Bonds & Fixed Income | |
Bonds & Fixed Income | |
1388 VIEWS | |
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Thursday, February 20, 2020
/ 11:14 AM/ Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV
Mr. Guy Czartoryski , Head of Research,
Coronation Merchant Bank believes Nigeria has a great opportunity to raise
enough funds to shore up its external reserves and avoid the pressures of a
currency devaluation in 2020.
Mr. Czartoryski was the keynote speaker at
the maiden Coronation Merchant Bank breakfast session for the Fixed Income
market discussing the theme "Re-Risking Nigeria's Financial System".
The Analyst was of the view that Africa's
largest economy could experience inflows of between $5bn and $6bn, but this
will largely depend on key developments in the Nigerian economy at the end of
Q1, 2020.
Part of this will be the level of foreign
portfolio investments (FPI) in the Central Bank of Nigeria's open market
operations (OMO) during the period of January and February,2020.
Major source of inflows for the Nigerian
economy will come from oil & gas proceeds, bilateral loans, eurobond issues
and the foreign portfolio investments in the Open Market Operations, OMO bills.
He noted that despite the fact that
foreign exchange steeped during the second half of 2019, Czartoryski was of the
opinion that there will be sufficient sources of US dollars, for the Central
Bank of Nigeria to support the foreign exchange, FX reserves.
Speaking further on the foreign exchange
said CBN will be expected to keep the exchange rate close to N362.50k for most
of, if not all of 2020.
Coronation Merchant Bank also stated that
an international crude oil price regime below $50 per barrel for example could
challenge foreign exchange and interest rate management in 2020.
Looking at interest rates he stressed that
the downward pressure on T-bill and government bond rates will continue as
domestic funds rotate from high-yielding CBN OMO bills into government
securities.
He identified two disruptive forces at work that could change the interest rate outlook for 2020, which are;
Giving the overview of the Fixed Income
Market, Mrs. Iyobosa Sorae, Head of Trading and Fixed Income, Coronation
Merchant Bank in her presentation said in the past five (5) years the
investment bank has executed transactions in the Fixed Income space worth
N6.1trn.
She also added that in the non-sovereign
debt market, Coronation Merchant Bank remained the major player helping
corporate and sub-sovereign entities raise over N100bn over the past two years.
Mrs. Sorae also highlighted some of the key regulatory actions carried out by the Central Bank of Nigeria in 2019 and early 2020, that have had a huge impact on the Fixed Income Market, including;
The Acting MD/CEO of Coronation Merchant
Bank Mr. Banjo Adegbohungbe in his opening remarks at the event said the
breakfast session, was an opportunity to give clarity to market stakeholders
amidst economic uncertainty.
He stated that the forum was an avenue for
fund managers and fixed income market players to receive deep insight into key
economic trends, and how they can best manage their funds in the year 2020.
The breakfast session also featured a panel
session with Mr. Magnus Nnoka, Chief Risk Officer, Coronation Merchant Bank,
Mr. Guy Czartoryski, Head of Research and Mrs. Iyobosa Sorae, Head of Trading
and Fixed Income as discussants.
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