STL TRUSTEES CAPITAL MARKET & MONEY MARKET NEWS RECAP

While you were away!

CBN TO HOLD 3^RD MONETARY POLICY COMMITTEE (MPC) MEETING IN THE YEAR 2018

The Central Bank of Nigeria (CBN) has announced that the 3^rd bi-monthly MPC meeting for the year 2018 will be held in Abuja next week.

In a circular issued on the website of the apex bank, the meeting was scheduled as follows:

Venue: MPC Meeting Room, 11th Floor, Wing C, CBN Corporate Headquarters, Abuja.

Day 1: Monday, July 23, 2018 Time: 10:00 am

Day2: Tuesday, July 24, 2018 Time: 8:00 am.

It is worthy of note that this is the first MPC meeting that will be held after the 2018 budget was passed in June.

Financial experts had after the last meeting in May, expressed optimism that the MPC would review the interest rate at its subsequent meetings when the 2018 budget would have been passed.

Recall that the MPC had in May retained MPR at 14 percent, alongside all other policy parameters.

CBN INJECTS FRESH $210M INTO THE FOREX MARKET

The Central Bank of Nigeria (CBN) has, on Tuesday, July 17, 2018, injected the sum of $210 million into the inter-bank foreign exchange (forex) market.

The figures restated the determination of the CBN to continue to intervene in the interbank foreign exchange market, and this is in line with its pledge to sustain liquidity in the market and maintain stability. He also stated that the continued forex intervention was to ensure that customer’s requests in various sections of the market are being met.

The sum of $100 million was offered to cater for the requests of dealers who are authorised in the wholesale segment of the market, while the sum of $55 million was offered to cater to the needs of the Small and Medium Enterprises (SMEs), just as $55 million was also allocated for Invisibles such as tuition fees, medical payments, Basic Travel allowance (BTA), etc.

Meanwhile, the Naira continued its stability in the foreign exchange market, exchanging at an average of N360 per dollar in the Bureau De Change (BDC) segment of the market.

What this means

By pumping $210 million into the inter-bank forex market by the CBN, the Apex bank will increase the supply of Dollars to meet its corresponding demand in the market so as to sustain the value of Naira to the Dollar.

It is important for the apex bank to increase liquidity in the inter-bank market to meet the demand for Dollars in the inter-bank window in order to forestall any likely shortages which might lead to a currency depreciation and a widening of the gap between the parallel and inter-bank forex markets.

On February 20, 2016, the Central Bank of Nigeria issued a new forex policy on its website during the Forex crisis in the country. It was called the New Policy Actions in the Foreign Exchange Market.

CBN had introduced capital controls as a center piece of its currency policy, this policy made the value of the Naira to plummet by over 38% at the black market as at the time the policy was made. The capital controls were introduced as a way to limit the access to forex and, therefore, direct utilisation of forex to sectors that it referred to as ‘preferred’.

NIGERIAN T-BILLS AUCTION RESULT

The Central Bank of Nigeria (CBN) held its Treasury Bill (T-Bills) Primary Market Auction (PMA) on Wednesday 18^th July 2018. T-Bills worth N178.44 billion was offered, while a total of N174.39 billion was subscribed for the 91 days, 182 days and 364 days, which represents a 97.75% subscription rate.

The Table below provides the breakdown of the results:

C&I LEASING PLC ANNOUNCES BUY OUT OF JOINT VENTURE MINORITY SHAREHOLDER

C&I Leasing Plc has concluded the buyout of 27.5% minority stake in C&I Petrotech Marine Limited. This buyout makes C&I Petrotech Marine Limited a fully owned subsidiary of C&I Leasing Plc.

C&I Petrotech Marine Limited is a Joint Venture company with six vessels currently deployed to a long-term contract with Shell Petroleum Development Corporation (SPDC)

Managing Director of the company, Andrew Otike-Odibi noted that the buyout will further the company’s drive to restructure and re-position its marine business for enhanced profitability.

In its Q1 2018 financial statements for the period ended 31 March 2018, the company recorded gross earnings of N6.47 billion as compared to N6.097 billion for Q1 2017. Profit before Tax also grew from N305 million to N405 million

C&I Leasing group of companies is made up of three divisions, Fleet Management, Outsourcing, and Marine divisions and two subsidiaries in Leasafric, Ghana and EPIC International FZE, United Arab Emirates.

In June 2018, C&I Leasing Plc recorded a successful N7 billion bond issue which is the first in the series of a N20 billion bond issuance programme. STL Trustees Limited is proud to be a Joint Trustee to this Issuance.

MOODY’S PREDICTS ACCELERATION OF GREEN BOND ISSUANCES AS GOVERNMENTS SEEK TO PROMOTE SUSTAINABLE POLICIES

Moody’s Investors Service in a report published on Tuesday 10^th July 2018, stated that the pace of sovereign green bond issuance is set to accelerate as governments seek to promote sustainable policy agendas, encourage private capital into low-carbon and climate-resilient infrastructure, as well as signal their commitment to the Paris Agreement.

So far, seven sovereign issuers have issued green bonds, totaling the sum of $25.5 billion. The government of Poland announced the inaugural sovereign green bond issue in December 2016, and since then France, Fiji, Nigeria, Belgium, and Lithuania have all issued green bonds. The government of Indonesia unveiled the first sovereign green sukuk early this year.

Sovereigns tend to spend a higher proportion of proceeds on a range of clean projects, including clean transportation, waste management, and land use, whereas the broader green bond market is predominantly used to fund energy-related projects. As a consequence, green sovereign bonds enable investors to diversify their exposures.

Sovereign issuers are taking steps to ensure effective management of green bond proceeds, including enacting legislation to ring-fence funds, on-lending proceeds to public investment companies, and committing to independent audits by external parties.

In Nigeria, the Securities and Exchange Commission (SEC) is in the process of issuing guidelines that will facilitate the smooth issuance and operation of Green Bonds by other interested Stakeholders in the Country, after the Federal Government had successfully issued over N10 billion in its maiden Green Bond programme in 2017 to fund environmental friendly projects.

Moody’s has assigned Green Bond Assessments (GBAs) to four sovereign green bonds to date, including transactions from the governments of Poland, Nigeria and Lithuania and covering a total of $2.1 billion of assessed debt in US dollar equivalent terms.

 DOLLAR EXCHANGE RATE REPORT 9^TH JULY  TO 20^TH JULY  2018

This report is a compilation of the dollar exchange rate at the official and parallel market from the 9^th of July to the 20^th of July 2018.  The quoted parallel market prices are to serve as a guide to readers, as they represent the average price obtained daily from different black-market dealers in the Country.