the Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, says there is significant market potential for green bonds in Nigeria.
He said as a developing market with a population in excess of 180 million people, with projected annual emissions of 900 million tonnes, the country required significant capital to develop mitigation and adaptation interventions that would reduce it.
He said this when the Federal Government held a stakeholders’ consultation on the pilot issuance of green bond.
The forum was part of a continuing collaboration between the Ministry of Environment and the Ministry of Finance to explore and develop a product that can leverage and channel resources towards viable green projects and contribute to the achievement of the nation’s development objectives.
He further stated that green bonds could mobilise funds from investors with strong environmental focus, who also craved transparency and lower risk appetite.
To this end, the Minister of Environment, Amina Mohammed, was quoted in a statement as saying that Nigeria, like most countries around the world, faced vast investment needs for the transition to a sustainable, low-carbon and climate-resilient economy.
The government, she noted, had made it clear that private sources of finance were needed, and that tapping into the international capital markets, as well as domestic capital, was crucial.
The Association of issuing Houses of Nigeria (AIHN) has urged the various trade groups in the capital market to deepen collaboration among themselves to build a more vibrant market.
The outgoing Chairman of the Association, Victor Ogiemwonyi who stated this during the group’s yearly general meeting in Lagos, admonished all market groups to work with greater collaboration, noting that one firm alone cannot make a market.
Ogiemwonyi, who has served the institute for two years, also implored the members to support and cooperate with the incoming executives.
“I will like to encourage us all to continue to work with greater collaboration, knowing that one firm alone can not make a market.” The Chairman, in a chat with The Guardian on issuers apathy in stock market, said: “The market is very soft for issuing process in the last one or two years. There has not been any major issuing activities, and that has been a major challenge.
“The economy is slowing down rapidly and the stock market is getting such signals. Government should give incentive because business environment is very difficult. We have a much better business environment and virtually every company is in trouble, because there is severe slow down.
“Policy side’s being slow in coming out, and they have not being consistent. So, policy inconsistency, and slow down are the major challenges.
“Once the environment is friendly, legislators put in place properly, policies are consistent, and people will do business in Nigeria.”
He explained that the association’s total income grew by 8.5 per cent to N38.34 million, compared to 35.35 percent achieved 2014, while N21.05 million was realised from members subscription during the period under review, up from N18.55million in 2014.
Total expenses rose to N24.38 million in 2015 from N22.08 million in 2014.
He explained that N13.44 million was transferred to the accumulated fund, which increased to N195.75 million.
“As at the date of the AGM, we have over N200 million in net assets. N150 million of this amount is invested in 12.5 per cent FGN 2026 bond. The committee took this decision to ensure that the overheads of the association will be paid from income of this bond for the next 10 years,” he said.
Reviewing its activities, Ogiemwonyi explained that the association threw its weight on the Securities and Exchange Commission (SEC) initiative to implement the new minimum capital requirement for capital market operator and made recommendations to the commission.
“In order to revitalize the market, we co-hosted a day dialogue on the capital market and the 2015 federal budget with the Chartered Institute of Stockbrokers and Association of Stockbroking Houses of Nigeria.
“We initiated the establishment of a strong capital market group that will be able to speak in one voice on issues bordering on capital market, engaged the Law Society of England and Wales on issues around the integrity of our market and we actively supported annual capital market conference,” he added.
The Nigerian Stock Exchange market capitalisation dropped by N70bn on Tuesday following losses in 29 stocks and gains in 10 stocks.
Market capitalisation dropped to N9.447tn from N9.517tn, while the NSE All-Share Index slipped to 27,503.81 basis points from 27,707.12 basis points.
A total of 176.772 million shares valued at N1.885bn were traded in 3,682 deals.
The equities market dropped more points (73 basis points) at the close of today’s session amidst increased pressure across market heavyweights.
The market attained a maximum index point of 28,419.92 basis points in the course of trading on Tuesday, while the lowest and average index points stood at 27,503.81 and 27,797.31 basis points.
The banking and oil and gas sectors led market declines following negative closes in Zenith Bank Plc (2.34 per cent loss), Union Bank of Nigeria Plc (five per cent loss), Forte Oil Plc (2.82 per cent loss) and Total Nigeria Plc (0.37 per cent loss).
