In what appears as a shake off of tensions around the general election, investors in Nigeria’s stock market on Thursday gained N228.1 billion as market capitalisation of equities rose to N11.722 trillion.
Anaylists had allayed fears that the market might have to wait till May, after the election, before recovering from the presumed political tensions that plunged it into sell-offs in December last year.
The market capitalisation fell below the N11tn mark from N11.72tn on December 31, 2018 but gained 1.98 per cent on Thursday, its best performance in 2019.
The All Share Index increased from 30,821.80 basis points on Wednesday to 31,433.49bps on Thursday.
Banking stocks topped both the traded stocks and value with United Bank for Africa Plc (136.8 million units), Zenith Bank (63.4 million units) and Access Bank Plc (44.4 million units) as top traded stocks by volume.
Zenith Bank (N1.5bn), GTB (N1.2bn) and UBA (N987.1m) were the top traded stocks by value.
Volume and value traded both increased by 21.8 as a total of 436.7 million shares worth N5.88bn exchanged hands in 4,047 deals while banking index, with 5.8 per cent increase on the back of gains in bellwethers, becoming the highest gainer.
Stock prices of Nestlé Nigeria Plc, Dangote Sugar Refinery Plc, Dangote Cement Plc and Lafarge Africa Plc recorded major appreciation as the consumer goods and industrial goods indices increased by 3.4 per cent and 1.5 per cent respectively.
The Central Bank of Nigeria, CBN, has said that the Federal Government recorded fiscal deficit of N910.41 billion in the fourth quarter of 2018.
The CBN stated this in its latest economic report.
It said: “Federally-collected revenue, at N2.41tn, in the fourth quarter of 2018, was 27.4 per cent and 4.8 per cent lower than the estimate and the receipts in the preceding quarter, respectively.
“The development relative to budget estimate was due to the shortfall in receipts from both oil and non-oil revenue in the reviewed quarter. Federal Government estimated retained revenue and total expenditures were N916.44bn and N1.826tn, respectively, resulting in an estimated deficit of N910.41bn in the fourth quarter of 2018.”
According to the report, the cessation of rainfall in the period led to widespread dryness across the country.
The report also said that agricultural activities in the fourth quarter were dominated by harvesting of tubers, grains and vegetables.
“In the livestock sub-sector, farmers continued with the breeding of poultry birds and fattening of cattle in anticipation of the end of year sales,” the CBN said.
It said the end-period headline inflation on year-on-year and 12-month moving average bases for the review period were 11.44 per cent and 12.10 per cent, respectively.
The apex bank maintained a non-expansionary monetary policy stance in the fourth quarter of 2018, aimed at further curbing inflationary pressure.
Broad money supply (M3), on a quarter-on-quarter basis, grew by 8.3 per cent to N33.42tn at end-December 2018, compared with the growth of 5.1 per cent at end-September 2018.
The development, the report said reflected, wholly, the 4.5 per cent increase in domestic credit (net) of the banking system, adding that broad money supply grew by 16.6 per cent, compared with the 7.6 per cent and 0.6 per cent growth recorded at the end of the preceding quarter of 2018 and the corresponding quarter of 2017, respectively.
The report also indicated that growth in M3 was due to the 6.4 per cent and 18.5 per cent increase in domestic credit (net) and foreign assets (net) of the banking system, respectively.
On a quarter-on-quarter basis, narrow money supply (M1), rose by 9.2 per cent, compared with 0.5 per cent and 11.0 per cent at the end of the preceding quarter, due largely to the 19.4 per cent and 7.5 increase in its currency outside banks and demand deposit components, respectively.
Developments in banks’ deposit rates were mixed, while lending rates trended downwards in the review quarter.
With the exception of the one-month and three-month deposit rates which fell by 0.26 and 0.04 percentage point to 8.79 per cent and 9.43 per cent, respectively, all other deposit rates of various maturities rose from a range of 3.68 – 10.10 per cent to 3.86 – 10.52 per cent at end-December 2018.
The CBN report further stated that average savings rate remained unchanged at 4.07 per cent, same as at the end of the third quarter of 2018, while the average term deposit rate rose by 0.12 percentage points to 8.63 per cent at end of the review quarter.
The Nigerian Investment Promotion Commission, NIPC, has said that the country received investment committment worth $90.90 billion for 93 projects between January and December last year.
According to the NIPC, the Nigerian Investment commitment are in various sectors of the economy in 23 states and the Federal Capital Territory, FCT.
