ARMF Bond W/H: Available FGN T-bonds & S-bonds For Allocation Under The Upfront Interest Savings Scheme….dd. 1/8/2019

Posted by ARMF Project on August 1, 2019
Posted in: NIGERIA STOCK MARKET ANALYSIS.

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The bond warehouse of our AMRF Bond Portfolio has the following bond odd lots for distribution to retail bond investors ONLY:

  • N83 mln of NIGTB 14.5% 15-JUL-2021 (FG132026S1)
  • N25 mln of NIGTB 16.39% 27-JAN-2022 (FG9B2022S1)
  • N0.1 mln of NIGTB 12.5% 22-FEB-2026 (FG132026S1)
  • N10 mln of NIGTB 16.2884% 17-MAR-2027 (FG142027S1)
  • N40.3 mln of NIGTB 12.15% 18-FEB-2034 (FG112034S2)
  • N0.113 mln of NIGTB 12.4% 18-MAR-2036 (FG132036S2)
  • N0.122 mln of NIGSB 12.62% 13-MAR-2022 (FGS202249)
  • (most bonds are now sold at premium)

Only FGN bonds with coupon >12% p.a qualify to be allocated to retail bond clients under the Upfront Interest Savings Scheme. Please kindly make Your purchase orders, min. N100,000.00

FAQ:

  • What is the effective yield of a FGN bond under the upfront interest savings scheme? – it is calculated by deducting the sum of transaction charges and upfront funding expenses from the total yield till maturity (excl. compounding opportunity) and divided by the holding period, for example, a purchase of NIGTB 14.2% 14-MAR-2024 (FG112024S1) and held for 5-yrs to maturity => effective yield of 12.6% p.a
  • What is the current 91-day FGN T-bill PMA rate ? – 9.6% p.a….as far as the bond’s effective rate is higher than the 91-day bill’s pma rate => investing via the upfront interest savings scheme is a good deal.
  • What is the current commercial banks av. savings deposit rate ? – 3.97% p.a….as far as the bond’s effective rate is higher than the savings deposit rate => investing via the upfront interest savings scheme is a good deal.
  • What will be the increment to the bond’s effective rate under the upfront interest savings scheme if the quarterly upfront interest(s) were compounded (re-invested) in 12-month TTM FGN bonds with coupon >12% for example? –  we estimate an increment of >1% p.a on the respective FGN bonds’ effective rate. Thus, compounding is an investment strategy that should never be ignored !!!
  • Must i have a CSCS trading acct with TRW Stockbrokers Limited to participate? – preferably YES !!!

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Caution – selling bonds on the secondary bond market before maturity, can either incur capital loss or capital gain !!!!

Should you require further information on how to get the best (and highest) coupon for Your FGN bonds purchase, please contact directly Ekwueme Mike Anyadibe (mobile: 08066564748 and/or e-mail: ekwueme.anyadibe@trw-stockbrokers.com or respartner@live.com and/or live during trading hours via skype #ID: respartner): Fixed Income Sales.

Thank you…

TRW BOND TEAM
Corporate Office: 62/64 Campbell Street (Kajola House)
4th Floor Lagos Island Lagos .
234-1-7646689,234-1-2710224-5
Email: info@trw-stockbrokers.com; ekwueme.anyadibe@trw-stockbrokers.com
website: http://www.trw-stockbrokers.com

Insurance sector may lose 72% of Dangote refinery’s risk

Posted by TRW STOCKBROKERS LTD on August 19, 2019
Posted in: NIGERIA STOCK MARKET ANALYSIS. Leave a comment

Dangote Oil Refinery Company
The nation’s insurance industry may lose 72 per cent of the insurance business in the Dangote Oil Refining company.

The company, which has insured value estimated at $6.8 billion, may be overtaken by foreign operators, when it becomes operational as result of low financial capability to underwrite bigger risk in the Nigerian market.

In addition, they might lose another $8 billion energy insurance business from energy companies to foreign insurers due to their current low capital base and lack of underwriting technical capacity.

The National Insurance Commission (NAICOM), which made the observations at the weekend at Ije-Ode, Ogun State, justified reasons for its determination to prosecute the ongoing recapitalisation of insurance companies.

NAICOM’s Director, Policy and Regulation, Pius Agboola, said the ongoing recapitalisation is to position the sector to independently handle big-ticket transactions in Nigeria as well as to end capital flight and support economic development of the country.

Agboola, explained that the reasons for the ongoing recapitalisation in the industry, said insurance had continued to lose substantial part of the income that was supposed to grow the industry to foreign counterparts due to low capital base.

He added that among the quantum of businesses currently approved-in -principle by the regulator to be taken abroad were aviation refueling liability insurance from II Plc (former Mobil Oil Nigeria Plc) with the sum insured valued at $1,000,000,000.

He expressed regret that of the above stated amount, the local insurers had the capacity to insure only 10.03 per cent, while 89.97 per cent would be ceded to foreign insurers from mainly European and American markets.

