The Nigerian equities market extended its bullish run for the fourth consecutive day this week as investors’ positive sentiments continued. As a result, the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) appreciated by 1.17 per cent to close higher at 39,534.14. Similarly, market capitalisation added N159.8 billion to close at N13.77 trillion.
The positive performance thursday could be linked to gains recorded by Nigerian Breweries Plc, Nestle Nigeria Plc, Zenith Bank Plc, Ecobank Transnational Incorporated and FBN Holdings Plc.
However, Union Bank of Nigeria Plc led the price gainers with 10.1 per cent trailed BY Fidelity Bank Plc with 7.5 per cent, while NAHCO Plc chalked up 7.2 per cent. Okomu Oil Palm Plc and FBN Holdings Plc garnered 7.1 per cent and 6.1 per cent respectively.
Conversely, Total Nigeria Plc led the price losers with 5.0 per cent, trailed by AXA Mansard Insurance Plc with 4.6 per cent. NEM Insurance Plc shed 4.6 per cent, while Livestock Feeds Plc closed 4.1 per cent lower.
According to analysts at FSDH Research, the bullish momentum was sustained and largely driven by high demand for banking, consumer goods and insurance stocks
“There was profit taking on a number of stocks as expected, leaving of Dangote Flour, Transcorp, Diamond, FCMB and Stanbic IBTC closing on offer. Bargain hunting continued and was sustained in FBNH, Zenith, Fidelity Bank, ETI and Okomu and leaving Sterling Bank, UBN, Aiico and Continental Insurance and they all closed on bid,” they said.
The analysts noted that although profit taking is expected to continue in the coming sessions, the market will remain positive and active as we approach year-end.
A further analysis of the trading activities shows that three sectors closed in the negative while two appreciated. The two gainers were the NSE Consumer Goods Index and the NSE Banking Index that appreciated by 2.7 per cent and 1.8 per cent respectively as a result of sustained buying interest in Nigerian Breweries Plc (+2.2%), Nestle (+6.0 per cent) Zenith Bank (+5.6 per cent) and Access Bank (+3.3 per cent).
On the other hand, the NSE Industrial Goods Index shed 0.8 per cent following profit taking in Dangote Cement (-0.4 per cent). In a similar vein, the NSE Insurance Index fell 0.5 per cent following losses in AXA Mansard (-4.7 per cent) and NEM Insurance (-4.6 per cent) while the NSE Oil & Gas Index shed 0.4 per cent as a result of to selloffs in Total Nigeria (-5.0 per cent).
The Securities and Exchange Commission (SEC) on Tuesday restated its decision to conduct a forensic exercise into the activities of Oando Plc. The commission’s commitment to continue with the forensic audit was contained in a letter dated December 5, 2017 addressed to Oando Plc.
Although SEC did not disclose full content of the letter, it assured “the general public of its zero tolerance to infractions in the Nigerian capital market.
The suspension of the Director General of SEC, Mounir Gwarzo last week by the Minister of Finance, Mrs. Kemi Adeosun, had been linked to the commission’s decision to probe Oando Plc’s activities.
The minister however denied the allegation, saying Gwarzo’s suspension was to make way for an unhindered investigations into allegations of financial impropriety levelled against him.
SEC had last October directed the NSE to place Oando’s shares on full suspension for two days and place them on a technical suspension afterwards , following its probe into two petitions received from two shareholders of the company – Alhaji Dahiru Barau Mangal and Ansbury Inc.
The suspension, according to SEC, was to enable it to conduct a forensic audit into the affairs of Oando, which has dual listing on the NSE and JSE.
SEC had explained that it carried out a comprehensive review of the petitions from Mangal and Ansbury and found a breach of the provisions of the Investments & Securities Act (ISA) 2007; breach of the SEC Code of Corporate Governance for Public Companies; suspected insider dealing; suspected related party transactions not conducted at arm’s length; and discrepancies in the shareholding structure of Oando Plc, among others. SEC said these findings were weighty and needed further investigation. Deloitte and the other firms were brought in to validate the probe already done by SEC for the past three months, adding that it is only after the audit by external experts that the commission would take a final decision on Oando.
Other experts appointed by SEC are registrar, United Securities Limited; the law firm, SPA Ajibade & Co; Tjadap Consulting and Associates; and Nasiru Muhammad & Co.
