Dealing Members are hereby notified that Wapic Insurance Plc has through its Stockbroker, Coronation Securities Limited, submitted an application to The Nigerian Stock Exchange for the approval and listing of a Rights Issue of Fifteen Billion, Six Hundred and Thirteen Million, One Hundred and Ninety-Four Thousand, Six Hundred and Twenty-Three (15,613,194,623) ordinary shares of Fifty Kobo (N0.50) each at Thirty-Eight Kobo (N0.38) per share, on the basis of seven (7) new ordinary shares for every six (6) ordinary shares held.
The Qualification Date for the Rights Issue was Thursday, 19 September 2019 (yesterday).
Godstime Iwenekhai, Head, Listings Regulation Department
By Samantha LaDuc – See it Market,
Wait, what? You haven’t heard what’s going on in the plumbing of the US economy, markets and more specifically the recent US dollar funding crisis that occurred overnight? $1.3 trillion in “excess reserves”, a Fed cutting rates, and the US financial system was urgently short $53 billion in immediate funding.
In short, for the first time in more than a decade, the Federal Reserve Bank of New York stepped in to relieve pressures in the Repo market that were pushing short-term interest rates higher than the central bank wanted.
Strains developed Monday in short-term financing markets that suggested the central bank could lose control of its federal-funds rate, a benchmark that influences borrowing costs throughout the financial system. The freeze in overnight Fed lending was likely from the Treasury Sell-off last week that triggered the Growth-to-Value unwind I warned about, and now with Oil much higher, this puts at risk certain Hedge Funds from blowing up. Saudis liquidating positions to extract cash is another theory. Either way, NY Fed had to step in with EMERGENCY MEASURES.
Liquidity in funding markets only really matters when it’s not there. Soon after, we had a 3.5 standard deviation move in Bonds, an 8.5 standard deviation move from Momentum to Value rotation… the largest one-day surge in Oil Prices in history and then Funding Spreads exploded HIGHER than Sept 2008 – and ALL in the span of Two Weeks!
If this is not foreplay for a Flash Crash, I don’t know what is!
QE or Bust
In addition to the sudden liquidity drain that occurred, here is an overview of the current market conditions (not even considering the geopolitical risks) that equate to Financial Tightening. No question: this is the perfect storm that can exacerbate the problems inherent in the faulty plumbing:
We are in a Fed easing cycle
ISM is below 50 and falling
Yield Curve is inverted
The bond market just tightened 50bps in the sell off
The money markets have tightened to wipe out the coming 25bpc cut and will tighten much more as a HUGE $600bn of liquidity is drained (treasury funding debt/deficits)
Oil prices tighten financial conditions
The dollar is rising again, tightening conditions
The US and China are engaged in economic warfare which equates to more tightening
There are increasing tariffs on the EU too
To which I say: USD makes the weather and the rate of change determines the severity. If the USD takes off in earnest, or the Oil Spike or the Bond Sell-off or, or, or… there is real risk of Fed losing even more control. And the only thing to fight QT is QE, last time I checked. Some are skeptical that QE will even help – Next Fed embarrassment? When QE via Repo & slashing IOER doesn’t fix the credit cycle…rolls over anyway.
With Central Banks on parade this week, we may find out sooner rather than later. 2morow, we have the minutes and press conference for the US Fed meeting, followed by BOJ and SNB rate decisions later in the week.
What the bond market wants is clear language that the Fed plans to move away from the ‘midcycle adjustment’ commentary and transition toward an easing cycle, but what the panicked funding market is intonating is anything less than signaling Quantitative Easing will disappoint.
In a nutshell, falling global growth/GDPs, growing/massive debts, USD shortage especially during inflation spikes (like we had with oil) and illiquid funding markets can cause the Fed to lose control of funding markets and Fed Effective rates – circa 2008.
The bond warehouse of our AMRF Bond Portfolio has the following bond odd lots for distribution to retail bond investors ONLY:
- N93.9 mln of NIGTB 14.5% 15-JUL-2021 (FG132021S3)
- N25 mln of NIGTB 16.39% 27-JAN-2022 (FG9B2022S1)
- N62.5 mln of NIGTB 16.2884% 17-MAR-2027 (FG142027S1)
- N0.599 mln of NIGTB 13.98% 23-FEB-2028 (FG152028S1)
- N40.494 mln of NIGTB 12.15% 18-FEB-2034 (FG112034S2)
- N0.122 mln of NIGSB 12.62% 13-MAR-2022 (FGS202249)
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
- 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, purchase at ‘par’ of NIGTB 14.2% 14-MAR-2024 (FG112024S1) and held for 5-yrs to maturity => estimated effective yield of 12.6% p.a
- What is the current 91-day FGN T-bill PMA rate ? – 11.1% 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 for institutional savers.
- What is the current commercial banks av. savings deposit rate ? – 3.93% 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 for retail savers.
- 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 !!!
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: firstname.lastname@example.org or email@example.com and/or live during trading hours via skype #ID: respartner): Fixed Income Sales.
TRW BOND TEAM
Corporate Office: 62/64 Campbell Street (Kajola House)
4th Floor Lagos Island Lagos .
Email: firstname.lastname@example.org; email@example.com