CBN To Sell N809.4 Bn Treasury Bills In Q3’19

The Central Bank of Nigeria, CBN, has slated Treasury Bills, TBs, sales worth N809.4 billion for the third quarter 2019, Q3’19. This is contained in the apex bank’s latest Nigeria Treasury Bills Issue programme released last weekend. 

Treasury Bills are short term (less than one year) debt instruments used by the CBN to borrow money from the public on behalf of the federal government. The CBN also uses TBs to control money supply in the economy. 

The TB issue programme commences on June 13, and ends on August 29, 2019. Your help can save this mother of two, Oge Azike(Opens in a new browser tab) During the period, the apex bank will issue TBs worth N80.62 billion on 91 days tenor, N154.04 billion on 182 days and N574.71 billion on 364 days. 

A breakdown of the programme revealed that in June, the apex bank plans to sell N147.25 billion worth of TBs, comprising N8 billion worth of 91 days bills and N139.25 billion worth of 364 bills. In July, the apex bank plans to sell N195.91 billion worth of TBs, comprising N15.9 billion worth of 91 days bills, N46.6 billion worth of 182 days bills, and N133.46 billion worth of 364 days bills.

(Vanguard)

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Foreign Investors Trade N1.22tr On Equities

Foreign portfolio investors traded about N1.22 trillion on Nigerian equities last year, a marginal percentage point increase on about N1.21 trillion traded by foreign investors the previous year. 

A full-year Foreign Portfolio Investment (FPI) report obtained at the weekend from the Nigerian Stock Exchange (NSE) indicated that foreign portfolio investors overtook Nigerian investors as the dominant bloc at the equities market last year, ending a two-year dominance of domestic investors in the market. 

However, transactions tended towards outflows than inflows, reversing the positive net foreign portfolio investments of N336.94 billion recorded in 2017 with a negative net foreign portfolio deficit of N66.2 billion in 2018. 

The FPI report, coordinated by the NSE, polls transactions from major custodians and capital market operators; it is widely regarded as a credible measure of the FPI trend.

(Nation) 

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Naira now N360.02/$ at NAFEX

The Naira, Wednesday, appreciated by 35 kobo to N360.02 per dollar in the Investor and Exporter (I&E) window prompted by 10 percent increase in the amount of dollars traded in the window. 

Datafrom the Financial Market Dealers Quote (FMDQ) showed that indicative exchange rate for the I & E window, known as Nigerian Autonomous Foreign Exchange, NAFEX, dropped to N360.02 per dollar, yesterday, from N360.37 per dollar on Tuesday. FMDQ also reported that the amount of dollars traded rose by 10 percent to $218.66 million yesterday from $198.71 million on Tuesday. 

Meanwhile, the Naira, stabilised at N364 per dollar for the sixth consecutive business day in the parallel market, yesterday. 

(Vanguard)

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Naira maintains N362.5 to dollar at parallel market

The Naira on Tuesday maintained N362.5 to the dollar at the parallel market, the Newsmen reports. The Pound Sterling and the Euro closed at N480 and N430. At the Bureau De Change (BDC) window, the Nigerian currency was sold at N362 to the dollar, while the Pound Sterling and the Euro traded at N480 and N430. Trading at the investors’ window saw the Naira closed at N360.37 to the dollar, while it closed at N305.80, N408.18 and N365.03 against the Dollar, Pound Sterling and the Euro at the CBN window. Traders expressed optimism at the relative stability of the Naira against the dollar. 

The relative stability of the Naira against the Dollar had impacted positively on price stability of most goods in the market. The hitherto volatility in the prices of goods and services that greeted the fluctuation in the Naira rates before the intervention of the CBN in February had fast disappeared. 

While some experts commended the CBN’s injection of liquidity to the foreign exchange market, others clamoured for productive economy to increase the chances of the nation’s ability to earn in dollars. 

(Vanguard)

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CBN intervenes in Forex market with fresh $210m

The Central Bank of Nigeria (CBN) on Monday injected another $210 million into the interbank foreign exchange market in its bid to boost liquidity in the market. Disclosing this in Abuja, the acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor said the sum of $100million was offered to the wholesale segment, while the small and medium enterprises (SMEs) segment got an allocation of $55 million. 

The invisibles segment (i.e. tuition fees, medical payments and Basic Travel Allowance (BTA), among others) was also allocated $55 million. Okorafor said the intervention was part of effort aimed at boosting liquidity in the forex market, facilitating trade and easing remittances for legitimate personal commitments. 

