- FG, States Borrowed N1.28tn From Stock Market in 2018
The Federal Government dominated capital raising activity last year as it borrowed a total of N1.16tn in a bid to finance fiscal and infrastructure deficits, while state governments raised N125.59bn in new debt capital.
The Chief Executive Officer, NSE, Mr Oscar Onyema, who disclosed this on Monday at the 2018 Market Recap and Outlook for 2019 in Lagos, said the market also witnessed the listing of a N100bn FGN Ijarah Sukuk designed to finance critical road infrastructure across the country.
Onyema said the amount of capital raised by corporate organisations fell by 39.09 per cent to N31.47bn in 2018.
He said foreign outflows from the stock market rose by 50.53 per cent to a total of N605.54bn from January to November 2018 compared to N402.26bn in the same period of 2017.
“This trend highlights attenuated foreign participation due to a shift to higher-yielding assets with lower risks in developed countries, coupled with the impending political risks in the coming Nigerian elections,” he added.
Onyema stated that the Nigerian economy continued its path of recovery, growing by 1.81 per cent year-on-year in real terms as of the third quarter of 2018.
He said the recovery was bolstered by increased stability in the macro environment as the Central Bank of Nigeria continued to pursue a relatively tight policy stance in an effort to curtail inflation, while holding the benchmark rate steady at 14 per cent and effectively maintaining liquidity and stability in the foreign exchange market during the year.
He noted that NSE equity market started the year on a high, with the All Share Index reaching a 10-year peak of 45,092.83 basis points in January 2018.
Onyema explained that, this was largely driven by the positive performance of the ASI in 2017, which emerged the best in Africa.
He said, “As we approached the second quarter, political risks, oil price volatility and rising global yields resulted in bearish sentiments that saw the ASI and equity market capitalisation fall by 17.81 per cent and 13.87 per cent to close at 31,430.50bps and N11.73tn, respectively.
“Turnover velocity inched up 0.91 percentage points to 10.25 per cent and likewise, the size of volumes traded in the period increased by 0.96 per cent to 101.43 billion with the financial services sector being responsible for the highest traded volume and value.”
Onyema noted that the market sentiments in the first half of 2019 would be driven by uncertainty in oil prices as well as the 2019 general elections.
He said volatility in the equities market in the first half of this year was anticipated with enhanced stability post-elections.
“We believe swift approval and implementation of the 2019 budget will have a positive impact on companies’ earnings as well as consumer spending. Therefore, we expect an uptick in market activity during the second half of 2019.”
The NSE boss added that to enhance listing prospects on the Exchange, the bourse had strengthened its government engagement efforts on privatisation and listing of state-owned enterprises.
He said the Exchange would take advantage of opportunities during the year, maintain collaborative efforts with public and private sector stakeholders to advocate for market-friendly policies and cater to infrastructure financing needs as well as other capital requirements necessary for sustainable economic growth.
“The Exchange intends to work with the private sector as well to catalyse the listing of more companies,” Onyema added.
CBN Extends Letter of Credit Issuance Timeline Amid Forex Crisis
Move Aims to Address FX Scarcity Challenges and Enhance Customer Service
The Central Bank of Nigeria (CBN) has announced an extension of the timeline for issuing letters of credit from 24 hours to five working days, according to the newly approved 2023 service charter.
This adjustment comes as the country grapples with foreign exchange scarcity, impacting local and international trade.
The 2020 service charter initially stipulated a 24-hour timeline for the issuance and management of letters of credit, but the updated charter now reflects a timeline extension to five working days.
Also, the CBN has prolonged the timeline for the registration of Form M and NXP from 24 hours to two working days.
The move follows the CBN’s unification of all forex market segments in June 2023, aimed at promoting liquidity and stability.
However, this measure appears to have led to increased market instability, with the naira losing nearly a fifth of its value.
Reports indicate that foreign suppliers are now rejecting letters of credit from Nigerian businesses, affecting the importation of goods and services.
Letters of credit are crucial for the payment of visible goods imports, wherein a bank commits in writing to pay the exporter a specified sum within a defined timeframe upon receipt of proper documentation from the customer.
The extended timelines for letters of credit, Forms M, and NXP in the service charter are seen as measures to manage cash flow and instill confidence in the process amidst the ongoing forex crisis.
CBN Governor Yemi Cardoso stressed the commitment to responsive and citizen-friendly governance through efficient, responsible, and transparent service delivery in the revised service charter.
The move is part of the CBN’s effort to comply with the Business Facilitation Act 2022 and enhance ease of doing business in Nigeria.
Unity Bank MD Advocates Policy Actions to Stem Gender-Based Violence in Nigeria
The Managing Director of Unity Bank Plc, Mrs. Tomi Somefun has called for comprehensive policy actions that will dismantle the structures that enable gender-based violence in Nigeria.
At the Ebony Life Cinema, the venue of the film screening in Lagos, Unity Bank supported the BECKMA movie premiere by ARDA Development Commuications Inc. which was held to highlight issues of Gender-Based violence and driving positive change in society.
Making the call, Somefun stated that the Bank committed to partnering with the movie premiere and putting the power of the brand behind BECKMA as the event brings sustainability and gender equality to the front burner.
Represented by Unity Bank’s Group Head of Compliance, Mrs. Patricia Ahunanya, Somefun noted that “9 percent of women aged 15 to 49 had suffered sexual assault at least once in their lifetime and 31% had experienced physical violence,” citing a recent study by UNDP in Nigeria.
Speaking further, Somefun said “Gender-based violence is not just a women’s issue, but a societal ill that demands our collective attention. It is high time for us to step forward and advocate for comprehensive policy actions that will dismantle the structures allowing such atrocities to persist”.
She added, “I urge policymakers to enact stringent laws against gender-based violence, ensuring swift and severe consequences for perpetrators. Our homes and various organisations must also be a catalyst for change, inspiring others to follow suit.”
While commending the ARDA Development Communications Inc. for their initiatives to promote gender equality and empowerment in line with SDG5, Somefun assured of the Bank’s commitment to sustainable initiatives and further collaborative initiatives and advocacy programmes for the elimination of gender-based violence.
Nigeria’s NIBSS Directs Banks to Disconnect Non-Deposit Financial Institutions from NIP System
Banks in Nigeria have received a directive from the Nigeria Inter-Bank Settlement System (NIBSS) to disconnect Switches, Payment Solution Service Providers (PSSPs), and Super Agents from the NIBSS Instant Payment Outwards System.
The circular, dated December 5, 2023, highlighted that including these non-deposit-taking financial institutions as beneficiaries on the NIP funds transfer channels violates the Central Bank of Nigeria (CBN) guideline on electronic payments.
The NIBSS emphasized that while Switches, PSSPs, and Super Agents might process outward transfers as inflows to banks, their licenses do not permit them to hold customers’ funds.
The circular referred to the CBN’s guidelines on electronic payment of salaries, pensions, suppliers, and taxes, dated February 2014, as the basis for this regulatory stance.
The directive also pointed to a circular dated May 11, 2018, titled “Permissible Services and Products of PSSP Operation in Nigeria,” reinforcing the need for compliance.
As a result, banks were urged to delist all Switches, PSSPs, and Super Agents from the NIP Outward Transfer channels while allowing their participation in inward transfers.
In Nigeria’s payment ecosystem, operators are required to obtain licenses such as Switching and Processing, Mobile Money Operations, Payment Solution Services, or Regulatory Sandbox from the CBN.
Only Mobile Money Operators (MMOs) have the authority to hold customer funds, according to the CBN’s regulatory framework.
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