Tuesday, 11 September 2018
The free fall of equities persisted on the Nigerian Stock Exchange (NSE) in the month of August with investors net worth depreciating further by 5.86 per cent.
Data obtained from the exchange showed that the All-Share Index during the period shed 2,169.33 points or 5.86 per cent to close at 34,848.45 against 37,017.78 in July.
Also, the market capitalisation, in spite of the listing of Notore Chemical Industries, lost N687 billion or 5.12 per cent to close at N12.722 trillion compared with N13.409 trillion achieved in July.
Speaking on the market performance, Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, said the capital market performed poorly in the month of August.
Tella said the poor performance was caused by both local and international activities.
“Locally, the economy was not performing due to late budget passage and late implementation in an economy that is public sector driven.
“On the international scene, there were large capital outflow from the markets as foreign investors were moving money out for investment elsewhere,” Tella said.
He said the implementation of the budget in this quarter would likely assist in stabilising the market.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd. attributed the poor performance to the political environment ahead of the next year’s general elections in the midst of dwindling macro- economic indices.
All share index-Aug
Omordion said the delayed implementation of the 2018 budget impacted negatively on the capital market and the economy in general.
He said the volatility experienced so far in the second half of the year was a reflection of the negative factors against the market, amidst capital flight.
According to him, the exit of foreign investors resulted to dwindling foreign reserve.
Omordion urged investors and analysts to interpret the recent scorecards from first-tier banking stocks and other stocks to reposition their portfolios ahead of third quarter.
He advised the Federal Government to evolve policies that would drive recovery and influence the market positively.
An analysis of the price movement table during the period showed that Ikeja Hotel emerged the worst performing stock in percentage terms.
The stock during the period lost 27.48 per cent to close at N2.27 per share against N3.13 achieved in July.
Other top losers’ were Law Union and Rock Insurance, GSK, Skye Bank, Forte Oil, Royal Exchange, Universal Insurance, CAP, Continental Reinsurance and Berger Paints.
Market Capitalisation for August
Conversely, Niger Insurance was the best performing stock in percentage terms with a growth of 69.23 per cent to close at 44k against 26k in July.
It was trailed by Portland Paints, Newest ASL, Neimeth Pharmaceuticals, AIICO Insurance, NEM Insurance, Eterna Oil, Hallmark Insurance, Transcorp and May & Baker.
A turnover of 5.40 billion shares valued at N66.92 billion were exchanged by investors in 68,906 deals during the period under review.
This represented a decrease of 19.52 per cent compared with a turnover of 6.71 billion shares worth N 73. 04 billion transacted in 84,963 deals in July.
An analysis of the activity chart indicated that the Financial Services Sector emerged the most active with an exchange 2.52 billion shares, valued N19.38 billion in 21,121 deals.
It was trailed by the Services Sector with 209.97 million shares worth N1.31 billion in 2,157 deals.
Consumer Goods sector came third with a turnover of 258.95 million shares valued at N14.02 billion in 11,252 deals.
Source: Vanguard
Published in News Economy
Tuesday, 11 September 2018 16:24

MTN drags CBN, AGF to court over $10.1bn refund

MTN Nigeria has dragged the Central Bank of Nigeria (CBN) and the Attorney-General of the Federation to court to seek relief over a $10.1 billion demand.

In a statement on Monday, the telecommunication company said it was seeking a restraining order from a Federal High Court of Nigeria to protect its assets and shareholder rights.

”In order to protect MTN Nigeria’s assets and shareholder rights within the confines of the law, we have applied today in the Federal High Court of Nigeria for injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders,” the statement read.

The telco, however, did not mention the Court at which it filed the suit, it simply said, ”MTN Nigeria seeks relief from the Nigeria High Court against the Central Bank of Nigeria and the Attorney General of the Federation.”

Last month, the CBN had ordered MTN Nigeria to refund $8.1 billion shareholders’ dividends it allegedly repatriated illegally to its coffers, while it imposed sanctions totaling N5.87 billion on four banks that aided the company in the repatriation.

