FCMB Group Plc has reported a profit before tax of N14.2bn for the nine-months, ending September 30, 2016.
This, the bank said on Thursday, represented an increase by 453 per cent from N2.563bn recorded in the comparative period of 2015.
FCMB Group Plc, the holding firm with subsidiaries including First City Monument Bank Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited, attributed the current development partially to its soundness of ratios, steady buffers against the subsisting adverse operating environment, in addition to the bank’s sustained revenue momentum combined with its cost optimisation programme.
Its unaudited results filed with the Nigerian Stock Exchange showed the FCMB Group Plc’s gross revenue was N140.7bn for the nine-months, which was a 29 per cent increase over N109.3bn recorded for the same period last year.
The group also recorded a non-interest income of N44.8bn, which was an increase of 128 per cent year-on-year, from N19.6bn for the same period last year.
This increase has been predicated on a 612 per cent year-on-year increase in foreign exchange income, from N5bn for the nine-months ended September 2015, to N35.3bn for the nine-months ended September 2016.
Commenting on the result, the Managing Director of FCMB Group Plc, Mr. Peter Obaseki, was quoted to have said, “The audited nine months results for the period ended September 2016, reflects our focus on key soundness ratios and the need to maintain buffers against a sustained adverse operating environment.
“Accordingly, capital adequacy and liquidity ratios have held up at 17.6 per cent and 36.8 per cent, respectively.”
The Group Managing Director of FCMB Limited, Mr. Ladi Balogun, said, “The audited results of the bank revealed that the extraordinary performance of Q2 2016 offset the loss recorded in Q3 of N2.4bn, thereby resulting in strong year-on-year profit growth of 913 per cent.
The bear run at the stock market was halted thursday on bargain hunting by investors, lifting the Nigerian Stock Exchange (NSE) All-Share Index (ASI) by 0.22 per cent to close at 25,517.00. Similarly, market capitalisation added N19.2 billion to close at N8.8 trillion. The market has been bearish in recent times, sending the NSE ASI to a seven-month low on Tuesday. However, the market rebounded yesterday on bargain hunting as investors capitalised on some of the highly discounted stocks to increase their portfolio. At the close trading, 19 stocks gained compared to 11 that depreciated.
Sterling Bank Plc led the price gainers with 5.7 per cent, followed by Oando Plc with 5.0 per cent. Flour Mills of Nigeria Plc and PZ Cussons Nigeria Plc advanced 4.9 per cent each, while Fidson Healthcare Plc and Diamond Bank Plc garnered 4.6 per cent and 4.4 per cent respectively. AIICO Insurance Plc and Glaxosmithkline Consumer Nigeria Plc appreciated by 3.5 per cent and 3.4 per cent in that order.
Conversely, Forte Oil Plc led price losers with 6.2 per cent to close at N70.00 per share. Julius Berger Nigeria plc trailed with 5.0 per cent, just as African Prudential Registrars Plc and Total Nigeria Plc rose by 4.3 per cent. Value of stocks traded rose by 5.01 per cent to N1.19 billion invested in 165.72 million shares. The most actively traded sectors were financial services (141.23 million shares); Conglomerates (12.91 million shares) and Consumer Goods (6.19 million shares), while the three most active stocks were: Diamond Bank Plc(34.42 million shares); Access Bank Plc (32.65 million shares) and FBN Holdings Plc (21.91 million shares).
In terms of sectoral performance, all the sectors closed in the green except the NSE Oil and Gas Index that shed weight. The NSE Banking Index led sector gainers after appreciating 0.75 per cent following investors’ swoop on GTBank Plc(+1.2 per cent) and United Bank for Africa Plc (+1.2 per cent). The uptrend in Nestle Nigeria Plc (+1.3 per cent), PZ Cussons Nigeria Plc (+4.9 per cent) and Nigerian Breweries Plc(+0.2 per cent) bolstered the NSE Consumer Goods Index by 0.50 per cent. Also the NSE Insurance Index appreciated 0.2 per cent on account of AIICO Insurance Plc (+3.5 per cent), while the NSE Industrial Goods Index rose 0.1 per cent.
The House of Representatives has approved the sum of ₦N70,672,492,000 as 2016 budget for the Nigerian Communications Commission (NCC).
The decision followed the adoption of the report of the Saheed Akinade Fijabi-led Committee on Telecommunications at plenary presided over by Speaker Yakubu Dogara.
Of the amount, ₦N22,211,186,000 is for recurrent expenditure, while ₦N15,651,475,000 goes for capital expenditure.
Besides, special projects get N6,557,708,000 while ₦N8,584,000,000 and ₦N17,668,123,000 are to be transferred to the Universal Service Provision Fund (USPF) and the Federal Government.
The Federal Government on Tuesday said it has been able to reduce the monthly wage bill of civil servants in Ministries, Departments and agencies from N165bn to N145bn monthly.
