STL TRUSTEES CAPITAL MARKET & MONEY MARKET NEWS RECAP

While you were away!

FG DEPLOYS PROCEEDS OF SECOND SOVEREIGN SUKUK IJARAH ISSUANCE

At a brief ceremony in Abuja on Thursday 10^th January 2019, the Minister for Finance, Mrs. Zainab Ahmed, formally handed over the N100 billion generated from the Sukuk Ijarah issued by the Federal Government in December 2018.

During the ceremony which was witnessed by the relevant officials of the Federal Government and representatives of the professional parties to the Issuance (STL Trustees Inclusive), the Finance Minister presented a symbolic cheque of the proceeds of the Sukuk Issuance  (N100 billion) to the Minister for Power, Works and Housing Mr. Babatunde Raji Fashola SAN.

The fund, according to the Minister for Finance, will be used for the Construction and Rehabilitation of 28 key economic Road Projects earlier captured in the 2018 Budget. The Road Projects are located in the 6 Geo-political Zones of the country with each Zone having a total allocation of N16.67 billion.

The Finance Minister added that the funds will be released to the Federal Ministry of Power, Works and Housing based on the framework agreed with the Joint Trustees to the Issue in order to ensure transparency and accountability in the use of proceeds.

The Sukuk Ijarah issued December 2018, became the second Sukuk Issuance by the Federal Government and the third issued in the country. Recall that  Osun state, in 2013, issued a N11.4 billion Sukuk Ijarah, while the Federal Government had in September 2017, issued the first Sovereign Sukuk of N100 billion.  STL Trustees is proud to be acting as Joint Trustee on all Three of the Sukuk Issuances.

FEDERAL GOVERNMENT ISSUES JANUARY  2019 SAVINGS BOND

The Federal Government of Nigeria (FGN) has offered for subscription the FGN Savings Bond on the 7^th of January 2019 which is slated to close today January 11, 2019.

The details of the offer are as specified below;

Summary of January 2019 Offer

2-Year FGN Savings Bond due January 16, 2021: 12.125%

3-Year FGN Savings Bond due January 16, 2022: 13.125%

Opening Date: January 7, 2019

Closing Date: January 11, 2019

Settlement Date: January 16, 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, specifically: April 16, July 16, October 16, January 16

REDEMPTION: Bullet repayment on the maturity date.

Status

1. Qualifies as securities in which trustees can invest under the Trustee Investment Act.
2. Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors.
3. Listed on The Nigerian Stock Exchange.
4. Qualifies as a liquid asset for liquidity ratio calculation for banks.

Security

Backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

Interested investors should contact the stockbroking firms appointed as distribution agents by the debt management office.

SEC ISSUES DIRECTIVES FOR REGISTRARS TO GIVE PERIODIC REPORTS ON PROGRESS OF E -DIVIDEND PROGRESS

In an effort to ensure that more investors keyed into the e-dividend initiative and also make the registration more seamless, the Securities and Exchange Commission, SEC, has directed Registrars to provide a periodic update on investors’ e-dividend registration status. It has been reported that as at date, 2.5 million accounts have been registered for e-dividend since the commencement of the initiative, while the level of the unclaimed dividend has been reduced to N100 billion. There are further reports that the exercise has however been inundated by complaints with some investors saying that registrars are deliberately frustrating the adoption.

In response to the complaints of delays, Henry Rowlands, Acting Head, Corporate Services, SEC, said that as long as investors are finding it difficult to key into the programme, the scheme could not be said to be satisfactory. He said that following its feedback programme and investigation, the Commission has mandated registrars to provide periodic feedback on the list of mandated accounts and challenges they are having.

According to Henry Rowlands: “The SEC as part of its feedback programme has noticed that a lot of people have a similar problem. We have investigated and out of inquisitiveness, the Director General directed that a meeting be held with registrars very recently where we discussed this matter. Part of the mechanism that SEC devised is that we requested the registrars to give us periodic feed-back on the list of mandated accounts and challenges they are having. So, we are going to implement the feedback as a measurement for impact assessment we are commencing.”

He enjoined investors to reach out to the Commission with any complaint they have concerning the e-dividend mandate, assuring that SEC would take it up with the affected registrar. He assured that the Commission has a dedicated department charged with the responsibility to investigate complaints received and attend to the issues raised accordingly.

DOLLAR EXCHANGE RATE REPORT 1^ST JANUARY TO 11^TH JANUARY  2019

This report is a compilation of the dollar exchange rate at the official and parallel market from 1^st January to the 11^th January 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.