Figures from the commission show that the proposed investments for 2018 is a 27 per cent higher than the $66.36 billion figure recorded in 2017.
The NIPC figures also showed that a huge chunk of the investment goes to mining and quarrying, which accounted for 35 per cent of the total value.
This is followed by the manufacturing sector with 24 per cent, while construction with 20 per cent, transportation and storage with 15 per cent followed, respectively, while other sectors accounted for the balance of six percent.
The NIPC also revealed that the investment commitments were made by investors from 20 countries, with domestic investors accounting for a huge chunk of the proposed investments with about 33 per cent of the value.
This is followed by investors from the United Arab Emirates with 20 per cent, France stood at 18 per cent, and the United Kingdom 10 per cent while the balance of 19 per cent were investment commitments made by other investors from other countries.
On the location of the proposed projects, the NIPC said the FCT was the biggest beneficiary as it got about 21 per cent of the total investment pledged during the period, Rivers State accounted for 18 per cent, while Lagos and Bayelsa got 14 per cent and 13 per cent, respectively
It stated that the other states accounted for the balance of 34 per cent.
The Central Bank of Nigeria, CBN, on Monday said there is no truth in a report alleging that faceless agents, backed by regulators, were exploiting the nation’s multiple exchange rates.
According to the report, the activities of the faceless agents which have devastating effects on the forex market, gives the agents about N32 billion annually.
The CBN, in a statement on Monday, said: “The forex rates across various markets governed and regulated by the CBN, have been converging, leaving no room for arbitrage opportunities in Nigeria’s forex market.
“For avoidance of doubt, the CBN will continue to act in the best interest of Nigeria and shall ensure it remains focused on its core mandate of sustaining the stability in the forex market.”
The Central Bank of Nigeria (CBN) on Monday denied involvement in foreign exchange manipulation as alleged in one of the national dailies.
The bank’s Director, Corporate Communications of the CBN, Mr Issac Okorafor made the denial on its Website.
The regulator noted that the story by BusinessDay Newspaper titled, “Exposed The Sleazy Face of N306/$1, inside Nigeria’s racket where faceless agents pocket over N32bn annually” was unfounded and untrue.
It therefore, challenged the BusinessDay Newspaper to provide the names of agents involved, and also verifiable evidence of collusion.
The CBN said: “The management of the CBN wishes to react to the report wherein BusinessDay Newspaper alleges that faceless agents in Nigeria are exploiting the country’s multiple exchange rates to devastating effects and allegedly with the backing of regulators.
“The CBN wishes to state unequivocally that this report is unfounded and untrue and challenges BusinessDay to provide the names and also verifiable evidence of collusion between these faceless agents and officials of the CBN, who are working to perpetuate these so called Forex (Fx) racket schemes.
“We would also urge the management of BusinessDay to contact the CBN prior to making such spurious allegations, as we were denied the benefit of responding to this article.
“The CBN wishes to remind BusinessDay, as most financial observers have noted, that the Fx rates across various markets governed and regulated by the CBN have been converging, leaving no room for arbitrage opportunities in Nigeria’s Fx market.
“For avoidance of doubt, the CBN will continue to act in the best interest of Nigeria and shall ensure it remains focused on its core mandate of sustaining the stability in the Fx market.”
Nigeria’s stock market recovered from Monday’s losses on Tuesday, with the market capitalisation appreciating by N1.6 billion to close at N11.462 trillion.
This is as a result of the 26 stocks that recorded gains at Tuesday’s trading.
The market had depreciated on Monday after seven consecutive days of price rally, but yesterday’s gains lifted the Nigerian Stock Exchange (NSE) All-Share Index to close higher at 30,736.88.
Price gainers were led by Linkage Assurance Plc with 9.8 per cent gains. It was trailed by Redstar Express Plc with 9.0 per cent while Nigerian Aviation Handling Company Plc chalked up 8.3 per cent, just as Royal Exchange Plc and Oando Plc garnered 7.4 per cent and 6.8 per cent in that order.
At the end trading on Tuesday, 10 stocks dipped in value. They were led by MCNichols Plc with 9.3 per cent, followed by Sovereign Trust Insurance Plc with 8.3 per cent while the Cement Company of Northern Nigeria Plc shed 7.0 per cent, with WAPIC Insurance Plc going down by 4.7 per cent among others.
