Finance

Nigerian Stock Market Roars Back to Life with Impressive Gains

Published

1 month ago

August 28, 2023

The Nigerian stock market made a triumphant turnaround as investors rekindled their enthusiasm for BUA Foods Plc, Dangote Sugar Refinery Plc, and Transnational Corporation Plc, igniting a remarkable surge in market capitalization by a staggering N458.55 billion Week-on-Week (WoW).

Fueling this impressive rebound, BUA Foods posted a 7.9% increase per share, Dangote Cement saw an astounding 35.7% surge, and Transcorp registered a gain of 39.4% per share.

Consequently, the market capitalization soared from N35.422 trillion at the beginning of the trading week to N35.881 trillion at week’s end.

The Nigerian Exchange Limited All-Share index followed suit, rising by a substantial 1.29% WoW, closing at 65,558.91 basis points, compared to the previous week’s close of 64,721.09 basis points.

As a result, the stock market’s Month-to-Date and Year-to-Date gains increased to 1.90% and a substantial 27.92%, respectively.

Breaking down the sectoral performance, the NGX Consumer Goods sector surged by 11.6%, while NGX Insurance gained a solid 1.2%. In contrast, NGX Banking experienced a modest decline of 3.6%, and NGX Oil and Gas dipped by 2.4%. The Industrial Goods index remained relatively unchanged.

The market’s trading activity for the week recorded a total turnover of 1.812 billion shares, valued at N29.299 billion, across 31,163 deals. This was a noticeable improvement compared to the previous week’s total of 1.689 billion shares valued at N29.407 billion, traded in 29,477 deals.

In terms of trading volume, the financial services industry led the charge with a substantial 936.685 million shares, valued at N10.116 billion, exchanged in 12,886 deals. This sector contributed significantly, accounting for 51.68% of the total equity turnover volume and 34.53% of its value.

Following closely behind was the Conglomerates sector, with 461.589 million shares worth N2.333 billion traded in 3,451 deals. The Consumer Goods Industry secured the third spot with a turnover of 127.310 million shares valued at N5.003 billion, involving 5,792 deals.

The top three equities in terms of trading volume were Transnational Corporation Plc, Fidelity Bank Plc, and Access Holdings Plc. Together, they accounted for 693.533 million shares worth N5.030 billion, traded in 5,450 deals, contributing 38.26% to the total equity turnover volume and 17.17% to its value.

Analysts at Cordros Research offered insights into the market’s future, stating, “Looking ahead, we anticipate that investor sentiment will be influenced by developments in the macroeconomic landscape and the fluctuation of yields in the fixed-income market. In light of the ongoing challenging macroeconomic environment, we emphasize the importance of positioning in fundamentally sound stocks as a prudent strategy for navigating these uncertain times.”

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Finance

Nigeria’s Tax Revolution: Shifting Burden to the Wealthy and Streamlining the System

Published

3 days ago

September 29, 2023

Samed Olukoya

President Bola Tinubu’s administration is set to revolutionize the nation’s tax system.

The ambitious plan seeks to redistribute the tax burden, making the wealthy pay their fair share while stimulating business growth through corporate tax cuts.

The cornerstone of this tax reform initiative is a push to increase Nigeria’s tax revenue from 11% to 18% of Gross Domestic Product (GDP) within three years.

Spearheading this transformation is Taiwo Oyedele, who leads a panel appointed by President Tinubu.

Oyedele articulated the primary objectives of the reform, saying “We aim to make the rich pay what is fair and protect those in poverty.”

This move is crucial in a country where extreme wealth disparities persist, with only a small fraction of the population enjoying immense riches.

Notably, the plan also includes a reduction in the corporate income tax rate, which currently stands at an effective rate of over 40%.

The aim is to benchmark this rate against Nigeria’s international peers, fostering a more business-friendly environment.

Nigeria’s tax system has long been plagued by complexity, with nearly 70 different taxes and overlapping jurisdictions.

The reform initiative seeks to simplify this by streamlining tax structures and drastically reducing the number of taxes to single digits.

