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NSE Responds to Competition, Cuts Bond Listing, Trading Fees

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In an apparent response to the competition in the fixed income market sector of the nation’s capital market, the Nigerian Stock Exchange yesterday announced the revision of the listing and trading fees for securities listed and traded on platform.

According to the NSE, the revised fee structure, which is effective August 17, 2016, will be piloted for an initial six month period, and then evaluated to determine if it has met its objectives.

Under the revised fee structure, the NSE will no longer charge trading fees on fixed income traded on its platform. The initial flat listing application fees of 0.15 per cent for all bond types has been replaced with variable listing application fees. With this, Corporate Bonds exclusively listed on the NSE, with existing equity listing, will attract 0.01 per cent listing application fee.

The exchange explained that dual listed Corporate Bonds with existing equity listing and other corporate bonds will attract 0.0375 per cent listing application fees, while the listing application fees for State and Supranational Bonds has been reduced to 0.05 per cent.

Besides, the exchange also replaced the fixed Brokerage Commission of 0.0005 per cent with a negotiable rate capped at 1.0 per cent so as to enable investors negotiate trading commission with brokerage firms, thus driving competition and best execution.

Commenting on this development, the Executive Director, Capital Markets, NSE, Mr. Haruna Jalo-Waziri, noted that the fee reduction in the NSE fixed income market is in line with the exchange’s commitment to boost market efficiency.

He said: “The reduction in listing application fees gives issuers opportunity to raise their profile and increase visibility through listing on a globally recognized Exchange with the highest regulatory standards. The aim is to reduce issuers cost of accessing long term capital and to provide investors with diverse investment products at competitive trading fees.”

Jalo-Waziri described the investment opportunities in the Nigerian capital market as huge, urging issuers to raise cheap long term capital through bond issuance for business expansion, project finance, loan refinancing among others.

He stated that the NSE remained committed to building an enduring marketplace and will continue to pursue initiatives that add value to issuers and investors.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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