Meanwhile, the stock market sustained its rally, hitting a 37-month high. The NSE All-Share Index appreciated by 1.37 per cent to close at 38,494.43, bringing the year-to-date (YTD) gain to 43.2 per cent.
Analysts at Afrinvest West Africa said although the rally was broad-based, they attributed the positive performance mainly to gains in bellwethers –Dangote Cement (+1.7 per cent), Nigerian Breweries Plc (+3.4 per cent) GTBank (+0.7 per cent) and Zenith (+0.6 per cent).
Foreign Portfolio Investment (FPI) jumped by 259.2 per cent in the third quarter(Q3) ended September 30, 2017 to $2.77 billion, which is a consolidation on the increase recorded in second quarter of 2017 (Q2-17). The figures are the highest since the $5.13 billion recorded in Q3 of 2014. However, the sizable increase in FPI was mostly driven by a monumental 860.7 per cent year on year(y/y) surge in equities (214.6 per cent q/q) to $1.93 billion, accounting for 70 per cent of total FPI, and a grand leap (105.6 per cent y/y and 630.2 q/q to $719 million in capital investments in the form of money market instruments.
Corroborating the significant inflows into equities, the Nigerian Stock Exchange (NSE) latest report on FPI reveals that foreign inflows surged 205.7 per cent y/y and 64.3 per cent q/q to N252.33 billion in the three months to September, from N82.54 billion and N153.62 billion in Q3-16 and Q2-17 respectively.
Analysts at Cordros Capital Limited said the improved FPI and inflow into equities market stem from improving foreign exchange liquidity, boosting transparency in FX transactions, and increasing dollar inflows from autonomous sources) of the Central Bank of Nigeria (CBN)’s “Investors & Exporter’s” FX window, established towards the tail end of April. The policy is attracting offshore inflows amid appealing valuation – supported by positively changing macroeconomic fundamentals.
“Still supportive of the potency of the I&E FX window is the sizable increase in the total turnover in the window by 171 per cent q/q to $10.16 billion in the three months to September, compared to $3.74 billion in Q2-17, and by extension, the 52.76 per cent q/q increase in total turnover in the domestic bourse to N360.73 billion in Q3-17, from N236.14 billion in the previous quarter. Equally reflective of investor confidence in the I&E window is the 15.8 per cent q/q growth (to $114.65 billion, from $99.0 billion) in the total OTC market turnover in Q3-17, as reported by the FMDQ OTC Securities Exchange,” the analysts said.
According to data released by the National Bureau of Statistics (NBS), capital inflows into the domestic economy expectedly recorded a notable improvement in the three months to September 2017, expanding by 127.5% y/y and 131.3% q/q to USD4.15 billion (highest since Q4-14), from USD1.82 billion and USD1.79 billion respectively.
As was the case in Q2-17, in terms of contribution, Portfolio Investment (259.2 per cent q/q and 200.7 per cent y/y to $2.77 billion) accounted for the most (67 per cent ) capital importation of $4.15 billion, from $1.82 billion.
“In line with our earlier guidance, the surge in capital imported into the country was driven by progressing improvement in the foreign exchange market, which, by extension, sustained the rally in the equities market, in addition to an attractive interest rate environment – attracting higher inflows into the fixed income space,” analysts said.
The Securities and Exchange Commission (SEC) On Tuesday restated its decision to proceed with a forensic audit into the activities of Oando Plc. The commission stated this a letter dated December 5, 2017 addressed to Oando Plc and signed the acting Director General, Dr. Abdul Zubair.
In the letter, obtained by THISDAY, SEC said: “Further to our letter to you dated November 27, 2017 and another letter to your lawyers dated November 28, 2017, wherein the commission had notified Oando Plc of its decision to go ahead with the forensic audit, the commission is in the light of recent development wishes to reiterate the following: That the commission is aware that Suit No: FHC/L/CS?160/17:Oando Plc v. SEC &Anor was struck out on November 23, 2017 by his lordship Hon, Justice Aikawa of the Lagos Division of the Federal High Court.”
The commission added it is not aware of the existence of any valid or subsisting order of court restraining it from proceeding with the forensic audit.
