Trading at the stock market resumed on a positive note monday as the bulls sustained their hold on the market. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.58 per cent to close at 27,812.06. Similarly, the market capitalisation added N55.5billion to close higher at N9.55 trillion.
The market had rebounded last week on bargaining hunting and reactions to the impressive results declared by Guaranty Trust Bank Plc and Access Bank Plc for the half year ended June 30, 2016.
And monday’s bullish session was partly influenced by continued positive sentiments by investors in the banking stocks. The NSE Banking Index appreciated by 1.28 per cent, lifted by gains recorded by Access Bank (+4.6 per cent) and GTBank (+1.58 per cent).
Apart from recording improved performance both banks announced interim dividend of 25 kobo apiece for H1.
GTBank grew its profit before tax (PBT) by 45 per cent from N63.1 billion to N91.38 billion, while Access Bank Plc’s PBT rose by 28 per cent from N39 billion to N50 billion.
Commenting on the results, the Managing Director/Chief Executive Officer of GTBank Segun Agbaje, said: “Going into the year, we knew it would be a challenging year and we prepared for it by focusing on effective management of the balance sheet and adapting our business model to changing market variables. The quality of our past decisions enabled us navigate the challenges that persisted in the business environment most of the half year period.”
On his part, the Group Managing Director/Chief Executive Officer of Access Bank, Mr. Herbert Wigwe said: the performance continues to be resilient in the face of a challenging macro-economic environment, which has been further exacerbated by double-digit inflation, amidst an untimely devaluation.
“The results underscore our continued ability to grow sustainably whilst effectively adapting to a challenging operating landscape.”
He explained that during the period, the bank grew its retail market share, leveraging innovation and technology to create lifestyle products and enhance customer experience.
“This growth has led to significant increase in our transaction volumes and fee-related income. In addition, our cost of funds dropped by 170 basis points year on year reduction, reflecting the increase in our low cost funding base.
The Central Bank of Nigeria (CBN) monday stated that it noticed that some authorised dealers in the FX market have continued to buy and sell FX referred to as “free funds” despite the provision of an earlier circular that warned against that.
Against the background, it stressed that dealing on FX without appropriate documentation, which includes “relevant entries, blotters, physical documents and non-disclosure to the regulatory authorities is a breach of extant regulations.”
The apex regulator therefore reiterated that as provided in the laws and regulations governing dealings in FX, authorised dealers “shall not sell foreign exchange without appropriate documentation and disclosure to the regulatory authorities irrespective of the source of such funds.”
“Accordingly, authorised dealers shall deal in eligible transactions only and not to engage in any foreign exchange transactions on terms inconsistent with the extant laws and/or regulations,” the CBN stated in a circular posted on its website last night.
Meanwhile, the CBN Governor, Mr. Godwin Emefiele has stressed the need to develop capacity in financial institutions in the West Africa sub-region.
The CBN Governor made this call in a keynote address at the 20th anniversary of the establishment of the West African Institute for Financial and Economic Management (WAIFEM) held in Lagos monday.
Emefiele, who was represented by the Deputy Governor (Economic Policy), CBN, Dr. Sarah Alade, noted that the dearth of the required capacity in the continent inhibits efforts in implementing strategies and policies as well as in achieving their desired development outcomes.
He cited the Africa Capacity Report 2015, which stated that weak capacity in various dimensions was still a problem in the continent.
“Twenty years after WAIFEM was established, the mandate remains as relevant as ever. We must continue to support WAIFEM to remain as relevant as ever. We must continue to support WAIFEM to remain true to the aspirations of the founders.
“Our next step is to ensure that WAIFEM now becomes the training and capacity building institution of ECOWAS. I know the process has started, but we need to fast track it to avail the entire ECOWAS countries opportunity to benefit from WAIFEM’s capacity building programme,” he added.
He described WAIFEM as a foremost institution in the West African sub-region, saying that the status was achieved through the hard work and dedication of its management and staff.
