Trading on the floor of the Nigerian Stock Exchange ended on a positive note on Thursday as financial services stocks boost the NSE All-Share Index significantly, while oil and gas stocks, overall, closed in the red.
The NSE ASI appreciated to 26,559.01 basis points from 26,407.64 basis points, while market capitalisation closed at N9.138tn from N9.086tn recorded on Wednesday.
A total of 199.983 million shares valued at N1.503bn exchanged hands in 3,313 deals.
The financial services sector extended its rally after gains across banking blue chips – Ecobank Transnational Incorporated Plc, United Bank of Africa Plc, Guaranty Trust Bank Plc and Zenith Bank Plc appreciated by 4.99 per cent, 4.85 per cent, 4.45 per cent and 1.59 per cent, respectively.
The consumer goods sector recorded losses following continued pressure on Nigerian Breweries Plc, which posted 0.73 per cent loss.
While the industrial goods sector closed flat, the energy sector retreated as Forte Oil Plc lost 0.25 per cent after it finally bowed to profit taking after notching an impressive return of 140 per cent in a nine session rally. Mobil Oil Nigeria Plc, Oando Plc and Total Nigeria Plc’s shares dropped by fiver per cent, 4.67 per cent and 4.40 per cent, respectively.
Market breadth remained positive with 23 advances and 14 declines.
Speaking on the possible outcome of Friday’s (today) trading, analysts at Vetiva Capital Management Limited said, “We expect the NSE ASI to add more points at week close as investors continue to bid up bellwether stocks.”
Global markets traded mixed after the United States Fed announced a 25 basis points rate increase and revealed a hawkish outlook for 2017. While European markets were higher with banking stocks leading gains, Asian markets were mostly lower save for the Nikkei which rose on the back of a relatively weaker yen.
Meanwhile, the naira stabilised at N305 to a US dollar as increased demand for FGN bonds persisted.
The impact of the net debit to the system following the treasury bond auction which happened on Wednesday was felt in the money market on Thursday, as the open-buy-back and overnight rates advanced to 3.42 per cent and 4.17 per cent, respectively.
The result of the treasury bills Primary Market Auction held on Wednesday showed an oversubscription was recorded for only the 364-day instrument. The stop rates for the instruments were: 91 Day – 14 per cent; 182 Day – 17.50 per cent and 364 Day – 18.68 per cent.
The FGN bonds space was awash with bullish sentiments. However, investors’ appetite for shorter-term instruments waned as the April 2017 bond recorded the highest advancement of 0.48 per cent. Overall, average bond yield fell to 16.51 per cent.
For the third consecutive day, the naira to dollar exchange rate pegged at N305 and N485 in the interbank and parallel foreign exchange markets, respectively.
Despite the weak macro-economic environment, the UPDC REIT has distributed the sum of N613.70million to unit holders as interim dividend for the period ended June 30, 2016.
This distribution, the company said in a statement, was the fifth distribution it made in its three years of operation.
The UPDC REIT was launched in 2013 and is being managed by FSDH Asset Management Limited.
Managing Director of FSDH Asset Management Limited, Mrs. Olumayowa Ogunwemimo, said the investment management process of the REIT is overseen by an investment committee which include independent members who have broad experience in both local and foreign real estate markets.
She explained that the UPDC REIT provides investors with the opportunity to invest in a diversified real estate portfolio as it has exposure to both residential and commercial properties with location in Lagos, Abuja and Aba.
“In addition, the UPDC REIT provides a stable and regular income to investors, as REITs typically pay out 90 per cent of the total income realised on an annual basis.
“For investors who missed the opportunity of investing in the UPDC REIT during the public offer in 2013, the units of the REIT can be purchased on the floor of the exchange through their stock brokers, “she said.
Nine months after it lost Africa’s top oil producer status to Angola, Nigeria has seen its crude oil production surpass that of the southern African country, data from the Organisation of Petroleum Exporting Countries have shown.
Nigeria had in March lost the top spot to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd.
The country has seen a rise in militant attacks on its oil facilities in the oil-producing region, Niger Delta, in recent times, denting oil production.
OPEC, in its Monthly Oil Market Report for December, which was released on Wednesday, put crude oil production from Nigeria at 1.782 million bpd in November based on direct communication, up from 1.39 million bpd in October.
The country’s rival, Angola, said it produced 1.688 million bpd in November, up from 1.507 million bpd the previous month, when it lost 142,000 bpd of its output.
Nigeria recorded the biggest increase in output in the month among its peers in OPEC, followed by Angola.
Saudi Arabia, the group’s biggest producer, saw its output rise by 95,000 bpd in November to 10.72 million bpd, according to the data.
OPEC, which uses secondary sources to monitor its oil output but also publishes a table of figures submitted by its 14-member countries, said the group’s total production in November averaged 33.87 million bpd, showing an increase of 150,800 bpd over the previous month.
