The Nation Newspaper

Category: Money

  • ‘Reserves accretion hits $1.4b in Feb’

    The foreign exchange reserves added $1.4 billion last month, raising the figure to $47.4 billion, FBN Capital, an investment and research firm, has said.

    In an emailed report, the firm said the reserves have grown in each of the seven past months other than December. It said reserves added $10.9 billion since the end of July when the Monetary Policy Committee (MPC) raised cash reserve requirement for banks by 400 basis points.

    FBN Capital said the Central Bank of Nigeria’s (CBN’s) sales of forex in the Wholesale Dutch Auction System (WDAS) amounted to $1.15 billion in February, compared with $830 million the previous month. The rise, it said, could be traced to the softening of offshore inflows to the interbank market in buying naira-denominated Federal Government of Nigeria (FGN) debt.

    It said an easing of that demand would oblige the CBN to increase its offer at auction.

    The reserves include the balance in the excess crude account, for which the latest available figure was $9 billion.

    “We would expect the distributions from the account to the tiers of government to pick up as the FGN strives to reach an agreement with the state governors on the full functioning of the sovereign wealth fund. Draw downs in the run-up to the elections in 2015 would also not be surprising,” it said.

    The firm said reserves at end of last month provided cover for more than nine months’ imports of goods, and over six months when services are included. The level of reserves is now the highest since January 2009, and rests on appropriate monetary policy and the comfort of a high oil price.

  • Investors jostle for banks’ shares

    The trio of Zenith Bank Plc, Guaranty Trust Bank (GTB) Plc and United Bank for Africa (UBA) Plc emerged the most active stocks at the stock market last week as investors continued to focus on prospective earnings from audited reports and accounts for the last year, which are expected to be announced in the next few days.

    The three banks were the main volume drivers during the week accounting for 30.79 per cent, 24.12 per cent and 43.28 per cent, of the turnover recorded by the banking subsector, financial services sector and total equity turnover for the week.

    UBA was the most active stock with a turnover of 172.71 million shares worth N1.39 billion in 1,472 deals. Zenith Bank trailed with a turnover of 169.06 million shares worth N3.6 billion in 1,684 deals. GTB was the third most active stock with 123.15 million shares valued at N3.06 billion in 1,883 deals.

    Total turnover at the Nigerian Stock Exchange (NSE) slowed down to 1.93 billion shares worth N20.99 billion in 28,832 deals as against 2.28 billion shares valued at N24.63 billion traded in 28,170 deals two weeks ago.

    The banking subsector accounted for 55.4 per cent of total turnover with 1.07 billion shares worth N11.23 billion in 11,333 deals. Altogether, the financial services sector accounted for 1.51 billion shares valued at N13.53 billion in 17,688 deals. The conglomerates sector staged distant second with a turnover of 121.134 million shares valued at N299.812 billion in 1,210 deals.

    The market ended up negative with a week-on-week decline of 1.01 per cent. Aggregate market value of all equities dropped from its opening value of N10.618 trillion to close the week at N10.512 trillion. The All Share Index (ASI), the main index that tracks prices of all equities on the NSE, followed the same trend, dropping from 33,183.20 points to close the week at 32,849.11 points.

    Most equities witnessed price depreciation with 44 losers against 36 gainers. Nestle Nigeria led the decliners with a drop of N50 to close at N836. Guinness Nigeria followed with a loss of N11.50 to close at N265. Dangote Cement lost N5.49 to close at N142.50. Mobil Oil Nigeria dropped by N3.50 to close at N125 while Total Nigeria lost N3.42 to close at N148.11 per share.

    On the upside, UAC of Nigeria led the gainers with a gain of N4.10 to close at N54.10. Oando rose by N2.96 to close at N17.94. Unilever Nigeria added N2.14 to close at N52.14. GlaxoSmithKline Consumer Nigeria improved by N2.04 to close at N50 while Lafarge Wapco Cement Nigeria chalked up N1.50 to close at N69 per share.

     

  • Fidelity pledges customer satisfaction

    Group Managing Director/Chief Executive Officer, Fidelity Bank, Mr Reginald Ihejiahi, has said the lender will continue to offer services to satisfy their needs.

    He said this during the presentation of cars and cash won by some customers at the third draw of “Cars and Cash Savings Splash,” promo to mark its 25th anniversary at the weekend.

    According to Ihejiahi, Fidelity Bank will continue to create products to support its customers. “We will continue to make our customers happy especially as our business continues to grow with more and more people signing on to the Fidelity Bank account. All that we are after is to make our customers happy by offering them delightful services and to help their businesses grow,” he added.

