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Equities Market: N3trn Gain Boosts Full Recovery Prospects

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  • Equities Market: N3trn Gain Boosts Full Recovery Prospects

Stakeholders in the Nigerian capital market are now more optimistic that about its recovery at the end of the year as the equities market has gained N3.094 trillion in seven months. Having recorded a decline for three consecutive years to 2016, expectations are high that the market would recover in 2017.

Although the market started the year with fall in January and February, it closed in green in March rising by 0.74 per cent. That positive trend has been sustained culminating in a gain of N3.094 trillion in capitalisation as at the end of July on Monday.

Specifically, the market capitalisation ended at N12.35 trillion, up from N9.265 trillion at the beginning of the year, translating to a growth of 33.3 per cent.

Similarly, the Nigerian Stock Exchange (NSE) All-Share Index rose by same margin of 33.3 per cent from 26,874.62 to close at 35,844 on Monday.

The Chief Executive Officer of the NSE, Mr. Oscar Onyema, some operators and market analysts had expressed optimism that investors should expect a positive performance this year.

According to him, the capital market is a subsector of the Nigerian economy and since it had been projected that the economy would recover from its recession and record a growth this year, the stock market should also recover.

After recording a decline in January and February, the make entered a bullish mode in March rising by 0.74 per cent. It consolidated with an appreciation of 0.95 per cent in April. The market took a major leap in May, jumping by 15 per cent as the new foreign exchange window for importers and exporters introduced by the Central Bank of Nigeria (CBN) attracted more foreign investors. The return of the foreign investors triggered interest among domestic investors, a development that led to sustained bull run that led to a growth of 12 per cent each in June and July. Consequently, the market gained over N3 trillion in seven months.

In fact, the market had rallied almost three months high last Thursday when the capitalisation hit a new high of N12.84 trillion, while index settled at 37,245.17 before profit taking set in last Friday and Monday.

Within the last six months, the level of foreign portfolio investments (FPIs) rose by 59.8 per cent to N430 billion, up from N269.22 billion invested in the corresponding period of 2016, according to data released by the NSE.

Similarly, domestic investors increased their level of investments to N505.03 billion in 2017, up by 42.19 per cent compared to N355.19 billion in 2016.

In all, total transactions at the nation’s bourse in H1 of 2017, increased by 47.7 per cent to N935 billion, from N624 billion in 2016. However, domestic investors outperformed foreign investors by 7.82 per cent in the month of May. While total domestic transactions increased by 7.53 per cent from N110.42 billion recorded in May 2017to N118.74billion in June2017, FPIs also increased by 6.66 per cent from N95.19 billion to N101.53billion within the same period.

But a further analysis of the domestic participation showed that the institutional composition of the domestic market decreased by 17.09pe cent from N67.95 billion recorded in May to N56.34billion in June 2017.

However, the retail composition increased by 46.92 per cent from N42.47 billion to N62.40billion within the same period.

According to NSE, this indicates a higher participation by retail investors over their institutional counterparts for the first time this year.

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

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

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Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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CIT Microfinance Bank Disburses Over N16bn Loans

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CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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Finance

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

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FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

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