Tag Archives: Bonds

Nigeria’s Recession Pushes Bonds To Lowest Point In More Than Two Weeks

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Nigeria’s dollar bonds have fallen to their lowest point in more than two weeks after official statistics  showed that the  economy had entered its first recession in 25 years.

  The official data showed that the economy contracted by 2.06 percent in the second quarter.

 According to a Reuters report “The 2023 issue chalked up the biggest losses, down 0.728 cents to trade at 99.417 cents in the dollar – its lowest since Aug. 15, according to Tradeweb data. The 2021 bond slipped by 0.489 cents to 102.156 cents while the 2018 issue lost 0.603 cents to trade at 101.167 cents.”

 The report further showed that “data from the Nigerian Bureau of Statistics (NBS) showed the non-oil sector declined due to a weaker currency while lower oil prices dragged the oil sector down.

Credit: dailytrust

External Reserves Rise by $595m as Offshore Investors Stake $327m on Bonds

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Nigeria’s external reserves, which have plummeted for about two months, pared some of the losses in recent weeks when they rose by $595 million in just five days to $26.196 billion Monday.

The marginal accretion represented an increase of 2.26 per cent, compared with $25.601 billion as of August 24.

The development was attributed to the inflow of funds into the country’s fixed income market. It was reported yesterday that there had been renewed interest by both foreign and local investors in the fixed income market given the attractive yields.

This was largely buoyed by a single $270 million transaction at N345 per dollar by Citibank Nigeria which bought 11-months treasury bills on behalf of offshore investors.
But other transactions were carried out at between N314.50 to N317.34 to the dollar.
The FX market registered $327 million worth of trades yesterday, about six times more than its usual volume, the Chief Executive Officer of FMDQ OTC Securities Exchange, Mr. Bola Onadele, disclosed.

Average trading is around $50 million a day on normal days, but might reach $100 million on days the Central Bank of Nigeria (CBN) intervenes in the currency market.
Traders told Reuters that the central bank sold an undisclosed amount of dollars close to the end of market session, to help prop up the naira.

Yesterday’s surge in trading came after the central bank said on Friday that it planned to offer N212.85 billion treasury bills maturing between 91-days and 1-year this week.
The central bank said it would sell N45.85 billion worth of the 91-day bills, N62 billion of the 182-day paper and N105 billion of the 1-year debt. Payment for the purchase will be effected on Thursday.

The CBN has been selling short-dated open market bills at yields as high as 18 per cent in an effort to attract offshore funds, most of whom fled Nigeria’s bond and equity markets during a financial crisis that began when oil prices plunged.

The crisis ultimately led the central bank to let the naira’s value float in June.
Yet, despite the intervention by the banking sector regulator, the spot rate of the naira fell to N318.83 to the dollar on the interbank forex market yesterday, down from the N314.95 last Friday.
On the parallel market, the naira also fell to N413 to the dollar Monday, down from the N412 to the dollar last Friday.

Read More: thisdaylive

Nigeria To Sell N80bn Bonds

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Nigeria will sell N80 billion worth of bonds denominated in the local currency at an auction on January 20, her first debt auction of the year, the Debt Management Office (DMO) said on Monday.

The debt office said it will issue 40 billion naira each of bonds maturing in 2020 and 2026, using the Dutch auction system.

The 2020 debt is a reopening of a previously issued bond. The 2026 debt, according to Reuters, is a fresh issue. Results of the auction are expected the next day. Nigeria has proposed a plan to issue 260 billion to 390 billion naira in 5-, 10- and 20-year naira bonds in the first quarter of the year.

Nigeria said it will borrow about N900 billion locally to finance part of the N2.2 trillion deficit in its 2016 budget.

The Central Bank Nigeria (CBN) last week sold N136.24 billion in treasury bills with maturities from three months to one year at its first auction of the year on Wednesday, at higher yields than previously.

The central bank sold N55.4 billion of three-month paper at 4 percent, up from 3.62 per cent at a sale on December 23. It also sold N25 billion  of six-month debt at 6.99 per cent against 6.19 percent, and N55.84 billion  of one-year paper at 8.05 per cent compared with 7.45 per cent. Total demand stood at 311.5 billion naira compared with 226.97 billion last time.

Credit: ThisDay