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Market Gains N29bn as CBN Reviews Forex Policy

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Nigerian Exchange Limited - Investors King
  • Market Gains N29bn as CBN Reviews Forex Policy

The Nigerian equities market appreciated by N29bn on Monday as the Central Bank of Nigeria released a new foreign exchange policy in the country with immediate effect.

The Nigerian Stock Exchange market capitalisation rose to N8.738tn from N8.709tn, while the NSE All-Share Index closed at 25,249.49 basis points from 25,164.91 basis points.

The new policy is the outcome of the last Thursday’s directive by the National Economic Council for immediate review to stem the widening gap between the inter-bank foreign exchange and parallel market rates.

The CBN said in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, it would henceforth be providing direct additional funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, with immediate effect.

The equities market started the week on a positive note, advancing by 0.34 per cent, to settle the year-to-date return at -6.05 per cent. There were 10 gainers and 18 losers.

A total of 110.016 million shares worth N985.667m were traded in 2,160 deals.

PZ was the top gainer for the second consecutive trading day, advancing by 9.04 per cent, to close at a year high of N14.60.

Diamond Bank Plc, Nascon Allied Industries Plc, Nigerian Breweries Plc and Caverton Offshore Support Group Plc also appeared on the top gainers’ list appreciating by 4.88 per cent, 4.55 per cent, 4.18 per cent and 3.33 per cent, respectively.

Meanwhile, Forte Oil Plc declined the most in share price by 5.02 per cent to close at N53.87. UACN Plc, Nigerian Aviation Handling Company Plc, Honeywell Flour Mill Plc and Neimeth International Pharmaceuticals Plc also appeared on the top losers’ table dropping by 4.95 per cent, 4.67 per cent, 4.55 per cent and 4.35 per cent, accordingly.

The NSE food and beverage index was the only index to close positive, with the oil/gas, banking and insurance indices declining by 0.63 per cent, 0.20 per cent and 0.11 per cent, respectively, while the industrial index traded flat.

Responding to the state of the market, analysts at Meristem Securities said, “The much expected upturn witnessed in the market today can be attributed to bullish activities on certain large-cap tickers, as well as intensified position-taking ahead of the 2016 financial year earnings releases and corporate actions.

“As we expect this to continue for most of the week, we advise value-seeking investors to temper their optimism with caution.”

Meanwhile, there was a decline in system liquidity, resulting in a 2.57 per cent increase in the average money market rate to 20.82 per cent, at the close of the trading session. The open buy-back and overnight rates rose by 2.67 per cent and 2.47 per cent, respectively, to settle at 20.50 per cent and 21.14 per cent, accordingly.

Activities in the Treasury bills space were characterised by bearish sentiments on February 17, 2017.

The one-month, three-month and six-month instruments recorded yield increases of 0.15 per cent, 0.02 per cent and 0.32 per cent, respectively. The average Treasury bills yield stood at 16.24 per cent (+0.16 per cent), at the close of Monday’s trades.

Similarly, in the treasury bonds space, yields advanced across most instruments, save for the March-2036, May-2018 and June-2019, which recorded declines of 0.04 per cent, 0.18 per cent and 0.03 per cent, accordingly. Consequently, the average bond yield increased by 0.12 per cent, to peg at 16.65 per cent at the close of trades.

The naira continued its downward trend at the parallel forex market, as it depreciated by 0.77 per cent, to settle at N520/dollar. However, the currency appreciated by 0.08 per cent at the interbank forex market, to close at N305.25/dollar.

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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Finance

Federal Government Clears $120m Debt to Gas Companies Amid Nigeria’s Power Crisis

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Gas-Pipeline

Amidst Nigeria’s persistent power crisis, the Federal Government has taken a pivotal step forward by clearing a significant portion of its debt to gas companies.

A sum of $120 million has been paid out of the country’s $1.3 billion indebtedness to gas suppliers, offering a glimmer of hope for improved energy stability across the nation.

The Minister of Power, Chief Adebayo Adelabu, underscored the critical role of gas in power generation and highlighted how the mounting debts had severely hampered gas supply to electricity-generating companies, exacerbating the country’s electricity shortfall.

Nigeria heavily relies on thermal power plants fueled by gas for over 70% of its electricity needs, making the timely settlement of gas debts paramount for enhancing power generation capacity and addressing the nation’s energy deficit.

