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Politics, Currency Movement’ll Affect Market this Year – Onyema

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Oscar Onyema, chief executive officer of the Nigeria Stock Exchange
  • Politics, Currency Movement’ll Affect Market this Year – Onyema

Happenings in the Nigerian political space and possible foreign exchange fluctuations are expected to impact the stance of the country’s capital market in 2018, albeit for a short period, the Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, has said.

Onyema, however, described the overall outlook of the market for the year as “encouraging”.

The NSE boss said this at the 2017 Market Recap and Outlook for 2018 event at the Stock Exchange House, Lagos, on Tuesday.

The annual event is a forum for the chief executive of the NSE to brief the stockbroking community, analysts, media and other stakeholders, on the performance of the market in the preceding year and give prognosis for the market for the New Year.

In keeping with its objective of taking a vigorous and adaptive approach to strategy execution, Onyema stated that NSE re-assessed its strategic agenda in the light of changing dynamics in both the operating environment and the global exchange landscape against the backdrop of the fourth industrial revolution.

This, according to him, has culminated in a new corporate strategy for the 2018–2021 period.

He said, “Our efforts will be geared at satisfying our customers, boosting our domestic retail segment, and enhancing our organisation for a demutualised structure.”

In his presentation, Onyema noted that the NSE recovered from the macroeconomic overhang of the commodity downcycle to become the third best performing market in 2017 globally, with a 42 per cent return in the NSE All-Share Index; while attributing the performance, in part, to the Central Bank of Nigeria’s monetary policies that resulted in increased liquidity in the foreign exchange market.

Speaking on the forecast for 2018, Onyema said, “Indeed, to some extent, political activities and currency movements will have some effect on the market, but we expect that such impacts will be short lived and the performance of the underlying business activities will ultimately determine market performance.”

He said the NSE was on track to become a more agile and flexible demutualised securities exchange, adding that, “We are hopeful that the Demutualisation Bill will be signed into law in 2018, and are working assiduously with our advisers to fine-tune outstanding aspects of the demutualisation project as well as providing clarity and transparency on the process via regular engagement with all our valued stakeholders.

“In 2018, the NSE will launch Exchange Traded Derivative instruments and continue to engage with the government on the privatisation and listing of state-owned enterprises in collaboration with the private sector. We also plan to maintain our role as an advocate for the adoption and implementation of market-friendly policies.”

According to Onyema, the equity market activity skyrocketed from 2016 levels, as market turnover increased by 121 per cent to N1.27tn from N0.58tn, adding that, “the IPO activity in the year remained mute, however, there were several other positive indicators including the revival of supplementary listings and the return of new issuances. The value of supplementary listings increased by 27 per cent, bringing the total value of equity issues in 2017 to N408bn.”

On bonds, he said the NSE fixed income market recorded mixed performance, adding that, “New bond issuances increased over the previous year, while bond yields gradually moderated from 2016 levels amidst easing inflation and greater forex stability.

“Yields across various tenors declined between 0.4 per cent and 1.5 per cent, and market turnover declined by 24 per cent in 2017, as investors sought higher returns in alternative product classes. However, supplementary issuances by the Federal Government saw bond market capitalisation increase by 34 per cent year-on-year.

“The NSE’s ETF market witnessed increased activity across key metrics in 2017, recording a 272 per cent year-on-year growth in trade volumes, 33 per cent growth in turnover and a 40 per cent year-on-year increase in market capitalisation to close the year at N6.69bn.”

He said, the NSE made steady progress on its strategic focus areas set out at the beginning of 2017.

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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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans

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micro-finance-bank

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

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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