While attributing the long spell of calm in the market to the interventions of the CBN and the cooperation of all stakeholders, Okorafor said the convergence of rates between the interbank market and the Bureau de Change segments, had all but converged with customers able to buy forex from either market at not more than N362 to a dollar. In spite of the development, he stressed that the CBN would continue in its monitoring of the market in order to ensure that authorised dealers abide by the extant rules. Meanwhile, the naira maintained its steady rate against the United States Dollar, exchanging for N361 to a dollar on the BDC segment of the market yesterday. 

On the other hand, the Investors’ and Exporters’ window recorded a total turnover of $198.71 million transactions yesterday. 

(ThisDay)

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CBN reads riot acts on transaction settlement

The Central Bank of Nigeria (CBN) yesterday warned that any authorised dealer that defaults in the settlement of any auction or 2-way quote with the CBN in the financial market would be duly punished. The punishment includes suspension from all auctions as well as from its discount window.

The central bank stated this in a circular to all authorised dealers titled: “Amendment of S4 Business Rules and Guidelines,” dated February 1, 2017, that was signed by its Director, Financial Markets Departments, Dr. Alvan Ikoku. Specifically, the amendment was with reference to Section 10.1 of the S4 Business Rules and Guidelines. The directive was with immediate effect. 

It stated: “Any auction of 2-way quote with the CBN must be settled. If it is on queue, it shall be given highest priority and when it fails to settle, the system shall generate an automatic Intra-day Liquidity Facility (ILF) backed by collateral to settle the transaction. Where there are no securities, the allotment shall be cancelled and the defaulter suspended from all auctions for eight weeks from the date of default. 

“ILF shall be bought back or converted to Standing Lending Facilities (SLF) by the participant by the close of business day, failing which it shall be automatically converted to SLF at the prevailing SLF rate plus 500 basis points. “If any SLF is not repurchased by the participant bank by the next business day, such participants shall not be eligible to access the discount window until such outstanding obligation is settled in accordance with Section 27 of the Guidelines for the Conduct of Repurchase Transactions under the CBN Standing Facilities.” 

Furthermore, the central bank directed that henceforth, all SLFs must be bought back latest by 10am on the maturity date, adding that” failing which, the encumbered securities would be automatically rediscounted.” 

(ThisDay)

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The Slumps That Shaped Modern Finance

Finance is not merely prone to crises, it is shaped by them. Five historical crises show how aspects of today’s financial system originated—and offer lessons for today’s regulators

What is mankind’s greatest invention? Ask people this question and they are likely to pick familiar technologies such as printing or electricity. They are unlikely to suggest an innovation that is just as significant: the financial contract. Widely disliked and often considered grubby, it has nonetheless played an indispensable role in human development for at least 7,000 years.

At its core, finance does just two simple things. It can act as an economic time machine, helping savers transport today’s surplus income into the future, or giving borrowers access to future earnings now. It can also act as a safety net, insuring against floods, fires or illness. By providing these two kinds of service, a well-tuned financial system smooths away life’s sharpest ups and downs, making an uncertain world more predictable. In addition, as investors seek out people and companies with the best ideas, finance acts as an engine of growth.

Yet finance can also terrorise. When bubbles burst and markets crash, plans paved years into the future can be destroyed. As the impact of the crisis of 2008 subsides, leaving its legacy of unemployment and debt, it is worth asking if the right things are being done to support what is good about finance, and to remove what is poisonous.

History is a good place to look for answers. Five devastating slumps—starting with America’s first crash, in 1792, and ending with the world’s biggest, in 1929—highlight two big trends in financial evolution. The first is that institutions that enhance people’s economic lives, such as central banks, deposit insurance and stock exchanges, are not the products of careful design in calm times, but are cobbled together at the bottom of financial cliffs. Often what starts out as a post-crisis sticking plaster becomes a permanent feature of the system. If history is any guide, decisions taken now will reverberate for decades.

This makes the second trend more troubling. The response to a crisis follows a familiar pattern. It starts with blame. New parts of the financial system are vilified: a new type of bank, investor or asset is identified as the culprit and is then banned or regulated out of existence. It ends by entrenching public backing for private markets: other parts of finance deemed essential are given more state support. It is an approach that seems sensible and reassuring.

But it is corrosive. Walter Bagehot, editor of this newspaper between 1860 and 1877, argued that financial panics occur when the “blind capital” of the public floods into unwise speculative investments. Yet well-intentioned reforms have made this problem worse. The sight of Britons stuffing Icelandic banks with sterling, safe in the knowledge that £35,000 of deposits were insured by the state, would have made Bagehot nervous. The fact that professional investors can lean on the state would have made him angry.

