The Nigerian National Petroleum Corporation on Tuesday denied claims that it failed to remit $12.9bn dividend from the Nigeria LNG Limited for a period of eight years; instead, it said that part of the funds was reinvested in the gas-producing firm.
According to the NNPC, the funds were reinvested in the development of the Brass LNG and Olokola LNG projects, adding that it was not right for anybody to say the money was missing.
Reacting to the latest report released by the Nigerian Extractive Industries Transparency Initiative, which indicted the corporation for the non-remittance of $3.8bn and N358bn in 2013 as well as $12.9bn, being dividends received from the NLNG from 2005 to 2013, the NNPC argued that the funds were utilised legally in running its operations, while the balance had been transferred to the Central Bank of Nigeria.
Speaking on the sidelines of a stakeholders’ dialogue organised by NEITI in Abuja, the Group General Manager, Debt Management/Federal Allocation, NNPC, Mr. Godwin Okonkwo, maintained that the NLNG dividends were never misappropriated nor withheld by the corporation, but that every amount spent was with the approval of the Federal Government.
According to him, a large portion of the funds, with the approval of the Federal Government, was used to fund various gas projects in the country, while the balance has been moved from the Treasury Single Account to the Federation Account in the CBN.
Okonkwo said, “Before now, the position is that the NLNG belongs to the Federal Government and the NNPC is an arm of the Federal Government. The NLNG dividends were there and if there was any kobo that went out of it, it was done with the approval of the Federal Government. No kobo leaves the NLNG dividends without appropriate approval.
“Part of the spending for the NLNG dividends was the development of NLNG trains — Brass LNG and Olokola LNG — and it is not right for anybody to say the money is now missing. And with the current regime that says the NLNG belongs to the federation, the balance of the money has been transferred through the TSA to the CBN. Nothing leaves there without appropriate approval. The NNPC is not an unorganised place where people do things anyhow.”
The NNPC manager stated further that the $393m joint venture cash call refunded by the Nigerian Petroleum Development Company to the National Petroleum Investment Services was not remitted to the Federation Account because the amount was used to finance its operations as stipulated in its budget for the period.
On claims that the NNPC and NPDC had yet to pay about $1.7bn from the transfer of some oil assets to the NPDC, Okonkwo stated that the actual amount would be determined by the Department of Petroleum Resources, which was currently at the last lap of evaluating the amount to be paid.
He, however, admitted that the NNPC and its subsidiaries made some mistakes in the past, but stressed that these errors were being corrected now to prevent a reoccurrence.
The Nigerian equities market recorded its third straight decline as investor sentiment remained dampened just as the National Bureau of Statistics (NBS) released very disappointing economic data.
The Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell 0.26 per cent to close at 27,034.05 while market capitalisation shed N23/8 billion to be at N9.3 trillion. The market has remained bearish in the past three days as investors await details of the flexible foreign exchange policy from the Central Bank of Nigeria.
However, the NBS released economic statistics showing a jump in inflation to 15.6 per cent in the month of May, up from 13.7 per cent in April.
According to the NBS, the upsurge in the headline index in May was due to increase in general price levels across all divisions that contribute to the headline index. Market analysts said the rise in inflation will affect demand for equities.
Yesterday’s decline in the ASI brought the year-to-date loss to 5.61 per cent. The market was dominated by losses by highly capitalised stocks, while the gainers were mostly low capitalised stocks.
Profit-taking activities on banking and consumer good stocks, Guaranty Trust Bank Plc and Nigerian Breweries Plc responsible for the decline in the ASI. GlaxosmithklineConsumer Nigeria Plc led the price losers with 9.7 per cent trailed by Unity Bank Plc with 8.8 per cent. FCMB Group shed 5.4 per cent, while Eterna Plc and Transnational Express Plc went down by 5.0 per cent and 4.8 per cent respectively.
On the other hand, NEM Insurance Plc led the price gainers with 5.0 per cent, trailed by Continental Insurance Plc with 4.7 per cent, just as Stanbic IBTC Holdings Plc, A.G Leventis Nigeria Plc added 4.6 per cent and 4.4 per cent in that order. A.G Leventis two days ago declared a dividend of 10 kobo per share despite a loss for the year ended December 31, 2015.
