Connect with us

     

Business

Job creation: ECOWAS seeks enhanced private sector role

Published

on

Job creation: ECOWAS seeks enhanced private sector role

Economic Community of West African States (ECOWAS) has urged member states to urgently implement policies on private sector participation to enhance job creation and encourage youth development. This formed part of recommendations at the close of the delocalised meeting of the Joint Committees organised by the ECOWAS Parliament in Conakry, Guinea.

The committees are Communications and Information Technology; Education, Science and Technology; Labour, Employment, Youth, Sports and Culture. The parliamentarians urged the ECOWAS Commission to organise campaigns to sensitise youths on the economic goals of the region and understanding their role to play. Members of parliament also said it was pertinent for member states to intensify efforts to ensure projects in the region were geared toward sustainable regional integration.

In his presentation, ECOWAS Commissioner, Industry and Private Sector Promotion, Mr Mamadou Traore assured that the commission was committed to strengthening Small and Medium Enterprises (SMEs) through its regional capacity building programmes. Traore said the commission was ready to address some of the challenges experienced in the region through its “new investment policy” coming up in December.

The commissioner said entrepreneurship and SMEs were the foundation of societies including ECOWAS and would provide inclusive development and decent jobs for the majority. He added that entrepreneurship and SMEs were opportunities to “turn our bourgeoning population into a dividend instead of a curse”. He, however, said that major challenges to the growth of entrepreneurship and SMEs in the region were due to insufficient capacity, poor business climate, general lack of access market and relevant finance, among others.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Food imports: Divergent views trail Buhari’s directive to CBN

Published

on

Food imports: Divergent views trail Buhari’s directive to CBN

Financial experts and stakeholders continue to hold varied views on the implications of President Muhammadu Buhari’s statement, last week, that he had directed the Central Bank of Nigeria (CBN) not to allocate foreign exchange to importers of food items to help the nation attain full food security. Tony Chukwunyem reports

 

R

eactions to the President Muhammadu Buhari’s widely reported speech last Tuesday that he had directed the Apex Bank to stop allocating foreign exchange to importers of food items, as part of efforts to conserve the country’s foreign reserves, continue to come thick and fast from financial experts and stakeholders.Indeed, it does appear that confusion still lingers in some quarters over exactly what the implications of the President’s statement are especially with regard to CBN autonomy and his claim that the move will help the nation attain full food security.

 

 

Presidency denies FT’s report

 

 

For instance, just last Sunday, the Presidency reacted to a Financial Times (FT) of London report on the issue, describing it as incorrect.

 

 

In a letter addressed to the Editor of the publication made available to journalists, Senior Special Assistant to the President on Media and Publicity, Mr. Garba Shehu, stressed that the Federal Government had not banned or placed restrictions on the importation of agricultural products into the country, as the report, according to him, seemed to have insinuated.

 

 

Mr. Shehu’s statement reads in part: “To be absolutely clear, there is no ban or restriction on the importation of food items whatsoever. President Buhari has consistently worked towards strengthening Nigeria’s own industrial and agricultural base. A recent decision sees the Central Bank maintain its reserves to put to use helping growth of domestic industry in 41 product sectors rather than provide forex for the import of those products from overseas.

 

 

“Should importers of these items wish to source their forex from non-government financial institutions (and pay customs duty on those imports – increasing tax-take, something the FT has berated Nigeria for not achieving on many occasions) they are freely able to do so,” he stated.

 

 

However,  as  the FT pointed out in its report, many analysts believe that instead of boosting  Nigerian agriculture, the forex ban on food imports would create food shortages,  increase smuggling activities, and send prices higher.

 

 

The publication reported Africa Director for the Eurasia Group, Amaka Anku, as saying that the problem was not whether  Buhari’s directive would be implemented or not, but that it sent a troubling message for an economy suffering from high unemployment, low foreign direct investment and sluggish growth.

 

 

Specifically, she was quoted as saying: “Most actors, especially the central bank, should know that a total ban of food imports is not practical and I doubt that will be the policy. But his comments will continue to drive home the sense that Buhari has no idea how to manage an economy and will raise uncertainty about what other (foreign exchange) restrictions are coming, and contribute to already low business confidence.”

 

 

Similarly, the publication reported Chief Economist at NKC African Economics, Mr. Cobus de Hart, as saying that President Buhari’s call for a currency ban raised more “serious concerns,” adding that it also cast doubt on Nigeria’s commitment to the Africa Continental Free Trade Area agreement, which the country signed last month after more than a year of delay.

