The Central Bank of Nigeria (CBN) has exposed a group which called itself Wailing Wailer as paid hirelings, describing them as a bunch of blackmailers fighting for the interest of those who want to destroy the Nigerian economy. The group which goes by the tag OccupyCBN had threatened to protest efforts of the CBN to conserve scarce foreign exchange. In a statement, the CBN Ag. Director of Corporate Communications, Mr. Isaac Okorafor described them as paid agent of some selfish interest groups and enemies of the Nigerian economy. He said further that “the allegations are totally false and fabricated”. According to him, there is no iota of truth to these allegations. Mr. Okorafor said that the CBN did not allocate or sell any $12 million to anybody. He challenged the group to show proof, stating that such a thing is not possible under the new forex system.
He stated that “these paid agents of selfish interests and the enemies of the Nigerian economy will fail in their bid to distract the CBN and the Federal Government from their focus on the diversification of the Nigerian economy away from import and crude oil dependency”. The CBN spokesman pointed out that “some powerful interests want the CBN and Government to reverse the policy on conservation of forex and sabotage the ongoing efforts to wean Nigerians from senseless importation”. He opined that they want to create markets for importers to the overall detriment of the Nigerian economy. He went further to state that no amount of blackmail will make the CBN allow a practice whereby our farmers and industrialists who have invested heavily and employed our youths in the production of Nigerian made rice, fish, industrial starch, palm produce, wheat, tooth pick, wines, etc, would be made to close their farms and factories again. He noted that what these charlatans and hirelings want are basically twofold; first, they want the CBN to give out the nation’s scarce foreign exchange to their sponsors to import all manner of foreign goods and dump them on our markets, thereby frustrating the good work our own farmers and manufacturers have begun. Second, they want the CBN to fold its arms and allow currency speculators to drive the naira down to a level at which it will be easy for their paymasters to buy up and take control of the Nigerian economy. They have even gone to the extent of making false allegations that some banks are having trouble just to trigger panic in the financial system.
These will not happen, he stated emphatically. According to Mr. Okorafor, “it will be economically suicidal for the CBN to allocate our scarce forex to those who will engage in another escapade in senseless importation, which will again discourage our local producers who have borrowed money to engage in agriculture and local manufacturing”. He noted that it will be dangerous to our peasants in the rural areas and indeed to masses of Nigerian workers who are on fixed incomes for the CBN to allow speculators to drive the value of the naira to any level just for the selfish gains of the sponsors of these arrangee protests. “We will not succumb to blackmail”, he said. On the issue of the CBN funding the Federal Government budget, Mr. Okorafor said that this has been long addressed, with clear figures which have been widely publicized. He reinstated that the role of the CBN as banker to the Federal Government is to do exactly what had been done and it is within the limits specified by law. He queried if the so-called group would want the CBN to withhold advances so that the government collapses?
The Nigerian equities market opened 2017 on a bearish note, shedding N214 billion in the first week. Having recorded positive performance in the last weeks of December, most investors resorted to profit taking in the New Year, a development that depressed the broader index. Specifically, the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) went down by 2.3 per cent to close at 26,251.39. Similarly, market capitalisation shed N214 billion to close lower at N9.032 trillion.
