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Index Appreciates by 1.25% as 20 Stocks Gain

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Egypt Stocks
  • Index Appreciates by 1.25% as 20 Stocks Gain

The Nigerian equities market closed on a positive note on Monday as 20 stocks gained, boosting the Nigerian Stock Exchange All-Share Index by 1.25 per cent.

The NSE market capitalisation rose to N9.145tn from N9.032tn, as the NSE ASI closed at 26,580.22 basis points from 26,251.39 basis points recorded on Friday.

A total of 219.025 million shares valued at N1.407bn were traded in 3,423 deals.

The NSE ASI halted its losing streak to settle the year-to-date return at -1.10 per cent.

On the other hand, the volume and turnover of transactions pared by 0.56 per cent and 7.41 per cent, respectively, at the close of trading. Twenty stocks appreciated in value while 17 declined at the end of Monday’s trading activities.

On the gainers’ chart for the day were United Capital Plc, FCMB Group Plc, Fidelity Bank Plc, Sterling Bank Plc and African Prudential Registrars, which appreciated by 9.60 per cent, 9.40 per cent, 8.43 per cent, 7.14 per cent and 5.63 per cent, respectively.

However, the stocks of 7UP Bottling Company Plc, Ashaka Cement Plc, Cadbury Nigeria Plc, Capital Hotel Plc and the Nigerian Aviation Handling Company Plc fell by 4.95 per cent, 4.86 per cent and 4.78 per cent, respectively.

Market performance, as measured by the NSE indices, reflected the positive sentiments in the market as most sectors recorded gains. However, the food/beverage and oil/gas sectors declined by 0.27 per cent and 0.18 per cent, accordingly.

“We attribute this rebound to bullish activities on some stocks trading at low prices. We expect the rest of the week to be swayed by mixed investors’ sentiments, possibly skewed more towards bargain-hunting,” analysts at Meristem Securities Limited said in the firm’s daily post.

At the start of the week, the Central Bank of Nigeria conducted an Open Market Operation auction offering N30bn on the 150 day-to-maturity and 318DTM bills. The apex bank eventually sold N22bn and N201bn at respective stop rates of 18 per cent and 18.6 per cent (effective yields: 19.44 per cent and 22.20 per cent).

Despite this, the interbank call rate moderated by 41 basis points to 7.92 per cent. At the foreign exchange interbank market, the naira remained unchanged at N305 and N378 against the dollar for the spot rate and one-year forward rate respectively.

The fixed income market trend remained the same at week open as the bullish sentiment on Treasury bills contrasted with the bearish sentiment in the bond space. Treasury bill yields moderated by eight basis points on the average with the largest declines observed on the mid-dated maturities. Specifically, yields on the 122DTM, 234DTM and 241DTM bills moderated to 15.74 per cent, 18.79 per cent and 19.36 per cent, respectively. Meanwhile, yields on benchmark bonds rose 11 basis points on the  average amid advances across the entire space.

Notably, yields on the 8.50 per cent FGN November 2029 and 12.1493 per cent FGN July 2034 bonds climbed by 14 basis points and 16 basis points to close at 16.30 per cent and 16.02 per cent, respectively.

The Debt Management Office released its bond issuance calendar for Q1 2017, outlining an average monthly issuance of N130bn. “While we expect bullish trading to persist in the Treasury bills market amid healthy demand, we believe the higher volume on offer may further pressure bond yields higher in the days ahead,” analysts at vetiva Capital Management Limited said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

A Failed Attempt to Trigger a Run on Banks

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Fidelity Bank
As market sentiment remains highly volatile and driven by news flow, banks liquidity levels can become vulnerable due to spread of inaccurate information.
As Nigerian banks put finishing touches to their recapitalisation plans as directed by the Central Bank of Nigeria (CBN), industry watchers have seen how social media mercenaries and their hirelings are deliberating distorting the truth and pushing campaigns that spread false information which could result in deposit outflows from their targeted banks.
Earlier this month when the Central Bank of Nigeria (CBN) revoked the banking licence of Heritage Bank, it gave reasons for the decision.
The reason was clearly stated! “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability,” CBN noted.
The CBN said Heritage Bank had continued to suffer and had no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.
A statement by Hakama Sidi Ali, acting Director, Corporate Communications of the CBN, said the apex bank acted in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act, BOFIA, 2020.
Many market watchers, particularly those following developments in the banking industry did not think the CBN should have done otherwise and subsequent appointment of the Nigeria Deposit Insurance Corporation, NDIC, as the liquidator.
Mischievous ‘list’ of other banks
Shortly after the apex bank hammer fell on Heritage Bank, social media mischief makers released their own ‘list’ of other banks they felt will go the Heritage way – not minding the illegality of assuming such a regulatory position.
Thanks to Central Bank of Nigeria (CBN) for quickly debunking the fake news which had mentioned the names of other banks – Fidelity Bank, Wema Bank, Polaris Bank and Unity Bank.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.
“The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system. The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs).
“These plans are currently being reviewed by the Bank. In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalise will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will increase the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.
“The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness,” said CBN’s Sidi Ali said in a June 4 statement in response to the false allegations of license withdrawals.