Meanwhile, two sectoral indices, the NSE Banking Index and NSE Consumer Goods Index declined 1.03 per cent and 0.99 per cent respectively. On the other hand, the NSE Industrial Goods appreciated by 1.20 per cent, while the NSE Insurance Index rose by 0.80 per cent. Similarly, the NSE Oil & Gas Index appreciated by 0.19 per cent.
Over- The-Counter (OTC) market, last month, recorded a turnover of ₦7.43 trillion. This figure, according to FMDQ OTC report was 21.22 per cent lower than the value recorded in the previous month.
A breakdown of activities in OTC last month, showed that FX transactions accounting for 13.30 per cent of the total value.
In the fixed income market, bearish sentiments prevailed in the short-, mid- and long-term maturities as yields trended upwards.Similarly, open-buy-back and overnight rates remained in the single digit range, averaging 6.54 per cent and 7.08 per cent respectively, while T.bills continued its dominance in the fixed income market, accounting for 82.51 per cent of all trades.
For the month of April, 2016, turnover recorded in the OTC market was ₦9.43 trillion; 9.86 per cent higher than the value recorded in March 2016. FX transactions accounting for 16.69 per cent (March – 18.67%) of the total value. In the fixed income market, bearish sentiments prevailed in both mid- and long-term maturities as yields trended upwards while yields declined on short-term maturities.
Open-buy-back and overnight rates experienced minimal volatility averaging 4.23 per cent and 4.71 per cent respectively, while T.bills continued its dominance in the fixed income market, accounting for 81.72 per cent (March – 78.21per cent) of all trades. FMDQ OTC Securities Exchange had last week, signed a Memorandum of Understanding (MOU) with NMRC.The agreement, according to FMDQ, was coming on the heels of the Regulatory Supervision Collaboration Agreement, which the Exchange recently executed with the National Pension Commission, to promote enhanced and efficient pension fund governance, regulation and supervision.
The Managing Director of FMDQ, Bola Onadele, explained that the need for effective cooperation and collaboration between FMDQ and NMRC cannot be overemphasised, as the partnership would mark an essential step towards the development of the Nigerian housing sector through the introduction and deployment of initiatives aimed at launching a range of mortgage products.
The partnership would also enhance the articulation of strategies for developing the Nigerian mortgage industry through non-interest finance (e.g. Sukuk); partnership on awareness programmes, investor/market education and capacity building in Nigeria; the expansion of listing opportunities for NMRC debt securities among others.
These initiatives, according to him, are geared towards engendering market confidence and allowing NMRC to effectively connect the Nigerian mortgage industry to the DCM; and collaboration on pricing methodology, valuation framework and index development for mortgage bonds.
He explained that FMDQ, in partnership with NMRC and other key stakeholders, will engage in relevant initiatives and campaigns to educate the market on mortgage-related debt instruments such as Mortgage-Backed Securities, Real Estate Investment Trusts, among others, in readiness for the ensuing housing revolution which the Nigerian market is positioned to experience.
A.G Leventis Nigeria Plc monday recommended a dividend of N264.729 million for the year ended December 31, 2015. The dividend, which translates to 10 kobo per share, was recommended despite the fact that group recorded a loss of N177 million, while the company ended the year with a decline of 54 per cent in profit to N355 million.
The audited results, made available yesterday, showed that the group recorded a revenue of N12.536 billion up by six per cent from N11.7 billion achieved in 2014. Gross profit fell by 20 per cent from N3.469 billion to N4.166 billion, while profit before tax fell by 38 per cent to N329 million, from N524 million in 2014. Finance costs rose to N1.023 billion from N833 million.
The group ended the year with a loss of N177 million, compared with a profit of N211 million in 2014. Despite the loss, the directors recommended a dividend of 10 kobo for the approval of shareholders. According to the directors, the dividend will be paid on September 9, to shareholders whose names appeared on the register of the company as at the close of business on August 19, 2016.