Although trading was for only four days, three out of the days were negative. The only positive performance was recorded on Friday (+0.2) as gains in the banking space – Zenith Bank (+1.8 per cent), Access Bank (+2.3 per cent), United Bank for Africa Plc (+1.5 per cent ), Ecobank Transnational Incorporated (+1.2 per cent) FBN Holdings (+1.7 per cent) and Guaranty Trust Bank Plc (+0.3 per cent) – bolstered. Apart from the NSE ASI that closed negatively, all other indices also finished lower during the week. The NSE Industrial Goods Index led with a decline of 3.0 per cent following weak sentiments toward Dangote Cement (-4.0 per cent) and Lafarge Africa Plc (-2.3 per cent). The NSE Consumer Goods Index went down by 2.3 per cent on account of losses suffered by Dangote Flour Mills Plc (-4.9 per cent), Nigerian Breweries (-4.0 per cent) and Guinness Nigeria (-3.7 per cent). The NSE Banking Index shed 1.6 per cent as a result of profit taking in GTBank (-4.7 per cent) and ETI(-4.2 per cent). Also the NSE Oil & Gas Indices lost 1.6 per cent on the back of losses by Mobil Oil (-5.0 per cent) and Forte Oil (-4.6 per cent). The NSE Insurance Index recorded a 0.2 per cent as NEM Insurance Plc and Custodian shed 9.5 per cent and 4.9 per cent respectively. Daily Market performance
The market opened the first trading day of the year bearishly. The market followed the same trend on the second day, leading to a decline of 1.41 per cent in the first two trading days of 2017 as some investors lock in profits while others await government’s economic policy direction for year. The NSE ASI went down by 0.46 per cent on Tuesday to close at 26,495.04. Similarly, market capitalisation shed N41.9 billion to close at N9.1 trillion as a total of 17 stocks declined while 14 stocks appreciated. Commenting on the performance, analysts at Meristem Securities Limited said: “The performance can be ascribed to profit taking activities on some counters that rallied towards the close of the prior year. For the rest of the week, we expect a continuation of today’s trend, hence, we posit that the market may close the week on a negative note.” For the third consecutive day, the Nigerian equities market continued on its downward trend on Thursday with NSE ASI declining by 1.07 per cent. NAHCO, emerged the highest loser for the day, shedding 9.49 per cent to close at N2.86. Guinness (-5.00 per cent), Dangote Cement (-4.94 per cent), Custodian (-4.88 per cent), and Caverton (-4.44 per cent) also featured on the top laggards’ list for the day. Market performance, as measured by NSE-sector indices, showed that the NSE Banking Index and NSE Insurance Index appreciated by 1.67 per cent and 0.71 per cent respectively. Conversely, the NSE Industrial Goods, and the NSE Oil & Gas shed by 1.81 per cent, and 0.14 per cent in that order. According to analysts at Meristem Securities Limited, Wednesday’s was affected by a decline in the share price of Dangote Cement which lost 4.01 per cent.
“Ex-Dangote Cement, the market would have returned 0.35 per cent. While we expect the market to close negative for the week, we envisage that the market may gain tomorrow(Friday) on the backdrop of bargain hunting activities on stocks that have suffered price declines recently and are trading at historically low levels,” they said. The total value of stocks traded on Thursday was N898.71 million, up by 2.88 per cent from N873.57 million recorded the previous day, while the total volume of stocks traded was 137.69 million shares n in 2,488 deals. The most actively traded sectors were: Financial Services (110.66 million), Conglomerates (11.13 million), and Industrial Goods (5.38 million shares), while the three most actively traded stocks were: Fidelity Bank (25.05 million shares), Diamond Bank (16.95 million shares) and United Capital (11.03 million shares). However, the market rebounded on Friday, as the NSE ASI appreciated by 0.15 per cent to close at 26,251.39. The appreciation recorded in the share prices of Guinness, GTBank, Zenith Bank, Access Bank and FBN Holdings were mainly responsible for the rebound. Investors traded 210.20 million shares worth N1.51 billion in 2,659 deals. The three most actively traded stocks were: Oando (51.13 million shares), FCMB (35.87 million shares) and Zenith Bank (20.81 million shares), while the most actively traded sectors were: Financial Services (131.98 million), Oil and Gas (52.34 million shares), and ICT (10.77 million shares). Market turnover
Meanwhile, a total of 4.319 billion shares worth N7.376 billion in 9,330 deals were traded this last week by investors in contrast to a total of 405.939 million shares valued at N3.724 billion that exchanged hands the previous week in 6,363 deals. As usual the Financial Services sector led the activity chart with 4.177 billion shares valued at N5.306 billion traded in 5,047 deals, thus contributing 96.71 per cent and 71.94 per cent to the total equity turnover volume and value respectively. The Oil and Gas sector followed with 65.827 million shares worth N594.522 million in 1,385 deals. The third place was occupied by Conglomerates sector with a turnover of 26.487 million shares worth N48.163 million in 299 deals. Trading in the top three equities namely – Unity Kapital Assurance Plc, Omoluabi Savings and Loans Plc and FCMB Group Plc accounted for 3.863 billion shares worth N3.013 billion in 286 deals, contributing 89.45 per cent and 40.85 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 55 units of Exchange Traded Products (ETPs) valued at N505.65 executed in 11 deals, compared with a total of 9,965 units valued at N56,446.35 transacted the previous week in 16 deals. A total of 5,100 units of Federal Government Bonds valued at N5.120 million were traded this week in two deals, as against no bond transaction the preceding week. Price gainers and losers The price movement chart showed that 18 equities appreciated, lower than 37 equities of the previous week. Thirty-one equities depreciated in price, higher than 21 equities of the previous week, while 126 equities remained unchanged higher than 117 equities recorded in the preceding week. UACN Property Development Company Plc led the price gainers with 14.5 per cent, trailed by United Capital Plc with 10.6 per cent. Access Bank Plc appreciated by 6.9 per cent, just as Eterna Plc, FCMB Group Plc and Unity Bank Plc garnered 6.4 per cent, 6.4 per cent and 6.3 per cent in that order.
