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Rates Repricing may Occur as DMO Auctions N180 Billion Bonds – Analysts

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By Niyi Jacobs, Editor

Investment analysts at Chapel Hill Denham have said that odds are in favour of higher marginal rates at the upcoming bonds auction schedule for this week.

In the fixed income space, rates on fixed securities have remained cold as the headline inflation rate tempered two consecutive months.  

During the week, Nigeria’s Debt Management Office (DMO) is expected to offer up to N180 billion across three maturities, split evenly between the MAR 2027, MAR 2035, and Mar 2050 reopening.

In a report, Chapel Hill Denham said the last auction cleared at 12.93%, 13.80%, and 14.00%, respectively with expectation for upward repricing this week.Marking trend in the fixed securities market, sentiments were broadly mixed in the fixed income space last week as yield compressed at the long end of the curve, due to investors’ inclination towards duration, occasioned by a second straight moderation in headline inflation.

Chapel Hill Denham said on the other hand, short-duration apathy drove a slight expansion in short-term rates, especially in the OMO segment.Precisely, from a week ago, yields across the benchmark bond curve dipped by an average of 25 basis points to 12.78%, while the OMO benchmark curve rose by an average of a basis point to 9.24%.“We highlight that the Nigerian Treasury bills curve was flat at an average of 6.14%”, Chapel Hill Denham’s analysts said.Amidst pressure on liquidity,  a cumulative maturity of N61 billion comprise N46 billion from open market operations and  N14.8 billion from Nigerian Treasury bill hit the financial system, with the CBN and the Debt Management Office (DMO) conducting rollover actions on Wednesday and Thursday.

At the NTB auction on Wednesday, analyst said average stop rates compressed by 8 basis points to 5.13% from 5.21%, single-handedly driven by the 364-day tenor that shed 24 basis points.

Relative to the offer size of N14.84 billion, Chapel Hill Denham’s analysts stated that total investor subscriptions reached N281.74 billion, translating to a bid to cover ratio of 19.0x, up from 3.6x.Meanwhile, the DMO allotted only N30.58 billion.

Elsewhere at the OMO auction, the Central Bank of Nigeria (CBN) sold N17.3 billion worth of OMO bills across three maturities: 89-day: N3.0 billion; 159-day: N4.3 billion; 348-day: N10 billion. Analysts noted that the auction bid-to-cover ratio printed at 3.7x, saying the pattern of subscription was similar to the Treasury bill auction held on Wednesday as investors mainly oversubscribed the 348-day bills.

The stop rates cleared same as the previous level (89-day: 7.0%, 159-day: 8.5%, 348-day: 10.1%) as investors gun for higher return on funds.Recall that headline inflation moderated by 19 basis points to 17.93% year on year in May 2021, with most of the gains stemming from the positive impact of the high base from the prior year.“We understand that this is the second consecutive slide in headline inflation since August 2019.

Looking ahead, we guide that Inflation will likely sustain a decelerating path.`“Our prognosis is largely hinged on the positive pass-through from last year’s high base. Risk to our view remains an absence of price shock relating to the removal of fuel subsidy or a hike in electricity tariff”, Chapel Hill Denham said.

That said, the investment firm noted that with inflationary pressure looking set to sustain moderation, it believes the CBN will now focus strictly on the economic growth mandate going forward.“We expect N15 billion worth of OMO bills to mature on Tuesday.

Meanwhile, all eyes will be on the bond auction scheduled to hold on Wednesday, June 23”, analysts said.

The investment firm stated that the DMO is expected to offer up to N180 billion across three maturities, split evenly between the MAR 2027, MAR 2035, and Mar 2050 reopening.It noted the last auction cleared at 12.93%, 13.80%, and 14.00%, respectively, adding that odds are in favour of higher marginal rates at the upcoming auction.

In a related development, Chapel Hill Denham said despite the 12% increase in liquidity at the Investors and Exporters window, with average daily turnover printing at $141 million – the first advancement in three weeks, Naira saw a 5 basis point depreciation to N411.Meanwhile, in the parallel market, analysts noted that Naira appreciated by 1.6% or N8.0 last week to N490.00.

“For us, we suspect the appreciation in Naira reflects the CBN’s recent policy to increase the amount of foreign exchange allocated to banks to meet personal and Business Travel, Medical, and school fees needs.“Although the quantum of increase is currently sketchy, we believe this is a positive step to narrowing the wide spread between the IEW and parallel market rates.“However, we maintain our view that the CBN will have to make further adjustments in the NAFEX rate to engineer a lasting solution to the liquidity challenges faced at the I&E window”, Chapel Hill Denham analysts added. 