Meanwhile, trading at the stock market continued on a bearish note as the Nigerian Stock Exchange (NSE) All-Share Index (NSE) ASI declined further by 0.47 per cent to close at 27,103.89. Similarly, the market capitalisation shed N44.19 billion to close at N9.31 trillion. Yesterday’s loss extended the year-to-date losses to 5.37 per cent. Twenty-three stocks declined while 15 appreciated.
In terms of sectoral performance, the NSE Industrial Goods Index shed 0.72 per cent, NSE Consumer Goods went down by 2.05 per cent while the NSE Insurance Index lost 0.81 per cent.
On the positive side, the NSE Banking appreciated by 0.76 per cent following gains recorded by GTBank Plc and Access Bank Plc, which rose by 0.69 per cent and 4.17 per cent respectively.
Investors traded was 152.32mn in 3,406 deals, led by FBN Holdings (40.04 million shares ), FCMB (19.13 million shares) and Zenith Bank (11.04 million shares ) as most active, while the most actively traded sectors were Financial Services (124.58 million shares), Consumer Goods (10.80 million shares ) and Conglomerates (8.57 million shares).
However, analysts at Cordros Capital Limited said they expect investors to remain downbeat, as the Central Bank of Nigeria (CBN)’s delay of the guided forex flexibility details lingers.
The Federal Government on Monday said it would encourage state governments to raise long-term funds from the capital market to finance capital projects.
It said rather than the states looking at the banking sector to raise funds, the capital market would be assisted to play its role in economic development.
The Minister of Finance, Mrs. Kemi Adeosun, stated these at a meeting with stakeholders in the market, led by the Chairman, Capital Market Master Plan Council, Mr. Olutola Mobolurin.
Adeosun said the assistance to be given to the state governments in raising funds from the capital market had been captured in the Fiscal Restructuring Plan, which was already approved by the National Economic Council.
She said, “There is a very aggressive plan to develop housing; the capital market is sitting at the root of financing the sector and we have to find a way to unlock it
“We need to create the instruments; we need to de-risk certain sectors; we need to look at procedures. At the moment, we are working on the fiscal sustainability plan and one of the things that we are saying to the state governments is that we want to take you away from the banks.
“The capital market should be your natural source of funding for your long-term projects.”
The minister lamented that currently, a lot of people had yet to understand the capital market and what it could do for the development of the country.
“There is a lot to be done on your part around literacy, awareness and stakeholder engagement at every level, especially at the political level, because I am not sure every minister truly understands what the capital market means for his portfolio,” she noted.
Mobolurin said the visit was to seek the support of the minister in driving the Capital Market Master Plan (2015-2025).
He explained that the capital market was usually neglected and had not found the right attention in the government.
The Nigerian Stock Exchange recorded a loss of N45bn in its market capitalisation on Monday after the shares of 22 firms depreciated in value.
The NSE All-Share Index dropped points at week open, shedding 0.47 per cent amid mixed performances in key sectors.
The market capitalisation slid to N9.308tn from N9.353tn, while the NSE ASI fell to 27,103.38 basis points from 27,232.62 basis points at the close of trading on the Exchange’s floor.
A total of 152.329 shares worth N2.290bn exchanged hands in 3,406 deals. In all, only 15 stocks appreciated in value.
Unity Bank Plc, Oando Plc, Honeywell Flour Mill Plc, Infinity Trust Mortgage Bank Plc and Lafarge Africa Plc emerged as top five losers.
Unity Bank shares dropped by N0.07 (5.83 per cent) to close at N1.13 from N1.20, while those of Oando slid to N6.65 from N7, shedding N0.35 (five per cent).
Honeywell Flour Mill share price also recorded a loss of N0.08 (4.62 per cent) to close at N1.65 from N1.73, while that of Infinity Trust Mortgage Bank closed at N1.47 from N1.54, losing N0.07 (4.55 per cent).
Other losers were May & Baker Nigeria Plc, Continental Reinsurance Plc, Berger Paints Plc, Nestle Nigeria Plc, Cadbury Nigeria Plc, Africa Prudential Registrars Plc, Dangote Sugar Refinery Plc, Axa Mansard Insurance Plc, International Breweries Plc, AIICO Insurance Plc, Tiger Branded Consumer Goods Plc, Fidson Healthcare Plc, Skye Bank Plc, Dangote Cement Plc, among others.