    He explained that promo was in celebration of the bank’s anniversary. The Fidelity Bank boss urged potential customers of the bank to participate.

    At the promo held about a fortnight ago, the bank gave out five Hyundai Accent cars to five winners while 21 other winners also won cash prizes ranging from N100,000, N500,000 and N1 million.

     

     

     

     

  • CBN mops up N190b via T-bills

    CBN mops up N190b via T-bills

    The Central Bank (CBN) last week issued treasury bills (TBs) worth N190 billion as part of monetary control measures to help banks manage their liquidity. The apex bank said it plans to raise N917.76 billion from TBs in the second quarter of the year. The is N40 billion more than it had initially offered at the auction, data from the CBN showed.

    The demand for Nigeria’s local debt since the beginning of the year has been high due to attractive yields. Yields on the 91-day and 182-day notes were broadly unchanged while the returns on 364-day paper edged up marginally compared with the previous auction on February 20.

    The bank sold N32.97 billion in 91-day paper at 9.2 per cent, same as at the previous auction on February 20, N40 billion in the 182-day bill at 9.44 per cent, compared with 9.45 per cent at the previous auction.

    A total of N117.12 billion of the 364-day bond was sold at 9.98 per cent, higher than the 9.45 per cent at the previous auction on February 20. Nigeria had originally planned to sell N50 billion in 182-day notes and N67.12 billion in 364-day paper at the auction.

     

    Interbank rate

     

    The inter-bank rate remained steady on March 7, reflecting CBN’s effective/aggressive liquidity management efforts. Call overnight rate remained steady on 10.25 per cent, the seven-day money market rate fell slightly to 10.6 per cent. The three-month Nigeria Interbank Offered Rate (NIBOR) fell to 11.66 per cent though fewer activities are done on the tenor.

    The CBN liquidity management remained active and supported by the circular issued on 1 August, which reviewed guidelines on how banks access its Standing Lending Facility and forex auction.

    Naira

    The naira depreciated for the third time in four days after the CBN paid out maturing Treasury bills, boosting money supply and freeing up local currency for buyers to seek dollars. The currency of Africa’s biggest oil producer declined 0.1 per cent to 157.85 per dollar, paring a weekly gain to 0.1 per cent, according to data compiled by Bloomberg.

    CBN settled maturing bills amounting to N263.93 billion ($1.7 billion), the Financial Markets Dealers Association, said on its website. The institution sells bills to help manage currency supply within the market. “The maturities boosted money supply as they hit the market, making dealers more able to seek dollars,” Sewa Wusu, an analyst at Lagos-based Sterling Capital Ltd., said.

    The regulator held the benchmark interest rate at a record high 12 per cent for an eighth time on January 21 to control inflation and stabilize the naira. The nation’s inflation rate fell to 9 per cent in January from 12 per cent in December the statistics bureau said February 18.

    Yields on Nigeria’s $500 million of Eurobonds due January 2021 fell 20 basis points to 4.08 per cent. The yield on the country’s 16.39 per cent domestic bonds due January 2022 rose 24 basis points to 11.1 per cent, according to data compiled on the FMDA website.

     

    Forex inflows

     

    Provisional data on foreign exchange (Forex) flows through the CBN showed that inflow during the fourth quarter of 2012 amounted to $11.17 billion, representing a decline of 16.9 from preceding quarter, according to data obtained from the CBN website.

    Outflow amounted to $7.82 billion, showing a decline of 3.3 per cent in the preceding quarter and resulted in a net inflow of $3.35 billion, compared with a net inflow of $5.36 billion in the preceding quarter.

    The report said decline in inflow relative to the preceding quarter was attributed largely to the 9.6 per cent fall in crude oil sales, while the fall in outflow was attributed to the 35.2 per cent decline in Wholesale Dutch Auction System (WDAS) utilisation.

    Meanwhile, the invisible sector accounted for the bulk (32.9 per cent) of total forex disbursed in the fourth quarter of 2012, followed by mineral and oil sector (18.7 per cent). Other beneficiary sectors in a descending order included industrial sector (18.2 per cent), food products (15.5 per cent), manufactured products (10.1 per cent), transport sector (10 per cent) and agricultural products (0.2 per cent).

    Estimated forex demand by the authorised dealers in the fourth quarter stood at $4.28 billion, indicating a decline of 35.2 in the preceding quarter. The sum of $4.27 billion was sold by the CBN during the review period, indicating a decrease of 36 in the preceding quarter.

