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Market Index Dips by 0.79%, Investors Lose N71bn



Nigerian Exchange Limited - Investors King
  • Market Index Dips by 0.79%, Investors Lose N71bn

The equities market on Wednesday depreciated by 0.79 per cent, causing the market capitalisation of the Nigerian Stock Exchange to fall by N71bn at the close of trading.

This aggravated the poor performance since the beginning of the week, dragging down the year-to-date return on equities to -10.44 per cent.

A total of 145.744 million shares worth N1.35bn were traded in 2,421 deals.

The NSE capitalisation dropped to N8.83tn from N8.901tn, while the All-Share Index closed at 25,653.14 basis points from 25,857.06 basis points recorded on Tuesday.

Similarly, the volume of transactions declined by 23.18 per cent; while the value of transactions advanced by 49.17 per cent.

The market breadth was negative as only six gainers emerged while 33 declined.

Fidson Healthcare Plc, International Breweries Plc, Union Bank of Nigeria Plc, Ecobank Transnational Incorporated Plc and Africa Prudential Registrars Plc were the top gainers for the day, appreciating by 4.88 per cent, 4.68 per cent, 3.37 per cent, two per cent and 1.15 per cent, respectively.

On the other hand, 7UP Bottling Company Plc led the decliners, having shed 9.74 per cent to close at N129.36.

This is followed by Transcorp Hotel Plc, Paint Company Plc, Transnational Corporation of Nigeria Plc and Forte Oil Plc, which share prices depreciated by 9.66 per cent, 9.52 per cent, 7.59 per cent and 7.43 per cent, respectively.

Sector performance as measured by the NSE sector indices revealed that all sector indices trended southward save for the industrial sector, which appreciated marginally by 0.08 per cent.

The oil and gas sector dropped by 1.79 per cent; financial services sector dipped by 1.23 per cent; the food and beverages sector declined by 0.95 per cent; while the insurance sector depreciated by 0.31 per cent.

Commenting on the market performance, analysts at Meristem Securities Limited said, “The equities market has traded negative thus far in the week, and we do not anticipate a significant change in the prevailing mood in the remaining days of the week.

“This outlook is based on sustained investors’ apprehension towards the equities market, given the weak economic fundamentals and the dearth of market moving news to boost confidence.”

Meanwhile, the interbank call rate moderated 16 basis points to 25.17 per cent amid relatively unchanged system liquidity.

At the foreign exchange interbank market, the naira depreciated by N0.25 against the dollar to close at N305.50 in the spot market whilst the one year forward remained unchanged at N355.

At Wednesday’s Treasury bills Primary Market Auction, the Central Bank of Nigeria sold N37bn, N34bn, and N87bn on the 91-day, 182-day, and 364-day bills at respective stop rates of 13.99 per cent, 17.40 per cent, and 18.70 per cent (effective yields: 14.50 per cent, 19.05 per cent, and 22.99 per cent).

Also, the Debt Management Office conducted its monthly bond auction with N95bn on offer across five-year, 10-year, and 20-year bonds. Eventually, the DMO sold N5bn, N14bn, and N20bn each on the five-year, 10-year, and 20-year notes at respective marginal rates of 15.48 per cent 15.98 per cent and 15.95 per cent.

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

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Banking Sector

Vietnamese Prime Minister Moves on CBDC Amid Questions on Regional Nature of e-Yuan



Vietnamese Prime Minister Pham Minh Chinh

This month, it was reported that Vietnamese Prime Minister Pham Minh Chinh asked, in Prime Minister’s Decision No 942/QD-TTg, the State Bank of Vietnam to study and execute a pilot implementation of a central bank digital currency before the end of 2023. Currently, cryptocurrencies are not legally recognized as an asset in the country, nor do any crypto exchanges hold licenses from the central bank. Last year, the country set up a group to study digital assets, with a purview that extended to potentially proposing regulatory mechanisms.

“Vietnam is a country that has had its eye on blockchain, even though they haven’t made many steps towards mainstreaming cryptocurrencies. It is a country that is interested in technology and riding a potential economic wave brought upon by new innovation, from blockchain to AI and VR. But, what’s notable here is that this decision was pushed forward very near the time that many pundits began to ask whether the Chinese e-Yuan would become a digital currency which transcended China and became something of a regional powerhouse as an asset,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“I think that’s important. Many countries are looking at what’s happening in China, then taking a look at their own place in the CBDC rat race, and they’re making decisions, I think, which moves up their timetable. This isn’t an innovation where you want to be last to the party. Doing so, in fact, could have ripple effects across a country’s monetary policy,” noted Gardner.

“Digital money is an inevitable trend,” said Huynh Phuoc Nghia, Deputy Director of the Institute of Innovation under the University of Economics Ho Chi Minh City. Some believe that moving quickly to develop a CBDC could give countries like Vietnam greater influence in the global financial system.