On the other hand, Champion Breweries Plc, Diamond Bank Plc, Access Bank Plc, NEM Insurance Company Nigeria Plc and Unilever Nigeria Plc emerged as the top five gainers.
The shares of Champion Breweries appreciated by N0.16 (5.90 per cent) to close at N2.87 from N2.71, while those of Diamond Bank went up by N0.12 (5.66 per cent) to close at N2.24 from N2.12.
Market analysts said the capital market was unlikely going to see advancements in the performance of indices this week owing majorly to the continued delay by the Central Bank of Nigeria in developing the new foreign exchange framework for the country.
The Nigerian Stock Exchange was unable to shake the previous week’s negative mood particularly as a result of this inaction.
Ecobank Transnational Incorporated (ETI) has targeted a Non-Performing Loan (NPL) ratio of 7.5 per cent in the current financial year, against 8.2 per cent achieved in previous year.
The pan-African bank, as part of its commitment to improve on quality of its loan book and refrain from riskier assets, according to the Group Managing Director of the bank, Ade Ayeyemi, has also concluded plans to focus on return on equity rather than cost, after first three months’ profit after tax dropped by 35 per cent.
The Group Managing Director of the conglomerate. Ade Ayeyemi, who stated these while addressing shareholders during the ‘Facts Behind the Figures’ of the bank on the Nigerian Stock Exchange (NSE) at the weekend, explained that the group recorded a decline of 35 per cent in profit after tax from $126 million in the first quarter of 2015 to $82 million in during the corresponding period of this year.
He attributed the decline to high rates and inflation in some Middle African countries, the devaluation of dollar risk; and Treasury Single Account (TSA) reforms in Nigeria, among others.
He, however, expressed optimism that despite the bank’s low performance in some financial indices last year, it is currently well positioned to generate high returns to meet shareholders’ expectations.
“Shareholders of the financial institution are not expected to be delighted about the growing NPL but it is important not to hide to fact in order to recognize where there are problems. Our target at the end of the year is 75 per cent.
“The business environment can be challenging but there are opportunities. The value of mobile phone transactions in Nigeria has been demonstrated and if we can connect that into banking; it means there are a lot we can make,” Ayeyemi said.
He explained that the group NPL has risen to $1 billion in first three months of 2016 from $967 million in fourth quarter of 2015, while its NPL coverage stood at 71.3 per cent in first three months of 2016 as against 67.9 per cent in fourth quarter of 2015.
According to him, the group would sustain a stronger Return on Equity (ROE) to shareholders as it grow to 12.8 per cent in first three months of 2016 from 4.2 per cent in fourth quarter of 2015
The capital market is unlikely to see advancements in the performances of indices this week owing majorly to the continued delay by the Central Bank of Nigeria in developing the new foreign exchange framework for the country, analysts have said.
The Nigerian Stock Exchange was unable to shake the previous week’s negative mood particularly as a result of this inaction. Consequently, the NSE All-Share Index pared on four out of five trading days to accumulate a week-on-week loss of 1.45 per cent.
This performance pegged the year-to-date return of the index at -4.92 per cent. Volume and value of transactions during the week waned by 24.02 per cent and 32.05 per cent in the same order.
The market saw 27 advancers and 42 decliners, of which the advancers’ chart featured Unity Bank Plc, NEM Insurance Company Nigeria Plc, Union Dicon Salt Plc, Neimeth International Pharmaceuticals Plc and OAndo Plc with respective week-on-week gains of 30.43 per cent, 24.68 per cent, 15.69 per cent, 13.92 per cent and 13.64 per cent.
The decliners’ chart was populated by Cadbury Nigeria Plc, Airline Services and Logistics Plc, United Bank for Africa Plc, GlaxoSmithKline Consumer Nigeria Plc and Union Bank of Nigeria Plc with the highest week-on-week declines of 9.71 per cent, 9.38 per cent, 9.11 per cent, 8.95 per cent and 8.59 per cent, respectively.