These five crises reveal where the titans of modern finance—the New York Stock Exchange, the Federal Reserve, Britain’s giant banks—come from. But they also highlight the way in which successive reforms have tended to insulate investors from risk, and thus offer lessons to regulators in the current post-crisis era.

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Capitalism is not perfect. But it's better than other systems

Capitalism lacks defenders these days, while protests against it have fresh vigour. A vocal coalition of critics, from Occupy Wall Street to Pope Francis, castigate global trade as being exploitative and people’s fixation on money as the “dung of the devil”.

Worries about the impact of economic inequality on social cohesion lend new urgency to moral questions about markets. But, as John Plender points out in his new book, “Capitalism”, discontents about its effects are as old as the world’s most powerful -ism itself. The pursuit of profit has been “unloved” since Socrates declared that “The more [men] think of making a fortune, the less they think of virtue.” Anti-business sentiment characterises the lampooning of Trimalchio’s feast in Petronius’s “Satyricon”, and persists through Molière’s miserly 17th-century lucre-seekers to the portrayals by Charles Dickens and Emile Zola of dreadful 19th-century bosses and the modern incarnation of greed on the screen, Gordon Gekko in “Wall Street”.

Mr Plender, who once worked for The Economist, is a columnist with the Financial Times. He has written incisively for decades on the excitements, oddities and disasters of financial markets. He approaches the quandaries of capitalism with a shrewd eye for detail. The reader discovers, for example, that Voltaire turned up at the court of Frederick the Great as a pet Enlightenment intellectual, only to run a bond-market scam that could have bankrupted the Prussian exchequer. In the mid-1980s Japanese fund managers visited the shrine of Madame Nui, a restaurateur whose porcelain toad delivered tips on stocks—for a while successfully, acquiring its own portfolio worth $10 billion—until they collapsed when the Japanese bubble burst in 1990. If free markets emerge from this survey as dynamic, their claim to be rational is suspect indeed.

But Mr Plender is wise enough to realise that for all its faults, capitalism has raised the living standards of billions of people since the 18th century and improved their life expectancy. The rapid improvement in the growth rates of China and India in recent decades as they headed (albeit not entirely) in a capitalist direction are further signs of the system’s vitality, as is the contrast between capitalist South Korea and the communist North.

The revival of anti-capitalist rhetoric owes much to the financial crisis of 2008 and its aftermath. The crisis was merely the latest example of the inherent stability of capitalism, a process that, while allowing the economy to benefit from “creative destruction”, causes a lot of collateral damage along the way. The real problem is that capitalism has become associated with high finance, rather than the heroic entrepreneurship of Thomas Edison, whose inventions still surround us. It is not just that few people can see the benefits of complex financial products like credit default swaps. He adds that “bankers have undoubtedly done their best to give capitalism a bad name. The extraordinary scale on which big banks have been rigging interest rates and foreign-exchange markets and ripping off their customers is almost beyond comprehension.”

Mr Plender fears that another great financial crisis is inevitable—international banks are bigger and more interconnected than ever. But he also thinks that the world will muddle through; capitalism will adapt as it has so often in the past. In conclusion, he echoes Churchill’s words on democracy “capitalism is the worst form of economic management, except for all those other forms that have been tried from time to time.”

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‘Nigeria, others need high tech mobile infrastructure to boost growth’

INCREASED investments in relevant new technologies like mobile, cloud and big data analytics that offer advance solutions and services are essential for Nigeria and other West African countries socio-economic development.
  
In all sectors of the regional economy, these advanceFMDQ OTC PLC has announced the firm’s plan to integrate the FMDQ Bloomberg E-bond system to the CBN’s S4 system.

This, according to the Divisional Head, Operations & Technology,Dipo Odeyemi would facilitate straight-through-processing of transactions on the platform.

Besides,he noted that plans are underway to ensure the listing of all bonds on FMDQ’s platform as a choice platform given the value-adds on the securities exchange, introduction of fixed income specialists to provide liquidity to non-FGN bonds technologies allow economies and companies to ensure the integrity of their data assets, providing them with hitherto unseen levels of data mining capabilities, which allow them to derive fresh insights and business intelligence from these data.

These points were made by the Country General Manager for IBM, West Africa, Taiwo Otiti, on the sidelines of the HR Leaders Africa Summit held in Lagos at the weekend.

He noted that the adoption of mobile and other technologies are one area public and private sector organizations need to look at with a view to injecting efficiency and new performance levels in their operations, adding “for African countries, new technologies allow the continent’s businesses and people to leapfrog through development stages/phases.”

He buttressed this point by referring to Nigeria’s adoption of mobile technology over the last 12 years which has become a showcase of how well technology can help transform economies.
  