     

    Microfinance banks

     

    The CBN said that the National Microfinance Development Strategy will soon be released. The document is expected to outline modalities for developing the subsector and rules that operators will follow to achieve improved performance s well s sector’s stability.

    The apex bank is also working on consolidating on the achievements recorded so far by the country in the development of MfBs by strengthening the regulatory frameworks and other guidelines. This also includes formation of National Microfinance development Strategy with the United Nations Development Programme (UNDP) and the recent signing of a major agreement with the Alliance for a Green Revolution in Africa (AGRA).

    Besides, the CBN is considering the establishment of a Microfinance Development Fund (MDF) as a further step to deepen the financial market. The MDF when established would assist in addressing teething challenges of underfunding for microfinance institutions in the country.

    It will further complement past and current efforts aimed at strengthening the microfinance sub-sector of the financial system, improve financial inclusion and by implication, improve the nation’s Gross Domestic Product (GDP) rate significantly, the statement indicated.

     

    MSMEs

     

    The Federal Government disclosed plans to launch a new policy on Micro, Small and Medium Enterprises (MSMEs) in the country. The proposed draft policy document-the National Enterprise Development Programme (NEDEP) is expected to be formally inaugurated by the presidency after inputs by various stakeholders have been accommodated.

    Minister of Trade and Investment, Mr. Olusegun Aganga said the programme, which is aimed at creating a more robust and stronger SMEs sector is estimated to cost N10 billion annually and targets to create about 3.5 million direct jobs in 2013 as well as 5 million indirect jobs by 2015.

    Speaking in Abuja at a stakeholders’ meeting on the NEDEP, which was being spearheaded hosted the Federal Ministry of Trade and Investment and the Bank of Industry (BoI) in collaboration with the Small and Medium Enterprises Development Agency of Nigeria (SMEADAN), and the Industrial training Fund, the Minister said NEDEP was the solution to the currently loose and uncoordinated relationships among the various SMEs initiatives in the country.

     

    GDR

     

    The admission of Zenith Bank’s Global Depositary Receipts (GDR) to the official list of the London Stock Exchange (LSE) and trading same on the LSE is expected to take place within the month, Renaissance Capital (RenCap), an investment and research firm has said. “Our understanding from management is that the listing of the instruments should happen in March 2013,” it said in an emailed report obtained by The Nation.

    It said the objectives of the GDR issuance are to increase the bank’s visibility and trading in its securities, as well as to expand and diversify its investor base. “Given that Zenith Bank is the most highly capitalised Nigerian bank with a capital-adequacy ratio of 29 per cent as at last September, and does not require any capital injection, it makes sense to us that the GDRs are non-capital-raising,” RenCap said.

    The GDR issuance, it added, simply gives existing shareholders the option to convert to an LSE-traded instrument. The conversion ratio is 50 common shares to one GDR.

     

    Economic growth

     

    Nigeria economy grew 7.1 per cent in the fourth quarter, the CBN has said. Growth was 6.9 per cent in the previous three months and 7.7 per cent in the same period the previous year, the bank said in a report on its website, citing figures from the National Bureau of Statistics.

    The pickup was largely driven by industrial growth, with the non-oil sector expanding 8.2 per cent and accounting for 87 per cent of all output, the bank said. Agricultural “areas adversely affected by the floods during the second half of 2012 were yet to recover fully from the impact.”

    The fiscal deficit of the country rose to N420.8 billion or 3.9 per cent of economic output, in the fourth quarter. That compares with a targeted deficit of N284.1 billion for the period and a gap of N489.5 billion in the previous three months, the bank said. “The deficit was financed mainly from domestic sources, particularly through the issuance of additional Federal Government of Nigeria Bonds,” it said.

     

    Bank to bank report

     

    Ecobank Transnational Incorporated (ETI) revenue growth forecast for fiscal year 2013 has been pulled down to 16 per cent, from initial 19 per cent by Renaissance Capital (RenCap), an investment and research firm. The forecast is higher than management 15 per cent revenue growth target for the year.

    RenCap, in an emailed report obtained by The Nation, said that even if there is little improvement in the bank’s Net Interest Margin (NIM), management’s revenue-growth target implies a slower progression in non-interest revenues than it had previously assumed.

    Leaders of the African Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Monetary Fund, and the World Bank Group have pledged close collaboration to support development and growth.