“While we acknowledge that a Notice of Appeal has been filed to challenge the judgment of the Federal High Court, this notice does not serve as an Order of Court restraining the Commission from conducting the exercise. We wish to restate that our forensic auditors had been directed to commence work since November 27, 2017 and as a result shall be at your premises on any date from Wednesday, December 6, 2017,” SEC said.
It assured the general public of its zero tolerance to infractions in the Nigerian capital market.
SEC had in October directed a forensic audit into the affairs of Oando following a probe into two petitions received from two shareholders of the company – Alhaji Dahiru Barau Mangal and Ansbury Inc.
SEC had explained that it had carried out a comprehensive review of the petitions from Mangal and Ansbury and found a breach of the provisions of the Investments & Securities Act (ISA) 2007; breach of the SEC Code of Corporate Governance for Public Companies; suspected insider dealing; suspected related party transactions not conducted at arm’s length; and discrepancies in the shareholding structure of Oando Plc, among others.
The suspension of the Director General of SEC, Mounir Gwarzo last week by the Minister of Finance, Mrs. Kemi Adeosun, had been linked to the commission’s decision to probe Oando Plc’s activities.
This allegation has since been denied by the ministry, saying Gwarzo’s suspension was to make way for an unhindered investigation into allegations of financial impropriety levelled against him.
The Nigerian stock market rose further last week to close 1.55 per cent higher as investors reacted positively to development in the economy especially in the area of capital flow that showed improvement.
According to data released by the National Bureau of Statistics (NBS), capital inflows into the domestic economy recorded a notable improvement in the three months to September 2017, expanding by 127.5 per cent year on year(y/y) and 131.3per cent quarter on quarter(q/q) to $4.15 billion (highest since Q4-14), from $1.82 billion and $1.79 billion respectively. Portfolio Investment (259.2 per cent q/q and 200.7 y/y to $2.77 billion) accounted for the most (67 per cent) inflows into the country in the review period, followed by other investments (30 per cent) in the form of loans and other claims (68.6 per cent q/q and 124.5 per cent y/y to $1.26 billion), and three per cent from foreign direct Investment.
The development, which showed improved investor confidence in the economy, led to a consolidation of the growth recorded in the market the previous week with the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rising to 1.55 per cent to close at 37,944.60.
Consequently, the year-to-date (YTD) growth climbed to 41.2 per cent. Apart from the NSE ASI that rose by 1.55 per cent last week, other sectoral indicators closed northwards as well.
For instance, the NSE Insurance Index led with 1.54 per cent, followed by the NSE Banking Index (1.43 per cent, while the NSE Oil & Gas Index appreciated by 1.43 per cent. The NSE Consumer Index added 1.34 per cent, just as the NSE Industrial Goods Index gained 1.15 per cent.
Market analysts at Cordros Capital Limited said: “Whilst noting possibility of momentum profit taking given the two consecutive weeks of gains, the outlook for equities remains broadly positive as market fundamentals (amid improving macroeconomic conditions) remain strong.”
On the economic front, the Central Bank of Nigeria (CBN) released the Purchasing Managers’ Index (PMI) report for the month of November, showing that manufacturing and non-manufacturing activities during the month of November expanded for the eighth and seventh months, respectively at 55.9 and 57.6, indicating positive response to improvement in the macroeconomic landscape.
“With festivity- related demand expected, amid sustained improvement in the FX space and strengthening consumer and business confidence, it is safe to expect continued expansion in the coming month,” analysts said.
Daily Market Performance On the first day of the week when the market resumed, it was a bearish performance with the NSE ASI declining by 0.31 per cent as investors took profit following the previous week’s gains. The depreciation recorded in the share prices of Stanbic IBTC, FCMB Group, ETI, Flour Mills, and Unilever was mainly responsible for the loss recorded in the Index.
Sector performance was mixed as three of five indices closed in the green, one trended southwards and the other flat. The NSE Banking Index emerged the lone loser, down 0.6 per cent owing to price depreciation in Ecobank Transnational Incorporated ( -3.0 per cent), Zenith Bank (-1.0 per cent) and Access Bank(-0.6 per cent). On the positive side , the Consumer Goods Index led gainers, up 0.3 per cent due to upticks in Nigerian Breweries (+0.9 per cent), Dangote Sugar Refinery (+3.3 per cent) and PZ (+3.4 per cent). The NSE Insurance Index trailed, up 0.2 per cent on account of gains in Continental Insurance (+2.9 per cent) and Law Union (+4.9 per cent). Similarly, buying interest in Forte Oil (+2.5 per cent) pushed the NSE Oil & Gas Index 0.1 per cent higher.
