Business
Greece set to end its bond market exile
LONDON/ATHENS – Greece, at risk of crashing out of the euro zone just two years ago, will issue its first sovereign bond in almost four years on Thursday, seeking to send a strong political and economic signal it is on the way out of its debt crisis.
International banks have been mandated to sell a benchmark five-year, euro-denominated bond under British law, with the sale to be completed “in the immediate future,” the country’s finance ministry said in a statement.
According to sources speaking to Reuters and Thomson Reuters news and information service IFR, pricing is set for Thursday. Two investors said Greece was sounding out an indicative yield of 5.25 percent to 5.5 percent.
“We aim to raise up to 2.5 billion euros on Thursday,” one government official said. “It will be a great success if the coupon is below 5.3 percent.”
The sale is an important milestone for one of Europe’s most troubled economies. The last time it sold bonds, as opposed to very short-term paper, was back in March 2010.
Greece has been since kept afloat by 218 billion euros of European Union/International Monetary Fund bailout money and about 15 billion euros of treasury bills.
Athens has no pressing funding needs but wants to test the waters for more and bigger bond sales in the future, as part of its strategy to cover all its funding needs from the market by 2016.
The sovereign has hired Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs International, HSBC, JP Morgan and Morgan Stanley to arrange the deal.
POLITICS PLAY ROLE
Athens originally planned to tap bond markets in the second half of the year, after more tangible evidence that its ongoing, six-year recession is over.
But rapidly falling bond yields and pressure to produce an economic success before the European Parliament elections in May have persuaded Prime Minister Antonis Samaras and his fragile coalition government to bring the sale forward.
In a dramatic turnaround, existing Greek 10-year bond yields dropped below 6 percent for the first time in four years on Wednesday, down from about 40 percent two years ago, when Athens imposed severe losses on private bondholders in a 130-billion euro restructuring [ID:nL6N0N132Z]
On Tuesday, foreign investors also snapped up about 80 percent of a 1.3 billion euro six-month T-bill issue.
Greece’s debt currently stands at about 320 billion euros, or 175 percent of GDP. It is rated nine notches below investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece six notches below investment grade at B-.
But despite its size, the country’s debt is attractive to investors because its 2012 restructuring has made it sustainable for ten years, the head of euro zone rescue fund ESM Klaus Regling said on Saturday.
About 80 percent of Greece’s debt is in the hands of the European Union and the International Monetary Fund, at very low interest rates and on a long repayment schedule. Private creditors are holding just about 30 billion euros of bonds with maturities between 10 and 30 years.
The Greek opposition opposed the bond sale, accusing Samaras of acting hastily on party-political motives. “Going out to markets is one thing. Exiting the crisis is another,” said the Democratic Left party. Samaras’s ruling coalition has a parliamentary majority of just two seats.
DON’T FORGET THE JOBLESS
Public anger about the economic pain in still running high Greece, which has seen unemployment soar to nearly 28 percent and almost a quarter of whose economy was wiped out in the austerity-fuelled recession.
Labor unions staged a nationwide strike on Wednesday to protest against austerity policies imposed on the country by its foreign creditors, including Germany, whose Chancellor Angela Merkel will visit Athens this week.
“All the joy about the bond market exit shouldn’t make us forget that 1.5 million people are unemployed in Greece,” said Nikos Koutsoukis, senior official at GSEE, the country’s biggest private sector labor union.
For all the green shoots, it is too early to talk about long-term economic stability. Thousands of businesses closed across Greece last year.
But economic data released on Wednesday add to evidence that its economy is bottoming out after six years of recession that wiped out almost a quarter of its gross domestic product.
Industrial production rose in February at an annual pace of 1.7 percent, the first time the reading rose for a third consecutive month since the end of 2007.
PPC, the country’s biggest power producer is set to become later this month its first state-controlled company to issue a bond since the debt crisis erupted.
– REUTERS
The Nigeria Deposit Insurance Corporation (NDIC) has announced revisions to the Maximum Deposit Insurance Coverage for banks operating within the country.
NDIC’s Managing Director, Bello Hassan, disclosed the updated coverage benchmarks during a media briefing in Abuja on Thursday.
The coverage for Deposit Money Banks has been increased from N500,000 to N5 million, for Microfinance Banks from N200,000 to N2 million, for Primary Mortgage Banks from N500,000 to N2 million, and for Mobile Money Operators subscribers’ pass-through from N500,000 to N5 million per subscriber.
Hassan underscored that the objective of the update is to enhance depositor safety, foster public trust, promote the inclusivity of financial services, and ensure the overall stability of the financial sector.
More to follow.. . .. .
The 63rd Annual General Meeting (AGM) of the Nigerian Exchange Group Plc (NGX Group), held at the Nigerian Exchange Group House on Monday, April 29, 2024.
