Nigerian Newspapers
Making the best of the bond market
The capital market has indeed gone through a number of transformations that continues to surprise many. It is a very challenging sector, yet it has a lot of opportunities in stock. To get the best of the sector, it is better to understand how to maximise the potentials within. Bosan Omafaye, a stakeholder and investor in the capital market, examines some of the critical issues and how to move the bond market forward. He talks about tapping into new shares in the market as well as how to raise new money through getting new investors.
First he stressed that one of the problems is that many are over stitching the secondary market. “I’ll give a typical example, if Total Nigeria Plc has 51% or thereabout of its entire shares, maybe 700 million shares issue in the hands of foreign investors and 49% in the hands of Nigerian, and everybody left. Out of that 49% you have a block of investors also in Nigeria who are institutional investors. Maybe another 20 or 30%, so the three float out of the 700 million shares of Total Plc in issue that is available is just about 10%. Now if we keep frosting the price of that stock from #1 to #1000, you are over trading just 10% of 700 million that is the danger.”
Aptly, he compares the experience this way: “In other words you are over using the oil that is in the engine of the car. It is dirty, it’s dry, you are not refilling it, you are not changing the oil and you are not toping it up.”
This, Omafaye informs, is the reason why the banking sector is collecting cash from the depositor and giving it out as loans to other customers. “Have you seen any bank that does not collect deposit and just keep giving loans out? How long does it take that bank to get burnt up like hydro-carbon? At any point in time, for every commercial bank, your deposit must be more than your credit, if not you are in trouble. If you give us more loans than you collect as deposit, you are in serious trouble. And that is what we have, so you are over trading the secondary market which is the total number of shares no company in this market that is worth its salt. The big boys have issued them the shares of Guinness, Nigerian Breweries, the top 50, Nestle, Cabin, nobody has come to the market to do one new primary issue, but you are trading their shares continuously on a daily basis and the prices are moving. “
The first fact that Omofaye opines should be taken seriously: “Is that you have to understand the essence of investments. Investing means buying and selling, therefore what I’m doing is that I keep buying and keep selling what I have but there is no new fresh issue to buy. It’s just like the rice and yam market, there is nothing different there. When you have to wait for new yam or new rice to come to the market, it is because you want to compare prices with the market. Like the tomatoes market, they will tell you these tomatoes just arrived today, and this is the price and the one they had before would have a price that varies. Therefore, if you want to go and reserve you have to choose either from here to there to balance your port folio. But right now there is no port folio balancing. All you have right now is the entire secondary trading and that is where the concerns are. You provide market makers only for secondary trading; there is no market that has a primary market to balance with secondary market.”
He continued: “If not, why do we keep talking about the bond market because the management force through the Ministry of Finance is issuing almost 200 billion every month as primary bond? How does a bond trader say the existing government is yielding 10.7% or that government is going to issue the new one at a lower rate? Should it be at the rate of 9.5, so it is still about 2% or 1.5% difference between the new bond and the existing bond already in the market? So he buys the new bonds quickly, sell a little bit of the old bonds. Then he buys the new bond at 9.5, goes to the secondary bond market and start selling it at 10.5 and he has made the gain of about 1.5 or 1.7% between the new bond and the old bond. That is what we call trading, but if you have only 24 or 35 federal government bonds and there is no new issue bond by the Debt Management Office (DMO).”
Next we need to ask questions like, ‘how long do you think it will take for the bond market to dry up and get burnt in the fire like a piece of paper that you put into a gas funnel?’ “I will use another illustration. It’s like the water cycle, if rain does not fall, you are all in trouble; that is why it is called a water cycle. The primary worker is in the sky and it is the secondary worker that is on ground. This one gets heated up and it goes through the process of osmosis and evaporates and cools up over there. Then it falls again as rain. That is what you call a water cycle, isn’t that what makes life possible on earth? So how long are we going to drink, use the water on earth in the toilet? Without new water or fresh water coming from the sky, how long do you think the human ways can survive it? Therefore, you need the primary market, the stock market and the secondary stock market.”
Moving into the late secondary market and alternating marketing, Omofaye says, are essential for engineering and reengineering the sector. “If you keep engineering that single oil in the engine of the car and you are not forming any new oil into the car. It won’t take you long before you knock that engine and you keep driving it and you are driving that car at speed. Now if you ask one retail investor to come into the market, one of the things that would make any retail investor come into any market is the fact that there is a new primary market. It is that stock market in which they can say, ‘okay let me sell a bit of Nigerian goods so that I can buy this new brewery product shares that want to come out of the alternative market but there is no alternative like now.’ Every day you trade only about 50 or 70 stocks 365 days a year and the price keeps moving up. That’s a hot balloon and you must come in like a nuclear reactor.”
