THE NATION THURSDAY, JANUARY 3, 2013
55
MONEY LINK
‘SWF hurdles ’ll be resolved via compromise’
S
TATE governors’ opposition against the Sovereign Wealth Fund (SWF) will affect the amount of money needed for investment but there is high chances of reaching a compromise, FBN Capital, a research firm has said. The Nigerian Sovereign Investment Authority is due to start its investment programme in March, but the agency will
Stories by Collins Nweze
not have sizeable funds to invest until the state governors drop their opposition to the scheme. The legality of the SWF is still being challenged by different state governments across the country. The research firm said higher budget threshold would reduce the transfers to the SWF, adding that given
the porous nature of the account and the many obstacles to its expansion, there are legitimate concerns about the defences against an external shock and therefore called for sufficient buffers to be built. The $1 billion SWF was set up in May last year to invest savings made from the difference between budgeted oil prices and actual market prices. Nigeria depends on crude ex-
ports for more than 90 per cent of foreign income and about 80 per cent of government revenue, making it vulnerable to swings in prices. The wealth fund will help meet budget shortfalls in the future, provide dedicated funding for development of infrastructure and keep some savings for the future generation, according to the law establishing it.
Bond tab for biggest economies may decline $220b the country’s first international sale, which was 24 per cent oversubscribed. Bidding for financial, legal and debt arrangement services closes February 7, the Lusaka City Council said. Barclays Plc (BARC) and Deutsche Bank AG arranged the Eurobond sale. Nigeria’s Lagos state sold its biggest bond of N80 billion in November to fund infrastructure projects.
•Zambia joins Nigeria, South Africa in raising funds
T
HE world’s leading economies will have $220 billion less sovereign debt to refinance in 2013, cutting supply after every major government bond market rallied for the first time since the 2008 financial crisis. According to Bloomberg report, the amount of bills, notes and bonds coming due for the Group of Seven nations plus Brazil, Russia, India and China will drop to $7.38 trillion from $7.60 trillion in 2012. It said Japan, the United Kingdom, Germany, France, Italy and Brazil will see a decline, while the United States, Canada, Russia, India and China will face an increase. “While high debt loads are blamed for curbing global economic growth, bond investors are encouraged by signs that some nations are starting to rein in spending as they extend the average maturity of their obligations. Instead of rising, borrowing
costs are falling as supply decreases, inflation remains in check and central banks from the United States to Europe cut interest rates to record lows,” it said. Deutsche Bank expects German bonds to outperform French debt even as it forecasts German 10-year yields will probably reach 2.25 percent at the end of 2013, from 1.32 per cent at the end of December and compared with the average over the past five years of about 2.85 per cent. Meanwhile Lusaka, the Zambian capital, is seeking financial and legal advisers for its first municipal bond issuance. Africa’s biggest copper producer will join Nigeria and South Africa as the only countries on the continent to sell bonds to finance regional or sub-national projects, Bloomberg report has said. The municipality will use the proceeds to build 3,500 high- rise apartments, the Lusaka City Council said. The
council plans to raise $500 million from local and international investors through what will probably be a dollar- denominated bond sale, Zambia’s Deputy Finance Minister Miles Sampa said. The planned municipal debt follows Zambia’s $750 million Eurobond issue in September
F
IRST BANK of Nigeria Limited has announced the appointment of its Chief Financial Officer, Mr. Adebayo Adekola Adelabu to the Board as Executive Director. In a statement, the bank said the appointment of Mr. Adelabu, who will still retain his portfolio as the Chief Financial Officer, is expected to follow the statutory approval of the Central Bank of Nigeria (CBN). The choice of the new direc-
tor, according to the Group Managing Director, FirstBank, Mr. Bisi Onasanya is geared towards enhancing the capacity of the Executive Management and Board, by deepening specialisation and strengthening the corporate governance culture of the lender. A first Class accounting degree graduate from Obafemi Awolowo University, Ile Ife and an alumnus of global accounting firm, PricewaterhouseCoopers, Mr. Adelabu was formerly
Amount N
Rate %
M/Date
3-Year 5-Year 5-Year
35m 35m 35m
11.039 12.23 13.19
19-05-2014 18-05-2016 19-05-2016
