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Naira to Hit 360/dollar at Investors’ Forex Market

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  • Naira to Hit 360/dollar at Investors’ Forex Market

The naira is expected to firm slightly to 360 per dollar at the Central Bank of Nigeria’s Investors and Exporters Foreign Exchange window next week as trading picks up after the Christmas and New Year holidays.

The local currency had traded weaker at 362/dollar at the I & E FX window on thin volumes on Thursday.

The naira closed at 363/dollar at the parallel market on Friday, while at the official market, it was quoted at 305.95.

The CBN’s regular interventions in the forex market have supported the local currency to remain fairly stable at the parallel and Bureau De Change segments of the forex market.

Meanwhile, the CBN has raised N161.54bn ($513.64m) at a Treasury Bill auction after it received subscriptions for more than twice the amount on offer.

The CBN sold N115.85bn of the one-year debt at a rate of 14.30 per cent.

It auctioned N11.77bn and N33.93bn, respectively in three- and six-month maturities at 12.54 per cent and 13.92 per cent. Total subscription stood at N388.50bn.

In December, the Federal Government repaid N198bn worth of Treasury Bills using part proceeds of a $3bn Eurobond issue, instead of rolling over the debt to lower its borrowing costs.

It plans to repay more bills this year.

Investors bid as high as 18.6 per cent for the one-year paper. However, the government has been offering debt at lower yields to track declining inflation, which fell for the 10th month in November to 15.90 per cent.

Meanwhile, the Kenyan currency may come under pressure next week on rising demand for dollars, while Zambia’s local unit may firm.

Reuters reported that the Kenyan shilling might come under pressure in the coming week due to increased demand for dollars from manufacturers, oil and food importers.

The Ugandan shilling is seen trading with a bearish tone in the coming days, weighed down by surging appetite from manufacturing firms as they look to replenish raw material stocks after the festive season.

The kwacha may gain marginally next week as firms convert dollars to the local unit in preparation for tax payments due next Wednesday.

“The supply side will be supported by corporates selling dollars to meet tax obligations,” independent financial analyst, Maambo Hamaundu, said.

The Tanzanian shilling is seen trading in a stable range over the coming days or could weaken marginally, underpinned by subdued demand for US dollars.

Commercial banks quoted the shilling at 2,239/2,244 to the dollar on Thursday, weaker than 2,233/2,243 a week ago.

“The shilling is expected to remain at the same levels next week, but it could weaken slightly if we see an increase in demand for dollars,” said a trader at CRDB Bank.

The local unit was trading at 4.5407 to the dollar on Thursday, same level as its 2018 open.

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.

Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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