“It is gratifying to note that through several independent evaluations commissioned by donors, the board and other partners, WAIFEM’s programmes have been found to be effective, efficient and relevant to social and economic development in Africa,” he added.
The Nigerian Export Promotion Council has concluded plans to establish border markets in six locations across the country as part of efforts aimed by reducing the loss of revenue by the government through informal trade.
It was learnt that the establishment of the border markets is part of the intervention programmes of the NEPC on informal trade.
Statistics from the council showed that about $12bn worth of informal exports take place at various locations in the country.
It was gathered that given the volume of informal trade along these trade routes, the council decided that the best way to check the increase in the activities of informal traders was to set up the markets.
This, according to investigations, would enable the traders carry out their business transaction under an organised environment thus generating revenue for the government.
Already, the NEPC had gone into strategic partnership with relevant stakeholders to establish warehouses in Maradi and Birini Konni in Niger Republic, while collection centres would be created in Jibia in Katsina State and Mela in Sokoto State respectively.
In the same vein, it was learnt that the NEPC and the United States Agency for International Development were currently collaborating in promoting inclusive economic growth through improved trade and transport competitiveness.
The NEPC Executive Director/Chief Executive Officer, Mr Segun Awolowo, while confirming the development in an interview in Abuja, said that significant volumes of informal trade take place in the country.
He said, “According to independent statistics report, Nigeria’s informal trade figure for Kano axis alone is put at $14.16bn, $9.83bn and $5.34bn in 2012 and 2013 and 2014 respectively.
“These amount to lost revenue to the government. So the council is working on establishing border markets across the country to ensure the conversion of informal export trade to formal trade.”
He said the challenges faced in generating adequate revenue from oil had made it imperative to facilitate trade and non-oil exports.
He said the NEPC is also into proactive economic activities aimed at developing and promoting the non-oil export sector.
Some of them are the creation of markets for made-in-Nigeria products, exposing exporters to international markets, creation of export incentives and provision of market intelligence information.
He said if the country could effectively key into the plan of the commission in taking advantage of the opportunities in the agricultural sector, there would not be need to depend on oil revenue for survival.
He disclosed that through the zero oil plan, the commission had identified 22 priority countries as markets for Nigerian products while 11 strategic products with high financial value have also been identified to replace oil.
These products, he said, are palm oil, cashew, cocoa, soya beans, rubber, rice, petrochemical, leather, ginger, cotton, and Shea butter.
He said, “Nigeria is in need of an export revolution because we can no longer continue to rely on oil for our survival.
“We have an annual import bill of $50bn, which is financed from proceeds from foreign exchange generated from oil.
“In 2014, we earned $70bn in oil and paid $50bn as import bill. In 2015, we earned about $40bn and still spent about $50bn on importation and that is why we can’t continue to finance our imports.
“Our objective is to increase the reserves of the country through the zero oil plan and this is achievable if all stakeholders collaborate with us because we want Nigeria to survive in a world where we no longer sell oil.”
Commenting on how the country can improve the level of non-oil exports, the National President, National Association of Nigerian Traders, Mr. Ken Ukaoha, said an effective diversification strategy would help the country boost its exports.
He said, “We have for so long remained import-dependent. We have also continued to cultivate a mono product economy which is oil and our earnings from oil are presently disappointing.
“In terms of other non-oil exports, the country had still not yet put its act together. This is because diversification which should have pioneered our export has not been effective.
“As we speak today, we don’t have a trade policy in place and we don’t have an export strategy in place.”
According to him, all the strategies needed for import substitution are not in place even though there has been much talk about import substitution.
Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, has stated that the Stanbic IBTC Pension ETF 40, would provide investors with a strategic exposure to the equities market for diversification of investment.
The Chief Executive, Stanbic IBTC Asset Management Limited, Mrs Bunmi Dayo-Olagunju, noted that aside diversification options, investors would also enjoy flexibility, cost effectiveness, as well as liquidity with the new exchange traded fund (ETF), which would be launched soon.
