The proposed issuance of FCMB N30 billion CP has been indefinitely suspended.
First City Monument Bank Limited, a subsidiary of the FCMB Group Plc, has announced the suspension in the issuance of its recently announced commercial paper worth N30 billion.
This is according to a disclosure signed by the Company’s secretary, Mrs. Olufunmilayo Adedibu, and sent to the Nigerian Stock Exchange market today.
READ: FCMB reduces interest on consumer loan products, offers customers opportunity to restructure tenure for repayment
Recall that FCMB had earlier announced its intentions to issue a fresh N30billion worth of commercial paper, as part of its N100 billion commercial paper issuance programme, as reported by Nairametrics.
Why the suspension?
According to the press release made available, Nairametrics gathered that the issuance was suspended due to the Nigerian Treasury Bills auction of December 9, 2020, which distorted price discovery.
What they are saying
A part of the recent press release reads:
“FCMB Group Plc (“FCMB”) hereby notifies the Nigerian Stock Exchange (“NSE”) and its esteemed shareholders that the proposed Commercial Paper Issuance (“CP”) by one of its subsidiaries, First City Monument Bank Limited (the “Bank”) has been suspended.”
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What you should know
According to investopedia, price discovery is the overall process, whether explicit or inferred, of setting the spot price or the proper price of an asset, security, commodity, or currency. The process of price discovery looks at a number of tangible and intangible factors, including supply and demand, investor risk attitudes, and the overall economic and geopolitical environment.
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Details of a new date for issuance and further corporate announcement as regards the subject matter will be duly communicated to our esteemed readers.
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RELATED TOPICS:FCMBFIRST CITY MONUMENT BANK LIMITED
Chidi EmenikeCLICK TO COMMENT
DEBT SECURITIESNegative interest rate continues to cause pain to money market funds
Money market funds, most of which invest in treasury bills are currently yielding near-zero rates.
Published 19 hours ago on December 14, 2020By Uche Ndimele
The N150.6 billion worth of Treasury bill offered by the Central Bank attracted stop rates of 0.02% for the 91-day treasury bill, 0.19% for the 182-day, and 0.15% for the 364-day treasury bills, in the most recent primary market auction conducted by the apex bank.
When one factors in inflation, the above translates into negative rates. In the same way, Money market funds, most of which invest in treasury bills are currently yielding near-zero rates. Arm money market fund has a yield of 1.2231%; Stanbic IBTC money market fund, 0.71%; FBN money market fund, 1.65%, amongst others.
This ultra-low interest rate is beginning to cause pain to Nigeria’s money market funds, the bedrock of the country’s mutual fund industry. Until recently, money market funds in Nigeria were not known to suffer significant redemptions or withdrawals. That privilege or accolade seems to be a thing of the past.
I reported last week that going by the NAV Summary report released by the Security and Exchange Commission, SEC, for the week ending on November 13th 2020, 4 major money market funds recorded redemptions totalling about N8 billion. That trend has continued into the week ending November 27th 2020.
Information gleaned or extracted from the November 20th NAV Summary Report indicates that 3 money market funds suffered a combined redemption of N12.9 billion between November 14th and 20th. To be precise, Stanbic IBTC money market fund saw N7.96 billion flowing out, FBN money market fund lost N2.96 billion to redemptions, and ARM money market fund lost N2.065 billion to redemptions as well.
In the week ended November 27th, 5 money market funds suffered huge redemptions as well. In all, the money market category of funds recorded total redemption of N16.488 billion in the week ended November 20th 2020 and N12.6 billion in the week ended November 27th, bringing the total redemptions suffered by money market funds to N54.5 billion since the beginning of November.
Net Zero Effect: Within the same period, Bond/fixed income funds recorded total inflows of N43.5 billion, which is an indication that much of the money that left money market funds are finding their way into fixed income and bond funds.
As long as this continues to happen, the net effect on the mutual fund industry will almost net out to zero and the state of the industry will remain strong.
We are watching.
CONTINUE READINGDEBT SECURITIESDMO offers N60 billion worth of FGN Bond for subscription in December 2020
DMO has offered for subscription Federal Government Bonds (FGN Bonds) valued at N60 billion.
Published 3 days ago on December 11, 2020By Chidi EmenikeDebt Management Office resumes FGN savings bond offer on August 10, Eurobonds, Patience Oniha, DMO, External debt servicing
The Federal Government of Nigeria, through the Debt Management Office (DMO) has offered for subscription Federal Government Bonds (FGN Bonds) valued at N60 billion in December 2020.
This is according to a notification released by the DMO and seen by Nairametrics. The latest offer comes in two tranches;
N30,000,000,000 – 12.50% FGN MAR 2035 (15-Yr Re-opening)
N30,000,000,000 – 9.80% FGN JUL 2045 (25-Yr Re-opening)
READ: Pension Fund Managers dump Nigerian Treasury Bills
Some other key highlights of the recent offer are:
UNITS OF SALE: N1, 000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.
Auction Date: December 16, 2020.
Settlement Date: December 18, 2020.
READ: Fashola to fix 44 roads across Nigeria with Sukuk funds
What you should know
Findings by Nairametrics revealed that the latest FGN Bond offer across two maturities is N20 billion less than the amount offered in the previous month (November 2020) at N80 billion, indicating a decline of 25% Month-on-Month.
FGN Bonds are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.
According to Investopedia, a bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments..
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CONTINUE READINGDEBT SECURITIESFirst City Monument Bank issues commercial paper worth N30 billion
FCMB has issued a fresh N30 billion worth of commercial paper, as part of its N100 billion CP issuance programme.
Published 3 days ago on December 11, 2020By Chidi EmenikeFCMB contact centre
First City Monument Bank has announced the issuance of a commercial paper worth N30 billion, as part of its efforts to generate additional source of short-term funds for the bank.
The disclosure was signed by FCMB Group’s secretary, Olufunmilayo Adedibu, and sent to the Nigerian Stock Exchange, as seen by Nairametrics.
The Commercial Paper (CP) has a tenor of 260 days and is part of a larger effort by the bank to raise a total of N100 billion through its CP issuance programme.
What they are saying
A part of the notification sent to NSE reads:
“FCMB Group Plc (“FCMB”) hereby notifies the Nigerian Stock Exchange (“NSE”) and its esteemed shareholders that one of its subsidiaries, First City Monument Bank Limited (the Bank) is undertaking a Commercial Paper Issuance (“CP”) under its N100 billion-naira CP programme.”
What you should know
FCMB had earlier in March 2020 issued a N20 billion worth of commercial paper as reported by Nairametrics. In lieu of this, the latest notice raises the total sum of Commercial Paper issuance by the bank to N50 billion, out of its benchmark target of N100 billion.
In a similar vein, Nairametrics also reported that Dangote Cement, MTN, Nigeria Breweries and 9 other firms raised a total sum of N478.4 billion from commercial paper issuance between January and September, 2020.
According to Investopedia, Commercial paper is a type of unsecured, short-term debt instrument, issued by corporations to meet its short-term liabilities. It is unsecured because it is usually not backed by any form of collateral.
Commercial papers are usually targeted at institutional investors, such as Pension Fund Administrators and non-pension asset managers. Some high net-worth investors are also eligible to apply.
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