    In a statement, the institutions said there is need for coordinated efforts to achieve the Millennium Development Goals by 2015, which aim to end poverty and hunger, increase access to education and health care, improve gender equality, and ensure environmental sustainability.

    “Nothing could be more important than ensuring young people get the right start in life. We aim to make 2015 the year in which children no longer negotiate access to basic education, mothers to the most basic health care, households to water and sanitation, or girls to the most fundamental opportunities for schooling, work, or voice in their communities. And we aim to ensure these gains are permanently sustained in the post-2015 era” Donald Kaberuka, President of the African Development Bank said.

    A one story building comprising six classrooms, a multipurpose hall and other facilities financed by First City Monument Bank (FCMB) Plc at Baptist Model High School in Ikola-Ipaja, Lagos State has been commissioned. The construction, which began in middle of the year 2012, was financed by the bank to the tune of N20 million.

    Speaking at the commissioning of the school building, FCMB’s Zonal Head for Ojo-Alaba in Lagos, Mr. Endwell Brown, explained that, “FCMB is committed to supporting developmental projects and programmes that will benefit the larger society”.

    Skye Bank Plc said it had granted facilities amounting to $500 million to operators in the maritime industry in recent times. The bank’s General Manager, Corporate Banking (Maritime and Aviation sector), Mr. Segun Opeke, explained that the loan was part of its commitment to the development of the maritime industry in the country.

    He said the amount represents money provided to indigenous ship owners and other stakeholders for the acquisition of ships and other critical work tools needed to strengthen operation o the sector. Speaking at a forum of maritime stakeholders, Opeke said the bank was prepared to expand its credit lines to the operators to further develop the industry. According to him, the bank was responsible for the provision of credit facilities to indigenous ship owners for the acquisition of an estimated 50 per cent of the entire fleet in the country.

     

     

     

     

  • NSE: Equities’ price change now to move by 10 per cent

    Market considerations of all equities quoted on the Nigerian stock market would in the next few weeks be allowed to move within a daily limit of 10 per cent as against the current general market daily allowable price change of 5.0 per cent.

    Executive director, operations, Securities and Exchange Commission (SEC), Mr Munir Gwarzo, who disclosed this yesterday in Lagos, said that the Nigerian Stock Exchange (NSE) would spread the 10 per cent daily allowable price change currently being enjoyed by only stocks in the market-making basket to cover all equities.

    Under the rules of the NSE, market values of stocks in the portfolio for market making could witness maximum daily change of 10 per cent as against maximum daily allowable percentage change of 5.0 per cent for the general market.

    The market making function subsequently kicked off on September 18, 2012 with 16 stocks selected for the take-off phase. The NSE has since continuously been increasing the coverage of market making. It last week added Flour Mills Nigeria Plc, Unilever Nigeria Plc, Royal Exchange Plc, and Wema Bank Plc to the list, bringing the number of stocks that have been rolled into the initiative to 43.

    Other market-making stocks included Oando, Unity Bank Plc, Seven-Up Bottling Company Plc, United Bank for Africa Plc, Access Bank, PZ Cussons Nigeria Plc, Nigerian Bag Manufacturing Company Plc, Presco Plc, Ecobank Transnational Incorporated (ETI), International Breweries, Lafarge Wapco Cement Nigeria, Julius Berger Nigeria Plc, Guinness Nigeria Plc, Dangote Flour Mills Plc, Academy Press, Fidson Healthcare Plc, Redstar Express Plc, Ashaka Cement Plc, Skye Bank Plc, Zenith Bank Plc, Dangote Cement Plc, UAC-Property Development Company, Custodian & Allied Insurance, Sterling Bank Plc, Prestige Assurance Company Plc, FBN Holdings, DN Meyer, Stanbic IBTC Holdings, Nestle Nigeria Plc, Diamond Bank, Dangote Sugar Refinery, Fidelity Bank Plc, Union Bank of Nigeria, National Salt Company of Nigeria (NASCON), Nigerian Breweries Plc, Transnational Corporation of Nigeria Plc, Airline Services & Logistics Plc, AIICO Insurance Plc, Guaranty Trust Bank Plc and UAC of Nigeria Plc.

    Gwarzo allayed fears that the market-making might be disruptive to the price discovery at the market pointing out that the initiative has been more beneficial to the market.

    Meanwhile, the stock market recorded its third consecutive decline yesterday as with the mian index at the NSE, the All Share Index (ASI) slipping by 0.16 per cent to close at 32,731.08 points. Market capitalisation declined marginally by N17.11 billion to close at N10.47 trillion. The decline yesterday pushed the average year-to-date return down to 16.57 per cent.

