- Nigerian Stock Investors Gained N695 Billion Last Week
Improved market sentiment boosted the Nigerian Stock Exchange last week as investors gained N695 billion.
The market capitalisation of listed equities rose by N695 billion from N12.441 trillion recorded in the previous week to N13.136 trillion last week.
NSE All-Share Index gained 1333.42 basis points or 5.59 percent from 23,871.33 bps it closed in the previous week to 25,204.75 bps.
Activity level was positive as 1.718 billion shares valued at N18.849 billion were exchanged in 26,367 transactions, higher than the 926.418 million shares worth N9.768 billion that were traded in 20,910 deals a week ago.
A break down of the week activity shows that 331,001,743 units of shares valued at N2,929,331,578 were traded in 5,544 deals on Monday. On Tuesday, a total turnover of 339,756,744 shares worth N3,921,291,339 were exchanged in 4,784 transactions. A turnover of 436,838,465 unit shares valued at N5,410,767,242 were traded in 5,195 deals on Wednesday. On Thursday and Friday 350,765,865 and 259,575,556 units valued at N3,706,029,098 and N2,881,109,187 were traded in 5,239 and 5,605 transactions respectively.
In terms of volume traded, the financial service sector led the activity chart with 1.273 billion shares worth N11.362 billion exchanged in 13,808 transactions during the week. The sector accounted for 74.08 percent and 60.28 percent of the total turnover and value recorded in the week respectively.
The industrial goods followed with a turnover of 102.377 million shares valued at N3.194 billion in 2,956 deals. The healthcare sector came third with 99.620 million shares worth N493.348 million in 1,194 deals.
Zenith Bank led the most traded equities along said Access Bank and FBN Holdings as the three accounted for a combined 673.104 million shares worth N6.803 billion in 5,927 deals. The three equities accounted for 39.18 percent of volume traded and 36.09 percent of value exchanged last week.
States Debt Rises by 163 Percent -BudgIT
Debts of All 36 States Rise by 163 Percent or N3.34 Trillion to N5.39 trillion Between 2014 and 2019
Debts continue to rise across the 36 states of the Federation, according to a recent report by BudgIT, a public sector-focused financial information house.
In the just released 2020 edition of its annual state of states report titled, “Fiscal Sustainability and Epidemic Preparedness Financing at the State Level”, BudgIT said debts rose by 162.87 percent or N3.34 trillion from N2.05 trillion in 2014 to N5.39 trillion in 2019 across the 36 states.
The report stated that 10 of the states incurred half or N1.68 trillion of the entire debt, adding that seven of the 10 states are from the South while three are from the North.
Speaking on how states can attain fiscal sustainability, Damilola Ogundipe, BudgIT’s Communications Lead, said: “States need to grow their Internally Generated Revenue, IGR, as options for borrowing are reduced due to debt ceilings put in place by the Federal Government to prevent states from slipping into debt crisis. There has to be a shift from the culture of states’ overdependence on Federation Account Allocation Commission, FAAC.”
The report further stated that 13 states, including Lagos, Oyo, Kogi and others, were unable to fund their recurrent expenditure together with debt repayments due in 2019.
It stated: “From our 2020 State of States analysis, 13 states were unable to fund their recurrent expenditure obligations together with their loan repayment schedules due in 2019 with their respective total revenues.
“The worst hit of these 13 states are – Lagos, Oyo, Kogi, Osun and Ekiti states while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia.
“Furthermore, of the remaining 23 states that can meet recurrent expenditure and loan repayment schedules with their total revenue, eight of those states had really low (less than N6 billion) excess revenue, that they had to borrow heavily to fund their capital projects.
“The worst hit are Zamfara, Ondo and Kwara who had N782.45 million, N788.22 million and N1.48 billion left, respectively.
“Based on their fiscal analysis, only five states – Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi states – prioritised capital expenditure over recurrent obligations, while 31 states prioritised recurrent expenditure according to their 2019 financial statements.”
Oil Marketers Says No to Labour Strike, Decries Over N320bn Losses
Oil Marketers Reject Labour Strike, Decries Over N320bn Losses
Oil marketers across the country have rejected labour’s planned strike over N320 billion worth of investment losses.
The marketers under the aegis of the Natural Oil and Gas Suppliers Association of Nigeria also kicked against the proposed industrial action by the Nigeria Labour Congress and other civil right groups, pleading with the union and allies to have a rethink and look into the situation from a bigger picture.
This was after labour and other civil right groups announced they would be embarking on a nationwide strike starting from September 28, 2020 to force the government to reverse the increase in pump price and electricity tariffs.
Labour had said the government remained insensitive to the plight of Nigerians despite the negative impacts of COVID-19 on the economy and Nigerians.
However, Ukadike Chinedu, the association spokesperson of Natural Oil and Gas Suppliers Association of Nigeria, who was quoted in a statement issued in Abuja, said members of the association may be forced to cut staff in an effort to reduce operating costs given current economic realities.
He said, “Some of our concerns are heavy losses of over N320bn investments from product purchases at government specified prices and sales at compelled price reductions, which could not be justified by the costs of transaction.”
Ukadike added that several oil businesses were no longer trading because of heavy losses and several others were dying in silence.
Banks’ Credit to Economy Hits N19.33 Trillion in August
Deposit Money Banks Credit to Economy Rose to N19.33 Trillion in August
The total credit facility to the economy rose to N19.33 trillion in the month of August.
The Central Bank of Nigeria-led monetary committee disclosed on Tuesday after the nation’s monetary policy committee meeting.
The committee attributed the improvement to the 65 percent loan-to-deposit ratio policy implemented to compel the nation’s deposit money banks to join central bank efforts at growing the real sector of the economy.
Godwin Emefiele, the Governor of the Central Bank of Nigeria, who spoke during the meeting said “The bank’s policy on Loan to Deposit ratio also resulted in a significant growth in credit to various sectors from N15.57tn to N19.33tn between end-May 2019 and end-August 2020, an increase of N3.77tn.
“This growth in credit was mainly to manufacturing (N866.27bn), consumer credit (N527.65bn), oil and gas (N477.65bn), agriculture (N287.11bn) and construction (N270.97bn).”
On monetary aggregates, broad money supply (M3) rose to 6.93 per cent (year-to-date) in August 2020 from 5.23 per cent in July 2020, reflecting the increase in both Net Foreign Assets and Net Domestic Assets.
He said total domestic credit grew by 6.94 percent in August 2020, lower than the 9.43 percent recorded in July 2020.
The committee reduced the nation’s benchmark interest rate by 100 basis points to 11.5 percent, down from the previous 12.5 percent.
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