Five things to know to start your Friday

NG Clearing steers clearing, settlement of first Exchange Traded Derivatives in Nigeria

 

The first-ever exchange-traded-derivatives (ETD) transactions in West Africa were executed on the trading platform of the Nigerian Exchange Limited on Thursday, April 14, 2012 with NG Clearing Limited serving as the Central Counterparty to clear, settle and guarantee the trades.

The first set of transactions were traded by APT Securities and Funds Limited and CardinalStone Securities Limited and Meristem Stockbrokers Limited, in their capacity as pioneer Trading Members with Access Bank and Zenith Bank as the pioneer Clearing Members, respectively. The contracts traded are the NGX30 Futures for June 2022, NGXPENSION for September 2022. Other listed contracts available for trading are NGX30 Futures for September 2022, NGXPENSION for June 2022.

The commencement of exchange traded derivatives in the Nigerian capital market comes after many years of anticipation by stakeholders and is a remarkable step towards the actualization of the Nigerian Capital Market Masterplan. This also comes at a time when economies are trying to grow after the setback of COVID-19 pandemic. This creates an opportunity for market liquidity and capital flows, potentially contributing to Nigeria’s post-covid recovery. Derivatives usher in a new asset class that will offer local and foreign investors new opportunities to hedge against market risks in Nigeria.

MD, CEO of NG Clearing Limited, Tapas Das spoke well in support of the achievements the exchange-traded-derivatives in Nigeria have made since its commencement. He assured investors of the safe nature of the Nigerian derivatives market that his company NG Clearing Limited main responsibility is to make sure that the Nigerian derivatives market is safe.

The Chief Executive Officer (CEO), NGX, Temi Popoola, who spoke at the event used the opportunity to commend the efforts of stakeholders who played a great role in driving the completion of the Derivatives Market since 2014.

It was agreed that derivative market education for all existing and new market participants will continue to ensure that stakeholders have a full understanding of how the market works.

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Coleman’s N30bn investment in GAP cables can improve Nigeria’s electricity –MD

Taking into cognizance the disturbing nature of the Nigerian electricity situation, Coleman Cable and Wires, one of the powerhouses in capacity building in the nation’s power sector, has said that it has what it takes to solve the national grid collapse.

George Onafowokan, MD/CEO of Coleman Cable and Wires, said this as the company prepares to commit N30 billion into the manufacture of GAP cables in the nation.

The MD was reacting to the troubling state of the nation’s electricity situation following the collapse of the national grid as reported by the electricity distribution companies (DISCOs).

The DISCOs, which reported the collapse of another national grid-the fifth in two months, has created another setback in the nation’s quest to improve the power sector.

The head of the company thinks that Coleman can help the country get over this electricity problem that has put the country a long way behind.

He advised the Minister of Power, Abubakar Aliyu to seek a home grown solution to this problem. Onafowokan said that the company was committed to investing $50 million, which is approximately N30 billion, which will, in turn, create around 100,000 direct and indirect jobs.

He pleaded with the government to let him in for a local solution to this problem, especially as the company wants to use the production of transmission cables to address this incessant collapse of the national grid.

He said that Coleman was looking forward to working with all stakeholders, especially the Federal Government and the Ministry of Power and Transmission Company of Nigeria, to ensure that the perennial power challenges are a thing of the past.

When one of the most advanced power conductors, GAP Cable, is made and delivered, he said, this kind of grid collapse will be over. GAP Cable can carry more load than the current ones, so this will no longer happen.

“Our company now has the technology and skills to make a wide range of cables that used to be imported with a lot of money from other countries,” he said.

The cable is the Gap-type ZT-aluminum conductor steel reinforced, which uses heat-resistant aluminum over a steel core.

“One of the features is that it keeps a high-strength steel core and the first layer of aluminum alloy strands separate.”He said.

One of the underlying technical differences of the Gap-type ZT-aluminum conductor steel is that there is a gap between the first layer of trapezoidal-shaped aluminum strands and the steel core. That gap is filled with high-temperature resistant grease, he stated.