    With 33 decliners to 24 advancers, the decline was further orchestrated by losses by some highly capitalised stocks. Total turnover stood at 278.97 million valued at N3.67 billion in 5,794 deals.

  • Fitch: Nigerian banks’ risk weight rises

    Fitch: Nigerian banks’ risk weight rises

    The higher risk weights introduced by the Central Bank of Nigeria (CBN) are likely to add to pressure on bank capital ratios, Fitch Ratings has disclosed.

    It however said that if successful in reducing sector concentrations, the changes could benefit asset quality and risk management.

    Capital has been tightening at some banks as they expand their loan books following the Asset Management Corporation of Nigeria (AMCON) clean-up of the sector.

    Fitch Core Capital (FCC) ratios at end of September 2012 were 10 per cent to 30 per cent. Speaking with Reuters, Fitch said that some Nigerian banks have lower FCC than is appropriate for their growth in a difficult operating environment (Nigeria is rated ‘BB-’/Stable). This is reflected in their low Viability Ratings (mostly in the ‘b’ range).

    The generous dividend policies demanded by Nigerian investors mean internal capital generation is unlikely to support sustainable growth in the medium-term. It said excessive credit expansion has been temporarily subdued by higher interest rates on government securities following the expiry of the interbank guarantee from the Central Bank of Nigeria (CBN) in 2011.

    “But we still expect loans to grow 18 to 20 per cent this year, close to the rate of inflation-adjusted economic growth as banks focus on increasing lending to government-sponsored projects, especially in the power sector,” it said.

    Fitch said there is little appetite for fresh equity issuances in the market as some banks may want to fund growth with long-term subordinated debt. “This does not count as loss-absorbing capital in our analysis, so further growth together with higher risk weightings would put core capitalisation under pressure. The Nigerian banks continue to report capital ratios based on local GAAP equity rather than the IFRS adopted for financial reporting in 2012,” it said.

    Fitch noted: “This is the same approach as taken by some European regulators. We estimate the regulatory capital ratios for Nigerian banks would be 60 basis points to 120 lower if based on International Financial Reporting Standards (IFRS).

  • Maritime secures $500m Skye Bank loan

    Skye Bank Plc has granted facilities amounting to $500 million to operators in the maritime industry in recent times.

    The bank’s General Manager, Corporate Banking (Maritime and Aviation sector), Mr. Segun Opeke, explained that the loan was part of the lender’s commitment to the development of the maritime industry in the country.

    He said the amount represents money provided to indigenous ship owners and other stakeholders for the acquisition of ships and other critical work tools needed to strengthen operation of the sector.

    Speaking at a forum of maritime stakeholders, Opeke said the bank was prepared to expand its credit lines to the operators to further develop the industry.

    According to him, the bank was responsible for the provision of credit facilities to indigenous ship owners for the acquisition of an estimated 50 per cent of the entire fleet in the country.

    He said the bank has played key roles in maritime financing, which has been recognized for that purpose.

    Recently, the bank won the “the most progressive maritime bank” award in recognition of its pioneering role in maritime banking as well as for its contributions to the growth and development of the maritime industry in Nigeria.

  • IFC’s portfolio in Nigeria hits $1.1b

    The International Finance Corporation (IFC’s) committed portfolio in Nigeria stands at $1.1 billion, the largest country portfolio in Africa and the eighth-largest globally, Bloomberg report has said.

    The IFC recently issued a Nigerian local currency bond totaling N12 billion, about $75 million to support domestic capital markets and increase access to local-currency finance.

    The issue, called the “Naija” bond, is IFC’s first naira-denominated bond. It is also the first placement by a nonresident issuer in Nigeria’s domestic capital markets. “Vibrant domestic capital markets create access to long-term, local-currency finance for the private sector—the key engine of job creation in emerging markets,” said Jingdong Hua, IFC Vice President and Treasurer.

    “The IFC Naija bond supports our efforts to deepen domestic capital markets in Africa, so they can sustain a thriving private sector in the region.”

    Solomon Adegbie-Quaynor, IFC Country Manager for Nigeria, said: “The IFC Naija bond supports the efforts of the government and authorities to deepen domestic capital markets and grow the corporate bond market in Nigeria. A well-developed corporate bond market in turn can provide affordable, long-term naira funding to meet the financing needs for critical sectors such as power.”