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Posted in Nigerian Newspapers. A DisNaija.Com network.
Source: The Nation Newspaper
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•Deploy more personnel as army chief vows to wipe out terror group
•Security beefed up at N’Assembly
Deji Elumoye and Kingsley Nwezeh in Abuja
Abuja, Nigeria’s seat of power, is under a massive security cordon following threats of attacks by insurgents and the increasing wave of banditry in the contiguous states of Kaduna, Kogi, Nasarawa and Niger States, THISDAY’s investigation has revealed.
There has been a wave of kidnappings in the outskirts of the federal capital, notably Pegi, Tuganmaje and Kuje among others, which the police have battled in recent times.
The security situation in and around the Federal Capital Territory (FCT) was heightened by the pronouncement of the Niger State Governor, Mr. Sani Bello, that Boko Haram fighters who he said sacked 50 villages in the state and hoisted the terror group’s flag, were about two hours drive away from the FCT.
Security has also been beefed up at the National Assembly as operatives, yesterday, thoroughly screened every vehicle approaching the National Assembly complex in Abuja.
The deteriorating security situation nationwide prompted the National Chairman of the Peoples Democratic Party (PDP), Prince Uche Secondus, to warn that the 2023 general election may not hold, demanding the declaration of a state of emergency as well as the convocation of a national conference.
However, the Chief of Army Staff, Lt. Gen. Ibrahim Attahiru, yesterday restated the Nigerian Army’s determination to annihilate Boko Haram.
But the Governor of Katsina State, Hon. Bello Masari, cautioned against declaring a state of emergency, saying doing so isn’t the solution to combat the security challenges facing the country.
The security of the nation’s airports was also in focus yesterday as the Office of the National Security Adviser (ONSA) said there was no threat to them.
THISDAY’s investigations showed increased presence of troops, police, Nigerian Security and Civil Defence Corps (NSCDC) personnel and intelligence operatives at the three strategic entrances to the city notably, Keffi, Zuba and Gwagwalada.
More checkpoints were also mounted around Gwagwalada and Keffi.
THISDAY also observed increased intelligence deployment at the entrance and the borders of FCT with contiguous states.
Beyond the borders, there were more deployments and police patrols inside the city and increased intelligence deployments as well.
Security sources told THISDAY: “There are deployments here and there but they are routine. Alertness is key to a secure environment.”
It was also learnt that security agencies were involved in frenzied meetings throughout yesterday.
The meetings, coordinated by the office of the Chief of Defence Staff under the new joint operational strategy of the armed forces, were aimed at coordinating a joint response to possible threats of attack to the FCT.
“I understand the security teams have been meeting for some days now and if you look around you, you will notice that there are increasing patrols and numbers of security personnel. The threats are not been taken lightly,” a source said.
National Assembly workers, lawmakers and visitors also had a harrowing experience accessing the legislative complex due to heightened security in the area.
Security operatives thoroughly screened every vehicle approaching the National Assembly complex in Abuja, impeding both human and vehicular traffic.
The Sergeant-at-arm of the National Assembly and other security agencies supervised the operations, leading to huge traffic build-up inside the complex.
Legislative staff, visitors and lawmakers were seen patiently waiting for their cars to be searched so that they could go ahead with the business of the day.
Some staff and visitors at some point got tired of waiting and were seen alighting from their cars to trek from the gate to the complex.
Meanwhile, the ONSA has said there is no threat to the nation’s airports.
A statement by the Head of Strategic Communication, Mr. Zachari Usman, said the reports of threats to the airports were an internal correspondence of security threat assessment misconstrued as security threat to the airports.
PDP Demands State of Emergency
In a related development, the PDP National Chairman, Prince Uche Secondus, yesterday demanded the declaration of a state of emergency, warning that the 2023 general election might not hold if the federal government failed to tackle insecurity.
He called on the federal government to summon a national conference to address the spike in insecurity.
Secondus added that the national caucus of the party will meet today to discuss the state of the nation.
Addressing members of the National Executive Committee (NEC) in Abuja, Secondus said: “We are worried Abuja is not even safe. It is no longer politics. We got alert of plots to bomb and burn down our airports.
“We urge the federal government to declare a national state of emergency in security. There is the need to call a national conference to discuss the insecurity in the country.
“There may not be any election in 2023 in Nigeria due to insecurity. This government must listen to the people. The Buhari government should call a national confab to discuss security and state of the nation. It is no longer politics. This time we are not playing politics. Let’s keep politics aside and move the nation forward.”
He said the country had been grounded, regretting that there had been no matching response from the federal government.
Secondus said in the past, terrorism in the North was confined to the North-east, but with the report of Boko Haram occupying villages in Niger State, terrorism had spread to the North-central
“Herdsmen are also menacing in the West; gunmen causing havoc in the East; and the militants in the South; all killing, looting, raping, maiming and burning down homes. The situation is bad; Nigerians all over are living in fear,” he said.