 

 

According to him, the move:  “Stands in stark contrast to the strategy outlined in the Africa Continental Free Trade Area agreement, and this policy will certainly not set Nigeria’s agricultural sector up to take full advantage of a liberalisation of trade barriers across the continent.”

 

 

NECA, others fret over directive

 

 

 

Even before international financial analysts faulted President Buhari on the directive, their counterparts in Nigeria, as well as stakeholders in the country, had also picked holes in the President’s call.

 

 

For instance, reacting to the directive, the Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane,  was reported by Reuters as saying that directive could have consequences  for Nigeria    given  that the country signed  the African Continental Free Trade Agreement,  which seeks  to create a continent-wide free trade zone where tariffs on most goods would be eliminated.

 

 

He was quoted as saying : “At this point in time, these rules will be manipulated in the interest of smugglers and their accomplices.”

 

 

Also, former Deputy Governor of the CBN, Professor Kingsley Moghalu, said the   issue was not whether or not CBN should allow access to Forex for food imports, but whether such an economic policy should be imposed by a political authority.

 

 

He said: “Our economy will not be saved by Ad Hoc political decisions like this, handed down by the very institutions that should be shielded from the whim and caprice of politicians. Nigeria’s entire economy appears to have been sub-contracted to our Central Bank, including industrial and trade policy. In the process, the economy has fared poorly, and the Central Bank has lost its independence. This is sad!”

 

 

Similarly,  the Centre for Social Justice and the Nigeria Employers’ Consultative Association (NECA), said in separate statements that the move was coming at a wrong time.

 

 

In the statement issued by the Centre for Social Justice’s (CSJ), signed by its Lead Director, Mr. Eze Onyekpere, the organisation also pointed out that  the directive was not in line with S.1 (3) of the CBN Act 2007, which, according to him, states : “The CBN shall be an independent body in the discharge of its functions.

 

 

“There are no provisions in the CBN Act or any other existing law empowering the President to run or give directives on foreign exchange management or any other component of Monetary Policy. This directive erodes the independence and autonomy of the apex bank,” Mr Onyekpere said.

 

 

Besides, he argued that Nigeria was far from attaining food security and had not even started the race for food sovereignty.

 

 

“Stopping the allocation of foreign exchange for the importation of needed food items will only increase their prices since there will still be demand for the goods,” he said. “Unless there is a ban on the importation of these food items, importers will still be free to source for foreign exchange from alternative sources to import them.

 

 

“Increase in the price of food at a time of grave economic crisis, increasing poverty and misery can only deepen the already fragile and precarious living conditions of the average Nigerian. Even an outright ban will be a misnomer in the circumstances”.

 

 

Equally, in a statement signed by its Director-General, Mr. Timothy Olawale, NECA said that while the intention behind the directive was laudable, the country could not afford such policy at the moment, as it had not yet attained self-sufficiency in food production.

 

 

He warned that an immediate withdrawal of forex for food importation without giving a buffer period for businesses to adjust might negatively impact the economy.

 

 

The NECA D-G said: “Though the recent thrust towards withdrawal of forex for imported foods is laudable and welcome, the timing, however, calls for concern.”

 

 

Only a few days ago, the Manufacturers Association of Nigeria (MAN) also issued a statement in which it said that  it was yet to fully understand the implication of the President’s  directive.  According to the association, a close examination of the directive reveals that it is broad and would have to be both specific and targeted and there should also be strategic implementation to achieve the purpose intended by government.

 

 

For instance, the association said it wanted to know what type of food import was affected by the directive, whether  it is  finished and ready to eat items or as input for further processing.

 

 

Director General of MAN, Mr. Segun Ajayi-Kadir, who spoke for the association, said that while MAN lauded the move, it needed more clarity on it, especially given, “trade agreements that require the country to be more open to imports and the well-known antics of our neighboring countries.”

 

 

  He further stated: “We are not necessarily worried about the directive and we prefer to see it as an expression of Mr. President’s mindset.  We are sure Mr. President is aware of the independence of the CBN and that such policies may be counterproductive if implemented by fiat, without ensuring necessary alignment with the fiscal policy and other economic policy initiatives of this administration.”

 

 

Commendation

 

 

However, the directive seems to have received a blanket endorsement from Economist and analyst, Mr. Tope Fasua. He commended President for giving the directive, which he described as the right step in the right direction.

