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Naira Falls at Official Market, CBN Supplies $180m

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500 and 1000 naira bills (Nigerian currency)
  • Naira Falls at Official Market, CBN Supplies $180m

The naira extended its declines at the official market on Monday, falling to 307.5 against the United States dollar.

The local currency closed at 307 to a dollar last week at the official market from the 305.50 level it had traded since last year. It was quoted at 445 at the black market, firmer than the 450 a dollar it closed on Friday.

The Central Bank of Nigeria on Monday said it offered a total of $180m to meet bids for forwards, which includes requests for invisibles such as medicals, school fees and personal travel allowances valued at $80m, through the interbank window.

The Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, said the wholesale requests would be settled on Tuesday (today), adding that the closing interbank rate was N307.5/$1.

Okorafor said with the fresh forex supply, naira should further strengthen in the foreign exchange market in the days to come.

He said the CBN had so far met all the legitimate demands from genuine customers, and would ensure sustainable forex liquidity and transparency in the process to enable as many customers as possible to get access to forex.

Okorafor advised eligible individuals with genuine foreign currency needs to freely approach their banks and authorised dealers with their request, stressing that the CBN had made adequate provisions of foreign currency for all such legitimate purposes.

The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said the depreciation of the naira at the official market might be part of the CBN’s effort to narrow the gap between the official and parallel market rates and achieve a market-reflective exchange rate.

“The central bank could adopt an intentional strategy to allow the naira to depreciate at the official window of the market, even as the parallel market is appreciating, to reduce the spread between the two markets and achieve a more market-reflective exchange rate,” he said.

A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said a true price discovery may not happen as quickly as one would have expected.

“The idea is that once they are able to fight the parallel market, they will want to allow the official market to depreciate and again reflect the market position.”

He said the 305 at which the naira was trading before now was a managed rate.

Ezun said, “It is only when you have that interplay between demand and supply that you begin to see a rate that reflect the market. So, that may begin to happen but it may not be as fast as one would have expected.

“But gradually, with confidence coming back to the market and the appreciation that we have started seeing in the parallel market, then we will begin to see a level of competitiveness in the official market.”

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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

Finance

Debt Market: Dangote Cement Raises N250 Billion in H1, 2020

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Prime Real Estate Development At Eko Atlantic City

Dangote Cement Raises N250 Billion From Debt Market in H1 2020

Dangote Cement raised a total sum of N250 billion from the nation’s debt market in the first half of the year, according to the FMDQ Securities Exchange Limited.

In the statement published on the FMDQ website, the N250 billion debt includes the N100 billion Series 1 Bond raised under Dangote Cement’s N300 billion Bond Programme and the N150 billion Commercial Paper (Series 13-16 Domestic CP Issuance Programme) offered earlier in the year and now listed and quoted on FMDQ Securities.

Mr Michel Puchercos, the Chief Executive Officer, Dangote Cement, was quoted as saying, “This landmark transaction is the largest-ever bond issuance by a corporate issuer in Nigeria.

“It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of our domestic commercial paper programme.

“The success of these transactions, in the current challenging environment, illustrates investors’ continuous confidence in Dangote Cement’s strategy, strong cash generation and solid credit profile.”

Mr Kobby Bentsi-Enchill, the Executive Director and Head of Debt Capital Markets, Stanbic IBTC Capital Limited, said, “Stanbic IBTC Capital Limited has a long history of partnering with Dangote Cement Plc, and are delighted to have advised on this landmark corporate bond issuance, which reflects the depth and diversity of the Nigerian debt capital markets.”

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Conoil Profit After Tax Declines by 20 Percent in Q1, 2020

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Conoil

Conoil Profit Before Tax Depreciated by 20 Percent in Q1 2020

Conoil Plc, Nigeria’s indigenous oil marketing company, on Tuesday declared a 20 percent declined in both profit before tax and profit after tax for the quarter ended March 31, 2020.

In the unaudited financial results released on the Nigerian Stock Exchange (NSE), Conoil grew revenue by 7 percent from the N35,637 billion filed in the same quarter of 2019 to N38.143 in the first quarter of 2020.

Also, the company’s retained earnings expanded by 8 percent from N14.395 billion in the corresponding quarter of 2019 to N15.556 billion in Q1 2020.

Accordingly, Shareholders’ funds appreciated by 6 percent from N18.566 billion filed in the first quarter of 2019 to N19.728 billion in the same quarter of 2020.

However, profit before tax declined by 20 percent from N468,202 million in Q1 2020 to N382,915 million during the period under review.

The tax paid by the company during the period also declined by 20 percent from N153,025 million in Q1 2019 from N122,533 million in Q1 2020.

The company’s profit before tax declined by 20 percent from N325.178 million in achieved in the first quarter of the corresponding year to N260.382 million in Q1, 2020.

Similarly, earnings per share also declined by 20 percent from 47 kobo in Q1 2019 to 38 kobo in Q1 2020.

Total assets declined from N63.584 billion in Q1 of 2019 to N58.760 billion in Q1, 2020.

Conoil owned equity expanded from N19.467 billion achieved in the first quarter of 2019 to N19.728 billion in the first quarter of 2020.

Total Liabilities declined from N44.117 billion in Q1 2019 to N39.032 billion during the period under review.

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FMDQ Group Admits Dangote N100bn Bond, MTN N100bn Commercial Paper

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Bola Onalede

FMDQ Group Admits Dangote N100bn Bond, MTN N100bn Commercial Paper

The FMDQ Group has said the admission of both the N100 billion Dangote Cement bond and MTN Nigeria N100 billion commercial paper shows the potential of the Nigerian capital market to drive and stimulate economic growth.

The two most capitalised companies successfully raised N100 billion each from the capital market despite the COVID-19 pandemic and economic downturn.

Bode Onadele, the Chief Executive Officer, FMDQ Group, said: “The market has been yearning for corporate benchmarks for pricing and valuation of securities in the debt capital market, and coming at a time when the resilience of the Nigerian financial market is being tested by the impact of the COVID-19 pandemic is even more commendable.

The success of these issuances by the premier and largest business conglomerate in Africa, Dangote Industries, through its subsidiary, Dangote Cement Plc, and the debut made into the Nigerian debt capital market by leading telecommunications giant, MTN Nigeria Communications Plc, lay credence to the untapped and great potential of the Nigerian capital market to support sustainable development in Nigeria, and the confidence of investors, as well as the commitment of FMDQ Group to empower the markets to deliver prosperity to Nigeria and Nigerians.”

Onadele said the inclusion of the two securities on FMDQ validates the innovative and credible capital market solutions championed and efficiently delivered by FMDQ, over the last few years.

“Furthermore, in line with its mandate to facilitate global competitiveness of the Nigerian financial market, FMDQ, through these admissions, has provided the market and its diverse stakeholders – local and international – the much-needed corporate benchmark for the bond and commercial paper markets,” he said.

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