Commercial Papers Listed on FMDQ Rise by 43%
As companies continue to eye cheap funding sources, commercial papers quoted on the FMDQ platform rose by about 43% in the month of June, according to a report. Amidst a high interest rate environment, companies have altered financial plans to ensure a balanced capital structure as a way to reduce the costs of funding their operation.
Average lending rates offered by commercial banks have increased as monetary policy rate spiked following the Central Bank of Nigeria’s inflation-fighting moves. According to the FMDQ report, the platform recorded a slowdown in corporate bond listing in July 2023 compared to ₦17.50 billion worth of corporate bonds listed in June 2023.
As a result, the total outstanding value for corporate bonds remained unchanged at ₦1,757.95 billion in the review month, according to the monthly update. FDMQ said in the report that the total value of commercial papers quoted on the Exchange in July 2023 was ₦117.32 billion.
This represents a month-on-month increase of 42.85% or ₦35.19 billion from the value of CPs quoted in June 2023. The report explained that quoted CPs were issued by institutions from various sectors including Financial Services, Manufacturing, Real Estate, Agriculture, Chemical Supply and Oil Field Services.
Others are commodities trading, Public Sector, Telecommunications and Consumer Staples. As a result, the total outstanding value of CPs increased in July by 14.10% or ₦117.32 billion to ₦949.26bn
On the sovereign side, the DMO sold T-bills valued at ₦406.10 billion across its auctions in July 2023, representing a 0.39% or ₦1.59 billion month-on-month increase on the value of T-bills sold across its auctions in June 2023 worth ₦404.51 billion.
Similarly, the DMO reopened two 10Y, one 15Y and one 30Y FGN Bonds worth ₦657.84 billion in July 2023.
The total sale represented a 182.73% oversubscription of the amount offered, and a 39.03% (₦184.68bn) month-on-month increase on the amount sold in June 2023 (₦473.16bn) for the same FGN Bond maturities. The CBN did not conduct any public OMO Bills auctions in July 2023. #Commercial Papers Listed on FMDQ Rise by 43% Naira Steadies as Banks Issue Update on FX Purchase