She noted that the launch would bring the total ETFs in Stanbic IBTC Asset Management Limited’s portfolio to two.
“In 2014, the company, the largest non-pension asset manager in Nigeria, launched the Stanbic IBTC ETF 30, which tracks the performance of the top 30 stocks listed on the Nigerian Stock Exchange. “The Pension Index, launched last year by the Nigerian Stock Exchange (NSE) to drive market optimisation, is a tracking mechanism for investors, particularly institutional investors like Pension Fund Administrators (PFAs), that invest in line with guidelines set out by the National Pension Commission (PENCOM).”
Dayo-Olagunju also pointed out that the product would provide investors access to the most liquid publicly quoted companies on the NSE that are in compliance with the regulatory requirements for investing pension assets in terms of taxable profits, free float, dividend, sector and individual stock weighting.
“The Stanbic IBTC Pension ETF 40 is designed as an instrument of choice for PFAs, Life Assurance companies, institutional investors, as well as foreign portfolio managers who are desirous of the Nigerian exposure with minimal liquidity and exit risk,” Dayo-Olagunju said.
She added that it would act as a benchmark for PFAs to measure performance and report it to Retirement Savings Account (RSA) holders.
“The ETF is an asset product which is designed as a cost effective way to provide the same economic value as an investment in the underlying equities.
“In this case, the Stanbic IBTC Pension ETF 40 will help investors gain access to the 40 most capitalised and liquid equities on the NSE in a seamless way without the costs, risks and complexities associated with direct investments, particularly for retail investors,” Dayo-Olagunju stated.
According to her, the Stanbic IBTC Group, in line with its emerging market strategy and desire to become a one-stop shop for investable products, has invested in world-class investment management and market-making solutions, which should ensure that the tracking error of the ETF ranks amongst the lowest in the industry. The fund would also have a dedicated broker publishing bid and offer prices online and real-time and pay out its dividend quarterly.
She added that the firm would continue to leverage its expertise in asset and wealth management built over the years to provide quality products and services that would not only deepen the market but enhance transparency, value and boost investors’ confidence.
The Federal Government on Wednesday at an auction raised N110bn worth of bonds maturing in 2021, 2026 and 2036, the Debt Management Office said
According to DMO’s auction result obtained from its website on Wednesday, it sold N40bn of 2021 paper at 14.50 per cent.
It also sold N30bn of 2026 paper at 12.50 per cent and N40bn of 2036 paper at 12.40 per cent, the News Agency of Nigeria reported.
The summary stated that an additional N109.5bn of the 14.50 per cent July 2021 bonds was allotted on non-competitive basis.
Subscriptions from investors for the July 2021 bond, which was reopened, stood at N74.37bn, while that of January 2026, which was also reopened, stood at N71.06bn.
Subscriptions for the March 2036 bond which was also reopened stood at N64.86bn.
The DMO issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
The Federal Government said it would borrow about N900bn locally to finance part of the N2.2tn deficits in its 2016 budget.
Meanwhile, the Federal Government imported $227m of sugar in the first seven months of this year, the Central Bank of Nigeria said, Bloomberg reported.
Guaranty Trust Bank Plc yesterday reported its audited financial results for the half year (H1) ended June 30, 2016, showing positive growth across performance indicators.
Gross earnings rose by 37 per cent to N209billion from N153billion in 2015, driven primarily by growth in fee and commission income as well as foreign exchange income.
Net interest income fell marginally from N80.1billion to N79.1billion, while impairment charges surged by 530 per cent from N6.0billion to N37.5billion. However, non-interest income improved by 160 per cent from N38billion to N91.4billion in 2016. Non-interest income was the major catalyst for the upsurge in earnings, after benefiting from foreign exchange revaluation gains.