The industrial goods sector was next with 0.68 per cent loss as Dangote Cement Plc recorded 1.14 per cent loss and Portland Paints Plc losing 9.09 per cent owing to sell pressure. The consumer goods sector, however, closed relatively flat, recording 0.04 per cent loss after losses in Cadbury Nigeria Plc (4.11 per cent loss) and Champion Breweries Plc (4.72 per cent loss) outweighed gains in Guinness Nigeria Plc (0.49 per cent gain).
On the global front, Asian markets traded mixed as investors weighed the Reserve Bank of Australia decision to keep interest rate unchanged. In Europe, markets seesawed as oil prices pared yesterday’s gains. The United States markets opened flat after ISM non-manufacturing PMI for August surprisingly came in at 51.4 below Reuters estimate of 55.0.
“The negative closes across all key sectors amidst widening negative breadth and low trade volume suggests that market sentiment has become bearish. We believe this could weigh further on the ASI in the session ahead,” analysts at Vetiva Capital Management Plc said in a brief.
Meanwhile, interbank call rate in Nigeria surged 716 basis points to 27.33 per cent on the back of relatively tight system liquidity. At the foreign exchange interbank market, the naira depreciated N0.72 to close at N314.92.
There was a clear sentiment reversal in fixed income markets on Tuesday as bears seized the upper hand. Yields in the Treasury bills market rose 33bps amidst selling momentum weighted on short-dated bills. In particular, yields on the 37 Days-to-Maturity (1.03 per cent gain), 44DTM (1.09 per cent gain), and 93DTM (1.64 per cent gain) bills rose to 15.79 per cent, 15.75 per cent, and 15.09 per cent respectively.
Similarly, the bond market turned bearish although sell pressure was weighted across the entire space. The most notable changes were on the 12.5 per cent Federal Government of Nigeria January 2026, 10 per cent FGN July 2030, and 12.4 per cent FGN March 2036 bonds as their yields climbed 15bps, 11bps, and 17bps to close at 15.21 per cent, 15.07 per cent, and 15.19 per cent respectively.
PZ Cussons Nigeria Plc, NEM Insurance Company Nigeria Plc and John Holt Plc emerged as the top three losers at the close of trading on the floor of the Nigerian Stock Exchange on Monday, slashing market capitalisation by N17bn.
The NSE All-Share Index also dropped by 0.24 per cent, opening the week on a negative note following mixed performances across key sectors.
The NSE market capitalisation slid to N9.517tn from N9.534tn recorded on Friday last week.
A total of 195.024 million shares valued at N1.57bn exchanged hands in 3,221 deals.
Global markets traded higher following a rally in oil prices and as disappointing United States non-farm payroll data for August lowered expectations of a potential interest rate hike by the US Fed in September.
At the NSE, the industrial goods sector extended its downward trend amid continuous sell pressure in Dangote Cement Plc, which recorded a drop of 0.57 per cent. Consumer goods reversed previous session’s gains following losses in large capitalized firms like PZ (4.97 per cent loss) and Nigerian Breweries Plc (0.71 per cent loss).
Conversely, the financial services and the oil and gas sectors extended their positive run on the back of gains in Zenith bank Plc (1.01 per cent gain), United Bank for Africa (3.69 per cent gain), Diamond Bank Plc (4.46 per cent gain) and Oando Plc (2.10 per cent gain).
Market breadth turned negative with 13 advances and 21 declines.
To this end, analysts at Vetiva Capital Management Limited, said, “Notwithstanding some few periods of gains, the NSE ASI traded under water for most part of the trading session. Coupled with the mixed closing positions across key sectors, we expect market to remain volatile in the sessions ahead.”
Other losers at the close of trading were AIICO Insurance Plc, United Capital Plc, Unity Bank Plc, International Breweries Plc, Academy Press Plc, Africa Prudential Registrars Plc, FBN Holding Plc, Transnational Corporation of Nigeria Plc, Vitafoam Nigeria Plc, Champion Breweries Plc, among others.
The top three gainers were May and baker Nigeria Plc, Cutix Plc and Diamond Bank Plc.
The Group Managing Director/ CEO, United Bank for Africa, Mr. Kennedy Uzoka, has said the banks African subsidiaries contributed 25 per cent of the group’s profit and account for over a quarter of its overall total deposit base, which is largely made up of low-cost savings and current account deposits.
Uzoka was quoted to have said during an investor conference call on the bank’s 2016 half year results, according to a statement released by UBA.