According to him, similarly, the sector is losing another risk valued at $7,010,970, being the sum insured on Third Party Nuclear Liability Insurance from Centre for Energy Research and Training (CERT) in which indigenous insurers have capacity to insure only 0.05 per cent of the entire business, while 99.95 per cent would be taken abroad.

This is in addition to other four major high-ticket businesses in which the sector is losing over 50 per cent of the sum insured to foreign insurers as a result of low capital base and lack of technical underwriting capacity.

Agboola said the Combined Property Damage/Machinery Breakdown/Liability Terrorism/Political Violence Risk, belonging to Sahara Power (Egbin Power Plc), with the sum insured valued of $3.1 billion would have 53 per cent insured abroad, while 46.295 per cent would be insured locally.

He, however, said the Nigerian National Petroleum Corporation (NNPC) retained 78 per cent of its Consolidated Insurance package risk valued at N99,585,532,592 as sum insured with local insurers, while 22 per cent was taken abroad.

Also, Chevron Nigeria Limited insures 75 per cent of its Energy Package Risk valued at N14.311billion with indigenous insurers while 25 per cent is taken abroad; just as Mobil Producing Nigeria Limited insures 70 per cent of its Energy package/physical damage and O.E.E valued at $14.098 billion with local insurers while 30 per cent is taken abroad.

Agboola also said Lafarge Hoicim insured 68.73 per cent of combined property damage/business interruption and public liability, valued at $564,882,644,410, as sum insured with local insurers while 31.27 percent was taken abroad while Dangote Fertiliser insured 60 per cent of its Construction/Erection All Risk and third party liability risk valued at $1.128 billion with local underwriters.

Considering the quantum of risks ceded abroad due mainly to low capital, the Acting Commissioner for Insurance, Sunday Thomas, said the commission would, “prosecute as never before, the recapitalisation process of insurance companies to ensure that the sector is positioned to support economic development of the country.”

He said even though operators might not have the wherewithal for the recapitalisation of their respective companies, the onus was on the regulator to set the standards that would strengthen the insurance companies’ capacities and place them in a position to undertake insurance businesses.

Giving more insight into the need for the recapitalisation, Thomas, said: “The process is to enable the sector to retain insurance businesses instead of allowing it to go outside the country; turn the image of the insurance market, strengthen financial base of the companies, increase the sector’s contributions to gross domestic product of the country, among other benefits.

“We have the mandate to ensure that the recapitalisation throws up more solid companies. Our hands are open to welcome investors in new companies or existing companies.”

He enumerated the benefits of the recapitalisation to include the need for capital restructuring and improvement in the liquidity position of the insurance underwriters.

According to him, the insurance industry’s life cycle is still at an early growth stage, which needed to be explored.

NAICOM recently fixed August 20, 2019 as deadline for operators to submit their recapitalisation plans.

Also, firms that have decided to adopt mergers and acquisition strategy were directed to perfect such deals 60 days to the recapitalisation deadline.

FMDQ explains name change, says not out to compete with NSE

Posted by TRW STOCKBROKERS LTD on August 17, 2019
Posted in: NIGERIA STOCK MARKET ANALYSIS. Leave a comment

FMDQ Securities Exchange Plc, which recently became a full blown securities exchange, has explained that it is not out to compete with the Nigerian Stock Exchange in equities trading but to create new entities for the future.
Bola Onadele, FMDQ Managing Director, said on Saturday at a media parley in Lagos that the new securities exchange would work with Small and Medium Enterprises and private companies to create new entities for the future.
Onadele said the company’s intention was not going into the equities market to compete with the exchange or ask companies to delist.
The News Agency of Nigeria reports that the exchange recently secured necessary approvals for a name change to ‘FMDQ Securities Exchange PLC, thereby aligning its name to its upgraded status in the capital market.
It also in June 2019, the Securities and Exchange Commission registered its wholly owned central securities depository subsidiary – FMDQ Depository Limited – positioned to provide collateral caching, custodian and settlement services.
He noted that the exchange was looking at how to create new entities for the future, work with and nurture SMEs and private companies in Nigeria that had no access to long-term financing.
He said: “We are not playing the game of attacking the NSE, that is not our role or our job or the way we do business.
“Rather we are looking at how to create new entities for the future, to work and nurture them, to work with SMEs, private companies in Nigeria who have not had access to long term financing.
“So, we are in the business of planning 20-30 years ahead and working with Nigerian entities in getting prosperity to Nigerians.”
The managing director stressed the need to position the nation’s capital market to become number one in terms of standards, governance and transparency.
Onadele said FMDQ would continue to work with government and regulators develop the Nigerian capital market.
He assured that the exchange would continue to trade in all securities including fixed income, derivatives, commodities and foreign exchange.
Also speaking, Tumi Sekoni, Associate Executive Director, Capital Markets, FMDQ, said the exchange would continue to educate and enlighten investors and operators on its products and services.
Sekoni said the exchange would launch the first derivatives product in the first quarter of 2020.
She said preparations were in top gear to ensure the launch of the product, noting that the exchange would continue to meet the yearnings and aspirations of its stakeholders.