The market rebounded on Tuesday as the NSE ASI appreciated by 0.68 per cent to close at 37,503.73 points compared with the depreciation of 0.31 recorded the previous day. The appreciation recorded in the share prices of Nigerian Breweries, Stanbic IBTC, Access Bank, UBA and Dangote Cement buoyed the growth recorded in the index. In a similar vein, the market rose further on Wednesday to sustain the growth as most stocks appreciated. Subsequently, the NSE ASI appreciated by 0.55 per cent to close at 37,709.20.
On Thursday, which was the last trading day of the week , saw the market gain 0.62 per cent to bring the weekly growth to 1.55 per cent of the NSE ASI to 37,944.60.
Market Turnover It was a four-day trading week as the Federal Government of Nigeria declared Friday, 1 December, 2017 as a Public Holiday to mark Eid-el-Maulud celebration.
However, the volume and value of trading surged to 14.257 billion shares worth N35.056 billion in 17,379 deals compared to 2.182 billion shares valued at N22.795 billion that exchanged hands last week in 17,019 deals. The Conglomerates Industry led the activity chart with 11.396 billion shares valued at N14.534 billion traded in 890 deals, thus contributing 79.94 per cent and 41.46 per cent to the total equity turnover volume and value respectively. The Financial Services Industry followed with 2.484 billion shares worth N9.797 billion in 9,205 deals. The third place was occupied by Consumer Goods Industry with a turnover of 164.156 million shares worth N8.127 million in 4,405 deals.
Trading in the top three equities namely – Transnational Corporation of Nigeria Plc, Wapic Insurance Plc and Fidelity Bank Plc (measured by volume) accounted for 12.998 billion shares worth N15.494 billion in 1,813 deals, contributing 91.17 per cent and 44.20 per cent to the total equity turnover volume and value respectively. Also traded during the week were a total of 1,090 units of Exchange Traded Products (ETPs) valued at N14,708.50 executed in 10 deals, compared with a total of 127 units valued at N13,837.30 that was transacted previous week in five deals.
A total of 21,670 units of Federal Government Bonds valued at N23.125 million were traded this week in 17 deals, compared with a total of 9,024 units valued at N9.485 million transacted two weeks ago in 15 days.
Price Gainers and Losers Meanwhile, 39 equities appreciated in price during the week, higher than 36 of the previous week, while 23 equities depreciated in price, lower than 24 equities of the previous week. Fidelity Bank Plc led the price gainers with 21.1 per cent, trailed by Forte Oil Plc with 14.9 per cent, just as Law Union & Rock Insurance Plc appreciated by 14.7 per cent.
Caverton Offshore Support Group Plc rose by 14.4 per cent, while Dangote Flour Mills Plc, Nigerian Aviation Handling Company Plc and Cement Company of Northern Nigeria Plc chalked up 10.2 per cent and 10.0 per cent respectively. Cadbury Nigeria Plc, Diamond Bank Plc and Champion Breweries Plc garnered 9.7 per cent, 8.6 per cent and 6.8 per cent in that order.
Conversely, Double One Plc led the price losers with 6.0 per cent, followed by University Press Plc with 5.5 per cent, just as Neimeth International Pharmaceuticals Plc shed 4.9 per cent. Livestock Feeds Plc went down by 4.5 per cent, while Guinness Nigeria Plc traded 4.4 per cent lower.
Other top price losers are: Flour Mills of Nigeria Plc (4.2 per cent); PZ Cussons Nigeria Plc (4.2 per cent); Learn Africa Plc (4.1 per cent); Morison Industries Plc and N.E.M Insurance Plc (3.4 per cent).
The Nigerian equities market, on Thursday, gained N28bn as 28 stocks appreciated.
A total of 513.8 million shares valued at N6.448bn exchanged hands in 4,243 deals.
The equities market rebounded as the All-Share Index rose by 22 basis points to settle at 36,688.75 basis points, while the year-to-date return expanded to 36.5 per cent.
