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Offshore Investment In Fixed Income Market Now $12bn - Investment - Nairaland

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Offshore Investment In Fixed Income Market Now $12bn by mukina2: 4:13pm On Jul 01, 2013
The total value of offshore investment in Nigeria’s fixed income instruments has been put at about $12 billion.

A breakdown of this figure, according to a report, showed that while about 30 per cent of the funds were invested in the treasury bills market, 15 per cent in FGN bond market, 10 per cent had been staked on open market operations (OMO) bills.

The report however pointed out that most significant position had been taken at the primary market, saying that in order to avoid driving prices down, there would be need for investors to wait for maturity in order to exit.

CSL Stockbrokers, a division of FCMB (UK) Limited stated this in a report titled: “Are Concerns about the Naira Founded?” obtained at the weekend.

It also argued that with average daily liquidity of about $30 million in the equities market, it would take months, if not years, for foreign investors to unwind their positions in the market, even as it declared that to force a devaluation of the naira, will require about 30 per cent fall in oil revenues.

The CSL report added: “Looking ahead, there are redemptions worth $4.3 billion in the third quarter of 2013 – not an impossible sum for the CBN to manage, in our view. A greater cause for concern over the next six months is the level of oil production. While the price of Bonny Light is holding up well at $103.54 versus its year-to-date average of $110.62, there are widespread and often conflicting reports of falling crude production in Nigeria.

“As a rough guide (there are numbers of possible permutations) we think it would take a fall in oil production to 1.7million barrels per day (mbpd) and a near total liquidation of foreign FGN bond and treasury bills holdings over the next three months to force a devaluation of the naira. Under these assumptions, reserves would fall to just below $32 billion.

“A series of events over the past several weeks has contributed to a growing state of unease about the naira. There are reports of waning oil production in Nigeria, there has been volatility in the oil price, and uncertainty about monetary policy in the US has seen a rout in US Treasuries, with knock-on effects to bond markets across the world. While these events have dented market confidence in the naira, we do not think they hail a change in policy.”

According to the report, the anticipated change in leadership at the CBN represents “a tail risk”.

It pointed out that under the present CBN Governor, Mallam Sanusi Lamido Sanusi, the central bank had been clear about its approach to exchange rate management, adding that there had been consistency between its statements and actions.

“Yet with little visibility on potential successors – much less on how they would manage the exchange rate – the possibility of a dramatic shift in policy exists. It is a well-known fact that the Finance Ministry would prefer a freely floating exchange rate; at various times, the International Monetary Fund has also advocated for a liberalisation of the exchange rate regime,” it declared.


http://www.thisdaylive.com/articles/offshore-investment-in-fixed-income-market-now-12bn/152049/
Re: Offshore Investment In Fixed Income Market Now $12bn by DICKtator: 4:40pm On Jul 01, 2013
Big big money yet the hoi-polloi are yet to feel the impact. Investing for who?
Is it when the populace are dead that they would start enjoying full dividends?
We pay our taxes gaddem!!!!

grin grin grin grin
Re: Offshore Investment In Fixed Income Market Now $12bn by careytommy: 4:43pm On Jul 01, 2013
Translation please? angry

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Re: Offshore Investment In Fixed Income Market Now $12bn by Nobody: 4:47pm On Jul 01, 2013
How will this impact to the life of the ordinary man on the street
Re: Offshore Investment In Fixed Income Market Now $12bn by dj187: 4:52pm On Jul 01, 2013
My name na akpos abeg i need translator
Re: Offshore Investment In Fixed Income Market Now $12bn by Olucheye(m): 4:55pm On Jul 01, 2013
All these technical terms sadly don't translate to anything if its impact cannot be felt on way or the other on the life on the citizens who ply the streets for their daily manna.

If they like, they should save $50BN in fixed treasury or buy the highest returning value bonds across international markets. All we are worried bout is the judicious utilization of these mega funds that keep being screamed in our faces.

Like someone said earlier in the day while at work concerning the $7BN donation Obama promised Sub-saharan Africa, MONEY ISN'T OUR PROBLEM IN NIGERIA! Implementation is our problem and should be looked into before its late.

PARTING SHOT: There's nothing to be happy about on the fact that we've got a fixed $12BN fixed investment somewhere....OBJ blew $17BN on power generation during his tenure. The question is how will the investment proceeds better the life of the masses.