Recalled that the Nigerian environment struggled with barely 500,000 telephone lines as at the end of 2001, today, its fast adoption of modern cellular and other wireless technologies, the country boasts the largest online market for apparel and footwear in Africa, which is expected to grow from $104 million in 2014 to $1billion in 2019, according to Euromonitor International Data.

Only last week, Nigeria’s National Bureau of Statistics has put the subscriber base of the mobile telecommunications sector at 143.05 million as of the end of the first quarter of 2015. But as at May, the country, which has 104 per cent teledensity, now has 145 million connected telephone lines.
  
According to Otti, as the leading regional economy, the continuous advancement of enterprises in the nation’s public and private sector was crucial for growth. He explained that IBM is helping African businesses, governments, NGOs and innovators recognize the power of big data and the unique opportunities before them to leap-frog their counterparts from more developed nations.
  
In Ghana, the mobile market also continues to witness gradual progression notwithstanding the slow pace of macroeconomic growth.  A recent study, “The Mobile Africa 2015” report, conducted by mobile surveying company GeoPoll and World Wide Worx, has shown that 51 per cent of Ghanaians with mobile phones now use them to access the Internet.

Otiti said that mobile technology has been adjudged to be the most powerful communications platform throughout the Middle East

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Asian shares slip on weak data, dollar strong

Asian shares edged lower on Thursday as mixed regional data and overnight declines on Wall Street prompted investors to take profits, while the dollar held steady as expectations for a rise in U.S. interest rates were strengthened by buoyant home sales.

Financial spreadbetters expected Britain's FTSE 100 (.FTSE) to open around 0.4 percent higher, Germany's DAX (.GDAXI) 0.3 percent higher, and France's CAC 40 (.FCHI) to open around 0.4 percent.

South Korea's economy recorded its weakest expansion in six years in the second quarter, battered by a deadly virus outbreak and poor exports, while Japan reported strengthening export growth in June but concern remained over how shipments to China might be affected by its slowing economy.

The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.2 percent but was holding well above a near 1-1/2 year low hit on July 8.

Tokyo's Nikkei (.N225) rose 0.4 percent, helped by a weaker yen, while Australian shares (.AXJO) were off 0.2 percent.

Capital flow trends suggest money managers are slowly turning more bullish towards the region's growth prospects within the broader emerging market bloc.

Equity and bond inflows turned positive for the week of July 15 in Asia while Latin America posted yet another week of redemptions from both these asset classes, according to EPFR data compiled by BNP Paribas.

"Asia remains one of the bright spots in the global economy with China and India remaining committed to a broader economic reforms agenda," said Kenneth Akintewe, a portfolio manager at Aberdeen Asset Management, which has $490.8 billion in assets under management globally.

China stocks extended their recovery on Thursday from last month's collapse, with the Shanghai Composite index (.SSEC) set to rise for a sixth consecutive session, led by gains in blue chips. The Hong Kong market (.HSI) also advanced.

Stock markets were subdued by disappointing earnings from global tech giants, led by Apple (AAPL.O) whose shares plunged overnight, a day after the iPhone maker gave a fourth quarter revenue forecast that was below market expectations.

Microsoft (MSFT.O) also slumped after reporting its biggest quarterly loss.

In currencies, the dollar nudged up 0.1 percent to 124.05 yen JPY= after rebounding overnight from a low of 123.27 thanks to a rise in U.S. home sales to a 8-1/2 year peak.

The euro was little changed at $1.09360 EUR= after coming off an overnight peak of $1.0966.

Weaker commodity prices also supported a mild rebound in the dollar. Brent crude prices extended their decline after losing 1.6 percent LCOc1 on Wednesday after data showed U.S. crude inventories rose last week, while spot gold XAU= slid to a five-year low on the dollar's bounce. [O/R] [GOL/]

"Sentiment towards commodities as a whole has been plummeting as the Fed lift-off timeline narrows and the drive to the dollar returns after six weeks of macro turmoil," Evan Lucas, market strategist at IG in Melbourne, wrote.

The drop in commodity prices has hurt commodity currencies such as the Canadian dollar, which held near a six-year low of C$1.3053 CAD=D4 against the U.S. dollar overnight.

The Canadian dollar and other commodity currencies could weaken even more if the U.S. Federal Reserve begins hiking interest rates as early as September.

The New Zealand dollar, which also probed multi-year lows recently against the U.S. currency, fared a little better after the Reserve Bank of New Zealand delivered a smaller interest rate cut than some in the market had expected and softened its rhetoric on the kiwi following its recent, dramatic fall.

The kiwi NZD=D4 firmed as high as $0.6654, recovering from a six-year trough of $0.6498 hit last week.

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