Accordingly, market capitalisation increased by N27.8bn to settle at N12.773tn. Acording to analysts at Afrinvest Securities, the day’s performance can largely be credited to price appreciations in Zenith Bank Plc, International Breweries Plc, Access Bank Plc and Dangote Sugar Refinery Plc, which appreciated respectively by 1.8 per cent, 4.1 per cent, 2.5 per cent and 2.5 per cent.
In addition, activity level improved as volume and value traded rose by 55.1 per cent and 15.9 per cent to 513.8 million units and N6.4bn, respectively.
Performance across sectors was broadly bullish. First on the gainers chart was the Banking Index, which was up by 0.8 per cent as buying interest in Zenith Bank, United Bank for Africa Plc and Access Bank drove the index to a positive close.
The oil/gas index followed, rising by 0.5 per cent, primarily on the back of price appreciation in Seplat Petroleum Development Company Plc, which gained one per cent.
Following closely, the consumer goods index added 0.4 per cent due to gains in International Breweries Plc and Dangote Sugar.
Meanwhile, bargain-hunting in AxaMansard Insurance Plc and NEM Insurance Nigeria Plc drove the insurance index 0.2 per cent higher. On the other hand, the industrial goods index was the lone loser, declining five basis points as investor appetite for the Cement Company of Northern Nigeria waned, causing a decline of 3.2 per cent.
Investor sentiment, measured by market breadth, strengthened on 28 stocks advancing against 11 declining.
Custodian and Allied Plc, International Breweries and Nigerian Aviation Handling Company Plc respectively gained five per cent, 4.1 per cent and four per cent, emerging as the day’s top gainers while PZ Cussons Nigeria Plc, Champion Breweries Plc and Wapic Insurance Plc declined by five per cent, 4.7 per cent and 3.8 per cent to become the top three losers.
“In line with expectation, market performance was positive at the close of trade while activity level and investor sentiment improved. We expect market performance to stay positive in the near term as investors’ position ahead of anticipated year-end rally,” Afrinvest analysts said.
Oando Plc has suffered a major setback in its effort to stop the Securities and Exchange Commission (SEC) from conducting a forensic audit into its affairs, as a Federal High Court in Lagos, on Thursday, declined the jurisdiction to entertain the suit brought before it by the embattled oil firm.
The presiding judge, Justice Mohammed Aikawa struck out the suit, which also sought an order of the court directing the lifting of a technical suspension on Oando shares and advised the oil firm to take its case to the Investment and Securities Tribunal (IST).
The ruling was sequel to a preliminary objection filed by Counsel to SEC, George Uwechue, SAN, challenging the jurisdiction of the Federal High Court to entertain the suit.
In his ruling, the judge held that: “that the subject matter of this issue falls within the exclusive jurisdiction of the Investment and Securities Tribunal (IST) and not this court.
“In addressing this issue, I find the provisions of the Investment and Securities Act 2007 quite instructive. Section 284 of the ISA (2007) says the Tribunal shall, to the exclusion of any other court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving- (a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute- (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency; (iv) between capital market operators and self regulatory organisation; (b) the Commission and self regulatory organisation; (c) a capital market operator and the Commission; (d) an investor and the Commission; (e) an issuer of securities and the Commission; and Jurisdiction of the Tribunal, etc. 132 (f) disputes arising from the administration, management and operation of collective investment schemes.
“It is not in dispute that the matter before me is a dispute between capital market operators.” Continuing, the judge noted that “the duty of the court is to apply the law”.
He declared: “On this premise, I have no option than to uphold the preliminary objection. I also in the same vein uphold the preliminary objection of the 2nd defendant (Nigerian Stock Exchange). This court lacks the jurisdiction to adjudicate the dispute between both parties. “The proper place for this matter to go is IST. I therefore strike out this matter.” Reacting to the ruling, Uwechue, said: “We brought a notice of preliminary objection stating that this court has no jurisdiction to hear capital market matters because there is a special tribunal set up for it. And the court agreed with us. So the court upheld our preliminary objection and therefore struck out the application.”
Oando had approached the court for an order to lift the suspension of its shares as well as to stop an impending forensic audit after SEC, on October 18, directed the Nigerian Stock Exchange (NSE) to place trading of its shares on full suspension for 48 hours and on technical suspension from Friday, October 20.
The suspension, according to SEC, was to enable it conduct a forensic audit into the affairs of Oando Plc following petitions and protests by some aggrieved shareholders leading to a directive by the House of Representatives Committee on Capital Market to issue a directive to the regulator to investigate the grievances.
