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Banking Stocks Drive N17bn Gain on Equities

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  • Banking Stocks Drive N17bn Gain on Equities

Financial services (banking) stock, on Thursday, led the Nigerian Stock Exchange into a N17bn gain at the close of trading.

A total of 146.485 million shares worth N1.187bn exchanged hands in 3,013 deals.

The NSE market capitalisation appreciated to N9.045tn from N9.028tn, as the All-Share Index closed at 26,289.95 basis points from 26,240.45 basis points.

The bourse posted another positive close in Thursday’s session buoyed by late gains in the banking sector. Major bourses around the world traded firmly in the green following sustained confidence that President Trump’s policies would spur economic growth.

The banking sector rebounded after three consecutive sessions of losses owing to gains in Guaranty Trust Bank Plc and Zenith Bank Plc by 2.55 per cent and 0.98 per cent, respectively.

The oil and gas sector also closed higher after gains in Forte Oil Plc and Oando Plc by 10.25 per cent and 4.88 per cent, accordingly, outweighed declines in MRS Plc, Conoil Plc, Mobil Oil Nigeria Plc and Total Nigeria Plc by 9.74 per cent, 4.90 per cent, 4.94 per cent and 0.70 per cent, respectively.

While the industrial goods sector remained relatively unchanged, the consumer goods sector traded in the negative territory amid investors’ reaction to Guinness Nigeria Plc disappointing second half 2016 result. Guinness shares depreciated by five per cent coupled with losses in Nestle Nigeria Plc and Honeywell Flour Mill Plc by 1.33 per cent and 0.87 per cent, accordingly.

Market breadth remained positive with 24 advances and 19 declines.

On what would shape the next trading session, Vetiva Capital analysts, said, “Similar to the previous session, the positive close of the NSE ASI does not properly reflect the bearish sentiment that dominated Thursday’s trading hours. As such, we think the performance of the ASI could soften at week close.”

Meanwhile, the average bond yield advanced to 16.82 per cent, as the naira appreciated slightly.

The average money market rates at the close of trading activities stood at 5.88 per cent indicating a decline of 0.84 per cent from the average rate at Wednesday’s closing. The open buy-back and overnight rates settled at 5.50 per cent and 6.25 per cent, respectively.

In the secondary market for Treasury bills, weakened demand was witnessed across all tenors as yields trended northward on January 25, 2017 pegging the average Treasury bill yield for the day at 16.51 per cent. The one-month bill recorded the highest yield increase of 0.28 per cent.

Mixed sentiments pervaded the Federal Government bonds market. However, majority of the instruments recorded advancements in yield. The yields of the May-2018 and March-2024 bonds advanced significantly by 0.19 per cent and 0.22 per cent, accordingly. At the close of the day’s trades, average bond yield inched up marginally by 0.02 per cent to 16.82 per cent.

At the interbank foreign exchange market, the naira appreciated slightly by 0.08 per cent to close at N305.25 to the United States dollar. Also, the average forward quotes recorded in the day fell to N323.27/dollar. Parallel market rates, however, remained flat at N490/dollar.

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

CBN Leaves Interest Rate Unchanged at 11.5 Percent

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Godwin Emefile

CBN Leaves Interest Rate Unchanged at 11.5 Percent

The Central Bank of Nigeria led Monetary Policy Committee (MPC) left the interest rate unchanged at 11.5 percent to aid economic recovery from recession.

The MPC lowered the interest rate by 100 basis points to 11.5 percent in the third quarter to boost capital inflow to the real sector of the economy and halt the continued plunge in economic productivity.

The members voted unanimously to leave the rate unchanged because of the poor macroeconomic factors caused by the COVID-19 pandemic, rising inflation and lockdown.

Asymmetric Corridor was also retained at +100/-700 basis points while Cash Reserve Ration (CRR) stood at 27.5 percent. The liquidity Ratio was left at 30 percent, according to the CBN Governor, Godwin Emefiele.

Emefiele disclosed this on Tuesday after two days of meeting. He added that the global economic outlook has started showing improvements.

The retention comes as no surprise to experts given the escalating inflation rate, weak economic productivity and the present economic recession.

Obadiah Mailafia, a former deputy governor, CBN said “I do not see them shifting ground on those key areas. It would be counter-intuitive to reduce the MPR in a time of rising inflation.

The government is facing what is increasingly looking like a fiscal crisis, as government revenues continue to fall while a sizeable portion of government funds are going into debt-servicing,” Mailafia stated, noting that “More than 400 federal agencies have been unable to pay salaries to public sector workers for several months a in a row. Nigeria’s economic challenges are compounded by the geopolitical challenges of banditry, violence and terrorism.”

“As expected, I did not see them shifting ground on those key areas. It would be counter-intuitive to reduce the MPR in a time of rising inflation.

“I, therefore, suspected they would want to leave things as they are in order to weather the current storm, in the hope that things will begin to improve by Q2.

“A stable and consistent monetary policy stance can help stabilize the economic outlook while helping actors to anchor long-term rational expectations,” the former CBN stressed.

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Banking Sector

Deposit Money Banks Pay N2.7 Billion as Customers Complaints Rise by 34%

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Deposit Money Banks Pay N2.7 Billion as Customers Complaints Rise by 34%

Nigeria’s Deposit Money Banks (DMBs) refunded banks’ customers N2.67 billion in the first half of 2020, according to the latest findings.

This represents a 63 percent decline when compared to the N7.2 billion refunded in the same period of 2019.

A breakdown shows “Bank received 2,051 complaints from consumers of financial services providers in the first half of 2020, compared with 1,528 complaints in the corresponding period of 2019. Of the total 1,167 or 56.9 percent were complaints on electronic/card, while 125 or 6.1 percent were on excess charges. Other complaints were, mainly, on frauds, dishonoured guarantees and unauthorised deductions/transfers, among others.

“A total of 1,519 complaints, including those outstanding from 2019, were resolved in the review period, compared with 1,548 in the corresponding period of 2019. Total claims in the review period in local currency and foreign currencies amounted to N4.58 billion and $151,647.82, compared with N8.70 billion and $315,475.54, respectively, in the corresponding period of 2019.

“Relief was brought to many of the affected customers as the sums of N2.67 billion and $144,176.68 were refunded in the first half of 2020, compared with the N7.20 billion and $315,229.02, refunded in the corresponding period of 2019.”

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Banking Sector

Ecobank Nigeria Received N50 billion 10-Year Bilateral Subordinated Loan

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ecobank

Ecobank Nigeria Received N50 billion 10-Year Bilateral Subordinated Loan

Ecobank Nigeria announced it has received N50 billion 10-year subordinated Loan.

Adenike Laoye, Group Head, Corporate Communications, Ecobank Nigeria, disclosed this in a statement released through the Nigerian Stock Exchange.

The statement read in part, “The bilateral funding provides stable medium-term liquidity to the balance sheet of Ecobank Nigeria and positively improved its balance sheet ratios, especially the capital adequacy ratio by circa 300 basis points.

The transaction proceeds would be deployed to support Micro, Small and Medium Scale Enterprises (“MSMEs”) and Small Corporates.

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