Other top price gainers included: FBN Holdings Plc(4.4 per cent); UBA(4.0 per cent); Fidson Healthcare Plc(3.9 per cent);and CAP Plc (3.1 per cent). Conversely, NAHCO led the price losers with 13.9 per cent, trailed by Cement Company of Northern Nigeria Plc with a decline of 13.4 per cent. N.E.M Insurance Plc and Sterling Bank Plc shed 9.5 per cent and 7.8 per cent respectively. Other top price losers included: Cadbury Nigeria Plc (7.6 per cent); Union Bank (5.1 per cent); Mobil Oil Nigeria (5.0 per cent); Dangote Flour Mills (4.9 per cent); Ashaka Cement Plc(4.9 per cent) and Custodian and Allied Plc (4.8 per cent).
Investors in UACN Property Development Company (UPDC) Plc, United Capital Plc, Access Bank Plc, Eterna Plc and FCMB Group Plc have started counting their gains at the stock market. Although the market recorded a decline of the 2.3 per cent in the first trading week of 2017, these five stocks witnessed significant appreciation in their prices.
UPDC led with 14.5 per cent rise, followed by United Capital with 10.6 per cent. Access Bank Plc went up by 6.9 per cent, while Eternal Plc and FCMB Group added 6.4 per cent and 6.3 per cent respectively. For the shareholders of the United Capital, it has been a very bullish period despite the overall negative performance by the market in the past one year. United Capital had delivered an impressive return of 108.4 per cent to investors in 2016 before added another 10.6 per cent last week. Market operators attributed the consistent high demand for shares of United Capital, which led to the capital appreciation, to the impressive financial results of company.
United Capital Plc had last year recorded an impressive performance and rewarded shareholders with a dividend of 35 kobo per share. The company is already heading for another impressive year in 2016 going by its nine months ended September 30. According to results, gross earnings stood at N5.689 billion in 2016, up from N4.088 billion in the corresponding period of 2015. Investment income grew soared from N491 million to N2.612 billion, while net operating income settled at N5.132 billion compared with N3.722 billion in 2015. Profit before tax grew by 65 per cent to N3.962 billion in 2016 from N2.397 billion, while profit after tax rose from N1.910 billion to N3.170 billion. It followed that with a highly impressive performance for the half year to June 30, 2016, growing PBT by 47 per cent. The Group Chief Executive Officer of United Capital Plc, Mrs. Oluwatoyin Sanni expressed optimism that the company would consistently deliver value to all stakeholders.
“I have no doubt in my mind that the strategies we have put in place in light of our expectations of market scenarios in the coming year will prove effective in delivering much better results. I must thank all of you for your constant support in our task of building a leading financial services firm in Africa. I am confident that with the dedication of our resourceful staff and your unalloyed support, we will continue to delight you with superior return in every line of business we are involved,” Sanni said.
The Board of Directors of Vitafoam Nigeria Plc has recommended a dividend of N125 million for the shareholders for the year ended September 30, 2016. The dividend translates to 12 kobo per share.
The recommendation of the dividend was contained in a notification to the Nigerian Stock Exchange (NSE), made available yesterday. Although full details of the audited results for the period were not made available, the dividend is in line with the recent assurance by the company, which said that despite the economic recession, shareholders would receive dividend.