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Wema Bank Debunks False News, Says Cheque Forgery Allegation Is Not True

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Wema Bank Announces 108.3% Growth In Profit Before Tax

…there was no court summons on Wema Bank MD

Olushola Okunlade Writes

The attention of Management of WEMA BANK PLC has been drawn to the trending news in the media to the effect that a Magistrate’s Court in the Federal Capital Territory (FCT), Abuja, had issued a warrant for the arrest of our Managing Director, MR. ADEMOLA ADEBISE, in connection with a Garnishee proceeding for the payment of a judgment debt on behalf of the Bayelsa State Government.

WEMA BANK PLC would like to use this medium to refute the allegations and dismiss the gross representation of facts in regard to the material facts, and the apparent breach of the principles of fair hearing before such order of the court was entered against our Managing Director.

WEMA BANK PLC wishes to state that, contrary to the facts presented before Her Worship, Mrs. Elizabeth Jones, the said set of five cheques for the total sum of N50m issued in protest based on pending applications before an Abuja High Court then, were in favor of the Chief Registrar FCT High Court, not in favour Barrister George Halliday, who claims the proceeds of the cheques. It is important to note that those cheques were not signed by MR. ADEMOLA ADEBISE had not assumed the position of the Managing Director of the bank at the material time the cheques were issued in favour of the Chief Registrar.

Furthermore, we would like to state that the five cheques issued in protest by our Bank were not dud cheques as alleged by the complainant. The cheques have only not been cleared for payment because of the subsisting Appeal at the Court of Appeal Abuja on the Garnishee proceeding which has now been decided in favour of the bank. It was after Barrister George Haliday lost at the Appeal Court that he resorted to a Magistrate Court in Abuja to lodge a complaint about the issuance of dud cheques. It is very worthy of note that the judgment debt against Bayelsa State Government, which Barrister George Haliday attempted to enforce by a garnishee proceeding, thereby leading to the issuance of the cheques in question had been settled by Bayelsa State Government via a Terms of Settlement between Barrister George Halliday and the Bayelsa State Government at the Supreme Court.

WEMA BANK wishes to state that the warrant for the arrest of MR. ADEMOLA ADEBISE is in violation of his fundamental rights to a fair hearing as he was never personally served with any process to appear before the Magistrate Court, nor was he represented in court. We are a law-abiding corporate citizen; if there was any court summons properly served on the Managing Director for his appearance in court, he would have done so without fail. But, in this case, there was no such service extended to him or any court processes personally served on him to appear in court until a warrant of arrest was issued in absentia. We view the arrest warrant as being an infringement on his fundamental rights.

We, therefore, refute and dismiss in their entirety the allegations of dud cheque and forgery leveled against our Bank and the Managing Director. We also dismiss the inappropriate issuance of a bench warrant on our Managing Director. We are already engaging in legitimate actions to seek redress and bring all the perpetrators of these unprofessional conducts and heinous criminal acts against our Managing Director and the bank to book.

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Odu’a Investment Group Chairman Charges Subsidiary Companies On Innovation And Technology

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… As Otunba Toyin Ashiru visits three group subsidiary companies in Lagos

Olushola Okunlade Writes

The Chairman of Odu’a Investment Company Limited (OICL), Otunba Bimbo Ashiru, on Monday charged its subsidiary companies with the need to innovate and leverage technology to remain competitive.
 
Otunba Ashiru gave the charge, in Lagos, during his working visits to three of the group’s subsidiary companies: SWAgCo, WEMABOD Limited, and GLANVILL ENTHOVEN.
 
The former two-term Commissioner for Commerce and Industry in Ogun State said that fostering business innovation would not only help businesses remain competitive and protect earnings, but it would also make for healthier workplaces.
 
He charged subsidiary companies to leverage the immense goodwill and clouts of the group’s board of directors to market their company’s products and services so as to enhance their bottom lines.

The Chairman promised that the OICL Board is ever ready to give necessary support where needed to subsidiary companies in other to achieve the corporate goal of turning their companies into a high-yielding profit company.
 
The chairman noted that achieving the dream of making subsidiary companies a brand would require the total support of all board members, management, and staff, stressing that loyalty, team spirit, and creative engagement are key in other to uphold the vision, mission, and the core values of each company. 
 
Speaking during interactive sessions with staff and management of the companies visited, the OICL Board Chairman said he would focus more on human capital development as “human capital development is key in bringing the best out of every staff member.”
 