Uzoka noted that, overall, the African business (excluding Nigeria) contributed a quarter of profit in the period, with a stronger outlook.
He said, “I am particularly impressed by the performance of our business in Congo Brazzaville, where we doubled bottom-line, largely through transaction-based offerings.
“We will continue to consolidate our position across chosen markets, as we penetrate the market through innovative, simple and convenient offerings. We will maintain our diligent focus on profitable quality asset creation, as we situate our growth appetite within our prudent risk management culture.
The UBA boss explained that the bank’s strategy was hinged on a one-point agenda -Customer1st, which follows that as banking increasingly gets commoditised, the customer will be the sole determinant of the bank’s growth and profitability.
He stressed, “Hence, to win in this evolving landscape, we have devoted our strategic initiatives to our customer as every decision and action are being taken within the context of customer satisfaction and value addition.
“To this end, we are devoting reasonable resources at the same time leveraging our technology-driven Customer Relationship Management towards increasing the depth of our understanding of customer preferences and changing needs.
“We want to be in the best position to predict the customers on their utility curve, so as to ensure we proactively offer forward-looking products and services that will create unique customer experience as well as beat expectations.
The Central Bank of Nigeria borrowed N212.85bn ($654.92m) in an auction of Treasury bills on Wednesday, with yields little changed from previous sales, data from the Debt Management Office showed on Thursday.
The debt office raised N45.85bn of three-month paper at 14.38 per cent, down from 14.99 per cent in mid-August; N62bn of six-month bills at 17.50 per cent, up from 17.48 per cent, and N105bn of one-year paper at 18.42 per cent, down from 18.50 per cent.
Higher subscriptions on the one-year sale suggested some offshore investors participated, market players said.
On Monday, offshore investors traded about $270m through the interbank forex market to fund investments in naira debt.
Sovereign dollar bonds fell across the curve to their lowest level in more than two weeks on Wednesday after official data showed the economy contracted by 2.06 per cent in the second quarter, Reuters reported.
The 2023 issue chalked up the biggest losses, down 0.728 cents to trade at 99.417 cents in the dollar – its lowest since August 15, according to Tradeweb data.
The 2021 bond slipped by 0.489 cents to 102.156 cents while the 2018 issue lost 0.603 cents to trade at 101.167 cents.
Data from the National Bureau of Statistics showed the non-oil sector declined due to a weaker currency while lower oil prices dragged the oil sector down.
The lingering scarcity of foreign exchange had pushed the naira to an all-time-low of 420 against the United States dollar at the parallel market on Wednesday.
This followed data released by the National Bureau of Statistics on Wednesday, confirming that the economy was in recession.
The NBS data showed that the Gross Domestic Product shrank by 2.06 in the second quarter, after contracting by 0.36 in the first quarter.
Before dropping to 420/dollar on Wednesday, the local currency had traded at 418 in Kano, 417 in Abuja and 415 in Lagos on Tuesday. It closed at 414 against the greenback on Monday.
But Bureaux de Change operators raised hope of a gradual appreciation of the local currency in the near term as the CBN licensed 11 new International Money Transfer Operators to address the dollar supply side.
“Depending on the effective implementation of the central bank’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollar to sell to bureaux de change and provide the needed liquidity in the market,” the President, National Association of Bureaux de Change Operators of Nigeria, Aminu Gwadabe, told Reuters on Wednesday.
Gwadabe said the CBN’s directive that commercial banks should sell dollar inflow through money transfer operators to the BDCs had boosted daily dollar supply to the currencies agencies to around $10m to $20m and this could further boost supply and help support the naira.
The Nigerian Stock Exchange’s market capitalisation recorded a growth of N282bn at the close of trading on Thursday, one day into the country’s economic recession.
A total of 25 stocks appreciated in price, while 13 recorded price declines.
The NSE market capitalisation soared to N9.760tn from N9.478tn, while the NSE All-Share Index also closed at 28,419.92 basis points from 27,599.03 basis points.
The market traded on 229.225 million shares worth N2.117bn in 3,243 deals.
The highest index point attained in the course of trading was 28,419.92 basis points, while the lowest and average index points were 27,368.41 and 27,666.28 basis points respectively.
Dangote Cement Plc, CAP Plc, FCMB Group Plc, AIICO Insurance Plc and Wema Bank Plc emerged as the top five gainers.