 

 

In fact, he urged the President to ensure full implementation of the directive to enable Nigerians consume what is produced in the country.

 

 

He said: “I believe it is in the right direction but we need more than pronouncements. The boost in food production needed to bridge the gap cannot be left to the mere pursuit of profits. It should be strategically pursued using several instruments including mass mobilisation.

 

 

 

 

“Otherwise, this may end up counterproductive if only a few moneybags with stolen cash or unfettered access to bank loans are able to produce while the majority is at their mercy.”

 

 

Last line

 

 

However, as a top banking industry source pointed out at the weekend, contrary to popular belief, President Buhari’s directive to the Apex Bank last week was not new; the President was only reiterating something the CBN has been implementing in the last few years.

Continue Reading

Business

Naira stability: CBN sells N299bn T-bills in one week

Published

on

Naira stability: CBN sells N299bn T-bills in one week

W

ith the recent downward movement in oil prices resulting in a decline in the nation’s external reserves and triggering concerns over naira stability, the Central Bank of Nigeria (CBN) auctioned a total of N299billion worth of Treasury Bills between August 7 and 15, to lure foreign inflows, findings by New Telegraph show.

 

 

According to traders, the recent drop in oil prices, coupled with falling yields, led foreign investors to booking profits on local bonds, thereby putting pressure on the naira at the Investors and Exporters’ (I&E) foreign exchange window.

 

 

The CBN responded to the development by holding an unscheduled Treasury bill auction on August 7, during which it sold a total of N114.6billion worth of T-bills.

 

 

The auction was the apex bank’s first T-Bills sale since mid-July and  it saw the CBN offering  to sell N100billion of bills in maturities of three, six and 12 months, but  getting bids of N454.9billion, with the one-year paper winning around 80 per cent of the demand.

 

 

Specifically, the CBN sold the most-liquid one-year bill at 12 per cent, lower than the 12.25 per cent it paid at its last auction in July and compared with as high as 18 per cent it fetched a year ago.

 

 

The CBN followed up this auction with another after the Sallah break on August 14, during which  it sold  N34.4 billion worth of bills.

 

 

On the 91-day bill, N4.38billion was offered at 9.70 per cent. A total subscription of N15.06billion was recorded while N4.38billion worth of bills was sold.

 

 

Also, the N10billion 182-day tenor bill, which was offered at 11.35 per cent, recorded a total subscription of N8.59billion while N3billion was sold.

 

 

A total of N27billion was recorded from the sale of the N20billion 364-day bill, which was offered at 12 per cent up from 11.2 per cent it paid at its last sale and recording a total subscription of 122.88billion.

 

 

In addition, the CBN auctioned another N150billion open market bills last Thursday,  a sale that clearly showed that the regulator  was trying to lure foreign inflows as traders said it had told them  to increase their rates from last auction rates.

 

 

Interestingly, the T-Bills auctions in the last week  took place amid ongoing moves by the regulator to limit commercial banks’ investment in treasury bills and Federal Government bonds and get the lenders to increase lending to the real sector of the economy.

 

 

Last month, for instance, the apex bank first announced that all deposit money banks would be required to maintain a minimum Loan to Deposit Ratio (LDR) of 60 per cent by September 30, 2019, sub ject to quarterly review.

 

 

It stated that this was meant to encourage lending to Small and Medium Enterprises (SMEs), retail and mortgage customers which shall be assigned a weight of 150 per cent in computing the stipulated LDR.

 

 

The regulator emphasised that any DMB’s failure to meet the new minimum LDR by the specified date would result in a levy of additional Cash Reserve Ratio (CRR) equal to 50 per cent of the lending shortfall of the target LDR.

 

 

A few days later, the CBN tweaked the guidelines on DMBs’ access to Standing Deposit Facility (SDF), capping the remunerable daily placements by lenders at the SDF window at N2 billion (down from N7.5 billion).

 

 

It stated that while the N2 billion would be remunerated at the interest rate prescribed by the Monetary Policy Committee (MPC) from time to time, any deposit by a bank in excess of the N2 billion will not be remunerated.

 

 

Clearly, however, with falling oil prices and foreign investors taking profits, the CBN’s unending battle to ensure naira stability is again on the front burner.

 

 

Although the naira continues to remain stable at the parallel market, exchanging at N360 to the dollar, the same rate it had largely traded at over the last 12 months, the local currency  is currently under pressure at the I&E foreign exchange window.