Consequently, profit before tax rose by 45 per cent to N91.38billion, up from N63.1billion in 2015. The bank’s loan book grew by 14 per cent from N1.373 trillion recorded as at December 2015 to N1.562trillion in June 2016 with corresponding growth in total deposits which increased by 23 per cent to N2.008trillion from N1.637trillion in December 2015. The bank is proposing interim dividend of 25 kobo per unit of ordinary share held by shareholders.
Further analysis revealed that the bank closed the half year with total assets and contingents of N3.42trillion and shareholders’ funds of N453billion, while non-performing loans remained low and within regulatory threshold at 4.39 per cent and with capital adequacy ratio (CAR) of 18.25 per cent..
Commenting on the results, the Managing Director/Chief Executive Officer of GTBank Segun Agbaje, said: “Going into the year, we knew it would be a challenging year and we prepared for it by focusing on effective management of the balance sheet and adapting our business model to changing market variables. The quality of our past decisions enabled us navigate the challenges that persisted in the business environment most of the half year period.”
While expressing appreciation to customers for their loyalty, and to staff for their hard work and commitment, Agbaje noted that the current economic realities present some challenges to growth. “We remain committed to our ideals of staying positive, delivering exceptional service to our customers and adding value to all stakeholders,” he said.
The Central Bank of Nigeria has approved an increase in the maximum amount that could be sold to the Bureau De Change operators from $30,000 to $50,000 per week.
The decision was taken at the Bankers’ Committee meeting, which was held at the headquarters of the CBN on Tuesday in Abuja.
The move is part of the measures aimed at making more foreign exchange available to the BDCs as well as assist in bringing down the huge margin between the naira and the dollar.
The Director, Banking Supervision Department, CBN, Mrs. Tokunbo Martins, addressed journalists shortly after the meeting
She was accompanied during the briefing by the Managing Director,United Bank for Africa, Mr. Kennedy Uzoka; MD, Zenith Bank Plc,Mr Peter Amangbo; MD, Jaiz Bank Plc, Mr Hassan Usman, and the CBN acting Director, Corporate Communications, Mr. Isaac Okoroafor.
Some of the issues discussed at the 328th bankers committee meeting were the state of the economy, financial inclusion and financial literacy, savings mobilisation, and foreign exchange management.
Uzoka, who spoke on the decision taken by the committee on the sale of dollar to the BDCs, said the move was informed by the fact that the country was in a stage where a lot of dollar would be needed to meet financial obligations of overseas students.
Apart from this, he said it was imperative to also increase the weekly sale of dollars to BDCs in order to meet the rising demand of those traveling abroad for business trips.
He said the decision was taken after the committee analysed the feedback it got from the financial market after two weeks of implementing the CBN’s directive to banks to sell forex to BDCs.
The apex bank had in the circular issued two weeks ago directed banks to provide BDCs with a maximum of $30,000 per week.
He said, “The issue of making foreign exchange available to Nigerians has been very topical and the CBN has been working very hard to address this.
“About two weeks ago, a policy was released that made banks to send money to the BDCs and the BDCs are supposed to pass this money to Nigerians for various needs.
“At the meeting today and as expected, we got feedback from the market and the CBN, being a responsive regulator, has decided to move the limit of$30,000 per the BDC to $50,000.
“So, we believe that this development will make more cash available to the BDCs and increase the supply and help drive down the price.”
C&I Leasing Plc, a foremost brand for finance leases and other ancillary services in Nigeria, on Tuesday, listed its N600 million 18.25 percent Fixed Rate Bond on the platform of FMDQ OTC Securities Exchange (FMDQ).
The C&I Leasing bond listing comes barely a week into the formal admittance of the N16.79 billion UACN Property Development Company plc Commercial Paper (CP) on FMDQ platform.
In line with FMDQ objective of promoting an efficient and well regulated market, which will attract and retain both domestic and foreign investors, improve price discovery and transparency for issuers, dealers, regulators and the general public, the Bond shall also be included on the FMDQ-Bloomberg E-Bond Trading System (E-Bond).