The Senate Minority Leader, Senator Enyinnaya Abaribe, said the problem of Nigeria was outside of the PDP headquarters, while pledging the support of the Senate to the declaration of state of emergency in security.
Abaribe said he deliberately decided not to speak on the floor of the Senate but to allow the APC senators to speak so as to avoid being accused of giving a partisan colouration to the issue of insecurity.
He stated that only electoral reforms would give victory to the opposition party in the 2023 general election and ensure a democratic defeat of the APC-led federal government.
Also, the Minority Leader of the House of Representatives, Hon. Ndudi Elumelu, commended the NEC and the PDP leadership for their collective efforts at resolving the House leadership crisis.
The NEC meeting adopted the position of Secondus, calling on the federal government to convoke a national conference to discuss the state of insecurity in the country, according to a communiqué read by the National Publicity Secretary, Mr. Kola Ologbondiyan.
Army Chief Vows to Wipe Out Boko Haram
The army yesterday reiterated its commitment to wipe out Boko Haram.
Chief of Army Staff (COAS), Lt. Gen. Ibrahim Attahiru, told reporters in Maiduguri, Borno State that Boko Haram had been defeated in many encounters and would continue to be defeated until it’s annihilated from Nigeria.
“We will take on Boko Haram decisively, and we are committed to the focus of the operations, which is the total annihilation of Boko Haram from Nigeria,” he said.
The COAS, who was visiting the headquarters of Operation Lafiya Dole in Maiduguri for the fifth time since his appointment four months ago, said the visit was to boost the morale of the troops, reassure them and listen to any issues affecting them.
Earlier, the Theatre Commander of Operation Lafiya Dole, Maj. Gen. Farouq Yahaya, lauded the visit, which he said had continued to boost the morale of the troops.
“We are honoured, we are grateful, we are encouraged by those visits. You provided us guidance, logistics and other things we required. We are most grateful for those visits,” Yahaya said.
State of Emergency Won’t Solve Security Challenges, Says Masari
Katsina State Governor, Hon. Aminu Masari, has, however, said declaration of a state of emergency won’t solve the security challenges facing the nation.
Masari, who spoke yesterday with journalists after meeting with the Chief of Staff to the President, Prof. Ibrahim Gambari at the State House, Abuja stated that he was against the recent call by the House of Representatives for the declaration of a state of emergency in the security sector as it would not solve the problem.
According to him, declaring a state of emergency will not achieve the desired effect as the security structure and personnel to be used to execute the emergency are already overstretched in a bid to safeguard lives and property.
Sourced From: THISDAYLIVE
Tribune Online
Nigeria records 55 new COVID-19 infections, total now 165,110
The Nigeria Centre for Disease Control (NCDC) has recorded 62 new cases of COVID-19, bringing the total number of infections in the country to 165,110. The NCDC disclosed this on its official Twitter handle on Friday. “55 new cases of #COVID19Nigeria; Lagos-21, Yobe-19, Ogun-6, Akwa Ibom-3, Kaduna-2, Plateau-2, FCT-1, Rivers-1.” YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE COVID-19: Nigeria Recorded […]
Nigeria records 55 new COVID-19 infections, total now 165,110
Tribune Online
Sourced From: Tribune Online
Kamaru Usman has raked in a mammoth £1.1million, about N584.2 million after his impressive knockout victory over Jorge Masvidal on Saturday night, Sportivation.com.ng reports.
The Nigerian Nightmare has been handsomely rewarded for his stunning performance and he was the best-paid fighter on the card which was witnessed by 15, 000 fans in Florida.
According to Daily Mail, Usman earned £538,000 to show up, £459,000 pay-per-view bonus, a £43,000 sponsorship bonus and a well deserved £35,000 Performance of the Night bonus.
Jorge Masvidal also earned £358,000 to show, £186,000 in pay-per-view money and a £28,000 sponsorship bonus.
This is the biggest payday of Usman’s career so far and the Welterweight champion also benefited from the fact that Masvidal is also a top draw for the fans.
Kamaru Usman is a Nigerian-American professional mixed martial artist, former freestyle wrestler and graduated folkstyle wrestler.
Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics
The government said that no worker should stay back beyond 6:00 p.m. within premises of buildings undergoing construction.
The post Insecurity: Lagos bans occupation of abandoned buildings appeared first on Premium Times Nigeria.
Sourced From: Premium Times Nigeria
Nigeria records 55 new COVID-19 infections, total now 165,110
Military, Police Ring Abuja to Forestall Boko Haram Attack
UFC: Usman gets N584m after beating Masvidal
Insecurity: Lagos bans occupation of abandoned buildings
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