- Stock Market Ends Gaining Streak, Sheds N102bn
The nation’s stock market reversed its gaining streak on Monday on the back of weaker tech, industrial and oil and gas stocks.
Sell-offs in the stocks sent the equity benchmarks lower, with losses amounting to N102bn.
The market, which gained N723bn in five consecutive days, saw 14 per cent of the gains wiped off on Monday as the market capitalisation of equities listed on the Nigerian Stock Exchange dropped to N11.460tn from N11.562tn on Friday.
The All Share Index declined by 0.88 per cent to settle at 30,732.72 basis points from the 31,005.17 bps recorded on Friday, while the year-to-date return settled at -2.2 per cent.
A total of 499.212 million shares valued at N5.531bn exchanged hands in 3,874 deals, while 13 firms gained against the 18 laggards.
Though E-Tranzact International Plc was the biggest loser on Monday, oil and gas stocks led by Seplat Petroleum Development Company Plc recorded the biggest drag on the Exchange with a 4.55 per cent decline.
Other oil and gas stocks that recorded declines were 11 Plc and Eterna Plc.
Bank stocks led by Unity Bank Plc recorded a 0.14 per cent decline.
While Unity Bank saw its share price drop by 4.40 per cent, three other bank stocks ― Wema Bank Plc, Diamond Bank Plc and Guaranty Trust Bank Plc ― each recorded respective declines of 1.61 per cent, 0.95 per cent and 0.78 per cent.
On the flip side, insurance and industrial stocks recorded gains.
The industrial sector gained 0.97 per cent but witnessed sell-offs in its major stocks ― Dangote Cement Plc and Lafarge Africa Plc.
Lafarge’s share price dropped by 3.13 per cent, while Dangote’s share price fell by 2.51 per cent.
Despite losses in Sovereign Trust Insurance Plc and Mutual Benefits Assurance Plc, the insurance index gained 1.51 per cent.
The consumer goods index saw no changes at the end of trading on the floor of the Exchange on Monday.
After the stock market witnessed gains last week, analysts at Vetiva Capital Management Plc said with the conclusion of Nigeria’s elections in February as well as stable oil prices expected during the year, a return of foreign investment to the market was anticipated.
The Chief Executive Officer, NSE, Mr Oscar Onyema, while briefing stakeholders on the performance of the market in 2018 and his expectations for 2019, said he anticipated volatility in the first half of the year and stability post-elections.
He also highlighted that the swift approval of the 2019 budget would be essential for companies’ earnings and consumer spending, adding that he was expecting an uptick in market activity during the second half of 2019.
Analysts at Afrinvest Securities Limited said, “We expect Monday’s performance to persist into Tuesday’s trading session, as we maintain our near-term bearish outlook for the domestic equities.”
CBN Spends $11.5bn in Q1 2020 to Support the Economy and Dwindling Naira
CBN Injects $11.5bn Into the Economy in the First Quarter
The Central Bank of Nigeria (CBN) injected a combined $11.5 billion into the nation’s foreign exchange market to stabilise the economy and support the Naira value in the first quarter of the year.
According to the latest report from the apex bank, the central bank injected $2.96 billion into the nation’s forex market in the month of January. Another $3.39 billion was used to support the economy in February while $4.7 billion was supplied in the month of March, the very month the economy was locked and all operations grounded to curb the spread of COVID-19.
A further breakdown of the report revealed that the Investors and Exporters’ foreign exchange window, Small and Medium enterprises and Invisible segments received a total of $7.23 billion of the $11.5 billion, the Bureau De Change segment received $3.6 billion while the Interbank and WDAS/RDAS got the rest in the first quarter.
The report noted that the apex bank injected a total sum of $14.72 billion and $28.55 billion into the economy in 2018 and 2019, respectively.
Meanwhile, the central bank is yet to commence the sales of forex to the bureau de change following the March suspension.
But has commenced partial sales to all commercial banks for onward sales to parents and small businesses across the country.
Mr Isaac Okorafor, the Director, Corporate Communications, CBN, had said, “The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels and other designated retail uses, as soon as international flights resume.”
DSS Arrests EFCC, Acting Chairman, Magu
DSS Arrested Magu, the Acting Chairman of EFCC
The Department of State Services (DSS) has arrested the acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, on allegation bordering on financial misappropriation, abuse of power and embesslement.
The Acting Chairman was accused of siphoning part of the money recovered from looters, a Punch reported stated.
The report stated “It was learnt that the security details to Magu put up a stiff resistance during the arrest of their principal, as they objected to the DSS move.
But he is now undergoing interrogation at the DSS Headquarters In Aso Drive.
This is happening barely two weeks after the Attorney-General of the Federation, Abubakar Malami (SAN) reportedly complained to the President, Major General Muhammadu Buhari (retd.) about Magu’s conduct and advised that he should be relieved of his appointment.
The AGF was said to have accused Magu of insubordination and discrepancies in the figures of funds recovered by the EFCC.
Again CBN Debits Banks N118 Billion for Failing to Meet CRR Target
CBN Debits Deposit Money Banks N118bn for Not Meeting CRR Target
The Central Bank of Nigeria (CBN) on Friday debited the nation’s deposit money banks a total sum of N118 billion for failing to meet 27.5 percent Cash Reserve Ratio (CRR) target.
This is the fourth of such action, bringing the total amount debited so far this year to N2.2 trillion.
According to Tunde Abidoye, an analyst at Lagos-based FBN Quest, the move brings “further downward pressure on banks liquidity ratios and earnings.”
“Based on the total sum that each bank has been debited this year, and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86bn for our universe of banks coverage,” Abidoye stated in a note to clients.
The central bank continues to debit banks to force them to loan more into the real sector and also reduce their forex purchasing power to better manage the nation’s weak foreign reserves and curb capital outflow. A series of recent reports have pointed to a possible foreign exchange devaluation to ease pressure on the nation’s reserves.
The report shows that the Stanbic IBTC and Guaranty Trust Bank were debited N15 billion each.
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