The Group Managing Director and Chief Executive Officer of Vitafoam, Mr. Taiwo Adeniyi last week explained that 2016 was a very tough period, saying the most difficult problem was how to make realistic business decision in the face of continuous uncertainty in view of insecurity, exchange rate, interest rate, devaluation of the Naira and insecurity of lives and property.
He, however, expressed optimism that his company’s board and management had learnt how to operate profitably under recession assured the shareholders of dividend.
“Our shareholders are our pride. We have an obligation to work very hard to ensure that they are rewarded. We have consistently paid dividend. We shall pay dividend for 2016 despite the recession. We have always sustained our culture of shareholder value and we shall continue to appreciate our shareholders’ advice on how to move the company forward.
It has been difficult to plan under recession. But we have mastered the terrain. We can now do better planning. Our strategic focus is now to plan by the day. We plan as they come. At least we can now forecast some variables. This is helping us,” Adeniyi said.
Speaking on the manufacturing sector, Vitafoam boss noted that companies that import most of their raw materials had challenges with the exchange and availability of Dollars due to improper alignment of fiscal and monetary policies.
According to him, the federal government’s policy of preferential allocation of Dollars to genuine manufacturers did not achieve desired result because it is cashed backed. He explained that the manufactures could not take advantage of the special window for forex because many of them could not back their high demand with cash while the banks who are supposed to lend money had liquidity problem.
The Central Bank of Nigeria (CBN) sold N172.85 billion at its first treasury bill sale of the year on Wednesday with yields unchanged from the previous auction, held on December 21, fixed income traders said on Thursday.
Reuters quoted traders to have revealed that the central bank sold N115.85 billion of one-year debt at a rate of 18.68 percent, the same as the previous auction, traders said. They said the central bank also sold N35 billion of 91-day paper at 14 percent and N22 billion of six-month bills at 17.5 percent, unchanged from the previous auction. Subscription at the auction came to N194.12 billion , well up from N42.68 billion at the previous auction.
The central bank issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to help the government fund its budget. The monetary policy committee had last November left the benchmark monetary policy rate at 14 per cent. Inflation also stood at 18.48 per cent in December.
CBN Governor, Mr. Godwin Emefiele had pointed out that although interest rates are a veritable tool for curtailing inflation, with inflation at 18 per cent; “the CBN would be abjectly failing on one of its cardinal objectives if it cuts interest rates at this time.”
According to him, although he remains a strong believer in low interest rates, discussions around low interest should be based on facts, rather than politics or emotions.
“For those who say we need a rate cut to spur growth, we need to remind that high inflation is highly inimical to economic growth. Indeed, many empirical studies have estimated the threshold level at which inflation becomes significantly growth retarding to be 11 percent for developing countries.
“With ours at 18.3 per cent, one must question the judgment of cutting interest rates at this time. Finally, I think it is important to underscore that interest rates reflects not just the cost of capital but also the cost of doing business, and so we need to also look at interest rates from the perspective of the lender.
“Given that most banks have decided to individually provide security, power, and other infrastructure, it is not surprising that some of these costs are passed on to customers in the form of high interest rates. Notwithstanding these facts, we will continue to use moral suasion to encourage commercial banks to be more considerate in interest charges on customers,” the CBN governor had said.
Transactions on the Nigerian equity market resumed on Tuesday for 2017 on a bearish trend with major blue chips recording price depreciation. The News Agency of Nigeria, NAN, reports that the All-Share Index dropped by 257.73 points or 0.96 per cent to close at 26,616.89. This was against 26,874.62 achieved on Friday due to profit taking embarked upon by some investors.
Also, the market capitalisation which opened at N9.246 trillion shed N88 billion or 0.95 per cent to close at N9.158 trillion. Nigerian Breweries recorded the highest price loss to lead the losers’ chart, dropping N5.99k to close at N145 per share. Beta Glass trailed with a loss of N1.32 to close at N29 and Guaranty Trust Bank dropped 70k to close at N24 per share. Ecobank Transnational Incorporated was down by 51k to close at N9.77, while Cadbury also shed 51k to close at N9.78 per share. On the other hand, Stanbic IBTC led the gainers’ table growing by 74k to close at N15.69 per share.