Last week, the Auditor-General of the Federation, Abubakar Malami, in a statement ordered the telco to refund another $2 billion tax arrears it failed to pay.

He said his office made a “high-level calculation” which showed that MTN should have paid about $2 billion in taxes.

The taxes, according to the AGF, were relating to the importation of foreign equipment, payments to foreign suppliers since 2008, import duties, VAT and withholding taxes on foreign imports/payments.


The Ripples

Published in Telecoms
UN says Africa is the worst hit region with climate change resulting to the biggest impact on acute food insecurity and women are more vulnerable.
The Food and Agriculture Organisation (FAO) made this known in the 2018 global report on the State of Food Security and Nutrition released on Tuesday in Rome and made available to the News Agency of Nigeria (NAN) in Abuja.
The report was jointly signed by five head of UN agencies.
They are José da Silva, Director-General, FAO, Gilbert Houngbo, President International Fund for Agricultural Development (IFAD), Tedros Ghebreyesus, Director-General, World Health Organisation (WHO), Henrietta Fore, Executive Director of UNICEF and David Beasley, Executive Director, World Food Programme (WFP).
The report said that climate change had affected 59 million people in 24 countries and requiring urgent humanitarian action.
It identified the effects of climate variability on rainfall patterns and agricultural seasons, and climate extremes such as droughts and floods, as the key drivers of the rise in hunger, conflict and economic slowdowns.
The UN agencies noted that changes in climate were already undermining production of major crops such as wheat, rice and maize in tropical and temperate regions.
It said that without building climate resilience, the situation was expected to worsen as temperatures increased and became more extreme.
The report showed that the prevalence and number of undernourished people tended to be higher in countries highly exposed to climate extremes.
It said that undernourishment was higher again when exposure to climate extremes was compounded by a high proportion of the population depending on agricultural systems that were highly sensitive to rainfall and temperature variability.
It said that the rising of temperatures, the late or early start of rainy seasons and the unequal distribution of rainfall within a season were affecting food production.
“Other effects include food price hikes and losses in poor farmers’ incomes.
“Temperature anomalies over agricultural cropping areas continued to be higher than the long-term mean throughout 2011 to 2016, leading to more frequent spells of extreme heat in the last five years.
“The nature of rainfall seasons is also changing, such as the late or early start of rainy seasons and the unequal distribution of rainfall within a season,’’ it said.
It indicated that harm to agricultural production contributed to shortfalls in food availability, with knock-on effects causing food price hikes and income losses that reduce people’s access to food.
The UN report noted that women worldwide were especially vulnerable to the impact of climate extremes, particularly in countries where even a semblance of gender parity remained a distance dream.
The report said that the adverse effect of climate change was being felt in many areas that included agriculture, food security, biodiversity and ecosystems, water resources and human health amongst others.
It noted that in many of these contexts, women were more vulnerable to the effects of climate change than men, primarily as they constituted the majority of the world’s poor and were more dependent for their livelihood on natural resources threatened by climate change.
“Women faced social, economic and political barriers that limited their coping capacity.
“Women and men in rural areas in developing countries are especially vulnerable when they are highly dependent on local natural resources for their livelihood,’’ it said.
The UN report stressed that to achieve a world without hunger and malnutrition in all its forms by 2030, it was imperative to accelerate and scale up actions to strengthen the resilience and adaptive capacity of food systems and people’s livelihoods in response to climate variability and extremes.
Source: Business Insider
Published in World

MTN Group announced that MTN Nigeria has applied to the Federal High Court of Nigeria for injunctive relief from the Central Bank of Nigeria (CBN) and the Attorney General of the Nigerian Federation (AGF)’s orders. As previously disclosed, the CBN has alleged improper dividend repatriations by MTN Nigeria and requested that $8,1 billion be returned “to the coffers of the CBN”.

At the same time, the AGF has alleged unpaid taxes on foreign payments and imports, and has demanded that approximately $2,0 billion in relation to these taxes be paid to the Federal Government of Nigeria (and now directed that the payment of the $8.1 billion is dealt with through his office rather than as directed by the CBN). MTN Nigeria strongly denies these allegations and claims.