To this end, analysts at Meristem Securities Limited, said, “We opine that the continuous drag in the performance of the equities market was further impacted by negative news flow that permeated the market, including the cut (-3.8 per cent) in the 2016 economic growth outlook for Nigeria by the World Bank to 0.8 per cent.
“Also, the Niger Delta Avengers continued with its oil pipeline bombings, thereby disrupting production activities of oil companies and heightening skepticism about the near-term resurgence of the economy.
“We do not anticipate a significant recovery at the equities market this week, considering the dearth of positive news. However, we expect some bargain hunting activities within sectors that have recorded substantial price declines during the week ended.”
Demand for the Nigerian Bond instruments opened the week frail, as offer yields advanced across most instruments. However, a late increase in appetite resulted in a marginal increase (+0.38 per cent week-on-week) in average offer yield to peg at 12.89 per cent.
The domestic currency remained stable at a mid-price of N198.89 against the United States dollar, similarly the naira closed the week at N370/dollar at the parallel market.
“We opine that the hike in rates is not unrelated to the relatively low financial market liquidity, coupled with investors’ anticipation of more attractive rate at the CBN’s Open Market Operations auctions considering the Federal government’s borrowing needs. This, we believe is also related to the bearish demand for the Nigerian Treasury bills and bond instruments,” the Meristem analysts added.
In the firm’s weekly report, analysts at Vetiva Capital Management Limited, said, “With overall market sentiment still appearing weak, we see chances of a bearish start for this week.
“In the fixed income market, yields are likely to inch higher ahead of the release of May inflation data which is expected to be significantly higher (Bloomberg consensus: 14.7 per cent).”
The Meristem analysts are, however, upbeat about the agricultural sector’s ability to yield positive returns for investors, based on expectations of continued support to the sector from the government. Albeit, they advise that investment decisions should be grounded in evaluation of company fundamentals.
They added, “Much in line with expectations, the banking sector closed negative last week, as news regarding the new forex management framework was not forthcoming. We expect the same trend over the coming week, baring positive news regarding the aforementioned framework.
“We attribute the negative mood that pervaded the consumer goods sector in most trading days of last week to the general market mood. Therefore, we do not anticipate a significant change from the current trend this week, considering the dearth of positive news and market moving information to steer a sustainable rally.
“Considering that investors negative mood have persisted on the health sector counters in the past four consecutive weeks, amid some weeks of general market gyration, we advise investors with medium to long term investment horizon to consider only stocks with strong fundamentals that are currently not trading at their fundamentally justified levels.
“We expect the sentiments in the market and insurance sector to remain downbeat this week, as investors’ await the flexible forex policy modalities from the apex bank.
“For the industrial goods sector, we believe the country’s weakening economic fundamentals as evidenced by the rising inflation, lower crude oil production levels and output contraction, have all contributed to the prevailing investor apathy for the equities market generally. However, we expect to see some respite in the sector when the dividend of 2016 budget spending starts trickling.”
For the oil and gas sector, they anticipate an upbeat performance from specific sector counters in the new week, given the current trading prices of some sector stocks; while for the services sector, they said profit taking activities witnessed in the prior week persisted during the week concluded, after weeks of substantial price appreciation.
“This week, we advise investors to take position in counters perceived to be trading below their fundamentally justified prices,” the analysts said.
Global markets traded mostly in positive territory for the first two sessions of the past week, following sustained uptick in oil prices, a positive European data (GDP grew 1.7 per cent year-on–year in Q1 2016).
The harsh economic conditions facing the country have led to a drastic reduction in customers’ deposits in banks with the industry recording a decline of about N1.03tn in total deposit, IFEANYI ONUBA reports
The Bankers Committee has sent a proposal to the Central Bank of Nigeria to limit across-the-counter withdrawals to N10,000, following a major drop in customers’ deposit.
The proposal, according to a reliable source, is being considered by the apex bank through the Banking and Payment Systems Department.