In a statement in October, SEC said that it carried out a comprehensive review of the petitions and found a breach of the provisions of the Investments & Securities Act 2007; breach of the SEC Code of Corporate Governance for Public Companies; suspected insider dealing; suspected related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando Plc, among others.
The commission, in the memo said these findings were weighty and therefore needed to be investigated further. “The commission’s primary role as apex regulator of the Nigerian capital market is to regulate the market and protect the investing public. The commission notes that the above findings are weighty and therefore needs to be further investigated. After due consideration, the commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc. This is pursuant to the statutory duties of the Commission as provided in section 13(k), (n), (r) and (aa) of the ISA 2017.
“To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and registrars,” the regulator had stated. Trading in Oando’s shares were also suspended by the Johannesburg Stock Exchange (JSE) in October.
The Nigerian equities market opened for the week on a bullish note as investors reacted to the positive Gross Domestic Product (GDP) growth rate in the third quarter (Q3) 2017. The country’s GDP grew by 1.40 per cent in Q3, 2017 higher than the revised growth rate of 0.72 per cent recorded in Q2, 2017.
Buoyed by the positive news, investors increased demand for stocks. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.24 per cent to close at 36,792.60, while market capitalisation closed higher at N12.81 trillion. The appreciation recorded in the share prices of FBN Holdings, Nestle, PZ Cussons, UBA, and Zenith Bank was mainly responsible for the gain.
In all, 17 stocks appreciated, while 15 depreciated. PZ Cussons led the price gainers with 10.2 per cent, trailed by NASCON Allied Industries Plc with 9.5 per cent. Eterna Plc rose by 4.7 per cent, just as Diamond Bank Plc, NEM Insurance Plc Chalked up 4.5 per cent. Dangote Sugar Refinery Plc and May & Baker Nigeria Plc garnered 4.3 per cent and 3.5 per cent respectively among others.
Conversely, Forte Oil Plc led the price losers with 9.7 per cent, trailed by Law Union & Rock Insurance Plc with 4.6 per cent. Unity Bank Plc shed 3.7 per cent, while Learn Africa Plc Plc went down by 2.0 per cent.
However, the total value of stocks traded went down by 61 per cent to N2.45 billion invested in 208.70 million shares in 2,993 deals, down from N6.31 billion last Friday. The three most actively traded sectors were: Financial Services (175.47 million shares), Consumer Goods (21.42 million shares), and Conglomerates (5.63 million shares), while the three most actively traded stocks were: Custodian and Allied Insurance (40.45 million shares), FBN Holdings Plc (27.45 million shares) and Fidelity Bank (23.46 million shares)
In terms of sectoral performance, across sectors was broadly positive as three of the five indices closed northwards, while one declined another one was flat.
The NSE Banking Index and NSE Consumer Goods Index appreciated 0.5 per cent apiece. Similarly, the NSE Insurance Index gained, inching 0.4 per cent higher. On the flip side, the NSE Oil & Gas Index was the lone loser, shedding 1.1 per cent.
Analysts at Meristem Securities Limited said positive sentiments on stocks in the consumer goods and banking space strengthened the positive momentum of the bourse at the close of trades on Monday.
The Nigerian Stock Exchange has upgraded its website, www.nse.com.ng, to be mobile friendly with a better layout and navigation befitting of the brand.
The upgraded website would enable users to access information quickly and easily on the various products and instruments that are listed and traded on the regulated market, the local bourse explained in a statement on Tuesday..
Commenting on the upgraded website, the Chief Executive Officer of the Exchange, Mr. Oscar Onyema, noted that the upgrade was in line with the NSE’s drive to create more liquidity and improve participation in the market through greater access to market information and visibility for all securities listed on the Exchange.
Onyema said, “Accessibility and usability are our watchwords in providing capital market information to existing and potential investors. We aim for an Exchange that is easily accessible and actively used by investors who now have greater thirst for more information and detailed disclosure information to make sound investment decisions.
“The explosion of online services and the rising popularity of the Internet will continue to create new opportunities for the Exchange to utilise in its determination to constantly improve the level of services it provides to the market.”
The Head, Corporate Communications, Olumide Orojimi, said the NSE carried out the upgrade with the user experience firmly in mind.