 

 

Last Friday, at the window, the naira eased to 364 per dollar, from a quote of 363.50 amid thin liquidity.

 

 

In a recent note, analysts at Financial Derivatives Company (FDC) Limited predicted that the decline in oil prices would eventually lead to a depreciation of the naira.

 

 

It would be recalled that the CBN in its third quarter 2019 Nigerian Treasury bills issue calendar, stated that it hoped to raise the total sum of N809.37billion through new issues of Treasury bills from June 13 to August 29, 2019.

 

 

The data showed that the CBN would sell N90.62billion worth of three-month bills, N188.04billion of six-month bills and N530.71billion of one-year bills.

 

 

As part of its mandate to raise funds for the Federal Government, the CBN sells treasury bills twice a month. The regulator also regularly issues T-bills as part of monetary control measures to mop up excess liquidity and control the money supply.

 

 

Findings by New Telegraph indicate that the CBN had planned to raise a total of N1.006trillion and N823.43 billion from treasury bills sales in the second and first quarters of 2019 respectively.

Continue Reading

Business

Port haulage charges drop

Published

on

Port haulage charges drop

A well structured haulage rate and services for road transport is to be introduced by government following the 40 per cent drop in container haulage charges, BAYO AKOMOLAFE reports

 

 

Haulage charges which has gone up from N120,000 to N700,000 within the last two years in Lagos due perennial gridlock and extortion at port access roads are gradually coming down due to slight improvement on the roads.

 

 

Prior to the latest development, importers had been paying exorbitant charges and high rent on goods to terminal operators and truckers because of  delay caused by traffic gridlock and port inefficiency.

 

 

Costs

 

 

Last year, the National President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero, complained that the cost of transporting a 20 feet container from Tin Can/Apapa ports to Alaba International Market in Lagos jumped from N200,000 to N400,000, while 40 feet container cost  between N700,000 and N900,000.

 

Also, he noted that the cost of transporting a 20 feet container from Tin Can/Apapa to Kaduna was N900,000, while it cost N1 million to transport a 40 feet container from N600,000 previously.

 

 

Illegality

 

 

Other charges include the cost of evacuating and transporting containers, illegal charges by shipping lines, extortion by security operatives and loss of container deposits due to late return of empty containers.

 

 

Another factor is that extortion by security operatives has been reduced as the Presidential Task Force in charge of traffic at the Apapa port has reduced the gridlock.

 

 

The task force was set up as a result of a presidential directive, which ordered the removal of trucks on bridges and roads in Apapa as well as the restoration of law and order on the port roads.

 

 

The   Vice President of National Association of Roads Transport Owners (NARTO) Dry Cargo section, Mr Abdullahi Mohammed, told New Telegraph that truckers had stopped paying between N60, 000 and N70, 000 to security operatives.

 

 

He said that extortion at the port road had assumed in a new dimension, stressing that some security operatives not assigned to the port roads were using hoodlums to extort money from truck drivers.

 

 

He said: “We have stopped paying money for parking space. You know before now, truck drivers pay as much as N60,000 to N70,000 to the officials of the Nigerian Navy and other military formations just to gain entrance into the port.”

 

 

In order to bring sanity to the road, the truck transit park being constructed by the Federal Ministry of Power, Works and Housing at Tincan Island was forcefully opened three weeks ago by the Presidential Task Force in order to forcefully to decongest the road.

 

 

Also,  Abdullahi stressed that the Lilypond container terminal at Ijora had  been temporarily converted to holding bay for trucks and empty containers.

 

 

Also, as part of efforts to tackle the challenges of doing business within the port environment, the Managing Director of the Nigerian Ports Authority, Hadiza Bala-Usman, also noted that the management of the authority had introduced the automation of Call Up System (CUS) for trucks and other incentives given for the transfer of cargo through barges from Ikorodu, Epe and Ijegun among others.

 

 

Progress

 

 

The outcome, according to Nigerian Shippers Council (NSC), had made haulage fares charged by truck owners to drop by 40 per cent.

 

 

It was learnt that importers now paid N240,000 instead of N400,000 for 20 feet container and  N420,000 instead of N700,000 for 40 feet container within Lagos.

 

 

As part of efforts to further reduce the cost of container haulage, NSC noted that it had presented new rates to stakeholders at a conference in Lagos.

 

 

The  Executive Secretary of NSC, Barrister Hassan Bello, noted that plans were ongoing to establish a well-structured haulage rates and services for the road transport sector for port stakeholders.

