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Republicans on verge of retaining control of U.S. Senate

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CBN Cuts T-bill Rate Amid N3.63tn Demand Investors are increasingly positioning for longer-term returns in Nigeria’s fixed-income market, with the latest treasury bills auction showing an overwhelming preference for the one-year government security. At the Central Bank of Nigeria’s (CBN) primary market auction on Wednesday, investors submitted N3.63tn for the 364-day T-bill, representing 95.9 per cent of the N3.79tn total bids received across the three maturities. The demand came despite the CBN lowering the stop rate on the one-year instrument by 44 basis points to 17.15 per cent, from 17.59 per cent at the previous auction. The auction results point to a significant shift in investor appetite towards longer-dated government securities, even as demand for shorter-tenor instruments remained subdued. The CBN had offered N700bn across the three maturities, comprising N100bn each for the 91-day and 182-day bills and N500bn for the 364-day bill. However, total subscriptions reached approximately N3.79tn, more than five times the amount offered. The 364-day instrument was the clear outlier at the auction, receiving bids equivalent to 7.26 times the amount offered. The CBN ultimately allotted N638.19bn, exceeding the N500bn offer by N138.19bn. Despite the additional allotment, only about 17.6 per cent of total bids submitted for the instrument were accepted. Investors quoted yields between 16.00 per cent and 19.05 per cent, but the CBN settled at 17.15 per cent, suggesting that the level of demand allowed the regulator to reject more expensive bids. The development is significant because the CBN achieved a lower borrowing rate even after receiving exceptionally strong demand for the security. The contrast was stark at the shorter end of the curve. The 91-day bill attracted N103.32bn in subscriptions against N100bn offered. The CBN allotted N89.10bn at an unchanged stop rate of 16.30 per cent. The 182-day bill performed even more weakly, attracting only N52.93bn against N100bn on offer. The CBN allotted N35.59bn, while the stop rate remained at 16.50 per cent. Secondary-market yields for the three instruments stood above their respective auction stop rates, at 17.45 per cent for the 91-day bill, 17.05 per cent for the 182-day bill and 17.24 per cent for the 364-day bill. According to a financial sector analyst, Jimbe Asalor, the concentration of bids in the one-year instrument suggests investors may be placing greater value on locking in relatively attractive yields over a longer period rather than repeatedly rolling over shorter-term securities. He noted that the latest auction also demonstrates “the CBN’s ability to borrow more cheaply when demand is concentrated around a particular maturity.” He added that by accepting N638.19bn on the 364-day bill at 17.15 per cent, the CBN borrowed above its initial offer while simultaneously cutting the rate by 44 basis points. “The nine-basis-point difference between the auction stop rate and the 17.24 per cent secondary-market yield also indicates that the one-year segment is now trading relatively close to market expectations.” A Lagos-based consultant economist, Chukwunonso Iheoma, said if the preference for longer-dated treasury bills persists, the development could provide further support for a gradual decline in government borrowing costs while strengthening expectations of eventual interest-rate cuts.

With agency report

As American await the outcome of the result of the general polls, the Republicans are on the verge of retaining control of the U.S. Senate.

According to results streaming in, Senator Susan Collins defied political odds to win re-election in Maine.

Other Republican incumbents led Democrats in a handful of undecided races.

Democrats, who had been favored to win the Senate majority heading into Tuesday’s election, had a net gain of only one seat to show by Wednesday afternoon as their options for further increases dwindled, despite a huge Democratic money advantage going into the final weeks of the campaign.

Republicans currently hold a 53-47 seat Senate majority. To win control, Democrats would need to net three Republican-held seats if Democrat Joe Biden wins the White House and Senator Kamala Harris becomes vice president with the tie-breaking Senate vote. If Biden loses to Republican President Donald Trump, Democrats would need four seats.

Four Senate races remained undecided by Wednesday evening. Republican incumbents led in three: Alaska, Georgia and North Carolina.

Democratic Senator Gary Peters defeated Republican John James in Michigan, according to projections from television networks and Edison Research.

Senate Majority Leader Mitch McConnell, the top Republican in Congress who won reelection on Tuesday, discussed the possibility of retaining his leadership role at an event in Kentucky, describing his position as “offensive coordinator.”

“If we win in North Carolina … I’m still the offensive coordinator,” McConnell said. “I don’t know whether I’m going to be the defensive coordinator or the offensive coordinator as I speak,” he added.

One Senate contest in Georgia was headed for a Jan. 5 runoff between Republican Senator Kelly Loeffler and Democratic challenger Raphael Warnock. McConnell said a second Senate race on the Georgia ballot, between Republican Senator David Perdue and Democrat Jon Ossoff, could face the same fate.

The best news for Republicans came from Maine where Collins, a Republican moderate once seen as imperiled, pulled off a surprise victory over Democrat Sara Gideon, speaker of the Maine State House of Representatives.

I feel that this is an affirmation of the work that I’m doing in Washington to fight hard every day for the people of Maine,” Collins told reporters.

