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AMCON's N3.14tn bonds have refinancing risks - DMO Ad em tll;! Ala wiye

HE Deb! T N3 14m boocIs

N:an<tgl!ment

Office has sa d Ihi!ll the off....red by

the Asse1 !v.3fl~ent Corporation of Nigeria' 5 bonds. which wiD mature In 20 11 through 2m3. have

inherent refinallClI ~ risks. A report by the debt office on Wednesday al!o disclosed Ihllt an assessment 01 the redemption proIa.: indicated

!lUll th ere IVa:; a significant refinancing risk In the ovemJJ dllbt portfolio in 2iJI }. Refil1llncing nsJ._ a ccording to an online ne.llS media. Wilopedia. IS the poMIb.lity thai ill bonO\.~\~r Clmool refinance by ba;-rowing to repay Wsting ddT. The report. tiLkd. -Report 01 the Annual Na ional Debt

Sustllinabdity Analysis 20 11 ,SIllted tha t this was due to lhe significant size of short tenn domestic debt relative to the long term securities. add ing thai -the longer the matuTity structure of the debt instrumems. the Iov.-er the lefinallcing risk.The DMO. llov.-ever. sa.id It was fioe-tu ning a framel.'IOrk lor the Issuance of sovereign guarantee to corporate private sector to enable them to undertake the

development of co mmercially viable. naUonai priority projects in the cou ntry. and relieve the gD'>ernfllent of the need to borroo,\I to fund such

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Meanwhile, the DirectorGeneral. DMO, Mr. Abraham Nwanblo. said the DMO had mapped OUI SlrategK5 For small and medium enterprises operalors to be enlighlened abou t the opportuniUes that nOYol existed in the nat ion·s financial market lor them to

gain access 10 stable capital and generate long term capital for their bUSiness. Nwenkwo riald at a one· day workshop organised by DMO fOt" the SMEs operators in Lagos on Wednesday that the fundamental challenges facing entrepreneurs In Nigeria was limited rmancing and insufficient stable end long term ca.pltal lor operaton; to gfOYol their business. He said. "The traditional sources o f !:Jusiness finance in

Nigeria are largely restricted to personal savings and scare ban k credits. which in themselves. are inadequate for nurlUJing II stable enterprise. So any business Ihal IAlishes to glow requires a great deal of sta_ble enterprise and long

'''''' The DMO boss lamented that

the small and medium operators had faUen sholt of meeting their poten tial because 01 lack of debt management. business

A deruola A Iclwlye HE

Nlgli!na

In!iUTallCC

,hem He riaid Ihl" c)rporalion monitor Centage would achieve nent in Savings this regard in it: allO'o.>led commilment to ensuring stability in the lin..., :ial system and encouragirLg banking habit among Ihe pi. bile. Ibrahim added hal a total o f N 1.1 5bn was re.1i.sed from Ike- sale of ~ 0 Hallmark Savings which would be used to settle dep)$ tors of Ihe cw:qulred firm He noted Iha1 the corporation acted based on Us role as a ris.< minimiser with broader mlldate thllt included deposll !/UaranIH. banking SUpervislO 1 . distress resolution and banking liquidation Hallmark Homo:5 was a wholly owned 5ut:sidlaf}' of Hallmark Bank Pic The firm wes esmblished in 1995 es Qumtl!SSentla! Savings & Loanl Umi led. It c 13nged its Savings after its

Book

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AV ID Cameron is facing pre!.5Ure lrom senior conservatives 10 taU a le(et\1ndum ove r Europe if a treaty change is proposed at the ewmone crisis summit in Brussels Sky News reported London Mayor Boris Johnson as $lIying. ~ lf Brilain Willi asked to sign up to such a thing within the 27 (EU members), II v.rould be right for us to ve to it.. [f we felt unable to veto it, then certainly it should be put to a re fere ndum.Cabinet member Paterson. Ihe Northern IreJand Secretary, also threw weight behind the caU for a refeNndum, saying it would be an ~inevitable- result of proposals lor doser fiscal union in the eurozone. Cameron had sa.id he wo uld veto plans lor II new EU treaty unles.! European leaden agreed to a list of British demands.

US banks

Deposit

NITED States b<mks wan t regulators to give them more time to liquidate investmen ts In certain private equity funds under the Volcker ru le, arguing that withou t more leeway Ihey will have to hold "fire sales." Reuters reported that the Volcket rule. a part of Ihe 2010 Dodd-Frank financial O\o'eBight law thai tries to make the financial system safer. greetJy restricts the amount banks can inve5t In hedge and private equity funds . Banks already have been trying to shrink their private equity portfolios. But they fear certain funds with a longer time horizon, such as th~ tied to real estate. will lake longer than the general timeframe of five j.l'e3rs laid oul in the Voicker rule to seD the assets at decent prices.