The activity level at the NSE fell as volume and value traded declined by 51.0 per cent and 56.0 per cent to 245 million shares and N2.4 billion.
In terms of volume, the most active stocks were Diamond Bank (71.6 million shares), Access Bank (27.0 million shares) and GTBank (27.0 million shares while the top traded stocks by value were GTBank(N848.0 million), Zenith Bank (N236.0 million) and Seplat (N193.8 million).
Performance on sectoral basis was mixed with two sectors appreciating while three declined.
The NSE Oil & Gas Index advanced the most, up 1.7 per cent while the NSE Banking Index followed with a rise of 0.8 per cent.
However, the NSE Industrial Goods Index shed the most, down 2.5 per cent, while the NSE Consumer Goods Index and NSE Insurance Index shed 0.3 per cent and 0.4 per cent respectively.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has raised the alarm that Nigeria may return to the pre-2005 Paris Club debt level, if the Federal Government fails to come up with immediate measures to address the rising debt profile.
The MPC stated this on Tuesday in Abuja after its first meeting of the year.
It would be recalled that in October 2005, Nigeria and the Paris Club announced a final agreement for debt relief worth $18bn and an overall reduction of Nigeria’s debt stock by $30bn.
The deal was completed on April 21, 2006, when Nigeria made its final payment and its books were cleared of any Paris Club debt.
Statistics from the debt management office showed that Nigeria’s debt profile as at June 2018 stood at $22.08 billion.
However, key officials of the President Muhammadu Buhari’s administration have consistently dismissed fears raised by Nigerians over the rising debt profile.
Prominent among these Buhari administration officials are the Vice President, Yemi Osinbajo and the Minister of Power, Works and Housing, Babatunde Raji Fashola.
Speaking on behalf of the MPC on Tuesday, CBN Governor, Mr Godwin Emefiele, said that the committee noted the rising debt profile and called for caution.
He said: “On external borrowing, the committee noted the increase in debt level advising for caution, noting that it could fast be approaching the pre-2005 Paris Club level.”
According to Emefiele, the committee noted that while the real Gross Domestic Product grew by 1.81 per cent during the third quarter of 2018, the persistence of herdsmen attacks on farmers, cattle rustling and flooding in parts of the country affected agricultural and livestock output.
He said in view of this, the output for growth remained fragile as the late implementation of the 2018 budget and the residual impact of flooding and security challenges constituted headwinds to growth.
The MPC called for the effective implementation of the 2018 capital budget and the Economic Recovery and Growth Plan in other to stimulate economic activities.
It also hammered on the need for improvements in the security situation in the country as well as continued stability in the foreign exchange market to enhance aggregate demand and growth.
“The committee observed that the near term risk to inflation remain the impact of flooding on agricultural output, insecurity on food producing belts in the country, exchange rate pass through to inflation due to the weakening of oil price and campaign-related spending towards the 2019 general elections.
“Accordingly, the Monetary Policy Committee called on the Federal Government to sustain its efforts towards improving security to ease supply chain bottlenecks.
“The committee recommended that the Federal Government should focus investment on infrastructure and urge the Federal Government to sustain the pace towards addressing infrastructure deficit in Nigeria.
“It noted that the immediate impact of this on the GDP will be slow in coming but it will expand the economy, reduce unemployment and increase aggregate demand in a more sustainable manner”, Emefiele said.
The MPC also backed the plan by the Federal Government to raise more revenue through Value Added Tax, saying the move would help to reduce pressure on government expenditure.
“The committee also noted the attempts by the government to broaden the base of the Value Added Tax and urge the authorities to expedite action in that effect, arguing that increased tax collection will reduce pressure on government expenditure and create fiscal buffers to improve macroeconomic management,” he added.
On the recent increase in foreign capital inflow into the country despite the political risks, Emefiele said this was based on the confidence of the international community in the country’s macroeconomic management.
He said: “The observed and recent high foreign capital inflow into the Nigerian economy despite the perception of political risks is based on the confidence of the international community in the country’s macroeconomic management and provides a compelling reason for the committee to await clarity on the macroeconomic performance after the general elections in February and March.”
Nigeria’s foreign exchange reserves would have crashed to as low as $2bn if the Central Bank of Nigeria had not restricted importers from accessing forex for the importation of about 42 items, the Federal Government declared on Tuesday.
According to the government, the release of the items on the foreign exchange restriction list by CBN has contributed in shoring up the country’s reserves to about $40bn.