UAC Property followed with a gain of 13k to close at N2.75 and UACN gained 9k to close at N16.90 per share. United Capital increased by 8k to close at N2.81, while FBN Holdings appreciated by 5k to close at N3.40 per share. The volume of shares traded closed higher as investors bought and sold 3.37 billion shares worth N3.76 billion achieved in 2,033 deals. This was in contrast with a turnover of 156.96 million shares valued at N1.59 billion traded in 1,714 deals on Friday. Unity Kapital emerged the most active stock having accounted for 3.07 billion shares worth N2.37 billion. Omoluabi Savings and Loans followed with 190 million shares valued at N159.60 million, while GT Bank accounted for 26.63 million shares worth N687.15 million. FCMB Group transacted 17.98 million shares valued at N19.65 million and United Bank for Africa (UBA) sold 14.28 million shares worth N63.89 million. (NAN)
Ten banks, led by Access Bank Plc, accounted for N121.59 trillion securities traded on the FMDQ OTC Securities Exchange in 2016. This value represents 71 per cent of the overall turnover in the market.
According to data from the exchange for fixed income and currencies, the 10 banks are Access Bank Plc, United Bank for Africa Plc, Ecobank Nigeria Limited and First Bank of Nigeria Plc. Others are: Diamond Bank Nigeria Limited, Citibank Nigeria Plc, First City Monument Bank Limited, Standard Chartered Bank Nigeria Limited and Union Bank of Nigeria Plc.
The top three banks-Access Bank Plc, UBA and Stanbic IBTC accounted for 28 per cent or N47.76 trillion transactions.
Since it commenced operations in 2013, the FMDQ OTC Securities Exchange has facilitated transactions worth N340.98 trillion in the fixed income securities and currency market within three years. FMDQ OTC was licensed by the Securities and Exchange Commission (SEC) in 2013 as an OTC securities exchange and self-regulatory organisation to run the fixed income trading platform and organise the market to international standards.
The coming of FMDQ OTC has significantly boosted the fixed income market leading to transactions N340.98 trillion within three years. This shows an average yearly transaction of N114 trillion, which is a significant improvement on N39.693 trillion recorded a year before the platform commenced operations.
An analysis of the yearly transaction data obtained from FMDQ OTC showed that N103.57 trillion was recorded in 2014, which rose to N137.43 trillion in 2015. However, it dropped to N99.98 trillion last year, apparently due to the challenges in the foreign exchange market.
A further analysis of the transactions indicates that Treasury Bills accounted for the highest value of N113.29 trillion, followed by repurchased agreements/buy buy-backs, which recorded N83.86 trillion. Foreign exchange accounted for N72.81 trillion, while federal government bonds recorded N25.92 trillion. Foreign exchange derivatives accounted for N23.02 trillion just as unsecured placements/takings recorded N17 trillion among others. With a “mission to empower financial markets to be innovative and credible in support of the Nigerian economy,” a vision “to be number one in Africa in the fixed income and currency market by 2019, FMDQ OTC is seen as a revolution in the financial sector. Managing Director/Chief Executive Officer of FMDQ OTC, Mr. Bola Onadele.Koko had always assured that stakeholders should expect better deal from the platform in the years ahead.
According to him, having succeeded in turning around the market, the next move is to bring more innovations that will benefit all stakeholders and make the platform more attractive to issuers and investors.
The FMDQ OTC recently set up the Debt Capital MarketDevelopment (DCMD) Project to ensure the effective implementation of the recommendations drawn its debt capital market (DCM) workshop in 2015.
According to the exchange, the resolutions from the workshop have been translated into the Nigerian DCM Transformation Roadmap to be executed through the DCMD Project.
“The DCMD Project, having received the unrivalled support of the apex regulator, SEC, was officially launched during the Commission’s third Quarter Capital Market Committee Meeting, on November 24, 2016. Its focus on identifying and implementing quick-win strategies that would transform the Nigerian DCM into a world-class, properly functioning DCM by 2020 drawing strongly from SEC’s 10-year Nigerian Capital Market Master Plan (NCMMP), with the DCMD Project seeking to fast-track the realisation of the DCM initiatives in the NCMMP,” FMDQ said.