“I think it’s too soon to say what kind of ripple effects this development will have. It’s worth noting that Vietnam is in the very early stages. This isn’t a case where they’re ready to begin a pilot test in the short-term. Vietnam isn’t Ghana. But, forging ahead now can only be a positive. It’s better to move forward than continue to wait. Those countries that continue to take a wait-and-see approach are going to find themselves in last place. This is a race you don’t want to finish last. It very well could be the 21st century equivalent to the Race to Space,” opined Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Vietnam is so close in proximity to China, and China is so far ahead in the development of their own CBDC, it was likely the push that they needed to move on this. Earlier this year, some pundits wondered if the e-Yuan would replace the dollar. That’s a premature discussion to have. But, if successfully rolled out, could it have a real regional impact? Absolutely,” Gardner offered.

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Banking Sector

Fidelity Bank Promotes 745 Staff Members



Nneka Onyeali Ikpe, Fidelity Bank CEO - Investors King

Seeking to increase staff morale while empowering them to work more efficiently, Fidelity Bank has announced the promotion of 745 employees following the performance review of two financial years – 2019 and 2020.

A total of 461 staff members benefited from the FY 2019 promotion exercise, while 284 staff members benefited from the FY 2020 exercise. The beneficiaries cut across the senior, middle, and junior management cadre of the bank, and the promotion was based on merit, using a transparent and robust performance management system in line with global best practices.

Speaking about this, Nneka Onyeali-Ikpe, MD/CEO, Fidelity Bank Plc said “I am very delighted to announce the promotions for 2019 and 2020 financial years. Releasing the list for 2 financial years’ promotion at the same time is something we are very proud of. We strongly believe that the continuous growth of our bank over the years has been largely attributed to the commendable efforts and unrelenting sacrifices of our employees. Promotion is one of the many ways we express our gratitude. We are thankful to be home to many amazing talents that continue to drive our value and most importantly, serve our stakeholders to the highest standards.”

Speaking further, she said. “Since I was appointed the MD/CEO of our great bank in January 2021, I have been committed to a 7-point agenda to move our bank further, out of which workforce transformation is a key category. Staff performance and reward are critical to us, and as an organisation, we will continue to make available adequate resources to deepen the skills and entrench a culture of high performance amongst employees. I wish to appreciate all members of the Fidelity Bank family for their commitment and drive and unrelenting sacrifices towards delivering our objectives. As we move forward in our quest to becoming a leading tier-one bank, I encourage all elevated staff to see their promotion as a call to rededicate themselves to excellence.”

Fidelity Bank has continued to empower its employees with invaluable resources capable of putting them at the forefront of innovative transformation. In March 2021, the bank announced two capacity-building projects – One Culture Project and Project Alpha – that were targeted at transforming the workplace for its staff. In particular, Project Alpha was created to help Fidelity Bank develop a robust and holistic learning and development framework for all staff while One Culture Project was formed to reinforce the behaviour and value systems that will help the bank, as well as staff, achieve set goals.

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Nigeria’s Central Bank To Launch Digital Currency On Oct 1



The Central Bank of Nigeria (CBN) has said that it will launch its much-awaited digital currency on October 1, to mark Nigeria’s independent anniversary.

CBN Director of IT Department, Rakiya Mohammed, revealed this at a private webinar, explaining that the banking sector regulator had been conducting research towards the launch of digital currencies since 2017.

She added that the central bank may conduct a proof of concept before the end of the year. The move to adopt the digital currency was first mulled by the CBN Governor, Godwin Emefiele, during the Monetary Policy Committee (MPC) in May.

He had said a digital currency will soon become a reality in the country, adding that the central bank had already set up its committee which was working on the concept.

The CBN governor had further restated the determination of the apex bank to drive the e-Naira project during the recent 306th Banker’s Committee meeting, pointing out that the process was ongoing.

Mohammed was quoted by Nairametrics to have highlighted the benefits of the digital currency, saying it would enhance macroeconomic management, boost economic growth, facilitate cross-border trade, boost financial inclusion and monetary policy effectiveness.

Mohammed said the digital payment instrument would further improve payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.

She added that the innovation would also benefit the fintech ecosystem by enhancing operational efficiency, opportunities for fintech start-ups in building services and products as well as financial inclusion that will contribute to economic growth, and the creation of a new system complimenting the traditional payment system.

Mohammed had last month said the proposed digital would be launched before December. According to her, every Nigerian would have access to digital currency.

She had while briefing journalists at the end of a Bankers’ Committee meeting said: “Let me state categorically that cryptocurrency such as Bitcoin and the rest of them are not under the control of the central bank; they are purely private decisions that individuals make and are not part of this arrangement.

“We have spent over two years studying this concept of central bank’s digital currency and we have identified the risks. And it is one of the reasons why I said we are setting up a central governance structure that would involve all industry stakeholders to access all the risks as we continue on this journey.

“Very soon we would make an announcement on the date for the launch and by the end of the year, we should have the digital currency.”

According to her, about 80 percent of central banks across the world are presently exploring the possibility of issuing the central bank’s digital currency, saying that Nigeria cannot be left behind.

Mohammed had added: “You are aware that we have two forms of fiat money: The notes and the coins. So, the central bank’s digital currency is the third form of fiat money. So, this digital money is going to complement the cash and note that we have.

“The central bank digital currency will just be as good as you having cash in your pocket. So, if you are having the currency in your pocket, you are as good as having cash on your phone.

“Now, why did we need to go into this? There are different cases that the central bank is looking at.

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