The Permanent Secretary, Ministry of Finance, Mr Mahmoud Dutse gave the figures while speaking with journalists at the sideline of a workshop on cost management.
The event was done to sensitise stakeholders on the need for transparency, accountability, prudence and efficiency in the management of government resources.
He said the N20bn reduction in monthly wage bill was achieved after an audit conducted by the Presidential Initiative on Continuous Audit.
Dutse said in addition to the monthly savings of N20bn, the sum of N15bn had been saved from reduction in overheads and excessive foreign travels and other allowances paid to civil servants
This N15bn savings according to him was achieved through the activities of the Efficiency Unit that was set up by the Minister of Finance, Mrs Kemi Adeosun.
Dutse said the federal government is not only interested in cutting cost of governance. but to also get value for the funds allocated for implementation of government programs.
He said, “This workshop is a cost management workshop organised for the Directors of MDAs. Basically, it centered on how we should manage government’s funds better.
“As you all know, due to sharp decline in government revenue , we must manage our purse more efficiently . Though the revenue has gone down, expenditure has not gone and this is creating fiscal pressure.
The Nigerian equities market closed on a negative note on Tuesday as Forte Oil Plc, Livestock Feeds Plc, Total Nigeria Plc, Neimeith International Pharmaceutical Plc and Nascon Allied Industries Plc emerged the top five losers at the close of trading on the floor of the Nigerian Stock Exchange.
The market extended Monday’s loss position, as the NSE All-Share Index shed 0.15 per cent, dragging the year-to-date return to -11.11 per cent.
The NSE market capitalisation dropped to N8.764tn from N8.777tn, while the NSE ASI closed at 25,461.34 basis points from 25,499 basis points.
A total of 120.931 million shares worth N1.186bn exchanged hands in 2,397 deals.
However, volume traded and value of transactions, advanced by 14.29 per cent and 42.82 per cent, accordingly. There were 11 gainers as against 17 decliners.
The share price of Forte Oil closed at N74.62 from N82.64, losing N8.05 (9.74 per cent), while Livestock Feeds shares also plunged by N0.04 (five per cent) to close at N0.76 from N0.80.
Total’s share price dropped by N13.45 (five per cent) to close at N255.58 from N269.03, while Neimeth shares closed at N0.78 from N0.82, losing N0.04 (4.88 per cent).
The share price of Nascon also dropped by N0.36 (4.77 per cent) to close at N7.19 from N7.55.
Champion Breweries Plc led the gainer’s chart in the day, appreciating by 8.41 per cent to close at N2.45. This was followed by Flour Mills Nigeria Plc, Africa Prudential Registrars Plc, Unity Bank Plc and Mobil Oil Nigeria Plc.
Commenting on the state of the market, analysts at Meristem Securities Limited, said, “We attribute Tuesday’s market performance to sell offs in the oil and gas space, driven by the persistent negative market sentiments. We expect the market to close negative for the week.”
The Nigerian equities market yesterday extended losses for the eight consecutive trading, driving the Nigerian Stock Exchange (NSE) All-Share Index to a 7-month low. The NSE ASI fell by 0.15 per cent to close at 25,461.34, increasing the month-to-date and year-to-date decline to 6.46 per cent and 11.47 per cent respectively.
Yesterday’s decline resulted from heavy sell offs across oil and gas sector. Specifically, Forte Oil Plc fell by 9.7 per cent, while Total Nigeria Plc went down by 5.0 per cent. In all, 17 stocks declined compared with 11 stocks that appreciated. Forte Oil Plc led, declining by 9.7 per cent to close at N74.62.
The sell-off in Forte Oil Plc came after the company successfully raised N9 billion bond under its N50 billion bond issuance programme. The company said the funds would be used to refinance existing short term commercial bank loan obligations and to finance the retail outlet expansion of the company.
The Group Chief Executive Officer, Forte Oil, Mr. Akin Akinfemiwa had said: “With the raising of this initial capital which has been fully underwritten shows the confidence the investing public has in Forte Oil Plc as an investment of choice. This bond programme being the first in the downstream sector, is testament to Forte’s position within the downstream sector and allows the company to actualise the vision of the Board to continue to provide value to its shareholders regardless of the economic climate.”
Apart from Forte Oil that led the price losers’ table, Livestock Feeds Plc trailed with 5.0 per cent, while Neimeth International Pharmaceuticals Plc shed 4.8 per cent. NASCON Allied Industries Plc depreciated by 4.7 per cent.
In terms of sectoral performance, the NSE Oil & Gas Index led with 2.5 per cent due to the losses by Forte Oil Plc and Total Nigeria. Also, the NSE Consumer Goods Index marginally lost 0.02 per cent on account of weak appetite in PZ Cussons Nigeria (-3.3 per cent) and Dangote Cement Plc (-1.6 per cent). On the positive side, the NSE Banking Index rebounded, gaining 0.05 per cent on the back of bargain hunting in Access Bank Plc (+0.5 per cent), Zenith Bank (+0.4 per cent) and GTBank (+0.3 per cent).