Also, a tax amnesty is under consideration, aimed at encouraging tax compliance and offering relief for past debts. The hope is that by fostering transparency and accountability, more Nigerians will willingly contribute to the country’s fiscal health.

In a nation where government debt has surged dramatically in recent years, this tax revolution is seen as a pivotal step towards reducing the deficit and ensuring sustainable economic growth.

Finance

Federal Government’s $3 Billion Rescue Plan to Bolster Naira Stability

Published

3 days ago

September 29, 2023

Samed Olukoya

The National Economic Council (NEC) has confirmed the deployment of the $3 billion emergency loan-for-crude oil, secured by the Federal Government in August, for the stabilization of the national currency.

The naira’s value has been under siege, with fluctuations in the Investors & Exporters’ window and a parallel market rate that briefly hit N1000/$ this month.

Addressing reporters following the 136th NEC meeting at the Aso Rock Presidential Villa, Nasarawa State Governor Abdullahi Sule expressed confidence in the plan.

He stated, “With the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”

The emergency loan, secured from Afrexim Bank, was initially intended to relieve pressure on the naira, facilitate the settlement of taxes and royalties in advance, and provide the Federal Government with vital dollar liquidity for naira stabilization.

The recent nomination of Olayemi Cardoso as the new Central Bank of Nigeria (CBN) governor by President Bola Tinubu has already shown promise.

The naira experienced a boost in the black market, strengthening by N10 against the dollar, closing at N990/$1.

Governor Sule indicated that the implementation of the intervention would require careful planning and time.

He emphasized the need for the new CBN team to devise effective strategies. In response to inquiries about a supplementary budget, Sule stated that there is no immediate need for one, as the situation does not warrant it.

As Nigeria’s economic landscape faces evolving challenges, the NEC’s decision to harness the $3 billion loan offers a glimmer of hope for a more stable naira in the near future.

Finance

Former FIRS Chairman Muhammad Nami Accused of Controversial N6 Billion Payments After Sudden Exit

Documents reveal questionable approvals and alleged backdating, raising concerns over financial misconduct

Published

4 days ago

September 28, 2023

Samed Olukoya

Muhammad Nami, the former chairman of the Federal Inland Revenue Service (FIRS), is under scrutiny for approving payments totaling N6 billion to contractors and consultants just days after his abrupt removal from office.

Documents obtained by TheCable shed light on these controversial transactions.

Nami, who was succeeded by Zacchaeus Adedeji, greenlit the payments on September 16, two days after his removal on September 14.

Sources privy to the situation, although not authorized to speak publicly, claim that Nami directed staff to work over the weekend to finalize these transactions.

Additionally, files were allegedly moved from the FIRS headquarters to his residence, where they were purportedly “backdated and signed.”

Perhaps the most eyebrow-raising revelation is that Nami transferred approximately N5 billion from the FIRS account to the Joint Tax Board (JTB) without apparent justification.

It is reported that the FIRS director of finance and accounts reluctantly approved these payments after warning Nami about potential repercussions.

Nami allegedly reassured his subordinates that the incoming FIRS chairman would remain oblivious to these approvals.

Also, documents indicate that Nami approved significant payments, including N1.4 billion for a ‘Business Case for Strategic Leadership’ retreat, N250 million for FIRS Data Mining Management and Analytics in Taxation Course, and N221 million for a ‘Skill Development and Management Improvement Workshop Training.’

Curiously, Nami also appropriated over N81 million for a study visit to the Inland Revenue of Malaysia.

The FIRS, when contacted for comment, remained tight-lipped about the situation. Spokesperson Abdullahi Ismaila stated that he had no knowledge of the payments, while Tobi Johannes, Nami’s former media aide, distanced himself from the matter, emphasizing that his role ceased when Nami’s tenure ended.

These revelations have ignited concerns about financial misconduct within the FIRS and have raised questions about the oversight and accountability of government agencies. The full extent of these allegations is yet to be determined as investigations into the payments and their legitimacy continue.