FMDQ played host to the Issuer (C&I Leasing plc) as well as the sponsor of the Bond on FMDQ, the Registration Member (Listings), WSTC Financial Services Limited, represented by Tofarati Agusto, managing director/CEO, among others, to a prestigious listing ceremony.
Tumi Sekoni, vice president/divisional head, marketing and business development, FMDQ, said: “FMDQ’s listing service had been tailored to provide, among others, a unique opportunity for issuers to raise the profiles of their issues and access a deep pool of capital, thereby meeting their long-term funding needs even as the Nigerian debt capital market becomes aligned with international best practices and standards.”
She further stipulated that the Exchange would provide continuous information disclosure on the C&I Leasing Bond, including price/value data and detailed issuers’/issues information, to stakeholders via the ‘Listings and Quotations’ page on the FMDQ website.
Andrew Otike-Odibi, managing director, C&I Leasing, said at the bond listing ceremony that, “The current operating environment presents both opportunities and challenges, and as a leading player in the support services industry, an offer of this nature will provide additional capital to enable us expand our marine business operations, repay existing credit facilities and meet working capital obligations which will ultimately lead to more profitability and growth in market share guided by a robust risk management framework and strong corporate governance.”
He added: “We remain committed and focused on the fundamentals of our business which are efficiency and service delivery whilst intensifying efforts to boost our revenue generating profile from our other businesses and reduce credit exposures to volatile segments of the market.”
Following the presentation of the listings scroll to the Registration Member (Listings), Agusto stated, “Coincidentally, C&I Leasing plc and WSTC Financial Services Limited were pioneer Finance Houses as both commenced operations in 1991 and were amongst a handful of those that survived the monumental crash of the industry in 1993. It is to the credit of the Board and Management of C&I that the company very early subjected itself to the discipline of public listing and evolved to be a preeminent leasing company in Nigeria. The growth of C&I is the result of focused and disciplined management and the FMDQ platform has deepened its access to the Financial Market. We congratulate FMDQ and C&I on this historic listing.”
The Bond listing ceremony included among others the signing of the FMDQ Bond Listings Register, presentation of the FMDQ Bond Listing Certificate, and the autographing of the FMDQ Bond Listing Wall of Fame.
FMDQ, through the concerted efforts of its varied stakeholders, has continued to facilitate growth and development in the Nigerian financial market, with specific focus on the debt capital market, and the Nigerian economy at large. The Nigerian debt capital market continues to make essential strides towards its development and today’s listing of the Bond on FMDQ marks another milestone in this certain development.
Nigeria’s external reserves diminished to $25.860 billion as at August 12, 2016, following the settlement of matured obligation by the Central Bank of Nigeria (CBN).
The latest external reserves position revealed by the CBN showed that the reserves derived mostly from the proceeds of crude oil sales fell by 1.9 per cent or N514 million in the last one month, compared with the $26.374 billion it was as at July 12, 2016.
Following the lifting of the peg on the naira on June 20, the central bank conducted a Special Secondary Market Intervention Sales (SMIS) to clear the backlog of $4.02 billion pent-up demand for forex.
According to the CBN, it sold $532 million on the spot market and $3.487billion in the forwards market. A breakdown of the $3.487 billion forward sales by the central bank had shown that $697 billion was for one month (1M), $1.22 billion for two months (2M) and $1.57 billion for three months (3M). Also last month, the central bank settled one-month forward contracts of $697 million.
The naira, which closed at N317.34 to the dollar on the interbank forex market on Monday has been under pressure in the forex market as complaints of scarcity of the greenback persist. The central bank ditched its 16-month old peg on the naira in June and introduced a flexible exchange rate regime to allow the currency to trade freely on the interbank market.
