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FG, States Borrowed N1.28tn From Stock Market in 2018

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  • 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.

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 market.

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FG Implores Parastatals to Promote the Country’s Digital Economy Initiative

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digital economy

FG Tells MDAs to Promote the Country’s Digital Economy

The Ministry of Communications and Digital Economy under the management of Dr. Isa Pantami, has implored all the federal government parastatals to promote and safeguard the country’s digital economy initiative.

Dr. Isa Pantami, while presenting the keynote address in a virtual forum organised by the Association of Telecoms Companies of Nigeria (ATCON),  said based on the negative effects of COVID-19 pandemic, the demand for critical data infrastructure and broadband is now high.

The minister urged government parastatals to put in effort to uphold and promote government’s digital economy initiative designed to reduce the effect of the pandemic on the nation. He also disclosed that the interests of all Nigerians would also be protected by the government.

Federal government will continue to develop its digital economy policy for a digital Nigeria. Both the Nigerian Communications Commission (NCC) and the National Information Technology Development Agency (NITDA) that are under the supervision of my ministry, now have special departments that promotes digital economy initiative and I urge them and all other parastatals under my supervision, to ensure that they promote the digital economy initiative of the federal government in order to maintain investor’s confidence and to protect the interest of Nigerians, especially telecoms consumers.

Government on its part will ensure that the interests of telecoms companies and the interest of Nigerians are protected. Government is currently addressing the challenges in the cost of investments such as the issue of vandalisation of telecoms infrastructure, and President Muhammadu Buhari has officially directed all security institutes, through the Office of the National Security Adviser (ONSA), to protect telecoms investments in the country,” Pantami said.

The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, when making his presentation said “The COVID-19 pandemic rapidly and sharply ravaged the globe, Nigeria is no exception. Governments therefore, faced unprecedented challenges from COVID-19 pandemic. The impact affects most sectors of the global economy, ranging from health, to education, to finance, to trade and investment.

While explaining the Commission’s efforts at resolving consumer-related issues, Danbatta noted that less than 500,000 people activated Do-Not-Disturb (DND) code as at 2015 when the code was introduced by the Commission but presently, over 22,722,366 people line on the code.

He also made it known that the commission has resolved 98 per cent of service-related complaints received from telecoms consumers from January 2019 to April 2020.

according to Danbatta “the Commission has monthly engagements with operators as well as quarterly industry working group on Quality of Service and Short Codes, and is currently monitoring 2G Key Performance Indicators, while the KPIs for 4G are being prepared.

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Mambilla Power Project: FG Spends N1.2bn on Survey, Sensitisation 

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FG Releases N1.2bn for 3,050MW Mambilla Hydroelectric Power Project

The Federal Government has released a total sum of N1.2 billion to the Taraba State Government for the 3,050 megawatts Mambilla Hydroelectric Power Project to finally take-off.

Investigations have revealed that the funds were released for the sensitisation of host communities around the site where the plant is to be constructed and survey works.

The N2 trillion power project is to be located in Sardauna Local Government Area of Taraba State after four decades of on and off planning.

Checks revealed that Sale Mamman, the Minister of Power, visited Taraba State last week, where he met with Darius Ishaku, the State Governor, and discussed the final take-off of the 3,050MW project, among other things.

Mamman on Wednesday had tweeted some of the highlights of his Wednesday visit, saying the Federal Government and Taraba State Government discussed how to speed up the project.

He said, “I paid a visit to the Taraba State Government House where I met with the governor and brother.

“We held discussions centered on how to speed up the final take-off of the Mambilla Hydroelectric Power Project and other power issues affecting the state.

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FBN Holdings Boost First Bank CAR With N25 Billion Capital Injection

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FBN Holdings

First Bank Boosts CAR With N25 Billion Capital Injection

FBN Holdings Plc announced it has boosted the Capital Adequacy Ratio (CAR) of its commercial banking subsidiary, First Bank of Nigeria Limited by N25 billion.

According to the statement released by the bank on the Nigerian Stock Exchange website, the capital injection represents part of the net proceeds of the company’s divestment from FBN Insurance Limited.

It noted that the capital injection upped the bank’s Capital Adequacy Ratio to 16.53 percent –before capitalising year to date profit– as at June 2020.

Oyewale Ariyibi, the Chief Financial Officer of the Company, was quoted as saying “the divestment is in line with the Group’s medium to long term strategic objectives. The divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core banking business for which the Group is renowned“.

Ariyibi further stated that the Company’s objective is to increase capital across the Group in order to drive business growth, enhance efficiency and improve overall shareholders’ value.

Uk Eke, the Group Managing Director, who commented on the company’s performance for the first half of 2020 said “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the results demonstrate our capacity to deliver exceptional services to our customers in these uncertain times. Looking ahead, we remain cautious, but confident that our business is fundamentally strong to surmount any future challenge towards delivering superior financial performance“.

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