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Published On: Thu, Jan 15th, 2015

Negative sentiments meet DMO maiden bond auction

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The bond issuance calendar of the Debt Management Office (DMO) for 2015 may have come under pressure given the lingering macro-economic and political uncertainties that are sustaining investors’ apathy.

DMO tested the waters aimed at raising N73 billion at its maiden bond auction Wednesday for 15.10% FGN April 2017 (5-yr re-opening); 14.20% FGN March 2024 (10-yr re-opening); and 12.1493% FGN July 2034 (20-yr re-opening).

Ahead of the auction result, dealers said as trading activity remained weak, bond investors stayed on the sideline to avoid probable surprises from the auction result.

Analysts said investors’ recent fatigue over Federal Government’s debt instruments resulted from general macro worries, which are prompted by recent pressure on oil price. This is in addition to compelling rates on money market instruments; as well as the squeezing of liquidity in the banking system, through tighter monetary policy.

“Nigeria’s 2015 macroeconomic performance is expected to be influenced by a number of variables, including crude oil prices, foreign exchange movements, national security, global financial markets, fiscal and monetary policies, as well as the outcome of the 2015 elections,” said Oscar Onyema, CEO, Nigerian Stock Exchange.

While presenting the capital market review and 2015 outlook, Onyema said, “A strengthening dollar may continue to precipitate foreign portfolio inflow (FPI) reversal, which remains a real threat to the Nigerian capital market”. (NAN)

 

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