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Naira Plunges to All-Time Low of 365.25 a Dollar

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500 and 1000 naira bills (Nigerian currency)

The Nigerian Naira traded at a record low on Thursday in a single interbank market trade of $1m, according to Thomson Reuters data.

The local currency traded at 365.25 to a dollar, with about $13m exchange reportedly carried out by 12:35 GMT.

Traders and experts expect the Naira to plunge further considering the present economic situation in the country, and drop in the volume of oil production needed to breach the gap created by the lack of forex.

Three-month non-deliverable forward contracts rose 4.1 per cent to 364.5 against the US dollar, while contracts maturing in a year climbed 3.5 percent to 403.

The Naira has slumped 38 percent since June 20, when the Central Bank of Nigeria ended a 16 month fix rate of 197-199 a dollar.

Since then the local currency has plummeted as foreign investors that were expected to offset the current deficit created by lack of liquidity flee, after the United Kingdom left the European Union – pushing global risks and uncertainties to the recession era.

Last month, the International Monetary Fund forecast a 1.8 percent contraction of the Nigerian economy this year, after the activities of the militants distorted oil production.

“There’s still a lot of demand for dollars,” said Craig Thompson of Nyon, a Switzerland-based brokerage Continental Capital Partners SA.

“The central bank has been supplying them. They sold some at 309 on Wednesday to keep the rate down. They’ve been selling dollars most days to keep it going above 320 and have done their best to try and keep it closing around 310. Managing the exchange rate is difficult because there’s pent-up demand,” he added.

Commercial banks are unable to meet surge in demand for the greenback, forcing customers to the black market.

Currently, the Naira is trading at 394 per dollar at the parallel market, about 11 percent lower than the official rate.

“There is no liquidity” in the interbank foreign-exchange market, an analyst at Ecobank Transnational Incorporated, Kunle Ezun, said.

“They won’t want to see this jump,” Ezun said. “They will come in, maybe tomorrow, to bring it down to 320 or 330.”

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.

Finance

Insider Dealing: Paul Miyonmide Gbededo Adds Another 612,326 Shares of Flour Mills to His Stake

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Paul Miyonmide Gbededo, the Group Managing Director, Flour Mills of Nigeria Plc bought an additional 612,326 shares of the company.

The management stated this in a disclosure statement sent to the Nigerian Stock Exchange on Monday.

The managing director purchased the shares at N27.75 per share on November 20, 2020 at the Nigerian Stock Exchange in Lagos, Nigeria. Meaning, Gbededo has invested another N16,992,046.5 into the company.

This was in addition to the 3,284,867 shares valued at N91,642,269 and 4,200,852 shares worth N117.62 million purchased by Gbededo earlier in the month of November. Bringing his recent purchases to 8,098,045 million shares worth N226,254,315.5. See the details of the latest transaction below.

 

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FCMB Reports 16.4 Percent Increase in Profit After Tax in Q3 2020

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FCMB

FCMB Group Plc, one of the leading financial institutions in Nigeria, reported a 16.4 percent increase in profit after tax for the third quarter of the year.

In the unaudited financial statements released through the Nigerian Stock Exchange (NSE), the lender’s profit before tax grew by 10.2 percent year-on-year to N4.8 billion while profit after tax increased by 16.4 percent to N4.2 billion.

FCBMB Group Plc expanded gross earnings by 4.8 percent to N48.3 billion during the period under review. Similarly, the bank’s net interest income rose by 30.03 percent year-on-year to N22.7 billion.

The strong performance continued across the board as net fee and commission income increased by 0.29 percent to N5.2 billion. Net trading income rose by 39.4 percent year-on-year to N1.82 billion.

Personnel expenses dropped by 7.9 percent to N6.9 billion during the quarter while general and administrative expenses declined by 7.52 percent year-on-year to N7.6 billion. Largely due to the COVID-19 lockdown.

Loans and advances to customers rose by 10.8 percent to N793.14 billion between December 2019 and September 2020. Total desposits from customers during the same period grew by 26.7 percent to N1.2 trillion.

The bank’s total assets increased by 22.12 percent to N2.04 trillion.

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Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary

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stanbic IBTC Insurance

Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).

In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.

“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.

“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”

 

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