ZOCK CAPITAL AND INVESTMENT MARKET UPDATE AS AT 12th AUGUST 2021
FOREIGN EXCHANGE MARKET
Naira appreciated at the I&E FX market, it dipped by by 0.06 % as the dollar was quoted at ₦411.67 as against ₦411.40 previous day trading session.However, Most participants maintained bids between ₦400.00 and ₦412.26 per dollar.
Naira Loses Against Dollar At Official Market
Naira fell against dollar at the official market as forex turnover rose slightly on Thursday, data posted on the FMDQ Security Exchange (Nafex window) where forex is officially traded showed. However, the currency remained stable at the black market window.
According to data recorded on the Nafex window, the naira closed at N411.67 per $1 on Thursday, this implies a N0.27 or 0.10 per cent depreciation from the N411.40 it traded in the previous session on Wednesday.
FIXED INCOME SECURITIES AND MONEY MARKET UPDATE
SECONDARY MARKET
There treasury Bills secondary market was bullish with average yield dropping by 8 bps to close at 5.45 %t from 5.54 % on the previous day. Average yield across the short-term maturities fell by 28 bps. However, the average yields across medium-term and long-term maturities remained unchanged at 5.39 percent and 7.26 percent, respectively.
Investment in treasury bills
CBN held its scheduled Primary Market Auction on August 11th 2021 amd sold treasury bills worth ₦156.33 billion across the 91-day (₦4.80 billion), 182-day (₦3.75 billion), and 364-day (₦147.78 billion) tenors.
The stop rates for the 91day and 182day remained unchanged at 2.50 percent and 3.50 percent for the third consecutive time while the stop rate for the 364-day tenor cleared lower at 7.35 %
OMO BILLS
For the OMO bills market, the average yield across the curve remained unchanged at 7.66 percent. Average yields across short-term, mid and long-term maturities closed flat at 7.34%,7.60 % and 8.32%.
MONEY MARKET
The Overnight rate decreased by 0.17 percent to close at 17.33 percent as against the last close of 17.50 percent, while the Open Buy Back rate declined by 0.33 percent to close at 16.67 percent compared to 17.00 percent on the previous day.
FGN bonds secondary market
Allotment for 2-year bonds decreased by 39.90 percent compared to ₦341.01 million allotted in the last auction, while allotment for 3-year bonds increased by 10.03 percent versus ₦620.99 million allotted in the previous auction.
lNVESTMENT FGN PMA BOND MARKET YIELD CURVE
The FGN Savings Bond Auction for August 2021, the DMO allotted bonds worth ₦888.21 million across the 2-year (₦204.96 million) and 3-year (₦683.25 million) tenors at coupon rates of 8.864 % and 9.864 %. Allotment for 2-year bonds decreased by 39.90 percent compared to ₦341.01 million allotted in the last auction, while allotment for 3-year bonds increased by 10.03 percent as against 620.99 million allotted in the previous auction.
MARKET NEWS HEADLINES
Nigeria’s IDA Debt Hits $11.7b’
Nigeria’s International Development Association (IDA)’s Debt Stock stands at USD11.7 billion, the Debt Management Office (DMO), has said.“IDA loans represent one of the most favourable borrowing options for countries like Nigeria and is also consistent with the Medium Term Debt Management Strategy of the Federal Government,” DMO said in a statement yesterday. In responce to claims that Nigeriais a high-debt risk nation, the DMO said the World Bank’s report “focused only on the composition of IDA’s Loan Portfolio and did not make any reference to the debt sustainability of the top 10 beneficiary countries of IDA loans, such as India, Pakistan, Nigeria, Kenya and Ghana that the report erroneously referred to as ‘high-debt risk nations”.
Bankers: Customers Abusing Forex Requirement
Rising from their meeting yesterday, the bankers said they have seen incidents of customers presenting fake documents such as expired passports, invalid flight tickets or open tickets that are cancelled after they acquire the forex.Some bank customers have been accused of requesting for forex in excess of what they require .Managing Director of Guarantee Trust Bank, Segun Agbaje, while speaking to the issue said banks do not want “fraudulent transactions taking place” in the guise of forex transaction.
He said banks have witnessed disturbing activities by customers demanding for forex. Specifically, he mentioned the submission of questionable flight tickets and the request for more forex than the customers may need.On how the forex market is doing since the ban, Agbaje said legitimate demands for Basic Travel Allowance (BTA) and Personal Travel Allowance (PTA), medical needs and educational purposes “are working very well”. He urged bank customers to consider putting their forex in cards as the Banker’s Committee is considering digitizing the process. Banks and their staff he assured are being held accountable if forex infractions are traced to them while the CBN is holding the banks themselves on a short leash to prevent fraudulent activities by the banks when transacting forex deals.
Naira Tumbles To 515 As Dollar Scarcity Persists
The naira pared some of its recent gains against the dollar at the parallel market on Wednesday amid the lingering scarcity of the greenback in the country.The local currency fell to 515 against the dollar at the parallel market from 510 on Tuesday.The naira had strengthened to 506/$ on August 4 after plunging to 525/$ at the parallel market on July 28, a day after the Central Bank of Nigeria stopped foreign exchange sales to Bureaux de Change. It had been hovering around 508/$ and 510/$ in recent days.The CBN Governor, Mr Godwin Emefiele, had on July 27, at the end of the Monetary Policy Committee meeting, announced the stoppage of forex sale to the BDCs, saying they had turned themselves into ‘agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria’.
DMO: ‘Nigeria’s IDA Debt Hits $11.7b’
Nigeria’s International Development Association (IDA)’s Debt Stock stands at USD11.7 billion, the Debt Management Office (DMO), has said.“IDA loans represent one of the most favourable borrowing options for countries like Nigeria and is also consistent with the Medium Term Debt Management Strategy of the Federal Government,” DMO said in a statement yesterday.In responce to claims that Nigeria is a high-debt risk nation, the DMO said the World Bank’s report “focused only on the composition of IDA’s Loan Portfolio and did not make any reference to the debt sustainability of the top 10 beneficiary countries of IDA loans, such as India, Pakistan, Nigeria, Kenya and Ghana that the report erroneously referred to as ‘high-debt risk nations”.
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