Orojimi said, “We are excited about our newly upgraded website which has been fully optimized to be mobile friendly and contains robust information for diverse stakeholders in our ecosystem. The revamp was fuelled by feedback from users that wanted certain high demand pages easier to navigate and some key changes implemented.”
Analysts at the FSDH Merchant Bank Limited have projected that the year-on-year inflation rate will drop marginally to 15.91 per cent in October 2017, from the 15.98 per cent reported in September 2017.
The expected marginal decline in the inflation rate was premised on slower increase in the food and non-food divisions, compared with the previous month.
Based on the data release calendar on the website of the National Bureau of Statistics (NBS), the bureau is expected to release the inflation rate for October 2017 on November 18, 2017. The monthly Food Price Index (FPI) that the Food and Agriculture Organisation (FAO) released recently showed that the Index averaged 176.4 points, 1.26 per cent lower than the revised value for September 2017, but 2.45 per cent higher than the October 2016 figure. According to the FAO, all categories of commodities used in the calculation of the Index dropped in value with the exception of cereal. The FAO Dairy Index fell by 4.19 per cent from September 2017 as the prices of butter, skim milk powder (SMP) and whole milk powder (WMP) eased in October.
Also, analysis by FSDH Merchant Bank indicated that the value of the naira depreciated on the interbank market, while it appreciated on the parallel market. Precisely, the naira lost by 0.02 per cent on the interbank market to close at US$/N305.80 while it gained 0.83 per cent on the parallel market to close at US$/N362.50 at the end of October. “The naira appreciation in the parallel market and the drop in the prices of food at the international market led to a drop in the prices of some consumer goods in Nigeria. “The prices of most of the food items we monitored in October 2017 moderated downwards, while a few items recorded price appreciation. “The movement in the prices of food items during the month resulted in 0.85 per cent increase in our Food and Non-Alcoholic Index to 256 points.
“Our Food and Non-Alcoholic Index increased by 20.24% from 212.90 points in October 2016. We also noticed increase in the prices of Housing, Water, Electricity, Gas & Other Fuels divisions between September 2017 and October 2017,” the bank stated. Furthermore, it revealed in a report that itmodel indicated that the general price movement in the consumer goods and services in October 2017 increased the Composite Consumer Price Index (CCPI) to 243.04 points, representing a month-on-month increase of 0.77 per cent. “We estimate that the increase in the CCPI in October 2017 would produce an inflation rate of 15.91 per cent marginally lower than the 15.98 per cent recorded in September 2017,” it added.
Forex Market In line with its foreign exchange policy, the Central Bank of Nigeria (CBN) injected US$195 million into the interbank forex market last Tuesday, to maintain stability in the naira’s exchange value. Accordingly, the interbank rate appreciated from N359.49/US$1 last Monday to N355.85/US$1 by midweek. However, a report by Afrinvest West Africa Limited showed that the rally was reversed on Thursday as the naira closed at N360.40/$1, the same value it closed last Friday. This represented a nine-kobo week-on-week deprecation. Similarly, the official rate traded within a tight band, marginally depreciating 15 kobo to N305.90/$1 from last week’s close of N305.75/$1. In continuance of recent trend in the parallel market, the naira traded flat at N363/$1 all through last week. At the I&E Window, the NAFEX rate pulled back losses on Monday (down eight basis points to N360.61/$1) and Tuesday (down six basis points to N360.83/$1) to close the week at N360.57/$1, implying a seven basis pointsloss week-on-week. Moreover, despite primary market auctions held last week, activity level in the I&E Window weakened relative to previous weak as total turnover fell to $680 million, relative to $750.8 recorded the preceding week. In the FMDQ OTC futures market, the total value of open contracts of the Naira settled OTC futures for the 12 instruments on the calendar stood at $2.9 billion as atlast Thursday, from $3 billion the previous week. On the back of the rally in oil prices and re-balancing of FGN debt in favour of external borrowings, Afrinvest expects theexternal reserves to continue to accumulate in the near term. “As such, we expect the CBN to sustain frequency of interventions and the naira to continue to trade within a tight band at all segments of the forex market in the near term,” the report added.
