STL Trustees Capital Market & Money Market News Recap

While you were away!

SEC LAUNCHES CAPITAL MARKET DEVELOPMENT FUND

The Securities and Exchange Commission (SEC) on Monday 30^th October, 2017 launched the Nigerian Capital Market Development Fund (NCMDF), to provide funding for the Nigerian capital market’s developmental initiatives.

The new development fund is expected to spur growth of the capital market and the Nigerian economy. The NCMDF which is a company limited by Guarantee incorporated under the CAC Act, 1990, also had its Board inaugurated on the same day.

The Board, chaired by the Director General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo has the following people as members. The Executive Commissioner of the SEC;  Director, Home Finance (federal ministry of finance), Mrs. Olubunmi Siyanbola; Chairman, Association for the Advancement of the Rights of Nigerian shareholders, Dr. Faruk Umar and Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu. Others are: President/Chairman, Institute of Capital Market Registrars, Mr. Bayo Olugbemi; Ify Ajezie of Association of Stockbroking Houses of Nigeria and CEO, Afex Commodities Exchanges/Association of Securities Exchanges, Ayodeji Balogun.

During the event, the Board chairman Mr. Mounir Gwarzo said the Commission has provided the initial takeoff grant for the Fund but going forward the entire capital market community should come together to discuss details of how “we can all contribute to the continued funding for this critical market vehicle”.

The NCMDF, among other responsibilities is expected to initiate and carry out plans and programmes aimed at the development of the capital market, generate and provide funds for financing of market development programmes facilitate the introduction of new products aimed at deepening the market; and also undertake and sponsor research and scholarly projects aimed at advancing knowledge and understanding of the capital market.

FGN SAVINGS BOND GENERATES N6.7BN FROM INCEPTION TO DATE

Reports have shown that a total of N6.694 billion has been raised so far in the past eight months from the Federal Government Savings Bond which debuted in March this year to encourage increased participation of low and middle income earners in the bond market.

The October allotment figure shows that N389.19 million had been raised through the 12.059 % two year bond and 13.059% three year bond. This month’s subscription was the lowest so far.

There has been increased participation at the debt market as demand for Treasury Bills, FGN Bonds and the Savings bond increased relative to supply. A breakdown of the data provided by the Debt Management Office (DMO) showed that the initial auction of the Savings Bond still had the largest participation.

At the first auction in March, the DMO had raised N2.068 billion from the 13.01 per cent two year debt. By the April auction, it offered a three year debt with the yield on the two year paper lower than the previous auction.

It had raised N1.288 billion through the 12.794 % two year paper and 13.794% three year paper. In May it raised N791.15 billion with yields rising to 13.189 % for the two year paper and 14.189 % for the three year paper.

The yield remained the same in June but the amount raised dropped to N607.26 million. However an increased yield failed to spike interest in July as only N400.57 million was raised from the two and three year paper although the yield for the papers were raised to 13.386% and 14.836% respectively.

By August, investors’ interest in the savings bond increased along with the yield offered. The two year bond was offered at 13.535 % while the three year bond was offered at 14.535 per cent and the debt office was able to raise N738.14 million through the Savings Bond.

At the auction held last month, the DMO had raised N412.7 million from both the 13.817% two year paper and the 14.817% three year paper. The DMO has made its first repayment on the Savings Bond in the sum of N67.813 million.

CSCS INCREASES AUTOMATION, EFFICIENCIES WITH TCS BANCS, APOST TRADE SERVICE SOLUTION

The Central Securities Clearing System (CSCS) Plc recently announced in Lagos that it would increase automation and improve efficiencies in the Nigerian capital market with the deployment of TCS BaNCS, a world class multi-asset class solution for securities depository, clearing and settlement. The solution replaces the NASDAQ Equator which has been in use since inception of the company in 1997.

According to the Interim Chief Executive Officer of CSCS Mr. Bola Adeeko, the deployment is a demonstration of the CSCS’s commitment to bring excellent customer service delivery and efficiency to the Nigerian Capital Market.

While listing some of the opportunities available on the platform, Mr. Adeeko said that TCS BaNCS, as a market infrastructure, will drive Straight-Through Processing (STP) by providing the unique ability to support multiple markets and asset classes on the same platform. It will also support various types of account ownership structures such as Segregated Depository Account, Nominee/Special Purpose Vehicle Accounts and Custodian Accounts

NIGERIA CLIMBS UP ON THE WORLD BANK HIERARCHY ON EASE OF DOING BUSINESS

 The positive headline emerging from the World Bank Group’s Doing Business 2018 report is that Nigeria has climbed 24 places to number 145 out of 190 countries over the past year. For the first time Nigeria has joined the ranks of the top ten improvers, measured by the introduction of reforms to business regulations.

The rankings are published alongside a country’s distance to frontier score, which captures the gap between current performance for the set indicators and best practice for the same across all economies. Nigeria’s score of 52.03 was 3.85 points above the previous year’s. It therefore achieved an improvement in absolute terms and relative to other economies surveyed.

You would recall that President Muhammadu Buhari had in July 2016, set up the presidential enabling business environment council, with the mandate to enhance the Ease of Doing Business in Nigeria. The council which was chaired by the Vice-President Professor Yemi Osinbajo introduced certain reforms that has influenced the country’s growth in the hierarchy.

 DOLLAR EXCHANGE RATE REPORT 30^th   OCTOBER TO 2^nd   NOVEMBER, 2017

This report is a compilation of the dollar exchange rate at the official and parallel market from the 30^th of October to the 2^nd of November, 2017.  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.