But as a result of forex scarcity in the system which had resulted to the strong volatility observed in the forex market, the banking sector intervened last week in its bid to achieve exchange rate stability.
Oil prices rose on Monday to their highest in nearly a month as speculation intensified about potential producer action to support prices in an oversupplied market. Brent crude was up $1.19, or 2.5 per cent, at $48.16 per barrel. The international benchmark futures are up about 13 per cent above the last close in July. Crude oil prices recorded nearly 20 per cent climb in April to about $46 per barrel. OPEC crude-oil production surged by 484,000 barrels to 33.217 million a day in April, according to a Bloomberg survey.
THISDAY had reported that the external reserves were expected to decline further due to the settlement of large swap positions between the banks and the CBN. The federal government last week said it had saved about N1.4 trillion that would have been paid as subsidy to oil marketers as a result of the successful deregulation of the downstream oil and gas sector a few months ago.
Vice-President, Prof. Yemi Osibanjo who disclosed this while speaking at the Lagos Chamber of Commerce and Industry 2016 Presidential Policy Dialogue Session also said the Nigerian economy remained resilient despite the huge challenges and downside potentials.
According to the vice president, refineries in the country were expected to resume operation in full capacity before the end of 2017,having set a medium to long term strategy in motion to overhaul and sort them out.
“Of course, the medium to long term plan is to sort out the refineries; it is important for us to deal with refineries because as many of us have well known, one of the largest foreign exchange cost for us is the importation of petroleum products and at the moment, most of our refineries are operating at sub-optimum and what we are able to refine is negligible compared to what is required on daily basis.
“The recent introduction of flexible exchange rate regime, which was meant to ease pressure on external reserves, is of course one issue I am sure many will still want to comment on. But I think that the immediate effect of the devaluation and depreciation of the naira and some of the consequences which include inflation is to be expected and I believe that as we see the implementation of that policy and clearer focus on a truly flexible exchange rate, we will be able to see the actual benefit of of this policy. I believe that the foreign exchange market will stabilise; confidence will be restored and there will be an increase in the supply of foreign exchange, especially due to inward investments,” he added.
PZ Cussons Nigeria Plc on Tuesday announced a dividend of 50 kobo per share for its shareholders for the year ended May 31, 2016. The company said in a corporate action filed with the Nigerian Stock Exchange (NSE) that closure date for the dividend is from September 19 to 23, 2016, while payment will be made on October 7, 2016, after its annual general meeting (AGM) in Abuja.
Although details of the audited financial results were not made available yesterday, the 50 kobo dividend is lower than the 61 kobo per share paid the previous year. Market operators said the reduced dividend was expected considering the challenging operating environment that affected the bottom-line of the company.
As at the third quarter ended February 2016, PZ Cussons reported a decline of 41 per cent in profit after tax, which fell to N1.647 billion, from N2.787 billion in the corresponding period of 2015.
Despite the challenging environment, the Chief Executive Officer of PZ Cussons, Mr. Christos Giannopoulos, had some months ago, assured shareholders that the company would continue to pay dividends.
.According to him, PZ Cussons is one of the few companies that have paid dividends consistently over the years, saying that policy would continue. “As long as we paid dividend, it means the fundamental of the company and confidence of investors in the company is strong.”
He disclosed that the company currently imports majority of its raw material, noting that if the suppliers could set up operations in the country, it would reduce the cost of production and increase its bottom line.
“The company is doing everything within its powers to attract our suppliers to set up their operations in Nigeria,” he said.
Giannopoulos said that company was working hard to reduce the amount of foreign goods that comes into the country, adding that the firm has brought its associate companies and currently secured 26 hectares of land which allows it to produce palm oil in Nigeria.
He said: “PZ Cussons has brought its associate companies and got 26 hectares of land plantation which allows us to produce palm oil in Nigeria. Nigeria was once the biggest. Palm tree in the world. So we are doing our part to be able to reduce the amount of foreign goods that Nigeria requires.”