Money Market Outlook
Last week, interbank rates trended lower on the first four trading days due to improved system liquidity attributable to Retail Secondary Market Intervention Sales (SMIS) refund, open market operations (OMO) and treasury bills maturity, which offset OMO mop-ups by the central bank. However, interbank rates spiked on Friday as banks provisioned for SMIS auction.Hence, the open buy back (OBB) andovernight rates rose to 36.3 per cent and 39.4 per cent, up 20.5 per cent and 20.6per cent, week-on-week respectively. Also, sentiment in the treasury bills market stayed bullish due to improvement in system liquidity during the week. Hence, average yield on benchmark bills declined 38 basis points week-on-week to 17.5 per cent. There was a treasury bills auction last Wednesday, where-in investors continued to aggressively bid for longer dated bills although rates were barely changed relative to the last auction. “In the coming week, an OMO maturity of N233.8 billion is scheduled to hit the system and we expect rates to remain around similar levels despite continued OMO mop ups by the CBN,” the report added.
Bonds Market Review The domestic sovereign bonds market traded slightly bullish in the week with average yield moderating 0.2 per cent week-on-week as investors’ appetite for long dated instruments stayed strong though more activities remained noticeable at the shorter end of the bond yield curve. Average bond yield opened the week flattish after closing at 15.3 per cent on Monday, (from 15.3 per cent close the previous week) and remained stable at that level for Tuesday. By mid-week however, average yield moderated by 14 basis points to settle at 15.2 per cent following positive sentiment towards short and medium dated instruments though average yield on long dated bonds traded flat.
The bullish sentiment was sustained into Thursday as average yield further declined by three basis points and eventually closed on Friday within the positive territory as it settled at 15.2 per cent. “Whilst we have noticed improved investor attraction for bond securities since the central bank started guiding towards a moderation in short term T-bills and OMO rates, we somewhat attribute the rather bullish investor sentiment on bonds to increased confidence in the credit status of the Federal Government of Nigeria following the slight rally in crude oil prices during the week (Brent crude price traded 1.3% higher week-on-week to close at US$60.92/b),”Afrinvest added. Nigerian Eurobonds yields on average moderated 15 basis points week-on-week to settle at 4.8 per cent with all the bonds currently trading at premium to par value. The Kenyan, Zambian and the Nigerian Eurobonds remained the best performingyear-to-date with 10.5 per cent, 9.7 per cent and 8.4 per cent respectively.
Opposition to FG’s Reform
The Minister of Finance, Mrs. Kemi Adeosun last week stated that ongoing efforts by the federal government to institute reforms in the economy have continued to be resisted by those she described as “vested interests within and outside the system.” But the minister maintained that the government would not be deterred, insisting that the reforms would continue. She said: “But we are not fazed. The work of reform goes on. It is, to borrow from the Nigerian novelist, Chinua Achebe, morning yet on Creation Day. Not very long from now, Nigerians and the world will look back on this recession we have just emerged from, and realise that it was the turning point in Nigeria’s journey to true growth and greatness. “Let me point out that the most important elements of any reform effort tend to be the least flamboyant. We are confident that in the months and years ahead, Nigerians and the world will see the full impact of the foundational resetting that the Buhari administration has been focused on since 2015.” She pointed out that since mid-2014, when the price of crude oil fell dramatically, the country’s finances became challenged.
Banking Sector Recapitalisation Following the intense weakening of Nigeria’s macroeconomic environment, resulting in the deterioration of asset quality and rise in non-performing loans (NPLs) in the banking industry, the International Monetary Fund (IMF) has advised the Central Bank of Nigeria (CBN) to consider asking the country’s lenders to recapitalise. The Senior Resident Representative and Mission Chief for Nigeria, African Department, IMF, Mr. Amine Mati, gave this advice while presenting a paper in Nigeria. Mati stressed the need for the banks to remain strong so that they would be able to play their roles in the economy. He explained: “We believe the banking sector should be strong to support the economy. So, it is important we recapitalise the banks to make sure that they are very strong.
“The regulators should try to make sure that the banks operate in line with international standards to be able to withstand any shocks.” He, however, endorsed the CBN’s tight monetary policy stance, saying it had helped in gradually easing inflationary pressure and brought about exchange rate stability. But he urged the central bank to continue in its pursuit of a unified exchange rate, just as he acknowledged efforts that had been made by the CBN in eliminating pressure in the forex market. He noted that the country exited the recession in the second quarter of the year, driven by improvements in the oil and agriculture sectors.
