CENTRAL BANK OF NIGERIA MOVES TO ATTRACT SHORT TERM FOREX.

In a move apparently intended to attract inflow of short term, in addition to more traditional long term, funds into Nigeria, the Central Bank of Nigeria (CBN) has amended its foreign exchange manual to allow for investment in money market instruments using imported funds.

According to a circular signed by Acting Director Trade and Exchange. W D Gotring, the change allows resident Nigerians and companies to import funds through authorised dealers to invest in money market instruments.

Under the new rule. "A resident/non resident national and entities /foreign national or entity may invest in Nigeria by way of purchase of money market instruments such as commercial papers, negotiable certificates of deposits, bankers acceptances, treasury bills etc" but subject to the following :

1) There must be tested SWIFT message evidencing remittance of the fund.

2) There must be board of directors resolution of the local beneficiary authorising the investment

3) Purpose of the importation of the fund must be stated in the SWIFT message and

4) There must also be evidence of incorporation where applicable.

The circular also clearly States the procedure to be followed and this includes formal appointment of local bank or broker as agent; electronic transfer of fund to a designated bank, issuance of certificate of capital importation by the bank within 24 hours and authorised dealers are to keep separate records for the investment and render returns to the  CBN.

Because money market instruments are for far more limited time than long term ones,  eventually, whenever such investors want to divest and recoup their investment, certificate of capital importation and evidence of money market instrument redemption must be tendered.

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more