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Naira Trades at N515 to US Dollar in FX Forward Market

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  • Naira Trades at N515 to US Dollar in FX Forward Market

Following the Central bank of Nigeria (CBN)’s decision to adjust the foreign exchange rate of the Nigerian Naira from N307 to a US dollar to N360 on Friday to accommodate the changes in macro fundamentals, investors in London traded the local currency at N515 to a US dollar in a foreign exchange non-deliverable forwards market.

A foreign exchange non-deliverable forward contract is an agreement entered by two parties to exchange certain currencies at a given spot rate on a future rate.

The naira’s one-year forward price, which gives a clue of where the currency is likely to trade in a year, declined by 11.3 percent on Monday. The highest in recent years.

While in the Non-Deliverable Forwards (NDF) market in London, the currency was priced at N515 to a US dollar in a year’s time. However, naira futures contracts of the same tenor were quoted at N385/$1.

“It is clear that the central bank will be unable to maintain exchange rate stability if global oil prices remain near current lows in the months ahead,” said Cobus de Hart, senior economist at South Africa’s NKC African Economics.

A nine-month tenor forward also decline by more than 11 percent while shorter tenors were down by 5 percent.

However, the difference between a year naira forwards and futures rose to N130 on Monday from N30 it traded in January due to the increase in the number of investors hedging against future risk.

According to traders, the naira futures one-year contracted on offer by the central bank was revised upward by N15 on Monday.

The Central Bank of Nigeria (CBN) continues to make adjustments to the foreign exchange rate of the naira to accommodate Nigeria’s current reality and ease pressure on the foreign reserves due to weak revenue generation.

The CBN led Monetary Policy Committee on Monday left interest rates unchanged, citing rising consumer prices and the need to sustain capital importation at a period when foreign investors are looking to safe havens.

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.

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CBN Disburses N539.8m Loan to Farmers in Q1 2020

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CBN Provides N539.8m Credit to Farmers in Q1 2020

The Central Bank of Nigeria has said it paid out a total sum of N539.8 million to farmers in the first quarter of the year.

The apex bank disclosed this in its third quarter economy report titled ‘Agricultural Credit Guarntee Scheme’ and released on Monday August 3, 2020.

The report stated that “A total of N539.8m loans was granted to 3,161 farmers under the Agricultural Credit Guarantee Scheme in the first quarter of 2020.

“This represented a decrease of 53.9 per cent and 34.8 per cent below the levels in the preceding quarter and the corresponding period of 2019 respectively.”

The sub-sectorial analysis showed that food crops received the largest share of the total amount disbursed in the quarter, with N291.6m (54.0 per cent) given to 1,958 beneficiaries. This was followed by the livestock subsector with N115.2 million (21.3 per cent) given to 430 beneficiaries.

Another N64.9 million was paid to 335 beneficiaries in the Cash crops sub-sector. 121 people in the fisheries sub-sector received N36.1 million (6.7 per cent), while the mixed crops collected N16.8m (3.1 per cent) given to 233 beneficiaries and ‘others’ N15.3m (2.9 per cent) given to 84 beneficiaries.

Analysis by the state showed the Federal Capital Territory and other 30 states benefited from the scheme, with the highest sums of N54.8m (10.2 per cent) guaranteed to Ogun state and the lowest sum of N1.8m (0.3 per cent) given to Nasarawa states.

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Cyberfraud: Access Bank Advises Customers to be Vigilant

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Access Bank Warns Customers Against Falling Victim

Access Bank Plc has joined the number of banks advising customers to stay vigilant amid rising cyberfrauds.

Mr. Victor Etuokwu, the Executive Director, Retail Banking, Access Bank, made the call on Friday in a statement titled “Be fraud smart – Access Bank urges customers.”

Etuokwu said the banking sector has witnessed surged in fraud cases in recent months due to the COVID-19 pandemic. He, however, said bank customers had not been spared from these attacks.

He advised bank customers to take more responsibility in protecting their funds and reiterated the bank’s commitment to provide the necessary information needed to identify and fend off fraudsters.

He said, “Over the last few months, the number of reported fraud cases has spiked considerably. This is not unexpected as the current economic hardships experienced due to COVID-19 has caused many to be vulnerable.

“However, this trend has become very disturbing, while we urge customers to become more aware of the tactics employed by fraudsters.

“Access Bank will continue to educate customers on how to avoid falling victims as well as deploy resources to ensure the security of customers’ funds.

According to him, Access Bank had identified smishing, phishing, social engineering, and identity theft as the most common methods used by fraudsters.

He said, “To aid the fight against this common enemy, we have put more power in the hands of our customers, through the *901*911# USSD code.

“We have provided a platform through which customers can immediately deactivate their USSD profile by dialling *901*911# from any phone in the event their mobile devices get lost or stolen.” He said through the years, Access Bank had remained committed to educating its customers, informing and protecting them from fraudsters.”

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Flour Mills Reports 184% Increase in Profit After Tax for FYE March 2020

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flour mills posts 184% increase in PAT

Flour Mills Posts 184% Increase in Profit After Tax for FYE March 2020

Flour Mills Nigeria Plc on Monday posted a 184 percent increase in profit after tax for the year ended 31 March 2020.

In the audited financial statements released through the Nigerian Stock Exchange (NSE), Nigeria’s leading integrated food business and agro-allied Group said revenue grew by 9 percent year-on-year from N527 billion posted in 2018/19 full year to N574 billion.

While profit before tax rose by 72 percent year-on-year to N17.5 billion, up from the N10.2 billion filed in the same period of 2018/19 full year.

The company grew profit after tax by 184 percent year-on-year to N11.4 billion, according to the audited financial statements.

Flour Mills proposed a final dividend of N1.40 for every ordinary share of 50 kobo, representing an increase of 17 percent.

The company said despite “prevailing economic headwinds and the difficult operating terrain of Apapa, the Group had a prosperous and successful year. In line with management’s strategy to continue to stimulate organic growth in all segments of the business, Agro-allied division reached profitability in 2019/20 behind the consistent and focused investments that have been made in this locally sourced segment over the last few years. The Agro-allied segments saw strong profit growth in Oils and Fats and Proteins with Gross Profits more than doubling in both segments on an annual basis.

“Our food business recorded accelerated growths within the business-to-consumer (B2C) segments in line with projections, as our focus to improve customer experience saw the introduction of a range of new products and our strategic marketing and promotional activities to win over new market segments yielded the desired result.

Speaking on the performance, Paul Gbededo, the Group Managing Director, said “The 2019/20 financial year was a remarkable year for our Group and I am really pleased with the result. Our Profit Before Tax saw a remarkable increase of 72 percent to 17.5 billion Naira, while our Profit After Tax nearly tripled from 4.0 billion Naira last year to 11.4 billion Naira in the current year. This is partly attributed to the improved performance of our Agro Allied Businesses and in line with our strategy to continue to grow the wealth of our shareholders.

He added that “We will remain focused on increasing operational efficiency within the group as we continue to implement our accelerated cost optimization plans across all businesses to ensure profitability in the new operating environment.

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