The shares of Dangote Cement appreciated by N15.11 (8.59 per cent) to close at N191 from N175.89, while those of CAP closed at N31.57 from N30.09, gaining N1.48 (4.92 per cent).
FCMB share price also appreciated by N0.05 (4.90 per cent) to close at N1.07 from N1.02, while AIICO shares soared to N0.66 from N0.63, gaining N0.03 (4.76 per cent).
Wema bank shares also gained N0.03 (4.55 per cent) to close at N0.69 from N0.66.
Other gainers were Sterling Bank Plc, Fidson Plc, Trans-nationwide Express Plc, NPF Microfinance Bank Plc, Law Union and Rocks Insurance Plc, Fidelity bank Plc, amonmg others.
On the other hand, Caverton Offshore Support Group Plc, Tripple G Plc, Chellaram Plc, May and Baker Nigeria Plc, Cutix Plc, among others emerged as the top five losers.
The NSE had on Wednesday, appreciated by N36bn despite confirmation by the Nigerian Bureau of Statistics that the economy was in recession.
The equity market maintained positive momentum, appreciating by 0.39 per cent.
The NSE market capitalisation rose to N9.478tn from NN9.442tn, while the All-Share Index closed at 27,599.03 basis points from 27,493.12 basis points.
A total of 262.614 million shares valued at N4.881bn exchanged hands in 3,302 deals.
The second quarter 2016 Gross Domestic Product data showed a contraction of 2.06 per cent year-on-year (Q1 2016: -0.36 per cent). July headline inflation spiked to 17.1 per cent year-on-year from 16.5 per cent and unemployment rate jumped to 13.3 per cent from 12.1 per cent.
On the global scene, markets traded mixed as investors reacted to a slew of data from the Eurozone and looked forward to the key August United States non-farm payroll data due Friday.
Having lost in the previous session, the oil and gas and financial services sectors rebounded to lead advances, following gains on Seplat Petroleum Development Company Limited(+10.25 per cent), Oando Plc (0.61 per cent), Guaranty Trust Bank Plc (1.53 per cent), Ecobank Transnational Incorporated Plc (0.35 per cent) and FBN Holdings Plc (1.67 per cent).
The consumer goods and industrial goods sectors continued on an upward trend, albeit marginal, as 7UP Bottling Company Plc (9.38 per cent gains), Honeywell flour Mill Plc (five per cent loss), Dangote Cement Plc (0.22 per cent gain) and Julius Berger Nigeria Plc (9.71 per cent loss) traded mixed.
Market breadth turned negative with 19 advances and 21 declines.
Commenting on the performance, analysts at Vetiva Capital Management limited, in the firm’s daily market analysis, said, “We believe the economic data releases are not far away from market expectation, hence, the muted impact on market.
“Nonetheless, we believe investors would digest the numbers more cautiously, and think this could result in mixed trading pattern in the session ahead.”
WorldRemit, one of the international money transfer operators (IMTOs) that was registered by the Central Bank of Nigeria (CBN) on Tuesday has commended the banking sector regulator in Nigeria.
The CBN licenced WorldRemit and ten other international money transfer operators. A statement from WorldRemit said Nigerians in the diaspora would benefit from increased competition in the remittance market.
The founder and CEO of WorldRemit, Ismail Ahmed said: “We launched our service to Nigeria in 2011 when we pioneered instant deposits to all bank accounts. Our service provided the Nigerian diaspora with an easy, secure and low cost way to send money home as well as bringing much-needed foreign exchange into the local economy. We’re delighted that we can now resume operations.
“We commend the Central Bank of Nigeria for reaffirming the country’s commitment to building an enabling environment and level-playing field for international money transfer services to Nigeria. Increased competition will help to bring the estimated 50 per cent of remittances to Nigeria that currently go through unregulated, informal networks into formal networks channelled through licensed IMTOs.
“We’re grateful to the many Nigerians both at home and in the diaspora that supported our call for money transfers to be restored. A competitive remittance market provides Nigerians with greater convenience and better pricing.” To celebrate the relaunch of its service to Nigeria, WorldRemit is offering promotional pricing of $0.01, €0.01, £0.01 or equivalent on all money transfers to Nigeria until 30 September 2016.
In furtherance of its efforts to liberalise the foreign exchange market, to ensure liquidity, and make FX readily available to low end users, the CBN disclosed that it has licensed 11 more International Money Transfer Operators (IMTOs) to operate in Nigeria.
