28 September 2012

Nigeria: CBN Sells N105 Billion Treasury Bills

The Central Bank of Nigeria (CBN) Thursday sold N104.69 billion treasury bills with maturities ranging from three months to one year.

Data from the Financial Market Dealers Association showed that the central bank sold N21,838.51 billion of 91-day treasury bills at a yield of 12.7 per cent, higher than the 12 per cent it offered at the previous auction.

The apex bank also sold N49,051.14 billion in 182-day paper at 13 per cent, compared with 12.6 per cent previously, just as it issued N33,783.25 billion naira in 364-day paper at 13.05 percent. It showed that yields were marginally up.

Total subscriptions stood at N278 billion. While total subscription for the 91-day bill was N50.024 billion, 182-day at N84.495 billion, subscription for 364-day bill stood at N143.480 billion.

While the fixed income securities has continued to attract a lot of investors, the planned addition of Nigeria on the JP Morgan Government Bond Index-Emerging Markets (GBI-EM) - the biggest underwriter of emerging market debt is expected to attract $1.5 billion to the country.

JP Morgan's London-based sub-Saharan Africa economist, Giulia Pellegrini said the FGN's most-traded bonds maturing in March 2014, October 2019 and January 2022 will join the indexes between October 1 and December 3 this year.

JPMorgan first disclosed the plans in August after Governor, Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi's decision last year to attract more funds by removing restrictions on foreign investors holding debt of Africa's biggest oil producer.

Meanwhile, the central bank in a circular dated September 26, 2012 has asked all authourised dealers to forward their returns on forex transactions in respect of their naira denominated cards between 2010 and 2011.

The circular titled: "Request for Source of Foreign Exchange for Transactions on Naira Cards for the Periods of 2010 to 2011," addressed to dealers was posted on the CBN's website yesterday.

The circular signed by the Director, Trade and Exchange Department, CBN, Mr. Batari Musa, said: "All authourised dealers are required to urgently forward hard copies of their returns on forex transactions in respect of naira denominated cards, showings the source of funds on a month by month basis for years 2010 and 2011. In addition, a soft copy of the same information in hard copies should be forwarded."

"In both cases, the information should be received in Trade and Exchange Department, CBN Headquarters, Abuja on or before close of business on Friday September 28, 2012. Please ensure compliance accordingly, failing which appropriate sanction shall be imposed."

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