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Banking Sector

MIPAD Announces Onyeali-Ikpe Among Global Top 100 Trade Champions of African Descent Worldwide

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In acknowledgment of her outstanding impact on global trade, Dr. Nneka Onyeali-Ikpe, the Group Managing Director and Chief Executive Officer of Fidelity Bank Plc, has been recognized as one of the honorees in the 2024 Most Influential Global Top 100 Export and International Trade Edition.

Themed, “Championing the Vision of Global Africa as a Unified Economic Block and Single Market,” the initiative which was announced on May 25, 2024 in celebration of Global Africa Day, lists several leaders in the global trade space of African descent, including the President, African Export–Import Bank (Afreximbank), Prof. Benedict Okey Oramah,); Minister of Trade and Export Promotion, Algeria, H.E. Kamel Rezig; Chairman, World Trade Centre Accra, Ghana, H.R.H Togbe Afede; the Nigerian Minister of Industry, Trade and Investment, Dr. Doris Nkiruka Uzoka-Anite; Executive Director and CEO, Nigerian Export Promotion Council (Nigeria), Nonye Ayeni; Executive Vice President, Intra-African Trade Bank (IATB), Kanayo Awani; Director, Trade Development (Africa & Caribbean), World Trade Centre Miami, US, Kemi Arosanyin; Secretary of State for Business and Trade and President of the Board of Trade (United Kingdom/Nigeria), Kemi Badenoch; President, US-Africa Business Centre at US Chamber of Commerce, Kendra Gaither; and President of the Buenaventura Chamber of Commerce (Colombia), Milady Garces Arboleda.

According to a statement by Most Influential People of African Descent (MIPAD), the organisers of the initiative, “These honorees are recognized for their groundbreaking achievements in Trade & Export and are called upon to champion the vision of a unified Global Africa as an economic block. This recognition aligns with the ethos of the International Decade for People of African Descent, highlighting MIPAD’s ongoing commitment to celebrating individuals, organizations, and governments demonstrating outstanding leadership in advancing people of African descent globally.”

Commenting on the initiative, Dr Onyeali-Ikpe said, “This recognition demonstrates our market leadership in the international trade space at Fidelity Bank and our devotion to helping Nigerian businesses play a more active role in the global trade space.

Since 2022, we have hosted the largest private-sector driven trade expo tagged the Fidelity International Trade and Creative Connect (FITCC) with hundreds of export businesses from Nigeria, off-takers in the UK and USA, investors, regulators, media and other key stakeholder in the trade sector. Through FITCC, we have closed deals totaling $450million. Our commitment as a bank is to do more in this space and we thank MIPAD for the recognition.”

The Most Influential People of African Descent (MIPAD), is a global civil society initiative in support of the International Decade for People of African Descent, proclaimed by United Nation’s General Assembly resolution 68/237, to be observed from 2015 to 2024. MIPAD identifies high achievers of African descent in public and private sectors from all around the world as a progressive network of relevant actors to join together in the spirit of recognition, justice and development.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged commercial bank with over 8.3 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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Banking Sector

Heritage Bank Liquidation: NDIC Opens Bidding for Assets and Branches

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The Nigeria Deposit Insurance Corporation (NDIC) has commenced the process of liquidating the bank’s assets across Nigeria.

This move comes as part of NDIC’s role as the liquidator of the failed bank, aimed at recouping funds and resolving outstanding liabilities.

The NDIC, through an advertorial published in major newspapers, has announced the sale of 48 properties belonging to Heritage Bank.

These properties include the bank’s head office located at 143 Ahmadu Bello Way and its annex at 130 Ahmadu Bello Way, Victoria Island, Lagos.

Also, the liquidation covers chattels such as vehicles, office equipment, plant, and machinery spread across 62 locations nationwide.

Interested parties are invited to participate in a public competitive bidding process. They have been given the opportunity to inspect the assets and submit bids to acquire them.

The bidding process requires potential buyers to submit bids accompanied by a Certified Bank Draft amounting to 10% of their bid.

Successful bidders will be required to settle the balance within two weeks of notification of their successful bid.

The liquidation process marks a significant step in NDIC’s efforts to manage the fallout from Heritage Bank’s closure effectively.

The corporation has also commenced the verification and payment of depositors with balances of N5 million or less, a category that constitutes about 99% of the bank’s customer base. According to Bello Hassan, the Managing Director of NDIC, Heritage Bank had approximately 2.3 million depositors with total deposits amounting to N650 billion, while its loan portfolio stood at about N700 billion.

The decision to revoke Heritage Bank’s license was made by the CBN due to the bank’s persistent breach of regulatory requirements and its inability to improve its financial position despite intervention measures.

This action underscores the CBN’s commitment to maintaining financial stability within the banking sector and protecting depositors’ funds.

Stakeholders within the banking industry, including the Bank Directors Association of Nigeria (BDAN) and the House of Representatives, have expressed support for the regulatory actions taken.

BDAN’s Chairman, Mustapha Chike-Obi, emphasized the necessity of such decisions in safeguarding the overall health of the banking sector.

Meanwhile, the House of Representatives has passed a resolution urging the CBN to investigate the management and leadership of Heritage Bank to ascertain if any mismanagement or wrongdoing contributed to its failure.

The resolution also called for a comprehensive review of NDIC’s operations to ensure it is adequately equipped to fulfill its mandate as a deposit insurer and investor in failed banks.

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