  • Courteville’s capital rises to $250m

    The worth of shares of Courteville Business Solutions Plc listed on the Nigerian Stock Exchange (NSE) has risen to $250 million, five years after the initial listing of the company.

    Its Group Managing Director, Mr. Adebola Akindele disclosed this during a meeting with the Caribbean Trade Mission, Jamaica and Trinidad and Tobago. The meeting, according to a statement, was meant to expand the firm’s operations into international markets and also on the request of Caribbean Enterprise Network UK (CENUK).

    Also on the trip were Deputy Managing Director (AutoReg Franchise), Mr. Wale Sonaike; Executive Director Projects , Strategy and Research, Mr. Femi Niyi and Director of Priority Group International, Denis St Bernard and Courteville’s Communications consultant, Mr Wole Oyewo.

    He said that Courtevilles’s AutoReg franchise is currently in use in 22 states in Nigeria and would be expanding to eight more states within the year. He said the company is also working with Serria Leone and is discussing with other African countries that are interested in leveraging on its services.

    He said his team first met with Jamaica Promotions Corporation (JAMPRO) in Kingston, Jamaica where they were received by Mr. Claude Duncan, the Vice President Investment Promotion.

    Mr. Akindele, the GMD of Courteveille Business Solutions unvieled Courteville’s profile and indicated his confidence that with his seven year tenure and the listing on the Nigerian Stock Exchange, the firm could be a credible partner to Small Business Association of Jamaica.

    He said that the firm has also been effective in providing business solutions with a specialty in Information Technology in Nigeria and Sierra Leone.

  • CBN’s reforms spark interest in money market instruments

    CBN’s reforms spark interest in money market instruments

    There seems to be a positive side to the Central Bank of Nigeria (CBN) reforms going by applause from some experts.

    The experts said the reforms have sparked interest in money market instruments.

    The reforms, they said, had not only brought about safer, healthier and a more conducive investment climate, but have buoyed confidence in the industry.

    They said firms that could not wait for the recovery of the capital market are looking at money market instruments for growth. They do this by approaching banks for Bankers Acceptance (BAs), Commercial Papers (CP) and fixed deposits, among others.

    The Chief Executive Officer, CDL Assets Management Limited, Mr Bade Adeshina, described fixed-income securities, equities, estate and money market instruments as investment options prominent in the consideration of many firms.

    hE said his firm has invested Union Trustees Mixed Fund in four portfolios for growth.

    Union Trustees Mixed Fund is a varied fund pooled by investors to aggregate the potential in the financial markets.

    He said the fund has invested in money market instruments because of its safer and good yields.

    “As at April 30, 2012, 61 per cent of the fund was invested in money market instruments, 23 per cent in quoted equities, 15 per cent in the fixed income securities and one per cent, in the Real Estate Securities. These investment allocations were in accordance with the Trust Deed of the Fund.”

    He said investments in money market instruments, such as deposits and bankers’acceptance rose from N1.032 billion in 2011 to N1.188 billion last year.

    The Chairman, Anchoria Investment and Securities Limited, Dr Olusola Dada, said people were looking for more beneficial investment windows as the stock market recovers. He said the only appealing windows for investors is the money market, adding that the development ensures that people keep their money in banks at fixed interests, no matter how small they may be.

    “Though investors are investing in fixed-income securities, such as Bonds and Treasury Bills, investment in money market instruments is on-going, because people are looking for channels to make money in the short and medium term basis,” he said.

    The Chief Executive officer, TFS Finance Limited, Eddie Osaronkhoe, said short-term borrowers rely on commercial papers issued by banks to survive, adding that they get better yields once the banks are doing well.

    “Once there is an increase in the values of such financial instruments, it implies that the values of investments of banks are growing up. This will have positive effects on the credit flow to the economy. If the trend continues, economic activities will improve,” he said.

    “Bankers acceptance and commercial papers are used to execute various business ideas or plans. Anytime the financial instruments experience an increase in values, the banks capacity to record a reasonable profit margin improves as well,” he added.

    A former President, Association of National Accountants of Nigeria (ANAN), Dr Francis Ndukwe, said the issue is showing the increased capacity of banks to lend to the economy, adding that banks are improving on their lending , as their bad debts have been acquired by the Assets Management Corporation of Nigeria (AMCON).

    Ndukwe said the development is going to have spiral effects on the products and services offered by the banks. He said considerable economic benefits can be derived when the values of Bankers Acceptance, among other instruments, appreciate.