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CAPITALDIGEST DAILY NEWS. 18TH OCTOBER 2021.

MONDAY 11/10/2021 – OIL PRICES SURPASS $82 AMID DISAPPOINTING US JOBS REPORT Crude oil prices settled higher on the back of tightened supply balances and a weak United States employment report that may present headwinds to an increasingly hawkish US Federal Reserve. The international crude oil benchmark, Brent, traded at $82.39 per barrel after gaining 0.54 per cent as of 7:49 pm on Sunday, Nigerian time while the US West Texas Intermediate traded at $79.35 per barrel as it rose by 1.34 per cent. S&P Global Platts reported that US non-farm payrolls climbed by 194,000 jobs in September, US department of labour data showed October 8, down from 366,000 in August and well below market expectations of around 500,000. Oil futures paradoxically moved higher following the report, in part due to the fact that the weak print may add headwinds to a recent hawkish pivot in US Federal Reserve monetary policy, analysts said. TD Securities analysts were quoted as saying by Platts that, “The jobs report came in well below expectations, questioning the timing of a well-telegraphed November taper, as well easing some enthusiasm about Fed hikes in 2022. “Energy markets are solidifying at the upper end of recent trading ranges as the fear factor and right tail risks become more embedded heading into the winter months that could exacerbate the energy crisis in Europe and Asia.”   TUESDAY 12/10/2021 – FOREX SUPPLY, DEMAND MAJOR FACTORS AFFECTING NAIRA – TERIBA The Chief Executive Officer, Economic Associates, Dr Ayo Teriba, has said the level of demand and supply of foreign exchange is a major determinant of the exchange rate of the naira to the dollar. Teriba said this in a presentation obtained by our correspondent titled ‘How to stabilise the naira’. He said, “The exchange rate is a mere indicator of the balance of supply and demand forces in the foreign exchange market. “Those who are discussing exchange rate developments without reference to the unfolding realities of demand and supply are chasing the shadows instead of substance.” He said the recent slides in the official exchange rate of the naira and the dramatic widening of the parallel market premium signalled that the unease in the Nigerian foreign market had intensified, and tested the capacity of the country to stabilise the naira. According to him, the current exchange rate crisis was triggered by the forex supply shortfalls in the wake of the pandemic-induced global lockdown in 2020. Teriba quoted figures from the 2020 statistical bulletin of the Central Bank of Nigeria.   WEDNESDAY 13/10/2021 – FG TO AUCTION N150BN BONDS IN OCTOBER The Debt Management Office said on Tuesday that the Federal Government will offer N150bn bonds for subscription in October. A circular by the DMO on its website showed that the breakdown of bonds consisted of three bonds worth N50bn each. They are 10-year re-opening bond to be offered at the rate of 12.50 per cent and mature in January 2026; a 20-year reopening bond to be offered at 16.2499 per cent and mature in April 2037; and a 30-year reopening bond to be offered at 12.98 per cent and mature in March 2050. According to the DMO, the bonds, which will be auctioned on October 20, have a settlement date of October 22. The units of sale are N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter. According to the circular, the bonds qualify as securities in which trustees can invest under the Trustee Investment Act, and as a liquid asset for liquidity ratio calculation for banks. The Debt Management Office said on Tuesday that the Federal Government will offer N150bn bonds for subscription in October. A circular by the DMO on its website showed that the breakdown of bonds consisted of three bonds worth N50bn each. They are 10-year re-opening bond to be offered at the rate of 12.50 per cent and mature in January 2026; a 20-year reopening bond to be offered at 16.2499 per cent and mature in April 2037; and a 30-year reopening bond to be offered at 12.98 per cent and mature in March 2050. According to the DMO, the bonds, which will be auctioned on October 20, have a settlement date of October 22. The units of sale are N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter. According to the circular, the bonds qualify as securities in which trustees can invest under the Trustee Investment Act, and as a liquid asset for liquidity ratio calculation for banks.   THURSDAY 14/10/2021 – NIGERIA MULLS RETURN TO EUROBOND MARKET FOR $2.1BN BORROWING The Federal Government is considering a return to the Eurobonds market for the balance of its $6.1bn external borrowing after it successfully raised $4bn in September. The Director-General of the Debt Management Office, Mrs Patience Oniha, gave the hint during an interview in London obtained by our correspondent on Thursday. Oniha said the international investors had shown interest in engaging the government after a global investors meeting and roadshow, as they were still optimistic about the country’s credit status. She said, “One of the questions that kept coming up was the balance of the new external borrowing for 2021, which is about $6.1bn. “We are going to have a meeting with our transaction parties after this engagement if we will come back to the market for the balance. “We need to assess the market to understand how to proceed. We remain confident international investors find our credit story enticing enough.” The Director-General of the Budget Office, Ben Akabueze, in a separate interview said though investors were concerned about debt sustainability, the Federal Government had given an assurance on that.   FRIDAY 15/10/2021 – NAIRA CRASHES TO RECORD LOW AT OFFICIAL MARKET The value of the naira fell further by 1.68 per cent against the dollar at the official market on Thursday. At the Investor & Exporter foreign exchange window, the local currency opened at 413.15/$1 on Thursday but closed at 422.07/$1. The naira had depreciated by 0.19 per cent to 415.10/$1 on Wednesday after closing at 414.30/$1 on Tuesday. At the parallel market, the dollar was bought at N565 and sold for N570, according to some operators in the black market. The Central Bank of Nigeria, however, maintained N410.91/$1 as its official rate on its website. In July, the CBN stopped forex sales to the Bureau de Change operators and assured that it would supply forex to legitimate users through the banks.

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