Nigeria’s economy contracted in the third quarter as businesses struggled to access foreign exchange and militanta continued to bomb oil pipelines in the restive Niger Delta, official data showed Monday. “The nation’s gross domestic product (GDP) contracted by -2.24% year-on-year,” the country’s National Bureau of Statistics said in a report.
The Nigerian economy is reeling and bruised following the crash in global oil prices from over $100 a barrel in 2014 to around half that today.
A contraction appeared inevitable when militants renewed attacks on the country’s oil infrastructure, strangling production that accounts for around 70 per cent of government revenue and the bulk of Nigeria’s export earnings. The relentless sabotage has put the Nigerian government under pressure as economists increasingly question whether President Muhammadu Buhari can pull the country out of recession.
“During the period under review, oil production averaged at 1.63 million barrels per day (bpd),” the statistics agency said.
That is a 22-percent drop from the same period last year, when Nigeria was producing 2.17 million bpd.
Manufacturing also took a big hit, shrinking by 2.9 percent in the wake of a devalued naira and currency controls that have curbed trade.
“This is partly due to the continued fall in the exchange rate, which makes imported inputs more expensive, thereby increasing business costs,” the statistics agency said.
“This is greatly a result of the continued fall in (the) naira to dollar rate which translates to much higher cost of business operations.”
In early 2016, Buhari had vowed not to “kill the naira” by letting it fall in value, in opposition to depreciations by fellow major oil exporters Angola and Russia.
His government tried to prop up the naira for months, but that drained foreign currency reserves and it eventually abandoned the currency peg in June.
A dollar shortage persists, with black market rates hovering around 440 naira to the dollar this month compared to the official bank rate of approximately 320 naira to the dollar.
The economic troubles look to last, with peace talks between the Nigerian government and oil rebels falling apart this month — the Niger Delta Avengers claimed they bombed three pipelines last week — and foreign investors steering clear until they see a more coherent currency policy.
The International Monetary Fund has forecast the West African nation’s gross domestic product will shrink by 1.7 percent this year, the first full-year contraction in more than two decades, according to Bloomberg News.
The federal government has stated that of the N6.06 trillion that was budgeted for the 2016 fiscal year, it has spent about N3.577 trillion as at September, 2016.
This, it said translated to a 79 per cent performance recorded by the budget.
In a keynote speech at the KPMG CFO’s Forum in Lagos yesterday, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, also revealed that the 2017 Appropriation Bill was almost ready.
However, the minister who was expected to speak about the 2017 budget proposal declined making comment on that, saying it was because the document had not been submitted to the National Assembly.
“The good news is that it is almost ready,” he said. “We are almost through with our consultations with the National Assembly on the Medium Term Expenditure Framework, and the outlines of the 2017 Budget, and will soon be submitting it to the National Assembly for their consideration.
“Without giving anything away, I can assure you that the Budget will be targeted at stimulating private sector investment. The government believes that it is only by partnering with the private sector that we can propel the economy out of recession and onto the path of sustainable growth,” he added.
Commenting further on the 2016 budget, Udoma said in addition to the total of N2.44 trillion so far released for capital expenditure, non-debt recurrent and service-wide vote expenditure, a total of N1.138 trillion had also been paid out in domestic and foreign debt service expenditures, saying this included the N44 billion transferred to the Sinking Fund to retire maturing obligations.
Udoma, disclosed that to date, budget personnel cost and debt service obligations had been fully met, noting that, additionally, government has done reasonably well in the challenging circumstances with respect to capital expenditure.
“It is noteworthy that the total amount of N753.6bn already released for capital expenditure in 2016 is the highest in the nation’s recent history, even in the era of high oil prices.
“Indeed, the capital releases to date exceed the aggregate capital expenditure budget for 2015 of about N700billion, inclusive of capital expenditure in statutory transfers.
“Despite fiscal challenges, government is committed to meeting its debt obligations while funding critical sectors to enable government to function smoothly, as we continue to work out lasting solutions to the issues of revenue shortfalls”.
The minister also highlighted the Nigeria’s Economic Recovery and Growth Plan (NERGP) 2017 -2020, saying “all these reforms and initiatives, and many more, most of which will be reflected in the 2017 Budget, are being brought together in a single document to be called Nigeria’s Economic Recovery and Growth Plan (NERGP).”
He added that the document would present a coherent summary of Nigeria’s short and medium term economic plans for the period 2017-2020, saying by putting government strategies,directions, policy priorities and intended initiatives in one place, other stakeholders were better able to take their own strategic economic decision.
