29 Sep

Daily Watch – Naira finds new floor at ₦460/$, Ford calls quits on RT Briscoe

  • The CBN on Wednesday settled OTC FX futures contracts on the interbank market to the tune of $180 million. The FMDQ OTC Securities Exchange said the transaction settlement followed the maturity of the “third OTC Futures Contract Notional $180 million of naira/$ of September 28, 2016, settled today on the FMDQ OTC Securities Exchange”. This is just as the naira continued its precipitous decline on the parallel foreign exchange market, falling to a historic low of ₦460 to the dollar, lower than the ₦452 to the dollar on the day before. However, the spot rate of the naira on the interbank FX market closed at ₦312.99 to the dollar, marginally lower than the ₦312 to the dollar from the previous day.
  • Nigeria plans to raise between ₦250 billion and ₦340 billion ($794.91 million-$1.08 billion) in local currency-denominated bonds in the fourth quarter, the DMO said on Tuesday. The debt office said it would auction between ₦90-₦120 billion worth of bonds maturing in 2021, ₦70-₦100 billion in debt maturing in 2026 and ₦90-₦120 billion worth in paper maturing in 2036. In its latest issuance calendar, the debt office said the bonds will be re-opened from previously issued debt. Nigeria had planned to raise between ₦305-₦395 billion worth of debt in the third quarter but ended up issuing ₦460 billion worth.
  • The Q3 2016 “Credit Conditions Survey Report” has revealed an increase in secured and unsecured credit availability to households, small businesses and corporate entities, compared with the previous quarter. The CBN report also showed that the spread on overall secured and unsecured lending to households widened in Q3 and will remain so for the rest of the year. Lenders also reported households’ demand for house purchase lending, unsecured credit card lending and unsecured overdraft/personal loans all increasing in Q3, with the trend set to continue. As for demand for corporate lending in Q3, an increase across all firm sizes was observed. The only downside was corporate loans performance to all businesses which deteriorated.
  • NERC has asked the 11 Discos to formally wind down the alternative meter financing scheme it initiated in 2013 by November 1, 2016. The commission said the Credited Advance Payment for Metering Implementation or CAPMI which allows electricity consumers self-finance their meter acquisition and installation given that Discos were unable to promptly deploy meters to them, would now cease to exist from November 1. The commission said in a letter to the Discos that between November 2013 and June 2016, only about 500,000 meters were deployed by the 11 Discos within their networks with less than 35 percent directly done by the Discos.
  • The boards of SA Insurance and SA Life Assurance have secured shareholder approval to go ahead with a merger plan. The new development comes on the back of SA Insurance winning a “no objection order” for the merger from the industry regulator, NAICOM. At two separate court-ordered meetings held in Lagos, Bode Akinboye, CEO, SA Insurance and Bolaji Oladipo, MD, SA Life Assurance, respectively explained the strategic derivable values from the merger to the shareholders, noting that joint strength from the process will ensure much stronger performance and returns to the companies’ owners.
  • The Ford Motor Company has terminated its 11-year old partnership with a local distributor, RT Briscoe in what it calls a consolidation of its dealer representation in Nigeria. The partnership termination which took effect on June 30, 2016, also saw the auto company reinforcing its partnership with Coscharis Motors as Nigeria’s sole official Ford distributor. According to Regional Sales and Marketing for Sub-Saharan Africa, Rob Johnston The company is of the view that having two distributors in Nigeria does not make “commercial sense”.