Items filtered by date: Friday, 14 September 2018

Following declines in the value of shares of Nestle Nigeria, Guaranty Trust Bank, Zenith Bank and other highly capitalized stocks, the trading activity on the floor of the Nigeria Stock Exchange (NSE) on Monday closed in red to start the week.

The bearishness recorded at the market was as a result of persisted sell pressures on the local bourse, dragging the key performance indicator of the NSE, the All-Share Index (ASI), down by 1.25 percent to close at 34,037.91 points, and plunging the year-to-date loss of the ASI to -12.16 percent.

After the close of business, equities investors lost a total of N155.60 billion in value as market capitalization of all listed stocks, which opened at N12.27 trillion, dropped to N12.43 trillion.

Consequently, the total volume and value of transactions dipped by 11.75 percent and 35.53 percent from 155.95 million shares and N2.1 billion to 137.63 million shares and N1.36 billion, respectively.

Performance across sectors was also bearish, as indices of all major sectors headed to the south. The NSE Consumer Goods index led the sector decliners, falling by 3.69 percent as investors sold off Nestle Nigeria, which dropped by 9.7 percent, and Nigerian Breweries shedding 0.4 percent.

NSE Insurance index trailed with 2.09 percent depreciation on the back of sell-offs in NEM Insurance and Continental Reinsurance, while NSE Banking index dropped by 1.25 percent, driven by sell pressures in Guaranty Trust Bank, Zenith Bank and Access Bank, which fell by 1.4 percent, 1.9 percent and 1.7 percent, respectively.

Similarly, Forte Oil, which shed 9.3 percent, pulled the NSE Oil & Gas index down by 0.52 percent, while NSE Industrial Goods index closed flat amid profit taking activity on Cutix, dropping 0.25 percent of its share value.

Nestle Nigeria led the laggards chart, depreciating by 9.67 percent to close at N1,355 per share. Global Spectrum Energy Services followed by shedding 9.45 percent to close N5.75 per share, while Forte Oil dropped 9.29 percent to close at N19.05 per share.

Regency Alliance Insurance Company lost 8.70 percent to close at 21 Kobo per share, while Japaul Oil fell by 7.69 percent to close at 24 Kobo per share.

On the flip side, Sunu Assurances Nigeria emerged the top gainer with10 percent to close at 22 Kobo per share. Union Diagnostic & Clinical Services trailed by gaining 7.41 percent to close at 29 kobo, while Honeywell Flour garnered 5.56 percent to close at N1.52 per share.

University Press gained 4.17 percent to close at N2 per share, while Mutual Benefits Assurance rose by 3.70 percent to close at 28 Kobo per share.

Guaranty Trust Bank was the most traded stock in value after recording 29 percent of the total investment turnover, reaching 11.25 million volumes of shares valued at N390.94 million.

Nigerian Breweries, which accounted for 26 percent of the total return, traded a total volume of 2.36 million worth N218.80 million, while Zenith Bank sold 6.64 million volume of shares at N136.60 million.

United Bank for Africa traded 16.66 million shares valued at N130.87 million, while Nestle Nigeria transacted 87,930 shares worth N119.77 million.

Analysts at Afrinvest Securities said the market performance reflects investors’ bearish outlook on the market as political risks remain heightened and in addition to continued absence of positive drivers.

In spite of the negative performance, the analysts remained optimistic that some bargain hunting would drive performance in the near term.

 

Vanguard

Published in Business

Twenty four states of the federation sold Petroleum Motor Spirit (PMS), otherwise known as petrol, at an average price of over N145 per litre in August, according to a new report by the National Bureau of Statistics (NBS).

Recall that the Minister of State for Petroleum Resources, Ibe Kachikwu, had in May 2016 announced an upward review of PMS pump price by the Federal Government from N86.50 to N145.00, and directed filling stations across the country not to sell the product above the fixed price.

According to Kachikwu, the hike was the only way out of the exorbitant prices of N150 to N250 Nigerians were subjected to at many filling stations across the country during yuletide.

But in the latest PMS Price Watch report for August by NBS, only thirteen (13) states including the Federal Capital Territory (FCT), Abuja, complied with the directive, while the pump price of the product remained above the fixed price in other states in the review month.

According to the report, the average price paid by consumers for petrol increased by 1.7 percent to N146.90 per litre in August 2018 when compared with the same month in the previous year.

It said states with the highest average price of PMS in the review month were Borno, Kebbi and Kwara, which sold a litre at N157.00, N152.94 and N152.86, respectively.

It added that states with the lowest average price of the product for August 2018 were Ekiti, Katsina and Bauchi which sold at N144.23, N144.08 and N143.89, respectively.

