Business

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

Published

2 years ago

June 21, 2021

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.

Related Topics:#bondmarket #dmo #financialanalysts

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Mayor Of Houston Texas Endorses Fidelity Bank’s Trade Expo (FITCC)

Published

3 days ago

September 24, 2023

Business Echo Magazine

Mayor Of Houston Texas Endorses Fidelity Bank’s Trade Expo (FITCC)

Rashidat Okunlade Writes

Fidelity Bank’s upcoming trade expo tagged, the Fidelity International Trade and Creative Connect (FITCC Houston), has received a major boost as the Mayor, City of Houston, Sylvester Turner, has termed it, “A catalyst to support bilateral trade between Nigeria and Houston; and an opportunity for the Houston community and the diaspora to explore emerging trends, forge new partnerships and unlock new possibilities”.

This was made known in a video message recently issued by the mayor. In the one-minute clip obtained by our journalist, Mayor Turner highlighted the several side attractions scheduled for FITCC Houston and encouraged businesses to take advantage of the expo to expand their businesses beyond borders.

The event is scheduled for Tuesday, 24, and Wednesday, 25th October 2023 at the George R. Brown Convention Center, 1001 Avenida de las Americas, Houston, Texas 77010. The bank will be hosting exporters, leading businesses, entrepreneurs, investors, and regulators operating in the commodity, service, creative, fashion, and FinTech sectors in Nigeria and the United States with the view of promoting Nigeria’s non-oil exports and facilitating integrations to global supply-chain networks.

Watch Mayor Turner’s video here:

https://www.instagram.com/p/CxKyXhsN9xn/

Business

eTranzact CEO Bags BusinessDay Top 25 CEOs Award

Published

3 days ago

September 24, 2023

Business Echo Magazine

Left-Right: Mr. Frank Aigbogun, Publisher BusinessDay presenting Mr Olaniyi Toluwalope : MD/CEO, eTranzact Plc the award recognition of the company's stellar performance on the Nigerian Stock Exchange during the Top 25 CEOs Award in Lagos.

Rashidat Okunlade Writes

Mr Olaniyi Toluwalope, Managing Director and Chief Executive Officer, eTranzact International PLC, has bagged Business Day’s Top 25 CEOs award in recognition of his company’s stellar performance on the Nigerian Stock Exchange.

Speaking during the award ceremony last weekend in Lagos, the publisher, Business Day Media Ltd., Mr. Frank Aigbogun stated that the award is more than just a recognition ceremony, but a reward for excellence, innovation, and drive for positive change.

According to the publisher, the eTranzact boss and other awardees have demonstrated extraordinary leadership, resilience and relentless pursuit of a result of success and this remarkable achievement in growing market value within the period of review stands them out as industry leaders, serving as a beacon of inspiration, admiration and respect from their peers and stakeholders alike.

“This has made us gather to celebrate your achievements, passion, and your dedication to excellence. As we recognize the countless hours of hard work, sleepless nights, and sacrifices that go into building and leading a successful business, your resilience in the face of challenges is truly commendable and it is an honour to acknowledge and celebrate your triumphs,” he concluded.

Responding after the award, Mr Olaniyi Toluwalope said the award is a testament to what they have been doing in the financial technology sector within the past 20 years.

Left-Right: Mr. Frank Aigbogun, Publisher BusinessDay presenting Mr Olaniyi Toluwalope : MD/CEO, eTranzact Plc the award recognition of the company’s stellar performance on the Nigerian Stock Exchange during the Top 25 CEOs Award in Lagos.etra

Toluwalope said: “This award means a lot to us since we began the journey of transformation as an organisation a couple of years ago.”He believed the board, the management, and the entire team have worked very hard to reimagine strategy, focusing extensively on execution capability. “We have built more partnerships, deepened our collaboration with the government, private sector, with lots of our financial service partners. The quality of products and solutions we offer coupled with the investment we have made in technology infrastructure is the outcome of all we are seeing now in terms of our improvement and top performance.”

“As one of the top fintech companies in the country, having been around for over 20 years, doing great things and setting new standards and creating pioneer products and solutions, these are the things that have created the pillars which we stand on today, which is what is creating this visibility and identification we are seeing and benefiting from,” he said. It is worth noting that, eTranzact under the leadership of Mr. Toluwalope recorded the highest-ever profitability in the 20-year history of the company in its 2022 financial year.

The company is already on the upward trajectory to build on the gains of the performance by continually providing world-class solutions and products to its discerning clients which cuts across both public and private sectors.

Business

FBNHoldings CEO, Nnamdi Okonkwo Bags Outstanding CEO Award

Published

1 week ago

September 19, 2023

Business Echo Magazine

L- R: Adewale Arogundade, Acting Company Secretary, FBNHoldings, Tolu Oluwole, Head, Investor Relations, FBNHoldings, Nweke (Junior), former Director General, Nigerian Economic Summit Group, Oyewale Ariyibi, Executive Director, Finance FBNHoldings, Frank Aigbogun, Publisher, BusinessDay, and Wasiu Shafe, Financial Controller, FBNHoldings.

…as BusinessDay honour Top 25 CEOs

Rashidat Okunlade Writes

Nnamdi Okonkwo, Group Managing Director of FBN Holdings Plc, has bagged outstanding CEO in the just concluded Top 25 CEOs Awards organized by BusinessDay that was held at the Ballroom of the Federal Palace Hotel, Victoria Island, Lagos last Saturday.

Left-Right: Adewale Arogundade, Acting Company Secretary, FBNHoldings, Tolu Oluwole, Head, Investor Relations, FBNHoldings, Nweke (Junior), former Director General, Nigerian Economic Summit Group, Oyewale Ariyibi, Executive Director, Finance FBNHoldings, Frank Aigbogun, Publisher, BusinessDay, and Wasiu Shafe, Financial Controller, FBNHoldings.

In this year’s edition of the BusinessDay Top 25 CEOs, the publication recognised 25 Chief Executive Officers and Managing Directors of various listed firms on the Nigerian Stock Exchange (NGX) who experienced outstanding financial development and also made important contributions to their respective industries.

FBNHoldings team that graced the event are Adewale Arogundade, Acting Company Secretary, FBNHoldings, Tolu Oluwole, Head, Investor Relations, FBNHoldings, Nweke (Junior), former Director General, Nigerian Economic Summit Group, Oyewale Ariyibi, Executive Director, Finance FBNHoldings, Frank Aigbogun, Publisher, BusinessDay, and Wasiu Shafe, Financial Controller, FBNHoldings.