According to him, “human capital development and capacity building of staff are key in bringing the best out of staff and this would remain a priority of this new administration while in addition, rewards for performance will be maintained.”
 
The chairman was accompanied by Mr. Adewale Raji, OICL Group Managing Director/ CEO, Chief Segun Ojo, OICL director, Barrister Seni Adio, SAN, OICL Director, Dr. Tola Kasali, OICL Director, Mr. Segun Olujobi, OICL Director, Mrs. Foluso Olaniyan, OON, OICL  Independent Director and Mr. Olugbolahan Mark- George, Executive Director, Investment and Business Development, assured the staff of the commitment of the board and management to their welfare.

Otunba Bimbo Ashiru, Chairman of Odu’a Investment Company Limited (OICL).

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AMCON, Imo State Government Resolve Standard Shoe Company Limited Huge Debt 

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AMCON, Imo State Government Resolve Standard Shoe Company Limited Huge Debt.

…Hands Over Title Documents Of Shoe Company To Governor 

Olushola Okunlade Writes

As part of its strategy to partner, support, and help revitalize businesses in its portfolio over huge debt, the Asset Management Corporation of Nigeria (AMCON) in Abuja Friday, handed over the original title documents of Standard Shoe Company Limited (SSCL), a footwear manufacturing factory co-founded by the Imo State Government to Governor Hope Uzodinmma of Imo State. 

The handover of the asset to the good people of Imo State through their governor followed the full resolution of the indebtedness of Standard Shoe Company Limited to AMCON. Ever since it took over the factory, AMCON had continued the engage the government of Imo State because of the critical impact resuscitating such a massive factory would make in the manufacturing sector of the Nigerian economy. 

AMCON, Imo State Government Resolve Standard Shoe Company Limited Huge Debt
The Imo State governor, Hope Uzodimma and his team, and the AMCON team led by Dr. Eberechukwu Uneze in a group photograph after the handover…in Abuja on Friday.

In a brief remark before handing over the documents to governor Uzodimma, Dr. Eberechukwu Uneze, an Executive Director in charge of asset management at the Corporation who represented the MD/CEO, Mr. Ahmed Lawan Kuru said AMCON was not only happy that the Imo State government under the leadership of Uzodimma finally resolved indebtedness with AMCON, but because the factory would now go back to the good people of Imo State and contribute to job creation, and improve the internally generated revenue of Imo State, which in line with AMCON mandate. 

Uneze who commended the Imo State governor for making efforts to resolve the outstanding loan obligation owed AMCON by the Imo State government, added, “My governor, we appreciate this effort because other governments in Imo State have come and gone but none of them had made this much effort to resolve this debt. So, it is a huge impact you have made. I hope this will energize the State and encourage the good people of Imo State.” 

AMCON, Imo State Government Resolve Standard Shoe Company Limited Huge Debt.
The Imo State governor, Senator Hope Uzodimma supervised by Dr. Eberechukwu Uneze, an Executive Director at Asset Management Corporation of Nigeria (AMCON), and other Senior Staff of the Corporation as he signs the acknowledgment copy of the title documents…in Abuja on Friday.

In his own acceptance speech after signing and receiving the documents on behalf of the government and people of Imo State, Uzodimma who recounted the pleasant experience he had with AMCON all through the negotiation process encouraged other obligors to approach AMCON freely and willingly because the Corporation is not hostile, but only interested in their recovery mandate and in genuine growth as well as the development of the country. 

The governor added, “I approached the Management of AMCON and discussed with them. I want the public to understand that AMCON is not a hostile outfit. From my experience with them, AMCON is interested in the genuine growth and development of the Country. This is what I saw during the negotiation period concerning what Imo State was owing AMCON. 

“I am very happy about the co-operation we (Imo State government) received, and I assure you that we are going to revive the industry by employing our young men and women to stimulate industrialization in the State. The people will be happy to see the industry come back to life. On behalf of myself and the people of Imo, I am very grateful to AMCON.” 

AMCON had taken over the assets belonging to the Standard Shoe Company of Nigeria during the first phase of EBA purchases from Oceanic Bank in 2011 after the company stopped production in 2009 due to a lack of working capital and was unable to meet up with its loan obligations. 

Before now, the Corporation had made several efforts to discuss the debt with the previous Imo State administrations but never made any headway until the present government led by Uzodimma expressed interest in settling the debt obligations of the state, with the aim of rehabilitating the company to create employment opportunities and enhance the standard of living of the citizens of Imo State. 

This landmark signing and handover ceremony, which will go down as a major achievement for the Hope Uzodimma-led government of Imo State, took place at AMCON head office in Maitama, Abuja.

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