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Naira Gains on Fresh Dollar Supply, Now 390/dollar

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Forex Weekly Outlook October 31-November 4
  • Naira Gains on Fresh Dollar Supply, Now 390/dollar

The naira recorded a gain against the United States dollar on the parallel market on Tuesday, a day after the Central Bank of Nigeria injected $240m into the foreign exchange market.

The local unit rose from 395/dollar on Monday to 390/dollar on Tuesday as the new forex supply weighed on the market.

The CBN had on Monday released the sum of $90m to meet requests for invisibles such as business travel and personal travel allowances, medical and school fees.

The apex bank also offered a total of $150m to authorised foreign exchange dealers in the interbank wholesale auction window same day.

The development brought to $240m the total amount of forex released by the regulator on Monday.

The regulator also adjusted the sale day of forex to Bureau De Change operators to Tuesdays only to reduce logistical difficulties.

As a result, the central bank would sell $10,000 only to low-end forex dealers once a week, instead of $8000 a week previously.

Economic and financial analysts said the spate of interventions and dollar supply by the central bank would determine the direction of the naira in the coming weeks.

On the back of the previous forex supply by the CBN, the naira had appreciated to 375/dollar early last week.

The local currency, however, weakened to 383/dollar on Thursday before dropping to 390/dollar on Friday.

“The latest dollar injection is yet to fully percolate into the forex market; when that happens, the naira will appreciate further,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.

The naira closed at 306.25 to the dollar on Tuesday at the interbank market, compared with 306.30 the previous day.

Meanwhile, the CBN said on Tuesday it would offer dollar forwards to be delivered within two months to offset a backlog of matured foreign exchange obligations to manufacturers, airlines, fuel importers and agriculture businesses.

“Authorised dealers’ accounts with the central bank will be debited in full for the naira equivalent of the dollar bid amount on a spot basis,” the bank said in a notice to commercial lenders.

“The central bank will settle the bids through forward settlements of two months,” the CBN added without specifying the amount of dollars to be sold.

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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