STL TRUSTEES CAPITAL MARKET & MONEY MARKET NEWS RECAP

While you were away!

SEC WARNS AGAINST LATEST PONZI SCHEME LOOM NIGERIA

At a recent joint press conference in Abuja with the Federal Minister of Finance, Mary Uduk, the Acting Director General of the Securities and Exchange Commission (SEC), has warned Nigerians against the activities of the promoters behind the latest Ponzi scheme in the country — Loom Money Nigeria.

Loom’s Modus Operandi: According to Uduk who was represented by SEC‘s Acting Executive Commissioner of Operations, Isyaku Tilde, the promoters carry out their illegitimate business activities via social media platforms such as Facebook. They target young Nigerians, luring them to invest as low as N1000 and N13,000 to get as much as 8 times the value of the investment in 48 hours.

According to the Acting DG, Loom Money Nigeria had no tangible business model. She then described the digital venture as a Ponzi scheme, where returns would be paid from other people’s invested funds.

“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’. the platform has embarked on an aggressive online media campaign on Facebook and WhatsApp to lure the investing public to participate by joining various loom WhatsApp groups to invest as low as N1000 and N13,000 and get as much as 8 times the value of the investment in 48 hours.

“Unlike MMM that had a website and the promoter known, the people promoting loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and WhatsApp. if it were a local Ponzi scheme with known offices, it would be very easy for the commission to seal their offices and freeze their accounts.

We, therefore, wish to notify the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi Scheme, where returns are paid from other people’s invested sum. also, its operation is not registered by the commission.”

According to the Director General of the DMO Patience Oniha, “June was when the budget was approved and Sukuk is a project that was also approved in the budget. We will float it; we have made significant progress; we will issue it this year.”

FGN OFFERS N100 BILLION BOND IN MAY 2019

The Debt Management Office (DMO), has in a circular made available to the public on Tuesday 14^th May 2019, disclosed that it has been authorized to receive applications for the Federal Government of Nigeria’s fresh N100 billion worth of bonds.

According to the DMO, the bonds would be auctioned on Wednesday, May 22, 2019, with the settlement date being Friday, May 24, 2019.

Summary of the Offer

5-Year ₦35,000,000,000 FGN Savings Bond due April 2024: 12.75%

10-Year ₦35,000,000,000 FGN Savings Bond due April 2029: 14.55%

30-Year ₦35,000,000,000 FGN Savings Bond due April 2049: 14.80%

Opening Date: May 22, 2019

Settlement Date: May 24, 2019

ISSUER: Federal Government of Nigeria (“FGN”)

UNITS OF SALE: N1,000 per unit subject to a minimum Subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000.

INTEREST PAYMENT: Payable Quarterly

REDEMPTION: Bullet repayment on the maturity date.

The bonds is to be listed on the Nigerian Stock Exchange (NSE) and would qualify as a liquid asset for liquidity ratio calculation for banks.

Meanwhile, the debut 30-year FGN bond was oversubscribed at the April auction, which held on Wednesday, April 24, 2019. A total subscription of N80.41 billion was received from investors for the N20 billion offered by the DMO, representing a 400% subscription rate. 

FIXED INCOME AND MONEY MARKET PERFORMANCE RECAP MONDAY 6^TH TO FRIDAY 10^TH MAY 2019

Money Market: The money market rate increased last week as the Overnight rate (OVN) and Open Buy Back (OBB) rose to 10.00% and 9.14% from 5.93% and 5.29%, respectively. Consequently, the average money market rate increased by 3.96% to settle at 9.57% due to outflow seen on Monday which caused the money market rate to grow significantly.

The System Liquidity is estimated to have increased to close at cN590bn from cN250bn from the previous week. Major Inflow for the week included: OMO Maturity of cN151bn, CBN retail refund of cN250bn, and inflow from CBN discounted promissory note.

Major outflow for the week, on the other hand, included: Weekly Wholesale, Invisible, and SME FX auction of $210m, OMO Sales of c N456.38 (c N312.38bn on Monday and c N144bn on Thursday).

Source: FMDQ OTC

Fixed Income

Bond: FGN: The Bond Market closed on a bullish note last week as average yields fell by 12bps to close the week at 14.06%, following the news of re-appointment of the CBN Governor for another five-year term.

Yield across all maturities fell with the exception of the longest tenor bond (2049) which rose by 3bps. Notable last week were the activities on 2023, 2034 and 2027 bonds, with yield declining by 62bps, 41bps, and 32bps respectively.

SECONDARY MARKET REPORT

Source: FMDQ OTC

Treasury Bills: The secondary treasury bills market closed on a bullish note last week due to relatively buoyant liquidity. The average yield fell by 21bps to close at 12.91% from 13.13% in the previous week.

During the week, the CBN renewed its liquidity mopping activities with spot rate on issued OMO falling across tenors.

SECONDARY MARKET REPORT

Source: FMDQ OTC

DOLLAR EXCHANGE RATE REPORT 06^TH MAY TO 17^TH MAY 2019

This report is a compilation of the dollar exchange rate at the official and parallel market from the 06^th of May to the 17^th of May 2019.  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.