Addressing delegates at the 7th Nigeria International Energy Summit in Abuja, the Director of the Decade of Gas Secretariat, Ed Ubong, expressed optimism about the government’s progress in offsetting its financial obligations to gas producers.

He emphasized the importance of aligning gas and power sectors to foster sustainable energy solutions.

As Nigeria grapples with the multifaceted challenges plaguing its energy landscape, the government’s commitment to settling outstanding gas debts marks a pivotal stride towards revitalizing the country’s power infrastructure and ensuring reliable electricity access for its citizens.

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Finance

Nigeria Insurance Corporation Reimburses Depositors of 179 Closed Microfinance and Four Mortgage Banks

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Retail banking

The Nigeria Insurance Corporation (NDIC) has announced the successful reimbursement of depositors affected by the closure of 179 microfinance banks and four mortgage banks across the country.

The reassuring news came during the 45th Kaduna International Trade Fair, where NDIC’s Managing Director, Dr. Bello Hassan, explained the corporation’s unwavering commitment to safeguarding depositors’ funds amidst financial uncertainties.

Dr. Hassan, represented by Hauwa Gambo, the NDIC’s Deputy Director of Communication, highlighted the corporation’s proactive measures in protecting the interests of depositors.

The introduction of the Single Customer View framework has expedited the process of reimbursing depositors of liquidated banks, ensuring swift and transparent transactions.

The corporation’s collaboration with the judiciary has yielded positive results, facilitating the speedy prosecution of failed insured banks and resolving long-standing cases of bank liquidations like Fortune and Triumph Banks.

This concerted effort has significantly enhanced the debt recovery rate, enabling NDIC to declare full liquidation dividends to uninsured depositors of over 20 deposit money banks.

Furthermore, NDIC has embraced digital remote payment strategies, streamlining electronic funds transfers to verified depositors’ alternate bank accounts.

The introduction of the ‘Deposit Tracer’ initiative in partnership with mobile operators aims to address apathy among depositors with small balances, providing accessible avenues for claiming funds trapped in closed banks.

The initiatives underscore NDIC’s proactive stance in safeguarding depositors’ interests and ensuring financial stability in Nigeria’s banking sector.

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Banking Sector

85.51 Million Nigerian Bank Customers Face Withdrawal Freeze Over NIN, BVN Deadline

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First Bank

As the March 1 deadline looms, an estimated 85.51 million Nigerian bank customers are facing the possibility of frozen accounts due to their failure to link their National Identification Numbers (NINs) and/or Bank Verification Numbers (BVNs) to their accounts.

Recent findings reveal the potential scale of the impending banking crisis.

Data from the Nigeria Inter-Bank Settlement System (NIBSS) indicates that Nigeria had approximately 146 million active individual bank customers as of December 2022.

However, by January 26, 2024, only 60.49 million BVNs were recorded on the NIBSS portal, leaving a significant portion unlinked.

Meanwhile, about 104 million NINs had been issued by December 2023, highlighting the disparity between NIN issuance and BVN linkage.

The Central Bank of Nigeria (CBN) had earlier issued directives to banks, mandating them to restrict transactions on accounts lacking linked NINs and BVNs, with effect from March 1, 2024.

Any accounts found non-compliant risk being designated as ‘Post no Debit,’ rendering them unable to process further transactions.

Responding to the impending crisis, the Director-General of the National Identification Management Commission (NIMC), Abisoye Coker-Odusote, emphasized the need for the revalidation of Front-End Partners (FEPs) to ensure the integrity of the identity database.

She underscored the importance of NIN registration and urged collaboration with various stakeholders to expedite the process.

The Executive Vice Chairman/CEO of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, reiterated the significance of linking NINs to SIM cards to enhance national security.

Telecom subscribers were urged to comply with the NIN-SIM linkage directive to avoid service disruptions.

Meanwhile, financial service providers like Opay have issued reminders of the impending restrictions, urging customers to comply with the linkage requirements.

Amidst concerns, some customers contemplate transferring funds to compliant accounts to avoid potential financial setbacks.

As the deadline approaches, stakeholders are intensifying efforts to mitigate the impact of the impending banking crisis on millions of Nigerians.

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