- As Fed Govt raises $300m from Diaspora Bond
The All-Share Index of the Nigerian Stock Exchange (NSE) on Monday crossed 34,000 mark due to gain posted by Dangote Cement.
The index rose by 324.54 points or 0.96 per cent to close at 34,135.10 against 33,810.56 achieved on Friday.
In the same vein, the market capitalisation appreciated by N112 billion or 0.96 per cent to close at N11.803 trillion against N11.691 trillion recorded on Friday.
An analysis of the price movement table showed that Dangote Cement led the gainers’ table for the day with N5 to close at N210 per share.
Presco came second with a gain of N3.61 to close at N75.94 and International Breweries appreciated by N2.30 to close at N28.38 per share.
Stanbic IBTC increased by N1.45 to close at N32.45, while Ecobank Transnational grew by N1.02 to close at N15.35 per share.
Conversely, Mobil Oil recorded the highest price loss for the day, dropping by N13.20 to close at N250.90 per share.
CAP trailed with a loss of N3.60 to close at N34.20 and Forte Oil declined by N2.77 to close at N52.81 per share.
Zenith International Bank declined by 39k to close at N22.50, while Oando shed 34k to close at N8.02 per share.
Wema Bank emerged the most active in volume terms accounting for 62.90 million shares valued at N36.16 million.
GT Bank followed with an exchange of 50.45 million shares worth N1.81 billion, while Access Bank sold 34.49 million shares valued at N344.88 million.
In all, investors staked N5.68 billion on 482.52 million shares transacted in 5,771 deals in contrast with a turnover of 493.27 million shares worth N6.24 billion exchanged in 5,474 deals on Friday.
In the meantime, the Federal Government yesterday raised $300 million from its first Diaspora Bond issued in the International Capital Market. The fund was raised at the rate of 5.625 per cent for a tenor of five years, Debt Management Office (DMO) Director-General Abraham Nwankwo said.
He said the Diaspora Bond was targeted at Nigerians in the Diaspora to enable them contribute to national development. The bond, he said, was structured as a retail instrument to appeal to a wide base of investors, adding that it was offered through private banks and wealth managers, rather than the institutional investors that deal in large volume transactions.
“There was considerable interest from investors from all over the world, with the issuance attracting initial orders of about 190 per cent of the offered amount. Final subscriptions were about 130 per cent of offer at the final price for the transaction,” he said.
Nwankwo said the Diaspora bond had opened a new source of financing for projects for the country’s development. This new window, he said, would enhance the funding liquidity and flexibility of the economy, which are necessary characteristics as the country gathers momentum towards the attainment of advanced economy status.
The DMO boss said the bond issuance would attract foreign exchange into the country, serve as a viable way of diversifying government sources of funding, and a means of obtaining cheaper external financing.
It will equally open a new and parallel source of liquidity for the country in the commercial window of the International Capital Market relative to the Eurobond, since this will be targeting different classes of investors.
More than 50 per cent of the N2.21 trillion deficits in this year’s N7.44 trillion budget will be funded through external borrowing.
Finance Minister Mrs. Kemi Adeosun said Nigeria is the first African country to issue a bond targeted at retail investors in the United States, a market highly regulated by the United States Securities and Exchange Commission (US SEC). The only previous US SEC registration for an African country was targeted at institutional investors.
She said the issuance of a bond registered by the US SEC provides an opportunity to access a wide range of investors. In addition, Nigeria can now routinely access funds from private banks and wealth managers in the US and European markets: this opportunity is not available to other developing countries that have only issued Eurobonds. To have received the approval of the US SEC indicates that the highest level of transparency and accountability in the economic process has been attained.
She said the bond would impact the country’s credit, transparency and financial market development index rating. The Diaspora Bond is the first bond issued by an African sovereign registered with both the US SEC and the United Kingdom Listing Authority (UKLA) and targeted at retail investors.
“With the successful issuance of the debut Diaspora Bond, Nigeria will establish a programme for raising funds from Nigerians in Diaspora to provide an avenue for continuous participation in the development of the economy by Nigerians in Diaspora and other Friends of Nigeria,”she said.
In 2013, the country unveiled plans to sell diaspora bonds worth between $100 million and $300 million to Nigerians living abroad. But the government did not appoint a book runner to actualise the plan.
According to the bond issuance plan, a road show was led by Nwankwo. The DMO boss led the government’s delegation to the roadshow because the Finance minister stayed home to deal with the newly signed N7.44trillion 2017 budget. The budget was signed by Acting President Yemi Osinbajo on June 12.
Additional report from Nation