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Investors Snub Oil, Bank Stocks, Others



Trading floor stock exchange market nse
  • Investors Snub Oil, Bank Stocks, Others

Investors in the equities market have turned to insurance stocks as they snubbed those of oil, banks, consumer goods and industrial sector on Tuesday.

At the end of trading on the floor of the Nigerian Stock Exchange on Tuesday, the insurance index emerged the lone gainer, appreciating by 1.17 per cent, while all other indices depreciated, pegging the market breadth at 0.6x.

The All Share Index lost 1.14 per cent to close at 31,173.71 basis points, while the market capitalisation shed N132bn, dropping from N11.512tn recorded on Monday to N11.380tn on Tuesday.

The volume and value traded improved, advancing by 73.7 per cent and 41.9 per cent to 182.228 million units and N2.754bn, respectively, while the year-to-date loss settled at -18.5 per cent.

Performance across sectors was largely bearish as four of five indices depreciated.

The insurance index, which was the only gainer, witnessed a 1.17 per cent increase due to a price appreciation in Continental Reinsurance Plc.

On the flip side, the oil & gas index declined the most, losing 5.68 per cent.

Analysts at Afrinvest Securities Limited said the decline in the oil & gas index was because investors took arbitrage opportunities following a price discrepancy between listed prices on the NSE and the London Stock Exchange.

The banking index trailed, losing 1.65 per cent due to sell-offs in Guaranty Trust Bank Plc and Access Bank Plc.

The loss in the banking index is the second consecutive time this week, indicating investors’ loss of interest in bank stocks.

Similarly, the consumer and industrial goods indices shed 0.09 per cent and 0.93 per cent, respectively, on the back of losses in P Z Cussons Nigeria Plc, Flour Mills Nigeria Plc, Cement Company of Northern Nigeria Plc and Lafarge Africa Plc.

At the end of trading on the floor of the Exchange on Tuesday, 14 gainers emerged against 23 decliners.

The top traded stocks by volume were Cement Company of Northern Nigeria (37.9 million units), Access Bank Plc (29.3 million units) and Transnational Corporation of Nigeria Plc (22.4 million units), while the top traded stocks by value were Cement Company of Northern Nigeria (N682.9m), Nestlé Nigeria Plc (N551.4m) and Nigerian Breweries Plc (N297.7m).

The top five losers were A.G. Leventis Nigeria Plc, Forte Oil Plc, P Z Cussons, Seplat Petroleum Development Company Plc and Prestige Assurance Plc.

A.G. Leventis saw its share price drop by 10 per cent to close at 27 kobo as its year-to-date return settled at -61.43 per cent.

Forte Oil’s share price declined by 9.90 per cent to close at N17.30, while its year-to-date return settled at -60.21 per cent.

P Z Cussons, whose year-to-date return settled at -48.79 per cent, saw its share price decline by 9.83 per cent to close at N10.55.

A 9.61 per cent decline was recorded in the share price of Seplat Petroleum as it closed at N590 per share, while its year-to-date return settled at -5.78 per cent.

Prestige Assurance’s share price, recording a 9.41 per cent decline, dropped to 77 kobo per share as its year-to-date return settled at +54 per cent.

The top five gainers were Beta Glass Plc, Continental Reinsurance, Cap Plc, Cadbury Nigeria Plc and Wema Bank Plc.

Analysts at Afrinvest said, “The significant sell offs in bellwethers observed on Tuesday presents bargain hunting opportunities for investors.

“Thus, we expect an uptick in market performance towards the end of the week.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Banking Sector

Vietnamese Prime Minister Moves on CBDC Amid Questions on Regional Nature of e-Yuan



Vietnamese Prime Minister Pham Minh Chinh

This month, it was reported that Vietnamese Prime Minister Pham Minh Chinh asked, in Prime Minister’s Decision No 942/QD-TTg, the State Bank of Vietnam to study and execute a pilot implementation of a central bank digital currency before the end of 2023. Currently, cryptocurrencies are not legally recognized as an asset in the country, nor do any crypto exchanges hold licenses from the central bank. Last year, the country set up a group to study digital assets, with a purview that extended to potentially proposing regulatory mechanisms.

“Vietnam is a country that has had its eye on blockchain, even though they haven’t made many steps towards mainstreaming cryptocurrencies. It is a country that is interested in technology and riding a potential economic wave brought upon by new innovation, from blockchain to AI and VR. But, what’s notable here is that this decision was pushed forward very near the time that many pundits began to ask whether the Chinese e-Yuan would become a digital currency which transcended China and became something of a regional powerhouse as an asset,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“I think that’s important. Many countries are looking at what’s happening in China, then taking a look at their own place in the CBDC rat race, and they’re making decisions, I think, which moves up their timetable. This isn’t an innovation where you want to be last to the party. Doing so, in fact, could have ripple effects across a country’s monetary policy,” noted Gardner.

“Digital money is an inevitable trend,” said Huynh Phuoc Nghia, Deputy Director of the Institute of Innovation under the University of Economics Ho Chi Minh City. Some believe that moving quickly to develop a CBDC could give countries like Vietnam greater influence in the global financial system.