The central bank, in a statement signed by its acting Director, Corporate Communications, Isaac Okorafor, said the move was in line with the existing guidelines on International Money Transfer Services in Nigeria (2014). The newly registered IMTOs are Trans-fast Remittance LLC, Worldremit Limited, UAE Exchange Centre LLC, Wari Limited, Homesend S.C.R.L, Small World Financial Services Group Limited, Weblink International Limited, Cashpot Limited, DT&T Corporation Limited, FIEM Group LLC DBA PING Express, and CP Express Limited.
CBN also reiterated its commitment to providing an enabling environment for international money transfer services in Nigeria.
Some stakeholders in the Nigerian economy wednesday spoke on ways the federal government can take the economy out of the current doldrums. The stakeholders, who spoke at the second Nigerian Stock Exchange (NSE)-Bloomberg CEOs Roundtable, at the stock exchange in Lagos, included operators from the financial services, manufacturing and telecommunications sectors.
For instance, the Managing Director of Nestle Nigeria Plc, Mr. Dharnesh Gordhon, who noted that the middle class is disappearing, urged the government to tackle the foreign exchange crisis, improve infrastructure, saying the problem of inadequate power supply had worsened due to unavailability of gas, forcing companies to resort to more expensive alternatives.
The Chief Executive Officer of Airtel Nigeria, Mr. Segun Ogunsanya said government should have a visionary approach to the development of the economy. He said the government should digitise the economy, noting that would enhance the diversification programme and have rippling positive effects on the other sectors of the economy. In the opinion of Executive Director of Chapel Hill Denham, Mr. Ayo Fashina, rather embarking on external borrowing, the government should sell some its assets to raise money to finance the budget deficit. He said considering the devalued naira, borrowing $1billion from the international capital market would come with many challenges that would continue to affect the economy.
An economist and policy analyst, Dr. Ogho Okiti, said the government has just begun to bring out policies that would address the challenges, advising a more private sector collaboration and consultation. He declared that “Money doesn’t grow the economy, policies do.”
He also called for a major programme that would find a lasting solution to the banking crisis, saying the country has not exited the problem of 2009 that led to the creation of Asset Management Corporation of Nigeria (AMCON). According to him, non-performing loans (NPLs), continue to increase, saying “I hope we do not repeat the same mistake of 2009. We have seen the symptoms and we don’t know how deep it will be. I am not saying the CBN is not going to bail out banks, but banks NPLs continue to increase. There must be a long term solution so that we do not repeat the mistake of the past.
The acting Managing Director, Bank of Industry (BoI), Mr. Washed Olagunju wednesday pledged to increase funding support for the mining sector.
Speaking in Abuja on the sidelines of the International Mining Investment Conference, he said such intervention had become inevitable given the present administration’s efforts to diversify the country’s revenue base. He said the bank had reached out to other financial institutions both within and abroad to mobilise funding to promote mining activities in the country.
Olagunju said the current efforts by government, in collaboration with the private sector to come up with credible data on mining deposits in the country will not only help investors make credible investment decision, but also aid donor agencies’ grant decision.
He said: “We are aware that our government and the private sector are now collaborating to produce the data. Once the credible data is produced, we will be able to catalyse more investment resources into the country, particularly from abroad. A lot of international financiers and investors are willing to operate in Nigeria in partnership with the Bank of Industry.”
In order to be able to play active role of in the sector, the BoI boss noted that the bank had been engaging its staff in capacity development programmes both at home and abroad to acquaint them with international best practices. To match word with action, he said some of the bank’s staff were already undergoing training programmes at the Industrial Development Corporation of South Africa.
On the viability of the development finance institution to mobilize funding support for the mining sector, Olagunju averred that the bank has high credit rating.
According to him, “There are a lot of grants that are meant to support solid minerals development. Once there is a reliable financial institution, those donors will feel comfortable to make grant available. The BoI is already well positioned to act in the regards.
“We are supporting real sector in a viable manner; we take our time to identify genuine entrepreneurs. Our non performing loan ratio is 3.87 per cent, which is below the CBN ration of 5 per cent. Also, as at June this year, the collection from MSMEs was N2.97billion as against N2.19bn for last year. This shows that on a sustainable basis, our promoters are paying back.”
Olagunju also restated the commitment of the DFI to the development of commodity based industrialization, stressing that the country would only be able to derive maximise benefits from its verse natural resources when there is value addition.