According to George, the key benefit of the gap-type conductor is that “it can be tensioned on the steel core alone during erection.” This results in a conductor with a knee-point at the erection temperature. ”

IMF to hold debt discussions with Egypt, Sri Lanka, Tunisia

Kristalina Georgieva, MD, IMF, has said that the International Monetary Fund will have a meeting with Tunisia, Egypt, and Sri Lanka to discuss steps that would help them get out of their current financial troubles.

The IMF MD, who had an interview with Tom Keene on Bloomberg television, said that the financial lender was already “zeroing in on countries that are in need of debt restructuring.”

Kristalina added that the IMF will have a closed-door meeting with all three countries—Tunisia, Egypt, and Sri Lanka—and tell them what needs to be done to help address their debt burden.

Bloomberg reported that only Egypt of the three nations had dollar-denominated government bonds that paid at least 1,000 basis points more than U.S. Treasuries, which is above the threshold for debt to be considered distressed.

This meeting is coming in anticipation of the IMF and World Bank Spring Meetings, with finance ministers and central bankers from around the world set to converge on Washington next week.

She said that the ongoing war in Ukraine and its effects on economic uncertainty and inflation are causing the IMF to rethink its 2022 GDP growth forecast for 143 of its 190 member countries, which is a change from its previous forecast.

Reports say that Sri Lanka, which is a third-world country according to www.worldpopulationreview.com, needs between $3 billion and $4 billion this year to prevent a state collapse. The government is already appealing to its diaspora population to urgently help out while it prepares for talks on April 18 to start talks with the IMF for help, the nation’s finance minister said Thursday.

While Egypt is seeking support from the IMF, Tunisian central bankers are sure that a debt restructuring of its international debt won’t be part of the deal to get help from the IMF.

Ahead of the IMF and World Bank spring meetings, which are to be held on Wednesday next week, Kristalina said that some nations seeking help will require debt restructuring, with 60% of low-income nations in or near debt distress.

Kristalina expressed confidence that with the appointment of very prominent Sri Lankan economists as advisers, talks with the nation look promising.

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PBoC keeps MLF Rate unchanged at 2.85%

 

Tradingeconomics reported that the People’s Bank of China (PBoC) held steady the interest rate at 2.85% this morning as it rolled over maturing medium-term policy loans.

The apex bank in China decided to keep the interest rate at 2.85% despite calls from Beijing to deliver more incentives to support and drive growth in a slowdown economy.

The central bank said that it will leave the rate on CNY 150 billion worth of one-year medium-term lending facility (MLF) loans unchanged at 2.85%, believing that growth should be more fiscal than monetarily.

It said that with CNY 150 billion worth of MLF loans maturing today, the operation resulted in a zero net cash injection into the banking system.

The PBoC also injected CNY 10 billion through 5-day reverse repos while maintaining the borrowing rate at 2.1%.

Euro sinks to a two-year low on ECB interest rates caution

 

The euro sank substantially on Thursday following the decision by the European Central Bank to leave interest rates unchanged.

The decision by the ECB did not align with the March growth forecasts on the pace of stimulus removal, it was reported.

Many believe that the downside risks to the economy facilitated by geopolitical tensions in Ukraine compelled President Christine Lagarde and the ECB to maintain the status quo on interest rates.

In her speech, she remarked that inflation will continue to grow, owing mostly to increased energy expenses. Following Lagarde’s remarks, the euro fell as much as 1.2 percent versus the US dollar, reaching a two-year low of just under $1.08. After a while, the euro regained some of its losses as it closed 0.5% lower for the day.

The ECB believes that the war in Ukraine and rising inflation in the Eurozone and, to some extent, the UK will continue to exert considerable pressure on the Eurozone as supply shocks, especially in the energy sector, will affect monetary stability.

The Financial Times reported that as a result of the ECB’s decision to keep interest rates low, the yields on the different Eurozone government bonds rose across the board. The yields on 10-year German and Italian bonds increased to 0.84 percent and 2.48 percent, respectively.