34
Monday 03 August 2020
BUSINESS DAY
news
T-Bill rates rise first time in 8 weeks as investors place N265bn in successful bids Endurance Okafor
F
ixed-income investors seeking high-yielding securities in the light of the prevailing developments in the markets were not disappointed, as attempts to buy the Federal Government short-term debt instruments at attractive rates were accepted. The 364-day bill saw an increase by 5 basis points from 3.3 percent to 3.40 percent at the Nigerian Treasury Bills (T-Bills) auction conducted Wednesday, July 29, by the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria, as investors bid at rates as high as 12 percent. Although marginal, the increase in the 364-day bill for July 27, 2020, is the first since the last higher stop rate was recorded some two months ago. According to market analysts, fixed income investors are being cautious not to invest at a lower rate despite the limited investment options. “Though the increase is marginal,” Ayodeji Ebo, MD, Afrinvest Securities Limited said “investors are being mind-
ful of interest rate and as a result, “they didn’t submit at a significantly lower rate compared to the last auction.” While investors were able to place N265.95 billion (the exact amount the CBN offered to raise from the auction) in successful bids, N200.75 billion were unsuccessful, a pointer that there is still high liquidity in the market amid lack of high yielding investment instruments. A breakdown of the auction result seen by BusinessDay shows that stop rates on the shorter 92-day and 282-day bills dipped to 1.2 percent, and 1.5 percent, respectively. This is compared to the 1.3 percent and 1.8 percent reported in the previous auction. Meanwhile, investors were requesting for as much as 3 to 9 percent for the short term papers. While investors jostled for the N265.95 billion the CBN sought to raise at the auction with N468.27 billion, a breakdown of the result reveals that the CBN sold N49.84 billion worth of bills for the 91-day paper. The short term instrument was subscribed by N94.39 billion, N44.55 billion more than
what the apex bank offered. N54.59 billion worth of bills were allotted on the 182-day paper. Investors were, however, willing to offer N156.79 billion, almost three times what the CBN raised, considering they oversubscribed by N102.2 billion. Bills valued at N161.52 billion were sold on the 364-day paper but investors were willing to subscribe to the bill with N215.52 billion, N54 billion higher than the CBN’s offer. According to market analysts, Nigeria’s low yield environment which is further worsened by the country’s high inflation rate is a key driver of the high liquidity rate in the financial system of Africa’s largest economy. While interest rates in Nigeria have always been high due to the monetary system in vogue since 2009 which sought to use FGN bonds/Tbills and OMO bills as a means of attracting US dollars into the country to stabilise the naira, the recent OMO policy by the central bank which prevents domestic investors from participating in the auction is the key driver of the recent lowinterest rates.
Quantum Travels begins private charter evacuation flights to London, Lagos IFEOMA OKEKE
Q
uantum Travels, one of Nigeria’s leading travel management companies has launched private charter evacuation flights from London to Lagos and Lagos to London. The charter flight which costs $3,500 will be operated once a week. With the current exchange rate of N386
to a dollar, passengers will be paying N1.35million for this charter evacuation flight. However, BusinessDay checks show that airlines are charging $2,000 for evacuation flights. With the current exchange rate of N386 to a dollar, passengers have had to pay N772,000 for a one-way evacuation flight. A source at Quantum Travels told BusinessDay
that the reason for the relatively high cost is because it is a business class flight with a maximum of 30 persons on board. The source disclosed that the flight which is strictly for citizens and resident permit holders will be operated once in a week. Passengers are required to get Covid-19 negative tests to get on the flight.
United Way, 3M Nigeria rally support for communities impacted by COVID-19 Odinaka Anudu
S
cience-based technology company 3M Nigeria has partnered a non-profit organisation United Way Worldwide (UW) to support relief projects to help communities hard hit by Covid-19 across Europe, Middle East and Africa (EMEA). United Way Greater Nigeria, the local UW organisation, is working with 3M Nigeria to implement a $160,009 Covid-19 relief programme to support 10,000 beneficiaries in communities in the five administrative zones in Lagos State that have been identified as high-risk areas. This includes support in the form of food distribution and packaging in collaboration with local partners, including the government, NGOs and religious organisations. Nigeria is one of twelve countries across EMEA receiving a share of a 3M Nigeria grant totalling $1.875 million, which is being directed to projects
supporting nutrition, mental and physical health, education and Covid-19 awareness, according to the most pressing local needs and country status on the pandemic. “It’s important that 3M holds true to its core values during this pandemic by supporting our communities and improving lives” said Robert Nichols, managing director of 3M Middle East Africa. “The projects with United Way form part of a $20 million commitment made by 3M at a corporate level to support Covid-19 relief projects globally, and we’re grateful that some of this funding is helping vulnerable communities in Nigeria to receive support during these exceptional times.” United Way Worldwide has been helping communities in need for more than 130 years, but the scale of the Covid-19 crisis and its far-reaching impact on people’s health, social mobility, income and job security – factors that are essential to wellbeing www.businessday.ng
have posed new challenges. “We’re pleased to see how 3M is stepping up in helping the people in the Nigerian communities who support the most vulnerable that have been impacted by the pandemic,” Janet Butler, vice president, United Way African Region. “Together, we can make a real difference to people’s quality of life as we navigate through the coronavirus pandemic.” Lanre Towry-Coker, chairman, board of trustees, United Way Greater Nigeria, said although lockdown had been eased in major parts of the country, the United Way Greater Nigeria understood that there was an ongoing need for basic essentials in vulnerable households. “The team is working tirelessly to reach these households in these trying times. The financial support of organisations such as 3M helps us to achieve our goals to alleviate the burden brought about by the novel coronavirus,” TowryCoker said. https://www.facebook.com/businessdayng
@Businessdayng