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DMO raises N4.9trn for Ways and Means, says domestic market major source of funding for FG

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The Debt Management Office (DMO) has, again, sought the support of primary dealer market makers (PDMM) to raise more financing for Nigeria’s domestic debt plan.

The DMO has an outstanding N1.5 trillion to raise from the Federal Government’s proposed N6 trillion bond having already raked in N4.5 trillion from previous issuances.

The director-general of the Debt Management Office (DMO), Patience Oniha, who led a team from the debt office for a meeting with the primary dealer market makers in Lagos on Monday, noted that the DMO had raised part of the finance for both the domestic debt and ways and means borrowing, which they intended to complete.

“We had a meeting earlier in the year where we talked about the DMO’s borrowing plan, which is the FGN’s borrowing plan, and we told you what we were doing from the budget because that’s the principal document for refinancing.

“Then, we discussed the Ways and Means borrowing and how to put that in order. At that time, the budget had N6 trillion of domestic borrowing, new borrowing, not refinancing. And then the ways and means at that time, there was N7.3 trillion that the National Assembly approved for securitisation,” she said.

“We’re happy that with your support for the new domestic borrowing in the 2024 budget, which was N6 trillion, we raised N4.5 trillion. So it’s not our money, you gave us money and we’d like to thank you.”

“For the ways and means, out of that N7.3 trillion that the National Assembly approved for securitisation, we have raised N4.905 trillion. So, there’s still a balance in both cases, but let’s see how the rest of the year goes,” Oniha stated.

At the April bond auction, the DMO offered N450 billion across three bonds: the April 2029 bond (Reopening, 5-year), the February 2031 bond (Reopening, 7-year), and the May 2033 bond (New, 9-year reopening).

“Although subscriptions totalled N551.33 billion, this was relatively low compared to previous months but still 22.52 percent higher than the offer. The subscription distribution was N100.57 billion for the 2029 bond, N76.88 billion for the 2031 bond, and N373.88 billion for the 2033 bond.

“Ultimately, the DMO sold N380.77 billion, 15.38 percent less than the total subscriptions. The stop rates decreased to 19.29 percent, 19.74 percent, and 19.89 percen, compared to 19.30 percent, 19.75 percent, and 20 percent in the previous auction,” Futureview Research analysts said in their May 20 note to investors.

Also at the meeting, Nadia Zakari, president of Financial Market Dealers Association, stated that their interactions with the DMO have been critical in making decisions that shape the country in the long term.

“As market operators, we act as financial intermediaries who interact with other market operators, investors, and their clients. I think it’s because of the size and importance of these interactive sections, that our business environment is ever-evolving, and constantly changing.

“These constant engagements are crucial as some of the interactions we’ve had as highlighted by the director-general have been critical in making decisions as we strategically plan for the rest of the year,” she stated.

United Capital research analysts said in their May 20 note, “This week, we expect mixed interest in FGN Bonds. The overall direction of the market will be dependent on the outcome of the MPC meeting.”

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Money market

Naira slumps marginally at official, parallel windows

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The naira slumped marginally against the United States dollar on Friday. Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) showed that the domestic currency traded at N1, 485.53/$1 on Friday.

At the end of trading today, the naira lost less than N1 against the dollar as against the N1,485.36/$1 it recorded on Thursday.

The intra-day high and low recorded during the day were N1, 505/$1 and N1, 401/$1 respectively, representing a very lean spread of N104\$1.

Similarly, the naira slumped against the dollar at the parallel section of the market to trade at N1,495/$1, as against the N1,490/$1 it traded the previous trading day.

However, the Nigerian currency appreciated slightly against the British Pound to trade at N1,890\£1 s against the previous trading day’s N1,900\£1. For several weeks consecutively, the Canadian dollar closed flat against the naira to trade at N1,200| CA$1.

The naira also lost N10 against the Euro to trade at N1,590/€1 as against the previous trading day’s N1,580/€1.

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CBN, OPS collaborate to boost Nigeria’s financial sector

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By Opeyemi Abdulsalam

The Central Bank of Nigeria (CBN) recently hosted a meeting with the Organised Private Sector (OPS) to discuss strategies for enhancing Nigeria’s financial sector.

The meeting aimed to improve monetary policy communication and guidance to boost Nigeria’s image in the global investment community.

CBN Governor, Mr. Olayemi Cardoso, emphasised the importance of private sector contributions to economic policy and pledged to establish a framework for collaboration and regular interactions with OPS leadership.

“The private sector is a critical engine of our economy. This meeting underscores our commitment to working collaboratively with stakeholders to create a more robust and investor-friendly financial environment,” Cardoso said.

The CBN presented an overview of the economy’s trajectory, highlighting the deceleration of inflation and expectations of moderation.

The Bank assured the private sector of its commitment to building trust, ensuring price stability, and implementing monetary policies to support economic growth and stability in foreign exchange rates.

The meeting also addressed concerns about macroeconomic risks, exchange rate volatility, and the need for development finance support.

The CBN and OPS agreed to work together to create a more robust and investor-friendly financial environment.

“We appreciate the CBN’s open dialogue and interest in ensuring the manufacturing industry and other organised private sectors are abreast of the bank’s policies,” said Otunba Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN).

The meeting demonstrated the CBN’s commitment to collaboration and its willingness to listen to the concerns of the private sector.

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Sterling Bank, SMEDAN partner on data platform, Databanc

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Sterling Bank and the Small and Medium Enterprises Development Agency of Nigeria have launched a platform called Databanc that provides data on businesses in Nigeria and N5bn worth of single-digit loan programmes.

A statement from the bank said that Databank provides insights which will be utilised by SMEDAN to deliver its mandate on policy formulation and a unique identification for small businesses and their promoters.

Speaking at the launch of the platform, the Executive Director of Commercial and Institutional Banking at Sterling Bank, Tunde Adeola, described the platform and fund as evidence of Sterling Bank’s commitment towards growing the real sector of the nation’s economy.

Adeola said, “We are delighted to bolster the backbone of our economy with SMEDAN. This initial fund of N5bn marks just the beginning of what has been and will continue to be a mainstay of our approach to funding businesses to grow at scale, and become the preferred financial partner for businesses, no matter their scale.”

He added that over 20,000 SMEs had enrolled on the Databanc platform, with over 80 beneficiaries of the single-digit loan programme and further disbursements ongoing.

He encouraged all MSMEs in the country to enrol on the platform.

SMEDAN’s Director-General, Mr Charles Odii, represented by the Director of Agribusiness Development and Access to Finance, Levi Anyikwa, highlighted the programme’s alignment with SMEDAN’s mission to democratise credit access for nano and micro-enterprises.

Anyikwa affirmed that access to finance remained a significant hurdle for SMEs, and restated SMEDAN’s commitment to removing that barrier.

The Head of SME Digital Products at Sterling Bank, Bolanle Tyson, emphasised Sterling Bank’s strategic focus on critical sectors encapsulated in the HEART of Sterling forward strategy: Health, Education, Agriculture, Renewable Energy, and Transportation.

She said, “We are leveraging data to empower SMEs like never before. Our commitment to SMEs is steadfast. We recognise their pivotal role in driving Nigeria’s GDP and employment. This partnership with SMEDAN underscores our shared dedication to their success.”

The latest study from Visa, the SME Megatrends report showed that SMEs in Nigeria remained heavily underserved and underbanked with a considerable amount of SMEs relying on personal loans and informal credit, as they face obstacles and requirements that make it difficult to secure loans from banks and other formal lending institutions.

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