In his address at an event organised by Guinness Nigeria Limited to honour farmers in Abuja, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, shared his recent conversation with the CBN Governor, Godwin Emefiele, and stated that the government was pleased that the apex bank was resolute in its decision on the forex restriction list, despite the barrage of attacks.
Ogbeh said, “I was with the (CBN) governor on Friday last week and I said to him you remember I met you at Frankfurt airport in early 2015. We were on our way to the United States and I saw him and said, ‘how are you’, and he said, ‘fine, but I’m being bashed around at home because I stopped 41 items on the forex restriction list.’
“He (Emefiele) came under a barrage of attacks and I said to him that I am on his side because the bank should have done this 20 years ago not now. So, I told him that when I get back from the trip, I will call a press conference to defend him. And I did. Because I saw the logic in what he was doing.
“On Friday, he (Emefiele) said to me that even those that criticised him, including non-Nigerians, now say to him that they love what he did on that issue. So, if he had been weak and had succumbed to the bashing, by today, we would have $2bn as foreign reserves, but right we now have about $40bn.”
Ogbeh also noted that it would be foolish to devalue the local currency as a result of its fall against the United States dollar, adding that it was better to cut down on imports.
The minister said the massive importation of various commodities almost crippled the domestic economy, as the country’s forex reserves were heavily depleted, especially when crude prices started to nosedive.
On Monday, News reports that the CBN might increase the items on the foreign exchange restriction list from 42 to 50 in order to boost local production and stimulate the export market.
Emefiele stated that the CBN would get more aggressive in ensuring that more items being imported into the country were added to the forex restriction list.
He said, “To put it in proper perspective, by the time you dimension the size of the foreign exchange we use in importing petroleum products into the country, it is at least one-third of the foreign exchange the CBN spends to import items into Nigeria today.
“By the time we add also the 42 items that we have, which certainly we are going to increase from 42 may be to 50 or more in due course because we are going to get more aggressive in ensuring that more and more food items that are being imported into this country, are added to the FX restriction list.”
Meanwhile, Ogbeh told guests at the event that the purchase of sorghum by Guinness from farmers in Nigeria had created wealth in rural areas and had contributed in reducing the unproductive migration of youths from villages to cities.
“I commend Guinness for buying sorghum locally from our rural farmers and this is because every time you import, you are importing poverty and exporting wealth and you are also importing danger. But by making purchases from our rural farmers, the wealth is being moved to these villages,” he said.
The gaining streak the Nigerian capital market has enjoyed over some trading days was pushed back on Monday, with investors losing N102 billion.
The push back was occassioned by weaker tech, industrial and oil and gas stocks, just as sell-offs in the stocks sent the equity benchmarks lower.
The market, which gained N723 billion in five consecutive days, saw 14 per cent of the gains wiped off on Monday as the market capitalisation of equities listed on the Nigerian Stock Exchange (NSE) dropped to N11.460 trillion from N11.562 trillion on Friday.
The All Share Index declined by 0.88 per cent to settle at 30,732.72 basis points from the 31,005.17 bps recorded on Friday.
The year-to-date return settled at -2.2 per cent.
499.212 million shares valued at N5.531bn exchanged hands in 3,874 deals.
At the end of trading on Monday, 13 firms gained against the 18 laggards.
Oil and gas stocks led by Seplat Petroleum Development Company Plc recorded the biggest drag on the Exchange with a 4.55 per cent decline.
Other oil and gas stocks that recorded declines were 11 Plc and Eterna Plc.
Bank stocks led by Unity Bank Plc recorded a 0.14 per cent decline.
While Unity Bank saw its share price drop by 4.40 per cent, three other bank stocks ― Wema Bank Plc, Diamond Bank Plc and Guaranty Trust Bank Plc ― each recorded respective declines of 1.61 per cent, 0.95 per cent and 0.78 per cent.
Insurance and industrial stocks however recorded gains.
The industrial sector gained 0.97 per cent but witnessed sell-offs in its major stocks ― Dangote Cement Plc and Lafarge Africa Plc.
Lafarge’s share price dropped by 3.13 per cent, while Dangote’s share price fell by 2.51 per cent.
Losses in Sovereign Trust Insurance Plc and Mutual Benefits Assurance Plc, notwithstanding, insurance index gained 1.51 per cent.
The consumer goods index saw no changes at the end of trading on the floor of the Exchange on Monday.