It said, “Crude oil output increased the most in Angola, Nigeria and Libya, while production in Kuwait and Saudi Arabia showed the largest decline.”
The group has recently agreed to a new production target of 32.5 million bpd as per January 1, 2017, representing a reduction of around 1.2 million bpd from October production levels.
Nigeria and Libya were exempted from any obligation to cut output as both countries have continued to suffer production losses from militant attacks and political instability.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said the country hopes to boost its crude oil production to 2.1 million bpd next month.
Kachikwu was quoted as saying this at a Bloomberg Markets’ summit in Abu Dhabi last week.
According to him, the country’s output is at 1.9 million bpd with all three of its main fields online.
The Federal Government has so far recovered N1.44bn from three of its agencies alleged not to have remitted their operating surpluses as stipulated by the Fiscal Responsibility Act of 2007.
The agencies are the Nigerian Export Promotion Council, from which N108m was recovered; the Raw Materials Research and Development Council, N278m; and Nigerian Shippers Council, N1.05bn.
The development was confirmed by a statement issued by the Director Information, Ministry of Finance, Mr. Salisu Dambatta, on Wednesday.
The statement explained that the recovery was made following actions taken by the committee set up by the government with the task of recovering the unremitted N450bn operating surpluses from the revenue generating agencies.
It added that a meeting was scheduled with 33 of the agencies where demand notices were issued to 17 of them on how the unremitted funds would be repaid.
The statement explained that out of the 17 that were supposed to be at the meeting, which held on December 6, only 10 attended owing to the short notice, while others were asked to present their repayment plans at a later date.
Those present at the meeting were the NSC, NEPC, National Health Insurance Scheme, Nigerian Civil Aviation Authority and the Nigerian Communications Commission.
The rest are the Nigerian Postal Service, National Pension Commission, Nigerian Bulk Electricity Trading Company, RMRDC and the Federal Radio Corporation of Nigeria.
The ministry said those agencies that failed to appear would do so at a rescheduled date.
Some of the agencies that will now appear before the committee to present their repayment plans are the Central Bank of Nigeria, Nigerian Television Authority and the National Information Technology Development Agency.
The statement read in part, “As the Federal Government intensifies efforts to recover unremitted operating surpluses by agencies and increase independent revenue, an additional sum of N793m has been recovered from three Federal Government agencies by the recovery committee set up two weeks ago by the Minister of Finance, Mrs. Kemi Adeosun.
“So far, the cumulative total amount recovered is N1.44bn, given the earlier recovery of N650m from the Nigerian Shippers Council, even as several other agencies are in the process of submitting repayment plans for approval.”
Adeosun had while announcing the amount that was not remitted by the agencies lamented that while the Fiscal Responsibility Act, 2007 was designed to provide guidelines and control to elicit greater accountability and transparency in fiscal operations, actual compliance by revenue generating agencies had been poor.
This, according to her, has resulted in revenue leakages as confirmed by the audit findings conducted by the ministry.
The minister gave the infractions committed by these agencies to include non-remittance and under-remittance of operating surpluses due to the Consolidated Revenue Fund; operating without approved budgets; overstating of budgets and spending above budgeted amounts; and under-reporting of revenues.
The audit report, according to the minister, also revealed that payments were made without invoices and payment receipts; while loans and grants were given to parent ministries without prior approval.
the naira closed flat at 485 against the United States dollar at the parallel market on Wednesday, three trading days after the local currency fell against the greenback to the current level.
The naira has been under persistent pressure both at the official and parallel foreign exchange markets owing to the acute shortage of the United States currency
Currency and economic experts said unless the supply problem at the forex market was abated, the volatility in the forex market would continue.
“The challenge at the forex market is still supply; price is determined by the interplay of demand and supply,” currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.
The Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said the Federal Government needed to access an emergency lifeline to the tune of at least $10bn to stabilise the exchange rate and restore investor confidence to the market.
Economic and financial experts expect the naira to weaken further against the US currency in coming weeks as the Christmas celebration draws close.
They argued that the crackdown on the parallel market currency traders and the persistent scarcity of the greenback would make further weakening of the local currency inevitable.
Reuters had reported that foreign exchange demand by small businesses was set to surge ahead of holiday season sales.
Last week, the naira fell by 2.08 per cent week-on-week to 480, compared to 470/dollar the previous week.
The naira has, however, consistently closed around 305.5 a dollar level since August via the official window.
“The consistent clampdown on black market operators by security agents has driven some currency retailers underground, putting more pressure on available hard currency,” one dealer said.
In efforts to ensure food security and exports, the Bank of Industry (BoI) has signed three Memoranda of Understanding (MoUs) worth N10 billion with development partners.