A document obtained by our correspondent from the Central Bank of Nigeria on Friday showed that between April 2015 and April 2016, the total deposits of bank customers with the Deposit Money Banks dropped by 5.6 per cent or N1.03tn from N18.54tn to N17.51tn.
The banking sector also recorded a decline of N154bn in total assets within the one year period, from N27.58tn in April 2015 to N27.43tn as of April 2016.
In the same vein, the industry’s gross credit to the private and public sector dipped by N41bn or 0.3 per cent from the April 2015 value of N13.4tn to N13.36tn in April 2016.
According to the document, the Non-Performing Loans ratio for the sector currently stands at 10.1 per cent, which is far above the prudential limit of five per cent.
It attributed the sudden rise in the NPLs to the outcome of the Risk Assets Examination of the DMB, which was conducted by the apex bank in December 2015.
Specifically, the apex bank in the document explained that the sustained low price of crude oil, supply constraints at the foreign exchange market as well as other macroeconomic conditions impacted negatively on the quality of bank loans.
The document said, “The Capital Adequacy Ratio of the banking industry, which was still above the prudential minimum of 10 per cent and 15 per cent for banks with national and international authorisation, respectively as of April 2016 stood at 16.5 per cent compared with 17 per cent as of April 2015.
The CAR deteriorated between April 2015 and April 2016 due to the decline in the total qualifying capital caused by regulatory deductions, retirement of Tier 11 capital, impairment and increase in the total risk-weighted assets.
“The NPLs ratio stood at 10.1 per cent as of April 2016, which was well above the prudential limit of five per cent. The sustained low price of crude oil, supply constraints at the forex market as well as other macroeconomic conditions impacted negatively on the quality of bank loans.”
In terms of liquidity, the CBN in the document explained that the industry was operating above the minimum requirement of 30 per cent.
For instance, it said as of April 2016, the banking sector’s liquidity ratio stood at 46.3 per cent as against 39.79 per cent as of April 2015.
It said the sector also recorded a decline in earnings within the period as unaudited profit before tax for the industry decreased by 10.8 per cent (N24bn) from N222bn in April 2015 to N198bn at the end of April this year.
It added, “The return on assets and return on equity were 2.17 and 16.17 per cent in February 2016 compared with 2.42 per cent and 19.39 per cent in the corresponding period of 2015.
“The decline was driven largely by the decrease in both interest and non-interest income, which declined by six per cent or N50bn and 54 per cent or N259bn, respectively.”
Commenting on the drop in banks’ earnings within the period, a former Managing Director, Unity Bank Plc, Mr. Rislanudeeen Muhammed, told our correspondent in a telephone interview on Sunday that the time had come for banks to refocus their operations in line with their primary mandate.
He attributed the decline in banks’ profit to a mismatch between cost and income.
He said, “There has been a mismatch between cost and incomes. Most of the costs of operations of the sector have gone up because there are two major income lines that have actually dropped.
“The first one is the TSA, which had adversely affected their income line and capacity to create risk assets and the withdrawal of Commission on Turnover charges.
“The economy is also not doing well as it is virtually almost in recession. So definitely, that is why you are seeing some of the actions of the banks such as reduction of branches and sacking of workers happening.”
He added, “If you also check the NPLS, it has also gone up because pet banks have given out a lot of money to oil and gas sector and most of those banks that have lent to oil and gas sector have no option to make provisions for those loans.”
When asked what the banks could do now to increase their profitability in view of the current economic challenges, Muhammed, who is also the Managing Director, Safmur Investment Ltd, said, “The banks need to appreciate the reality of where they are now. They need to begin to operate as banks because hitherto, there had been what I called arms-chair lazy banking. A worker could generate deposits and be promoted, forgetting that most of the employees don’t have a good understanding of the banking system.
“Now is the opportunity for real banking to emerge rather than the liability generation banking that we currently have.”
The CBN, in the document, explained that the banking sector was still faced with a lot of pressure points, some of which it listed as resurgence of inflationary pressures in the face of negative output growth; continuing low oil prices; and lack of fiscal buffers.
Others are capital flow reversals; rising pressure on exchange rate in the face of declining external reserves; huge growth in credit to the government to compensate for declining oil receipts.