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Re: Offshore Investment In Fixed Income Market Now $12bn by DealZnaija: 4:55pm On Jul 01, 2013
DICKtator: Big big money yet the hoi-polloi are yet to feel the impact. Investing for who?
Is it when the populace are dead that they would start enjoying full dividends?
We pay our taxes gaddem!!!!

grin grin grin grin

I hae said it over and over again that the NSE is a gambling casino & its only lucrative to profit takers. A stock exchange that happenings in the country (Social & Political)do not affect is not part of that country e.g, Boko Haram Terrorism has no effect on prices on stick exchange; change of govt does not shake it & it was even at the height of Niger Delta militancy that we had the Stock exchange "boom".
Anyway, let does who have liver for gambling carry on as its paying them now but let no man complain when if bursts pls
Re: Offshore Investment In Fixed Income Market Now $12bn by Gifted4all(m): 4:58pm On Jul 01, 2013
What is all dis grammer for.abeg i nid translator
Re: Offshore Investment In Fixed Income Market Now $12bn by rozayx5(m): 4:59pm On Jul 01, 2013
BIg money, on papers, if you aint smart you aint getting a drop of it

T bills kiss
Re: Offshore Investment In Fixed Income Market Now $12bn by the_ripper2: 5:28pm On Jul 01, 2013
All these money matters dey disturb my heart abeg.
 
Re: Offshore Investment In Fixed Income Market Now $12bn by fexlist(m): 5:49pm On Jul 01, 2013
To what benefit of this news now to ordinary man?
Re: Offshore Investment In Fixed Income Market Now $12bn by akintun: 5:57pm On Jul 01, 2013
Oyinbo wise well well. Why won't dey pour in money, when u consider d high interest rate on dis securities .
 
Re: Offshore Investment In Fixed Income Market Now $12bn by Nobody: 6:47pm On Jul 01, 2013
grin Op it av tey wey d intellishjent pipo comot 4rm nairaland o.

Dat na why dis topic no get any meaningful contribusion. Ikenna was banning us like say we nor be God's own people again.

Anyway to translate, Nigerian capital market is still healthy and no amount of bloomberg or FT analysis can hide this fact. If oil price drops, we have Sovereign Wealth Fund under Okonjo's pillow tongue
Re: Offshore Investment In Fixed Income Market Now $12bn by ochukoccna: 7:30pm On Jul 01, 2013
akintun: Oyinbo wise well well. Why won't dey pour in money, when u consider d high interest rate on dis securities .
It simply Nigeria offers better rates than most developed economies at present
Yet having that amoubt of foreign exposure is a double edged sword especially if they pull out suddenly or global economic indices worsen without warning
As DealZnaija said,jt aint for you if you no get liver
Re: Offshore Investment In Fixed Income Market Now $12bn by AjanleKoko: 7:30pm On Jul 01, 2013
DealZnaija:

I hae said it over and over again that the NSE is a gambling casino & its only lucrative to profit takers. A stock exchange that happenings in the country (Social & Political)do not affect is not part of that country e.g, Boko Haram Terrorism has no effect on prices on stick exchange; change of govt does not shake it & it was even at the height of Niger Delta militancy that we had the Stock exchange "boom". pls


There are very few companies active in Boko Haram-ridden areas. Apart from telecom business, and trading, not much investment exists in the North. Maybe if telcos were listed, then the share prices would have been impacted with the shutdown of services in a number of states.
Same with oil companies, they aren't listed on the exchange.
Re: Offshore Investment In Fixed Income Market Now $12bn by Tonjeola1(m): 7:34pm On Jul 01, 2013
@op, how do we have a share?
Re: Offshore Investment In Fixed Income Market Now $12bn by guttentag: 7:02am On Jul 02, 2013
 
Re: Offshore Investment In Fixed Income Market Now $12bn by Peterwins(m): 8:48am On Jul 02, 2013
Investment in fixed income market by foreign investors will continue to grow because we offer a higher return for now. However the naira will be automatically devalued if:

1. crude oil prices fall far below our 2013 budgeted benchmark of about $75 per barrel.

2. crude oil production drops drastically below our OPEC quota of about 2.5million barrels per day. The major reason amnesty was granted to the ND militants in 2007/2008 because of the disruption in our production quota and/or capacity to less than a million barrels per day. However it seems this have been replaced by brazen crude oil theft.

Non oil exports needs to be deepened to avoid this over dependence on crude oil sales. However nobody seems to be asking about our revenue from LNG sales where we have a 49% stake via NNPC.
Re: Offshore Investment In Fixed Income Market Now $12bn by bot101(m): 9:46am On Jul 02, 2013
they keep calling these huge sums of monies but i don't see the effect. I don tire 4 all of dem

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