By Olaitan Ibrahim
The federal government, through the Debt Management Office (DMO), will be auctioning Series 1 of its first ever domestic dollar bond worth $500 million today while the National Bureau of Statistics sets to release the foreign capital importation report for Q2.
*Monday, August 19, 2024:*
*DMO to auction N190 billion in FGN bonds*
The Debt Management Office will be issuing three tranches of FGN bonds worth N190 billion today.
The issuance includes the reopening of a five-year N70 billion bond alongside reopenings of seven- and nine-year bonds, each valued at N70 billion and N50 billion each.
At the last auction in July, DMO sold N378 billion across the three bonds offered, with the stop rates of the longest tenure at 20.45 percent.
Nigeria’s Debt Management Office (DMO) sold double the N100 billion offered on its longest offer (a nine-year bond) as investors locked in on a 21.98 percent yield at its auction today.
“The market is trying to look for a higher yield, ”Olaolu Boboye, lead economist at CardinalStone Securities Limited, said.
Preference was given to the long-dated tenor (new nine-year bond) selling N200.65 billion, 100 percent higher than offered with an oversubscription of N241.65 billion.
A total of N225.72 billion FGN bonds was sold at the auction today; the amount sold was less than the auctioned N300 billion FGN bonds across three tranches. It included a reopened nine-year bond and five and seven tenures at N100 billion each.
Yield on the long-dated instrument increased to 21.98 percent at today’s sales from 21.50 percent in the previous auction.
The stop rates of the five- and seven-year bonds also grew to 19.89 and 21.00 from 19.64 and 20.19 percent reported at the last auction, respectively.
This is marginally less than the stop rate on the one-year Treasury bill considered less risky than longer-dated bonds.
CardinalStone, in its midyear outlook, reported that fixed income yields are currently high and probably unsustainable and advised investors to invest in long-dated instruments.
“With improved production from the Dangote refinery, the world’s largest single-train facility, the price of diesel is expected to crash to about N900 per litre while long queues at filling stations are tapped to end.”
*$500 million FGN US dollar bond to be auctioned*
Nigeria is auctioning Series 1 of its first ever domestic dollar bond worth $500 million today.
The bond, unveiled Thursday through the Debt Management Office (DMO), will be accessible to a broad range of investors, with a minimum investment amount of $10,000, with additional investments allowed in increments of $1,000. This structure is intended to enable wider participation among investors both within Nigeria and the diaspora.
“This bond issuance is more than just a financial instrument; it is a strategic move to channel funds into sectors that will catalyse economic growth,” Wale Edun, minister of finance and coordinating minister of the economy, said at the roadshow in Lagos.
The bond issuance will be listed on platforms such as the Nigerian Exchange and FMDQ, making it accessible to a variety of investors. The principal will be repaid after five years, with interest payments made every six months. This structured repayment schedule is designed to provide confidence to investors.
*NBS to release diesel, petrol price watch:*
The National Bureau of Statistics will on Monday release the price watch for diesel and premium motor spirit (PMS).
The average retail price paid by consumers for petrol in June 2024 was N750.17, indicating a 37.44 percent increase when compared to the value recorded in June 2023 (N545.83).
Similarly, the average retail price of automotive gas oil (diesel) paid by consumers increased by 79.32 percent on a year-on-year basis to N1,462.98 per litre in June.
It rose from a lower cost of N815.83 per litre recorded in the corresponding month of last year (i.e., June 2023) to a higher cost of N1,462.98 per litre.
On a month-on-month basis, it grew by 4.20 percent from N1,403.96 in the preceding month of May 2024 to an average of N1,462.98 in June 2024.
With improved production from the Dangote refinery, the world’s largest single-train facility, the price of diesel is expected to crash to about N900 per litre while long queues at filling stations are tapped to end.
*Wednesday, August 21, 2024:*
*NBS to release selected food prices watch*
The National Bureau of Statistics is expected to release selected food prices for July on Wednesday.
Food inflation, a significant driver of overall inflation, declined to 39.53 percent in July, down from 40.87 percent in June—the first in nearly two years.
But even as food inflation decelerated month-on-month, it is still higher than 26.98 percent recorded last July.
“The rise in food inflation on a year-on-year basis was caused by increases in prices of the following items: Semovita, Yam Flour (Prepacked), Wheat Flour (Prepacked), etc. (Bread and Cereals Class), Yam, Irish Potatoes, Water Yam, etc.”
It, however, attributed the fall on a monthly basis to the decline in the rate of increase in the average prices of tin milk and baby powdered milk, fish, garri, akpu (fufu), etc.
*Friday, August 23, 2024:*
*NBS to publish Nigeria’s capital importation report*
The National Bureau of Statistics will release Nigeria’s capital importation report for the second quarter (Q2) of 2024 on Friday.
In the last quarter, total capital importation into Nigeria hit a four-year high of $3,376.01 billion, higher than $1,132.65 billion recorded in Q1 2023, indicating an increase of 198.06 percent.
In comparison to the preceding quarter, capital importation rose by 210.16 percent from $1,0088.48 billion in the last three months ending 2023.
“Portfolio Investment ranked top with US$2,075.59 billion, accounting for 61.48 percent, followed by Other Investment with US$1,181.25 million, accounting for 34.99 percent,” NBS data revealed.
It, however, stated that foreign direct investment recorded the least with $119.18 million (3.53 percent) of total capital importation into the country in the first three months of 2024.
Analysts expect an increase in capital importation for Q2 on the back of high interest rates and recent stability in the foreign exchange market.
*Naira to extend winning streak as dollar supply rises*
The Nigerian naira is poised to continue its recent gains on increased dollar supply.
The naira-dollar rate, which has been stable in recent times, is offering hope for the economy and businesses alike.
The naira last Thursday recorded a gain of 1.38 percent on the official foreign exchange (FX) market following increased dollar supply by market players.
The dollar was quoted at N1,564.48 compared to N1,586.04 quoted on Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ Securities Exchange Limited.
It was reported that the dollar supplied by willing buyers and willing sellers increased by 61.54 percent to $149.25 million on Thursday from $92.39 million recorded on Wednesday at NAFEM.
At the parallel market, also known as the black market, the naira gained N5 as the dollar closed at N1,595 compared to N1,600 closed on Wednesday.
Financial experts expect a continued trend in the gains seen so far as the central bank intervenes in the FX market and remains hawkish.