Amount Amount Offered ($) Demanded ($) 350m 150m 350m 138m 350m 113m
Price Loss 2754.67 447.80
INTERBANK RATES 7.9-10% 10-11%
PRIMARY MARKET AUCTION (T-BILLS) Amount 30m 46.7m 50m
Rate % 10.96 9.62 12.34
Date 28-04-2012 “ 14-04-2012
GAINERS AS AT 2-1-13
SYMBOL SKYEBANK FCMB DIAMONDBNK PRESCO FBNH DANGSUGAR GUARANTY STERLNBANK CUSTODYINS VITAFOAM
O/PRICE 4.30 3.75 4.94 17.00 15.72 6.00 23.00 1.73 1.30 3.66
C/PRICE 4.73 4.10 5.40 18.50 17.10 6.43 24.60 1.85 1.39 3.84
CHANGE 0.43 0.35 0.46 1.50 1.38 0.43 1.60 0.12 0.09 0.18
JOHNHOLT MORISON PORTPAINT JOSBREW WEMABANK WAPCO ZENITHBANK ETI
O/PRICE 3.40 3.47 4.36 1.53 0.52 58.53 19.49 11.29
C/PRICE 3.23 3.30 4.15 1.46 0.51 57.50 19.40 11.25
NGN USD NGN GBP NGN EUR NIGERIA INTER BANK (S/N) (S/N) Bureau de Change (S/N) Parallel Market
Current Before
C u r r e n t CUV Start After %
147.6000 239.4810 212.4997
149.7100 244.0123 207.9023
150.7100 245.6422 209.2910
-2.11 -2.57 -1.51
149.7450
154.0000
154.3000
-3.04
152.0000
153.0000
155.5000
-2.30
153.0000
154.0000
156.0000
-1.96
DISCOUNT WINDOW Feb. ’11
July ’11
July ’12
MPR
6.50%
6.50%
12%
Standing Lending Rate ,, Deposit Rate ,, Liquidity Ratio Cash Return Rate Inflation Rate
8.50% 4.50% 25.00% 1.00% 12.10%
8.50% 4.50% 25.00% 2.00% 12.10%
9.50% 5.50% 30.00% 2.00% 11.8%
NIBOR Tenor 7 Days 30 Days 60 Days 150 Days
NSE CAP Index
27-10-11 N6.5236tr 20,607.37
Date 2-7-12 27-6-12 22-6-12
Rate (Previous) 4 Mar, 2012 9.0417 9.6667 11.2917 12.1250
Rate (Currency) 6, Mar, 2012 10.17% 11.46% 11.96% 12.54%
28-10-11 N6.617tr 20,903.16
% Change -1.44% -1.44%
MEMORANDUM QUOTATIONS Name
CHANGE 0.17 0.17 0.21 0.07 0.01 1.03 0.09 0.04
Exchange Rate (N) 155.2 155.8 155.7
CAPITAL MARKET INDEX Year Start Offer
LOSERS AS AT 2-1-13
SYMBOL
Amount Sold ($) 150m 138m 113m
EXHANGE RATE 6-03-12 Currency
Tenor 91-Day 182-Day 1-Year
•Adelabu
stint at Standard Chartered Bank between 2007 and 2009 as General Manager and the West African Regional Head of Finance and Strategy.
WHOLESALE DUTCH AUCTION SYSTEM
MANAGED FUNDS
OBB Rate Call Rate
the Group Financial Controller of the bank between 2009 and 2010 and the pioneer head of Business Performance Monitoring Department between 2005 and 2007. According to the statement, under his leadership, the existing performance management framework for the bank was set up while he was also credited with the successful execution of the bank’s medium term strategic plan. He also had a brief
DATA BANK
Tenor
NIDF NESF
money could take off within the year. It said the Petroleum Products Pricing Regulatory Authority plan to end all subsidy payments for petrol was a ground-breaking reform, which had defeated previous administrations, both civilian and military. “A familiar compromise was reached whereby the subsidy was maintained but on a higher retail price for petrol. Arguments in favour of the subsidy were, and remain unconvincing, the most risible being that it is somehow “pro-poor,” it said. The firm said Federal Government was unsuccessful at removing the subsidy because it lacks credibility with the broader population even as the reform was blocked by vested interests. These two constraints, it said, would continue to frustrate the reformers in 2013.
FirstBank strengthens board, appoints ED
FGN BONDS
Initial Current Quotation Price Market N8250.00 5495.33 N1000.00 N552.20
FBN Capital said that among ongoing reforms, the greatest mileage is in the power sector but there are compelling reasons to expect Nigeria to take some large steps forward. It said that inflation and interest rates are set to fall while the banks now have substantial lending capacity. The Monetary Policy Rate, the benchmark rate by which the Central Bank of Nigeria (CBN) determines interest rate, has remained at 12 per cent since October 2011 when it was increased from 9.25 representing 275 basis points raise. Besides, the CBN was advised to sustain its efforts at finding other innovative ways to unlock the credit market and stimulate the economy. FBN Capital said the apex bank has a proven formula to hold the naira exchange rate provided that the oil price remains stable even as it predicted that mobile
Offer Price
Bid Price
ARM AGGRESSIVE GROWTH 9.17 KAKAWA GUARANTEED 1.00 STANBIC IBTC GUARANTE 132.65 AFRINVEST W.A. EQUITY FUND 125.53 LOTUS CAPITAL HALAL 0.80 BGL SAPPHIRE FUND 1.13 BGL NUBIAN FUND 0.92 FBN MONEY MARKET FUND 100.00 FBN FIXED INCOME FUND 1,000.00 NIGERIA INTERNATIONAL DEB. 1,763.58 PARAMOUNT EQUITY FUND 11.31 CONTINENTAL UNIT TRUST 1.39 CENTRE-POINT UNIT TRUST 1.87 STANBIC IBTC NIG EQUITY 9,270.16 • ARM AGGRESSIVE • KAKAWA GUARANTEED • STANBIC IBTC GUARANTE • AFRINVEST W.A. EQUITY FUND
9.08 1.00 132.34 124.60 0.77 1.13 0.91 100.00 1,000.00 1,754.53 10.75 1.33 1.80 9,029.05
Movement
OPEN BUY BACK
Bank P/Court
Previous 04 July, 2012
Current 07, Aug, 2012
8.5000 8.0833
8.5000 8.0833
Movement