During the gathering, the Group concluded on ordinary and special business matters, while also unveiling plans to embark on a comprehensive digital transformation strategy to expand its business operations in line with its overarching strategy.
The meeting’s agenda, approved by the Board of Directors, included the declaration of a final dividend, ratifying the appointment of Temi Popoola as the Group Managing Director/Chief Executive Officer of NGX Group, presenting financial statements to shareholders, re-electing non-executive directors retiring by rotation, authorizing, and disclosing remuneration, among other undertakings.
Notably, the NGX Group, subject to regulatory approval, discussed its authorization on a rights issue to raise capital of up to N10 billion with a subjoined resolution to increase its share capital to sufficiently accommodate the rights issue.
All resolutions were approved by shareholders just as appointment and reelections of directors were ratified.
Following substantial authorization across its agenda, the NGX Group introduced plans to propel the markets with a digital transformation journey that includes an online platform for public offers and deep investments in its technology stack amongst others.
The platform will provide a smarter and efficient way for Issuers to raise capital and enhances the subscription process and operational workflow of POs in the capital market including initial public offerings (IPOs), rights issues and other public offers.
On the development, the Group Chairman, NGX Group, Umaru Kwairanga said, “I am particularly grateful to our shareholders for their assent to the critical business we conducted today. As the Board oversees the strategic direction and gives management the necessary support and guidance, we believe that the coming year will be a better one in terms of value created for our shareholders.
“NGX Group is positioned to capitalize on opportunities amid the positive and forward-looking reforms by the government and our stakeholders should rest assured we will deliver excellently.”
On his part, Group Managing Director/Chief Executive Officer, NGX Group, Temi Popoola, said, “As we complete our 63rd AGM, I extend my sincere gratitude to our shareholders, customers, employees, regulators, and directors for their steadfast support. In a year that underscored NGX Group’s strategic agility and operational excellence, we witnessed growth stemming from our dynamic revenue streams. We are optimistic and well-positioned to forge a future marked by success, resilience, and prosperity.
Addressing the digital transformation agenda, Popoola stated, “The future of our business and the capital markets hinges on technology. That is why we are driving this digital transformation journey across our subsidiaries through the Group. NGX Group’s digital transformation will democratize access to public issuances for every Nigerian with a mobile phone, supporting capital-raising efforts for companies. Additionally, we aim to commercialize our technology solutions and expand our footprint across Africa”.
Key insights and proceedings from the NGX’s AGM can be accessed via the live recording available on NGX Group’s website at www.ngxgroup.com.
. . . Firm Declares N4.5bn Dividend For 2023
The Nigerian Content Development and Monitoring Board (NCDMB) has announced that it had received an interim dividend payment of N450 million out the N1.5bn declared by the Waltersmith Refinery and Petrochemical Company Limited.
The NCDMB made the disclosure on Monday, adding that the payment represented NCDMB’s 30% share in the company for the year ended 2023.
Recall that the NCDMB had in July 2018 invested $10m to acquire 30% stake in the 5000 barrels-per-day (bpd) modular refinery project located at Ibigwe, Imo State, to support the Federal Government’s policy on modular refinery, stimulate investment and create employment opportunities.
Rising from a Board Meeting of Waltersmith Refinery and Petrochemical Company Limited, the Executive Secretary, NCDMB, Engr. Felix Omotsola Ogbe confirmed that a total dividend of N4.5bn had been approved for the year 2023, pending final approval at the Annual General Meeting (AGM).
The company reported a total profit of N23.6bn as profit after tax for the same year.
The Executive Secretary hinted that NCDMB expects to receive additional 30 percent of the outstanding N3bn dividend after the AGM is convened later this year.
He added that the receipt of this interim dividend payment was a testament to the strong performance and profitability of Waltersmith Refinery and Petrochemical Company Limited.
He said, “The NCDMB is proud to be a part of this success and looks forward to continued collaboration with the company in the future.”
He affirmed that the company was upscaling the refinery capacity from 5000 bpd to 10,000bpd and the expansion project was already 44 percent completed and on time to be commissioned by early 2025.
The NCDMB’s investment in the Waltersmith project was also geared to catalyse the industrialisation of the Nigerian oil and gas industry and its linkage sectors and deepen Nigerian Content in the oil and gas industry. It was the first third-party investment embarked by the Board, and it provided proof of concept and paved the way for other successful investments by the Board.
Two weeks ago, NCDMB received a cheque of $1 million from Nedogas Development Company Limited (NDCL), being part of the return on investment (ROI) on one of the Board’s strategic investments.
The cheque was presented by the Chairman of the company, Engr. Emeka Ene when he visited the Nigerian Content Tower in Yenagoa Bayelsa State, where he was received by the Executive Secretary, Engr. Felix Omatsola Ogbe and other members of the Board’s management.
Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company and it culminated in the construction and commissioning of a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.
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