The total package will be given to small holding farmers on a single digit of nine per cent. Value addition and processing will also be covered so that the country can have a viable agriculture value chain.
To fast track Micro, Small and Medium Enterprises (MSME) lending via cluster product programme, the Division Head, SME, South, Abdul-Ganiyu Mohammed, explained that apart from looking at technology to support SMEs, they also need to ensure value addition and areas of comparative advantage.
He said in order to collateralise credit, which are far beyond the reach of SMEs, the BoI came up with clustering where finance institutions will see SMEs in groups rather than individuals. Mohammed said youths are being incorporated with one-digit interest rate to address unemployment in the county.
The Executive Director, Corporate Services, Jonathan Tobi explained that agro mechanisation is essential for economic growth, adding that the sight of farmers with hoes and cutlasses has continued to discourage the youths from going into agriculture.
The Acting Managing Director of the bank, Waheed Olagunju said the synergy with relevant partners in the agro business was due to Nigeria’s comparative advantage including population, availability of land and other factors.
Olagunju said apart from providing food, agriculture also produces raw materials for industries.
FMDQ OTC Securities Exchange has facilitated transactions worth N340.98 trillion in the fixed income securities and currency market within three years, THISDAY checks have revealed.
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.
THISDAY checks showed that the coming of FMDQ OTC has significantly boosted the fixed income market leading to N340.98trillion transactions 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 so far this 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 Market Development (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. It added that the vision of the DCMD Project is also aligned with the Financial System Strategy (FSS) 2020 initiative, which is aimed at making Nigeria one of the top 20 economies in the world by 2020.
President Muhammadu Buhari will today (Wednesday) present the 2017 Appropriation Bill to a joint session of the National Assembly.
The document will be the second one to be presented by the President after his inauguration in May 2015.
Buhari, who will be accompanied by top government officials, is expected to present the document at 10am.
The Federal Executive Council had on November 30 approved the document for presentation to the National Assembly.
Speaking to State House correspondents at the end of the council’s meeting, the Minister of Budget and National Planning, Udo Udoma, refused to give details of the budget proposal as approved by the council.
He said it was only the President who would unveil the document on the floor of the National Assembly.
“The 2017 budget has been approved by the Federal Executive Council and the details will be revealed when the President presents the budget to the National Assembly,” Udoma said.
The budget of N6.07tn for 2016 was predicated on a benchmark price of $38 per barrel of crude oil and N197 to a dollar exchange rate.
Meanwhile, members of the House of Representatives have said that the key parameters of the 2017-2019 Medium Term Expenditure Framework upon which the budget will be based are not sustainable, asking the Federal Government to seek more realistic solutions to the economy.
They voiced their opinions as they debated the MTEF in Abuja on Tuesday, less than 24 hours to the presentation of the 2017 budget estimates to the legislature by the President.
The development came as the Speaker, Mr. Yakubu Dogara, declared a public hearing on the controversial Oil Prospecting License 245 open, saying that the House was prepared to assist the government to resolve the issues surrounding the lucrative oil well.
Nigeria is believed to have lost over $1.1bn on the OPL 245, better known as Malabu oil deal.
The MTEF’s crude oil production, benchmark and exchange rate projections for 2017 did not receive the full backing of members.
The government plans to spend over N7tn next year, but revenue projection is around N4.9tn, a figure that also accommodates a huge deficit.
The Majority Leader of the House, Mr. Femi Gbajabiamila, while leading the debate, urged his colleagues to accept the projections.
Gbajabiamila argued that a sudden rise in oil price by about $20 in the past few days suggested that the government could sustain a benchmark of $42.5 proposed in the MTEF.
He also stated that ongoing negotiations between the government and militants in the Niger Delta were indications that peace could return to the region to make the 2.2 million barrels’ daily production projection realisable.
But, other lawmakers called for a review of the projections.
For instance, the Chairman, Committee on Financial Crimes, Mr. Kayode Oladele, said the fact of oil price gaining extra $20 did not justify retaining $42.5 as the benchmark price for the 2017 budget.
He said the price could suddenly drop below $60 or $50, making whatever gains achieved useless.
Oladele said, “Let us look at the daily oil production of 2.2 million barrels; it has not been achieved this year and there are no signs that things will change.
“We can’t even rely on the $42.2 benchmark price because prices are likely to drop.”
Oladele also said the exchange rate of N290 to $1 was not sustainable, adding, “The market rate today is N490/$1, which makes the projection in the MTEF unrealistic.”
Another member, Mr. Shehu Garba, described the MTEF as a document that contained “so many illogical issues.”
“We cannot continue to use figures that are unrealistic. Which of the three exchange rates will be used for investment in Nigeria?” Garba queried.