Across geo-political zones, the North East zone recorded the highest average price of N148.81 per litre, while the South West zone sold the product at an average price of N145.01 per litre for the month under review.

 

The Ripples...

Published in Business

Bain & Company, which has been in the firing line for its work done at the South African Revenue Service (SARS) has set aside R164 million ($10.8 million) of fees plus VAT and interest paid to it by SARS.

In a statement it said “the money will be used either as prescribed by the Nugent Commission of Inquiry or – in the absence of such prescription – for the benefit of South Africa”.

In 2014, Bain conducted a diagnostic for SARS after being employed by the collection service’s then boss Tom Moyane. The plan has been widely criticised for weakening SARS’S collection abilities.

In a statement, the consultancy service said its organisation structure work at SARS did not achieve positive results for its client.

Bain also revealed that Vittorio Massone will step down as managing partner, and be replaced by Tiaan Moolman, a long serving member of the company.

Massone however remains a partner at Bain & Company and will focus his time on cooperating with the Nugent Commission, the statement said.

Elaborating it said: “We have requested Tiaan Moolman to take over day to day operations as interim managing partner. It has been known to our clients for some time that Mr Massone would rotate out of his current role in December to take on another senior role within the firm. This rotation typically occurs each 5-7 years and Mr Massone has already completed almost 9 years in his current role”.

Much of the destruction caused by Bain came to light at the Nugent Inquiry into SARS where Massone testified (see video). Following his and others’ testimony Bain & Company launched an independent investigation led by global law firm Baker McKenzie to examine the facts relating to people, processes, and governance that resulted in it getting and accepting the work.

In a statement Bain says initial findings have shown that its engagement with SARS fell short of its operating principles.

The consultancy also said to reinforce the independence of the investigation and Bain’s commitment to addressing any new facts, it has established an oversight committee made up of senior global Bain partners. “Athol Williams, a Bain alumnus and a respected independent advisor, will chair this committee on an interim basis. He is a distinguished academic in the areas of corporate responsibility, a corporate leader, and lifelong social advocate.”

 

By CNBC Africa

Published in Bank & Finance
Friday, 14 September 2018 07:05

SA loses out on Trump's steel tariff exemption

The US has not granted South Africa an exemption on its increased steel and aluminium tariffs, this after the department of trade and industry (DTI) made representations to the US government.
 
The DTI issued a statement expressing its disappointment on the matter on Monday, following a teleconference between Trade and Industry Minister Rob Davies and US Ambassador CJ Mahoney.
 
US President Donald Trump however signed proclamations granting a select number of countries exemptions until June 1, Bloomberg reported. These countries include the European Union, Mexico, South Korea, Australia, Argentina, Brazil and Canada.
 
The US is imposing a 10% ad valorem tariff on imports for aluminium products and 25% ad valorem tariff on imports for steel.
 
Davies had made two written submissions to the US and the SA Ambassador to the US Mninwa Mahlangu also engaged with the White House National Security Council Staff, State Department, the Office of the US Trade Representative and Commerce Department on the matter. Davies also had teleconferences with Mahoney and other US trade officials on March 22 and again on April 30 – when SA learnt its fate.
 
Similarly SA’s steel exports in 2017 only accounted for 0.98% of total US steel imports. However the exports represent 5% of SA’s production and this equates to 7 500 jobs in the steel supply chain, the department said. “SA will be disproportionately affected both in terms of jobs and productive capacity,” the department reiterated in its arguments to the US government.
 
The department also argued that SA is also grappling with the steel glut and has control measures in place to avoid transshipment of steel from third countries.
 
SA also offered to restrict its exports to a quota based on the 2017 exports level, but this was not enough to convince the US.
 
Collateral damage
 
The department also pointed out that some of the exempted countries are the “biggest” exporters of steel and aluminium to the US. 
 
According to the department the exempted countries accounted for 58% of steel imports and 49% of aluminium imports to the US in 2017.
 
“South Africa is therefore not a cause of any national security concerns in the US nor a threat to US industry interests and is not the cause of the global steel glut.
 
“Instead, South Africa finds itself as collateral damage in the trade war of key global economies. South Africa is concerned by the unfairness of the measures and that it is one of the countries that are singled out as a contributor to US national security concerns when its exports of aluminium and steel products are not that significant,” the DTI said.
 
The department raised concerns about the impact this decision will have on the competitiveness of SA steel and aluminium products in the US. The department believes it is likely to displace SA products out of the US market in favour of the exempted countries.
 
“South Africa is also concerned that the measures are implemented in a way that contravenes some of the key WTO (World Trade Organisation) principles.”
 
The department said it remains open to engage with US authorities to find a “mutually acceptable” outcome and encouraged domestic exporters to continue to engage with US buyers.
 
 
Fin24
Published in Business

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