He further disclosed that the NERGP would focus on five broad areas, namely: macroeconomic policy, economic diversification and growth drivers, competitiveness, social inclusion and jobs, and governance and other enablers, assuring that there would be a major emphasis on implementation and monitoring of the NERGP.
The Central Bank of Nigeria (CBN) has said it cannot meet the country’s monthly demand for $4.8 billion foreign exchange.
In september, only 13.75 per cent of the demand for foreign exchange was met.
The apex bank said its inability to meet the demands was based on the dwindling foreign reserves attributable to low production and drop in crude oil prices.
According to the apex bank, its forex policy was geared towards controlling access to the limited supply of dollars and to encourage local production of commodities that were hitherto being imported. It would be recalled that the CBN was only able to meet its forex obligation of $660.17 million to 1342 manufacturers and allied firms in September for the importation of raw materials, plants and machinery.
Besides, the CBN noted that it would be abjectly failing on one of its cardinal objectives if it cuts interest rates when the inflation rate is high, saying “ours at 18.3 percent, one must question the judgment of cutting interest rates at this time. 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 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.”
Similarly, the CBN Governor, Godwin Emefiele explained actions taken on Bureau De Change operators saying that about $6 billion per year was being sold to the operators for frivolous reasons.
According to him, we set up BDCs and started giving out FX cash to them.
“At some point, we even had Class A BDCs that could collect as much as $1 million per week. On average, we sold about US$6 billion per year for frivolous reasons. Over the 11 years that we were practicing this, we sold more than $66 billion. None of these monies were used to build factories or to create jobs in Nigeria. None of these were used to build hospitals or schools in Nigeria. Imagine what this money would have meant to us if we had that amount in our FX Reserves today”, he said.
Emefiele added that the demand for forex has reached an all-time high of over $1.2 billion weekly or $4.8 billion monthly, noting that when he assumed office in June 2014, the nation’s forex reserves had fallen from an high of $62 billion in 2008 to only $37 billion. “Rather than build on the one-time burgeoning base of agricultural production and manufacturing we had, we invested less in power, infrastructure, education, and health. As our schools began to dilapidate and teachers went on incessant strikes, we sent our children overseas even for primary school education. As doctors preferred to practice in the US and UK and hospitals lacked even hand gloves, we embarked on a medical exodus abroad even for basic diagnosis.
“As our manufacturing companies started closing especially for lack of power, we gladly substituted them with seemingly cheap imports while inadvertently exporting jobs and importing poverty to our country”, he added.
Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf explained that while the CBN may be right in its justifications for some of its actions, there is a need for a holistic and integrated approach to addressing the concerns in the economy, thus necessitating a fusion of fiscal and monetary policies.
President, Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs explained that the demands of the real sector are yet to be met and that may spell doom for the nation’s economy if unresolved by the end of the year.
FMDQ OTC Securities Exchange listed the pioneer memorandum money market fund, The Greenwich PlusMoney Market Fund. The fund is managed by Greenwich Asset Management Limited.
Commenting on the listing, Managing Director/CEO of FMDQ, Mr. Bola Onadele.Koko commended the fund manager on its choice of securities exchange for the memorandum listing and reiterated the exchange’s commitment to facilitate growth and development in the Nigerian debt capital market (DCM).
“In presenting an attractive and efficient platform for issuers/fund managers to list their money market and fixed income mutual funds, FMDQ, as a front-line regulator and an information repository, provides governance and ensures continuous disclosure/dissemination of key information on all funds listed on its platform, thus, improving information transparency whilst promoting credibility of the funds towards a more globally competitive DCM,” Onadele said.
In his comments, Managing Director of Greenwich Asset Management Limited, Mr. Dayo Obisan, said: “Our choice to list the Greenwich Plus on FMDQ as the first collective investment scheme on its platform is a deliberate strategy to promote the transparency and visibility of the fund, and be the pioneer mutual fund that would encourage others to be listed. The Greenwich Plus recorded the highest level of subscription at its Initial Public Offering (IPO) after subscribers demonstrated confidence in the Greenwich brand by over-subscribing to the IPO by 44.85 per cent. The Fund remains open and its core objectives are to achieve a competitive rate of return and generate a steady stream of income for unit holders.”
Also speaking the Group Managing Director of Greenwich Trust Group, Mr. Kayode Falowo said the IPO and subsequent listing of the fund is a great feat in view of recent economic and financial market conditions.
“Being the first mutual to be listed on this great platform, FMDQ, is remarkable for us all in the Greenwich Trust Group. We believe that the 48 per cent oversubscription attests to the confidence investors have in the capability of the fund manager, Greenwich Asset Management. As such, we encourage all investors, retail, institutional and pension funds administrators to invest in the Greenwich Plus Money Market Fund, as a means of portfolio diversification, and enjoy competitive returns on your investment.”