Democrats ousted Republican Senators Martha McSally of Arizona and Cory Gardner of Colorado. But those victories were cut to a net gain of one by Democratic Senator Doug Jones’s loss in Alabama.

The Democrats’ path to victory narrowed further as Republican incumbents Joni Ernst of Iowa, Steve Daines of Montana, John Cornyn of Texas and Lindsey Graham of South Carolina – all once viewed as vulnerable – fended off Democratic challengers to win re-election.

Republicans also held onto an open seat in Kansas, where Republican Roger Marshall defeated Democrat Barbara Bollier.

A Republican-run Senate would pose deep problems for Biden if he wins the presidency, likely blocking large parts of his legislative agenda, including expanding healthcare and fighting climate change. A second Trump term would face a similar hurdle in the House of Representatives, where Democrats held onto a slimmed-down majority.

CLOSE RACE IN MICHIGAN
The Senate race in Michigan drew criticism from Trump just before the contest flipped in the Democrat’s favor and Peters was declared the winner.

“Wow! It looks like Michigan has now found the ballots necessary to keep a wonderful young man, John James, out of the U.S. Senate. What a terrible thing is happening!” Trump wrote on Twitter.

North Carolina, Republican Senator Thom Tillis declaredvictory over his Democratic challenger, Cal Cunningham. The race had not been called, with Tillis leading by less than 2 percentage points. State election officials said no further results would be available until Nov. 12 at the earliest, when all mail-in ballots are received and counted.

In Georgia, Perdue was more than 3 percentage points ahead of Democrat Jon Ossoff in Georgia.

Republican Senator Dan Sullivan of Alaska held a sizable lead with half of the vote counted.

Gardner, a first-term Republican long seen as his party’smost vulnerable Senate incumbent, lost to former Colorado Governor John Hickenlooper in a formerly Republican state where demographic changes have increasingly favored Democrats in recent years.

Democrat Mark Kelly, a former U.S. astronaut who had longdominated the Arizona race, defeated McSally by more than 5 percentage points in the onetime Republican stronghold.

Jones, the most vulnerable Democrat, lost as expected tochallenger Tommy Tuberville in the Republican stronghold ofAlabama.

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CBN Cuts T-bill Rate Amid N3.63tn Demand Investors are increasingly positioning for longer-term returns in Nigeria’s fixed-income market, with the latest treasury bills auction showing an overwhelming preference for the one-year government security. At the Central Bank of Nigeria’s (CBN) primary market auction on Wednesday, investors submitted N3.63tn for the 364-day T-bill, representing 95.9 per cent of the N3.79tn total bids received across the three maturities. The demand came despite the CBN lowering the stop rate on the one-year instrument by 44 basis points to 17.15 per cent, from 17.59 per cent at the previous auction. The auction results point to a significant shift in investor appetite towards longer-dated government securities, even as demand for shorter-tenor instruments remained subdued. The CBN had offered N700bn across the three maturities, comprising N100bn each for the 91-day and 182-day bills and N500bn for the 364-day bill. However, total subscriptions reached approximately N3.79tn, more than five times the amount offered. The 364-day instrument was the clear outlier at the auction, receiving bids equivalent to 7.26 times the amount offered. The CBN ultimately allotted N638.19bn, exceeding the N500bn offer by N138.19bn. Despite the additional allotment, only about 17.6 per cent of total bids submitted for the instrument were accepted. Investors quoted yields between 16.00 per cent and 19.05 per cent, but the CBN settled at 17.15 per cent, suggesting that the level of demand allowed the regulator to reject more expensive bids. The development is significant because the CBN achieved a lower borrowing rate even after receiving exceptionally strong demand for the security. The contrast was stark at the shorter end of the curve. The 91-day bill attracted N103.32bn in subscriptions against N100bn offered. The CBN allotted N89.10bn at an unchanged stop rate of 16.30 per cent. The 182-day bill performed even more weakly, attracting only N52.93bn against N100bn on offer. The CBN allotted N35.59bn, while the stop rate remained at 16.50 per cent. Secondary-market yields for the three instruments stood above their respective auction stop rates, at 17.45 per cent for the 91-day bill, 17.05 per cent for the 182-day bill and 17.24 per cent for the 364-day bill. According to a financial sector analyst, Jimbe Asalor, the concentration of bids in the one-year instrument suggests investors may be placing greater value on locking in relatively attractive yields over a longer period rather than repeatedly rolling over shorter-term securities. He noted that the latest auction also demonstrates “the CBN’s ability to borrow more cheaply when demand is concentrated around a particular maturity.” He added that by accepting N638.19bn on the 364-day bill at 17.15 per cent, the CBN borrowed above its initial offer while simultaneously cutting the rate by 44 basis points. “The nine-basis-point difference between the auction stop rate and the 17.24 per cent secondary-market yield also indicates that the one-year segment is now trading relatively close to market expectations.” A Lagos-based consultant economist, Chukwunonso Iheoma, said if the preference for longer-dated treasury bills persists, the development could provide further support for a gradual decline in government borrowing costs while strengthening expectations of eventual interest-rate cuts.

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