According to the document, the bank is faced with policy challenges in the areas of stimulating output growth even with high rates of lending and inflation; and ensuring flow of credit to the real sector of the economy with liquidity trap in the banking sector.
The huge decline in banks’ deposits, according to sources in the banking sector, has forced most of the banks to increase the targets given to bank workers, in a bid to improve their liquidity position.
A top official in the banking sector told our corespondent on Sunday on condition of anonymity that the recent mass sacking in the industry was as a result of the declining rate of deposit mobilisation by some of the bank workers.
The official said while the withdrawal of government funds through the implementation of the TSA had badly affected the amount of bank deposits, the harsh economic climate had made it very difficult for many of the bank workers to meet up with their targets.
This development, according to the source was one of the reasons why many of the banks resorted to mass sacking of their workers.
The source said, “The competition for deposit mobilisation is very high now in the banking sector because since the government withdrew its funds through the TSA last year, a lot of banks were seriously affected.
“So, it has been challenging now for bank workers to mobilise deposits from customers as we used to do because of the economic situation.
“A lot of people are struggling to survive and even many of those that we meet when we go out to canvass for deposits will tell you that they are in need of money.”
A total of about 1,400 workers had so far been sacked by banks within one week in a move to prune the workforce in the sector.
The PUNCH had reported that Ecobank Nigeria sacked over 1,040 of its employees while Diamond Bank Plc and Skye Bank also sacked about 200 and 175 members of their staff, respectively.
In the same vein, FBN Holdings, the parent company of First Bank of Nigeria Limited, recently said it would reduce the number of its employees by 1,000.
The Nigerian equities market fetched investors the highest returns in the month of May, 2016 globally despite the economic headwinds, THISDAY checks have revealed.
The market has been bearish, recording a year-to-date decline of 4.9 per cent as at last Friday. However, the negative trend in the market notwithstanding, investors, who have remained in the Nigerian market wore the broadest smiles in the month of May as the market returned 10.38 per cent. The 10.38 per cent recorded by the Nigerian Stock Exchange (NSE) All-Share Index, was the highest monthly appreciation recorded across the globe in the month of May. The Bombay Stock Exchange 30 Index (India) trailed the NSE with an appreciation of 4.14 per cent. In Africa, the JSE All-Share Index rose by 1.79 per cent in May, while the Ghana Stock Exchange All-Share Index and Nairobi Stock Exchange All-Share Index fell by 3.85 per cent and 2.26 per cent in that order.
The Nigerian market outperformed even developed markets in Europe and America. In America, for instance, the Dow Jones Industrial Average recorded a marginal growth of 0.08 per cent, while S & P 500 Index went up by 1.53 per cent. FTSE 100 Index (United Kingdom) fell by 0.18 per cent, while Europe Swiss Market Index appreciated by 3.21 per cent. The CAC 40 Index (France) and DAX Index (Germany) gained 1.73 per cent and 2.23 per cent respectively. The Shanghai Stock Exchange Composite Index (China) and Hang Seng Index (Hong Kong) went down by 0.74 per cent and 1.20 per cent in that order in the month of May.
Meanwhile, assessing the performance of the Nigerian equities market in May, analysts at FSDH Merchant Bank Research said it was affected by four major factors.
The factors, according to them, included: the decision of the Monetary Policy Committee (MPC) to maintain rates and possible adoption of a flexible exchange rate, the price deregulation at the downstream sector of the petroleum sector, the signing of the budget 2016 by the President Muhammadu Buhari and profit taking as the uncertainty surrounding the economy.
The analysts noted that the possible adoption of a flexible exchange rate policy may boost inflow of foreign portfolio investment into the equity market.
“The equity market still offers opportunity for medium-to-long term investors. We recommend that investors should maintain a medium-to-long term position in the market and reiterate that long-term investors should take long positions in stocks that have strong fundamentals,” they said.
In their asset portfolio allocation recommendation, FSDH favours equities and treasury bills, which they allocated 25 per cent apiece. They allocated 15 per cent to fund placement, 10 per cent to collective investment schemes and five per cent to Real Estate Investment Trust (REIT).
