Economy

Debt: FG cuts Treasury bills issuance by N1.27tn

Avatar
Written by Maritime First

…As Investors snub oil, bank stocks, others***

As part of efforts to manage its debt profile, the Federal Government reduced the total Nigerian Treasury bills issued and allotted by N1.27bn in June this year to N1.65tn from N2.92tn in the same period of 2017, according to figures obtained from the Central Bank of Nigeria.

The CBN said, “The total NTBs issued and allotted was N1.65tn apiece, indicating a decrease of N1.27tn or 43.56 per cent below N2.92tn apiece in the corresponding period of 2017.

“The decrease was in line with Nigeria’s medium-term debt management strategy, attributable to reduced volume of NTB issues and the redemption of NTBs worth N638.90bn in favour of foreign issues.”

It added that the total public subscription stood at N3.22tn, compared to N3.96tn in the corresponding period of 2017.

The structure of holdings indicated that Deposit Money Banks, including foreign investors, took up N920.07bn or 55.65 per cent; mandate and internal funds customers (including CBN branches) N692.61bn or 41.89 per cent, and merchant banks N40.69bn or 2.46 per cent.

The successful bid rates in the market ranged from 10 per cent to 12.55 per cent for the 91-day, 10.30 per cent to 13.93 per cent for the 182-day and 10.70 per cent to 14.30 per cent for the 364-day tenors, the CBN added.

According to the apex bank’s half-year report, the lower rates experienced in the review period was due to smaller amount offered, fall in inflation rate, and competitive bids.

“The range of successful bid rates in the corresponding period of 2017 were between 13.40 and 14.00 per cent for the 91-day, 17.14 and 17.50 per cent for the 182-day and between 18.45 and 18.98 per cent for the 364-day tenors,” it added.

In the meantime, investors in the equities market have turned to insurance stocks as they snubbed those of oil, banks, consumer goods and industrial sector on Tuesday.

At the end of trading on the floor of the Nigerian Stock Exchange on Tuesday, the insurance index emerged the lone gainer, appreciating by 1.17 per cent, while all other indices depreciated, pegging the market breadth at 0.6x.

The All Share Index lost 1.14 per cent to close at 31,173.71 basis points, while the market capitalisation shed N132bn, dropping from N11.512tn recorded on Monday to N11.380tn on Tuesday.

The volume and value traded improved, advancing by 73.7 per cent and 41.9 per cent to 182.228 million units and N2.754bn, respectively, while the year-to-date loss settled at -18.5 per cent.

Performance across sectors was largely bearish as four of five indices depreciated.

The insurance index, which was the only gainer, witnessed a 1.17 per cent increase due to a price appreciation in Continental Reinsurance Plc.

On the flip side, the oil & gas index declined the most, losing 5.68 per cent.

Analysts at Afrinvest Securities Limited said the decline in the oil & gas index was because investors took arbitrage opportunities following a price discrepancy between listed prices on the NSE and the London Stock Exchange.

The banking index trailed, losing 1.65 per cent due to sell-offs in Guaranty Trust Bank Plc and Access Bank Plc.

The loss in the banking index is the second consecutive time this week, indicating investors’ loss of interest in bank stocks.

Similarly, the consumer and industrial goods indices shed 0.09 per cent and 0.93 per cent, respectively, on the back of losses in P Z Cussons Nigeria Plc, Flour Mills Nigeria Plc, Cement Company of Northern Nigeria Plc and Lafarge Africa Plc.

At the end of trading on the floor of the Exchange on Tuesday, 14 gainers emerged against 23 decliners.

The top traded stocks by volume were Cement Company of Northern Nigeria (37.9 million units), Access Bank Plc (29.3 million units) and Transnational Corporation of Nigeria Plc (22.4 million units), while the top traded stocks by value were Cement Company of Northern Nigeria (N682.9m), Nestlé Nigeria Plc (N551.4m) and Nigerian Breweries Plc (N297.7m).

The top five losers were A.G. Leventis Nigeria Plc, Forte Oil Plc, P Z Cussons, Seplat Petroleum Development Company Plc and Prestige Assurance Plc.

A.G. Leventis saw its share price drop by 10 per cent to close at 27 kobo as its year-to-date return settled at -61.43 per cent.

Forte Oil’s share price declined by 9.90 per cent to close at N17.30, while its year-to-date return settled at -60.21 per cent.

P Z Cussons, whose year-to-date return settled at -48.79 per cent, saw its share price decline by 9.83 per cent to close at N10.55.

A 9.61 per cent decline was recorded in the share price of Seplat Petroleum as it closed at N590 per share, while its year-to-date return settled at -5.78 per cent.

Prestige Assurance’s share price, recording a 9.41 per cent decline, dropped to 77 kobo per share as its year-to-date return settled at +54 per cent.

The top five gainers were Beta Glass Plc, Continental Reinsurance, Cap Plc, Cadbury Nigeria Plc and Wema Bank Plc.

Analysts at Afrinvest said, “The significant sell offs in bellwethers observed on Tuesday presents bargain hunting opportunities for investors.

“Thus, we expect an uptick in market performance towards the end of the week.”

Punch

About the author

Avatar

Maritime First