The Minority Leader of the House, Mr. Leo Ogor, also faulted the MTEF and asked how the government planned to finance the budget deficit.
Ogor noted, “We have not achieved 2.2 million barrels per day of crude in the last five years. Then, there is the budget deficit. We are looking at a revenue of N4.9tn or so, but we want to spend more than N7tn.
“Where is the money going to come from to finance the budget?”
However, the Deputy Speaker, Mr. Yussuff Lasun, advised members to downplay emphasis on the benchmark and the exchange rate, and focus more on the government’s plan to diversify the economy.
“What is more important to us is that this government is serious about diversifying the economy. Let us allow the government to use whatever proceeds from oil to diversify our economy,” Lasun said.
The document was later passed for second reading.
Speaking at the hearing on the OPL 245, Dogara recalled that efforts by successive governments to resolve the controversies had failed, making Nigeria to appear before the international community as a country that was not serious with its anti-corruption crusade.
However, he expressed confidence in the current administration to end the controversies.
A significant rally in oil and gas stocks assisted to extend gains at the stock market to the fourth session as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose 0.98 per cent to close at 26,071.16.
The market had last week sustained a positive momentum to close higher for the second consecutive week, rising by 0.30 per cent. That uptrend followed investors’ swoop on undervalued and fairly priced stocks after the selloffs experienced in November.
When the market resumed yesterday, the bulls maintained their control of the market driven by a significant rally in oil and gas stocks as investors reacted to a jump in crude oil prices to an 18-month high – supported by strong demand in Asia and supply cuts by Abu Dhabi, Kuwait and Qatar as part of production curbs organised by OPEC and other exporters. Yesterday’s performance pushed the month-to-date growth in NSE ASI to 3.05 per cent. Seplat Petroleum Development Company Plc and Forte Oil Plc led the price gainers with 10.2 apiece to close at N374.85 and N117.11 respectively. Champion Breweries Plc followed with 9.6 per cent, while Dangote Flour Mills Plc went up by 7.6 per cent.
Oando Plc and Total Nigeria Plc appreciated 6.7 per cent and 5.0 per cent in that order. Neimeth International Pharmeuticals Plc, Honeywell Flour Mills Plc and Transcorp Plc chalked up by 5.0 per cent, 4.7per cent, 4.7 per cent respectively. In all, 23 stocks appreciated while 14 stocks depreciated. Conversely, Avoncrowncaps Plc led the price losers with 5.0 per cent, trailed by Portland Paints and Products Nigeria Plc with 4.8 per cent. Union Bank of Nigeria Plc, AXA Mansard Insurance Plc, Fidson Healthcare Plc and Fidelity Bank Plc shed 4.7 per cent, 4.6 per cent and 3.4 per cent in that order.
In terms of sectoral performance, the NSE Oil & Gas Index led with 6.3 per cent on the back of increased buying interest in Seplat and Forte Oil while the NSE Industrial Goods Index gained 0.9 per cent. The NSE Banking Index rose by 0.7 per cent as gains in Guaranty Trust Bank (+2.0 per cent) and Access Bank (+2.0 per cent) buoyed the sector. Contrarily, the NSE Insurance Index declined 0.7 per cent as losses in AXA Mansard (-4.7 per cent) and WAPIC Insurance Plc (-2.0 per cent) impacted sector performance. The NSE Consumer Goods Index shed 0.02 per cent.
FMDQ OTC Securities Exchange says it has approved the listing of N16.29bn Wema Funding SPV Bond on its platform.
The company said in a statement on Tuesday in Lagos that the N16.29bn SPV represents series one seven-year 18.50 per cent fixed rate unsecured bond.
It said that the bond was coming shortly on the heels of the listings of the Sterling Investment Management SPV Plc Bond and the Greenwich Plus Money Market Fund.
According to it, FMDQ provides a highly recommended and efficient platform for the registration, listing, quotation and valuation of debt securities.
It said that listing of the Wema SPV Bond was another testament and validation of the efficiency and value-add provided by the FMDQ listings and quotations service.
“The Wema SPV Bond, having taken its rightful place on the FMDQ Bond Listings Wall of Fame, has joined a host of other securities to make history on FMDQ’s unique platform,” the company said.
It said that it was increasingly matching the efficiency of its processes being conscious of its crucial role in the Nigerian debt capital market.
“From improved market credibility, continuous information disclosure, to enhanced secondary market liquidity, and effective price formation, FMDQ continues to lay the foundation for sustainable and efficient financing in the Nigerian DCM,’’ the company said.
It said that the exchange would continue to fulfil its mandate of revolutionising the Nigerian financial markets through its product and market development initiatives.
The company said it would successfully position its operations, through streamlined and timely processes aimed at deepening the DCM.
It further said that it would soon commence the listing of short-term bonds and the quotation of private companies’ bonds.