“I think it’s too soon to say what kind of ripple effects this development will have. It’s worth noting that Vietnam is in the very early stages. This isn’t a case where they’re ready to begin a pilot test in the short-term. Vietnam isn’t Ghana. But, forging ahead now can only be a positive. It’s better to move forward than continue to wait. Those countries that continue to take a wait-and-see approach are going to find themselves in last place. This is a race you don’t want to finish last. It very well could be the 21st century equivalent to the Race to Space,” opined Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Vietnam is so close in proximity to China, and China is so far ahead in the development of their own CBDC, it was likely the push that they needed to move on this. Earlier this year, some pundits wondered if the e-Yuan would replace the dollar. That’s a premature discussion to have. But, if successfully rolled out, could it have a real regional impact? Absolutely,” Gardner offered.

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Banking Sector

Fidelity Bank Promotes 745 Staff Members



Nneka Onyeali Ikpe, Fidelity Bank CEO - Investors King

Seeking to increase staff morale while empowering them to work more efficiently, Fidelity Bank has announced the promotion of 745 employees following the performance review of two financial years – 2019 and 2020.

A total of 461 staff members benefited from the FY 2019 promotion exercise, while 284 staff members benefited from the FY 2020 exercise. The beneficiaries cut across the senior, middle, and junior management cadre of the bank, and the promotion was based on merit, using a transparent and robust performance management system in line with global best practices.

Speaking about this, Nneka Onyeali-Ikpe, MD/CEO, Fidelity Bank Plc said “I am very delighted to announce the promotions for 2019 and 2020 financial years. Releasing the list for 2 financial years’ promotion at the same time is something we are very proud of. We strongly believe that the continuous growth of our bank over the years has been largely attributed to the commendable efforts and unrelenting sacrifices of our employees. Promotion is one of the many ways we express our gratitude. We are thankful to be home to many amazing talents that continue to drive our value and most importantly, serve our stakeholders to the highest standards.”

Speaking further, she said. “Since I was appointed the MD/CEO of our great bank in January 2021, I have been committed to a 7-point agenda to move our bank further, out of which workforce transformation is a key category. Staff performance and reward are critical to us, and as an organisation, we will continue to make available adequate resources to deepen the skills and entrench a culture of high performance amongst employees. I wish to appreciate all members of the Fidelity Bank family for their commitment and drive and unrelenting sacrifices towards delivering our objectives. As we move forward in our quest to becoming a leading tier-one bank, I encourage all elevated staff to see their promotion as a call to rededicate themselves to excellence.”

Fidelity Bank has continued to empower its employees with invaluable resources capable of putting them at the forefront of innovative transformation. In March 2021, the bank announced two capacity-building projects – One Culture Project and Project Alpha – that were targeted at transforming the workplace for its staff. In particular, Project Alpha was created to help Fidelity Bank develop a robust and holistic learning and development framework for all staff while One Culture Project was formed to reinforce the behaviour and value systems that will help the bank, as well as staff, achieve set goals.

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Nigeria’s Central Bank To Launch Digital Currency On Oct 1



The Central Bank of Nigeria (CBN) has said that it will launch its much-awaited digital currency on October 1, to mark Nigeria’s independent anniversary.

CBN Director of IT Department, Rakiya Mohammed, revealed this at a private webinar, explaining that the banking sector regulator had been conducting research towards the launch of digital currencies since 2017.

She added that the central bank may conduct a proof of concept before the end of the year. The move to adopt the digital currency was first mulled by the CBN Governor, Godwin Emefiele, during the Monetary Policy Committee (MPC) in May.

He had said a digital currency will soon become a reality in the country, adding that the central bank had already set up its committee which was working on the concept.

The CBN governor had further restated the determination of the apex bank to drive the e-Naira project during the recent 306th Banker’s Committee meeting, pointing out that the process was ongoing.

Mohammed was quoted by Nairametrics to have highlighted the benefits of the digital currency, saying it would enhance macroeconomic management, boost economic growth, facilitate cross-border trade, boost financial inclusion and monetary policy effectiveness.

Mohammed said the digital payment instrument would further improve payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.

She added that the innovation would also benefit the fintech ecosystem by enhancing operational efficiency, opportunities for fintech start-ups in building services and products as well as financial inclusion that will contribute to economic growth, and the creation of a new system complimenting the traditional payment system.

Mohammed had last month said the proposed digital would be launched before December. According to her, every Nigerian would have access to digital currency.

She had while briefing journalists at the end of a Bankers’ Committee meeting said: “Let me state categorically that cryptocurrency such as Bitcoin and the rest of them are not under the control of the central bank; they are purely private decisions that individuals make and are not part of this arrangement.

“We have spent over two years studying this concept of central bank’s digital currency and we have identified the risks. And it is one of the reasons why I said we are setting up a central governance structure that would involve all industry stakeholders to access all the risks as we continue on this journey.

“Very soon we would make an announcement on the date for the launch and by the end of the year, we should have the digital currency.”

According to her, about 80 percent of central banks across the world are presently exploring the possibility of issuing the central bank’s digital currency, saying that Nigeria cannot be left behind.

Mohammed had added: “You are aware that we have two forms of fiat money: The notes and the coins. So, the central bank’s digital currency is the third form of fiat money. So, this digital money is going to complement the cash and note that we have.

“The central bank digital currency will just be as good as you having cash in your pocket. So, if you are having the currency in your pocket, you are as good as having cash on your phone.

“Now, why did we need to go into this? There are different cases that the central bank is looking at.

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