U

( OI'pOfallOn

on Wednesday ,,",oded OVI!T Hallmam Homes Umiled 10 Centage Sa.vings mel Loans Umited as a going concern The exercise. ao:;cording to the Managirl!;! Dire-:lor. NDIC. fw1 r. UOlaru [branIff . \.\:111 allow the 1.630 depo;;ilors of the Hallmark Home:; Jenfy their deposits worth N"'S2m with the nev. ov.'I1et5hq; A statemen t m'K Ii! available to our co~do 'nt quoled ibrahim as SCl~i ng. ""'The twIndover of lhl" flJ n . marked amilestone In lhl"o mmitment of the rorpor;atiofl to ils core mandate of iepositors· protection and c l nlri buling to the siability of t~ .. financial system.He appealed to the I"TIl'onage ment of Cen tage Sallif1!J5 10 immediately reach ou t to thz customers of HaUmark Hom!S on the recommencemenl IIf excellent primary mortgage ;ervices to

Eurozone crisis

o...-en

NDIC hands over Hallmark Homes to Centage S avings

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Briefly

, these, Ogun Stale

Naira weakens against dollar at auction, inter-bank market Oke c hukwu Nn od lm wllh ag e ncy report

HE naira feU against the Uni ted States dollar at both the bi-v,"eekly Wholesale Dutch Auction Syslem and at the inter-bank market on Wednesday On the auction. the Central Bank 01 Nigeria sold $200m a l Nl56.70 to the

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dollar. shorl 01 the S245m demanded by dealers. The CBN maintained the same amounl. which It sold to traders al N l 56.50 to the dollar on ~10nday. Meanwhile. the local currency dosed at N 161.80 to the dollar at the interbank market, contrasting

wi th N161.5S at

Tuesda~"s

00... Hence, the local currency leU by O.2kobo and 0 25koOO atlhe epex bank's bi-weekly auction and at inter-bank malket. respectively. ~As you can see, the demand AI the official windou.ris not a true renecti on

Agric bank dedicates N2bn to MFB HE Bank 01 Agriculture has dedicated a N2bn loan for the refinancing of Micronnance Banks 10 improve the capacity 01 small-scale larmers and rural populace. A consultan t to IFAD. Dr OIU$egun Ogidan. made lhe an nouncement on Wednesday in Oweni in lin Interview wi th Ihe Ne>NS Agency o f Nigeria at the concludi ng session 01the 3rd FG/iFAD joint ~upervision mISSion He said the facility \\las part of efforts aimed at linking commercial and developmenl banks with MFBs and Mfu selected by RUFFIN for the programme. addi ng that modalities lor accessing the fund were being worked o ut by BOA. Ogidan added Ihat the fund was to enable the participating MFBs and Micro Anllnce InstitutIons

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to have access to direct fund fo r lending at a reduced rate o f seven digits. He said .. the RUFFIN programme was a imed at improving lICceSS of the rural poor 10 appropriate and sustainable rural financial services. The areas covered by the programme are North East: Adamawo ond Bauchi States: North-West. Katsina and Zamlara. Nor th -Central: Benue and Nassarawa: South·West. Lagos, and Oyo: South-Ea.sl Anambra and Imo. Others are South-South. Akwa loom and &10 Slales (South-South) The are to be complemented with three local government areas from each of the participating states Ogidan said the linkage had become imperative. beCliUse poor fu nding had been one of the major

factors militating 2Igamst proper implementation of the MF& activities. He said a 101 had been achieved by the programme in mentonng MFBs under the Rural Anance Institution Building Programme. Ogidan added lhat more than N 119 .2m had been provided for the village credit and saVIng5 groups in the 12 pll1licipaling states. He said , "RUFFIN has done a lot to improve the actIVities 01the MFBs. mostly in the areas of dalll caplure system of the mlO"o-finance opera lOrs and the inlegrity of data in the micro rmance industry The consultant noted that recent Tl!pon by CBN Ind icated thai more Ihan 75 per ce nt of the MFBs now rendered their returns on line. hoping thallhere would be 100 cent compliance

of what is happen ing in the economy. There is Laten t demand for the dolla r. which is putting pres.sure on the local cu rrency a l the inter· bank markel, - one dealer told Reulers. The agency reported traders as saying lhat C8N officials had continued to advise banks on the amount of dollars 10 be demanded a nd rate quoted 10 red uce plessure on Ihe bi-weekly auction. adding thai a separate inte rvention by the regulatory bank and dollar sales from a gas nrm all failed to meet the robust demand The Nigeria Uquefied Natural Gas limited sold unspecined amount of dou.,.rs 10 some lenders. while the CBN also interve ned at Ihe inler-bank marke t towards th e end of busine.ss, but the inputs were not enough to calm the market. -The market failed to react to Ihe inflows Irom the gas company and direct. sales to some banks by Ihe CBN beca use of strong demand 111 the market: another dealer said According to InIders. th l! naira will continue to depreciate in the near term unless there is II large dollar ln fiow Irom the oil companies or the apex bank increases the volume of direct sales to

Economic recovery I\. NASCENT

economic is under way in California. but the sta te still faces a long slog in TEbuilding payrolls slashed by re«:ssion, the mortgage aisis and turmoil in housing and financial markets. a report by the UCLA Anderson Forecast $lIid on Wedne:sda.y. Reuten reported that the report by the economic forecasting unit said payroll galns in September and October show a rebound has taken hold in the most populous Un ited States of America. stales, aIbeit a modest one. "The preliminary indication of a new recovery having begun in September yields a slightly more optimistic forecast," the report $lIid.

l""\recovery


THE PUNCH, 08 DECEMBER, 2011