The aim of MTN’s application to the High Court is to protect MTN Nigeria's assets and shareholder rights within the confines of Nigerian law while the company continues to engage with the relevant authorities.

MTN Group President and CEO Rob Shuter said “We believe that we have complied with all relevant laws, and in light of that, and the conflicting instructions from different organs of State, we have had no choice but to seek relief from the Courts in Nigeria. We remain firmly committed to the Nigerian market and will continue to engage with the authorities on these matters.”

A fortnight ago, the CBN announced it wrote the firm to refund about $8.134 billion (about N2.5trillion at N306.15 to $) repatriated illegally out of Nigeria.

On the other hand, the AGF had a few days after the CBN sanctions also accused MTN of not paying taxes on foreign payments and imports totaling about $2 billion to the Federal Government.

CBN's spokesperson, Isaac Okorafor, said the repatriation was facilitated by four commercial banks using irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria.

The four banks, Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank, were also asked to refund various amounts totaling N5.87 billion.

The amounts, which have since been deducted from the banks' accounts with the CBN, include N2.5 billion for Standard Chartered; Stanbic IBTC (N1.9 billion); Citibank (N1.3 billion and Diamond Bank (N250 million).

The CBN accused the banks of violating the country's laws, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.

MTN, which described the allegation as regrettable, rejected both sanctions, promised to vigorously defend its position that it did not do anything illegal an unlawful.

Published in Advertise

Zimbabwe’s new Finance Minister Mthuli Ncube may scrap the quasi currency bond note and liberalize exchange controls as part of reforms he plans to implement by end of this year, a state-owned weekly newspaper reported on Sunday.

The southern African nation, which dumped its currency in favor of the U.S. dollar in 2009 following years of hyperinflation, introduced bond notes in November 2016 in a bid to ease acute shortages of cash. The shortages have, however worsened while a black market continues to thrive.

The notes are backed by U.S. dollars loaned to the government by the African Export and Import Bank, and can be used like cash.

Officially, they are pegged to the dollar at a rate of 1:1, but on the street $1 fetches up to 1.50 in bond notes.

“I am very clear that there have to be currency reforms and the current currency approach is not working,” Ncube told the government-owned Sunday Mail.

He said he would explore three options: either Zimbabwe joins the South African rand union; uses only the U.S. dollar while removing bond notes from circulation, or reintroduces the Zimbabwean dollar.

Ncube however said a local currency would only be introduced when the country has enough foreign reserves and achieves macro-economic stability. Zimbabwe currently has two weeks import cover, according to central bank data.

Ncube, a former senior executive with the African Development Bank, was appointed by President Emmerson Mnangagwa on Friday and is expected to lead Zimbabwe’s economic recovery program.

He was not immediately available to comment when Reuters tried to contact him.

A dwindling supply of cash dollars has led to banks limiting daily withdrawals to as little as $30 in bond notes. Companies are struggling to pay for imports and foreign investors cannot repatriate dividends or profits.

There are $350 million worth of bond notes in circulation, according to latest central bank figures.


- Reuters

Published in Bank & Finance

South Africa should avoid populist economic policies and prioritize strategies that lead to sustainable growth and job creation, according to the country’s Reserve Bank Governor Lesetja Kganyago.

“The central problem is avoiding the temptation to pursue economic policies that have short-term, populist benefits but long-term costs,” Kganyago wrote in an opinion piece in the Johannesburg-based Business Times. Such decisions result in higher public or private debt to finance consumption, which is contributing to recent market contagion, he said.

Africa’s most industrialized economy entered a recession in the second quarter, with the rand weakening to a two-year low.

The currency’s rapid depreciation reflects a perception that “South Africans are discussing policies that risk undermining the macro framework rather than inducing stronger economic growth and job creation,” according to Kganyago.

He said that “another task is to get more out of our public spending -- ridding institutions of corruption and improving health and education outcomes.”


Credit: Bloomberg

Published in Economy
  1. Opinions and Analysis


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