expect that a higher yield trend will boost foreign direct investment, which is aligned with the CBN policy of increasing foreign inflows.
- Some market participators see the increase as a good sign. However, the consensus was held for a steady slow increase rather than an eccentric rate change.
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