 

 

He said: “The haulage rates are determined by supply and demand, but there should be benchmarking so that foreigners and investors would know that they have an idea of how much it costs.”

 

 

Consultation

 

 

According to  Bello, the council embarked on consultation with the  Federal Ministry of Transportation, Federal Road Safety Corps, National Association of Road Transport Owners (NARTO), National Union of Petroleum and National Gas Union (NUPENG), Road Transport Employers Association of Nigeria (RTEAN), Association of Maritime Truck Owners (AMARTO), National Union of Road Transport Workers (NURTW) and other unions on how to bring the haulage changes down in the port industry.

 

 

Bello attributed the fall in haulage rate to efforts of the Presidential Task Force monitoring the traffic.

 

 

He said that the haulage rate was artificial because it was occasioned by the traffic and extortion.

 

 

Bello said: “Now that the traffic is leaving and there is order and sanity, the traffic rate has dropped. We are also helping by bringing sanity into the terminals, sometimes; it is what happens in the terminal that causes the traffic, so we try to achieve efficiency in the terminals so that there would not be congestion.”

 

 

Bello also assured that the new haulage rate coming up would guide transporters and port users.

 

 

Last line

 

 

There is need for government to establish a well-structured haulage rates and services to encourage importers to use the nation’s seaports. This will reduce diversion of cargoes to neighbouring countries’ ports.

Continue Reading

Business

UBA partners LCCI on 2019 Lagos I’tl Trade Fair

Published

on

UBA partners LCCI on 2019 Lagos I’tl Trade Fair

U

nited Bank for Africa (UBA) Plc, and the Lagos Chamber of Commerce and Industry(LCCI), have partnered to organize the 2019 edition of the Lagos International Trade Fair.

 

The fair, which holds between November 1st and 10th, 2019, is the 33rd edition and is expected to provide an avenue for networking and other business opportunities that will assist to catapult business activities in Africa’s largest and busiest city, Lagos and in Nigeria.

 

UBA, which is the headline partner will be working together with LCCI, to provide a veritable platform that is intended to grow both domestic and international trade. It further presents participants and visitors with opportunities to seal medium and top business deals.

 

 

In line with UBA’s unflinching support to the growth of small and medium enterprises (SMEs), the bank is giving a 20% discount to its Small and Medium business customers who register to attend the fair.

 

 

UBA’s Group Head, Marketing, Mrs Dupe Olusola, who expressed excitement at the partnership, noted that the bank, with its extensive spread across Africa and other major economies of the world, is always on the lookout for partnership opportunities that will benefit the business environment and the economies where it operates.

 

 

Olusola noted that the Bank is delighted as this year’s Lagos International Trade Fair is coming after a very successful organisation of UBAmarketplace by the Bank in Abuja, where over 120 SMEs from 20 African countries exhibited their products, attracting over 50,000 footfalls.

 

 

She said: “UBA, the Pan African financial institution, has branches in 20 African countries, including the United Kingdom, the United States of America and France and has always been involved in activities that aim to strengthen business connections and networks across key economies.

 

 

“Thus, we have decided to partner with LCCI to promote this year’s fair which is in its 33rd edition because the Lagos International Trade Fair has become a genuine avenue for both domestic and international trade through business to business meetings, product launches, enlightenment opportunities for government agencies’ programmes, and international trade partnership deals across borders. “

 

 

She added that the partnership would also offer the bank the opportunities to showcase its array of products to its teeming and new customers, adding that the bank will set up stands at various points to serve its customers and attend to various concerns.

 

 

The Director General of the Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, who praised the collaboration between both institutions, noted that it is a partnership that is expected to yield great benefits, owing to the fact that the LITF hosts an average of 2,000 exhibitors annually, with over 200 foreign exhibitors from 16 countries.

 

 

He also added that arrangements have been put in place to make this year’s fair even bigger and better than the previous editions, adding that already, existing and potential exhibitors have been responding positively to register and participate at the fair.

 

 

“We at LCCI believe that this is part of the bold initiatives of the bank with a corporate culture founded upon strong organizational values and performance-driven operating standards,” Yusuf said.

 

 

Yusuf stressed that the chamber would maintain the brand promise of the fair, with the theme ‘connecting businesses, creating value’, adding that this will be sustained this year in all its marketing campaigns.

Continue Reading

Business

NSE: Sell pressure dominates activities

Published

on

NSE: Sell pressure dominates activities

A

ctivities on the Nigerian Stock Exchange (NSE) yesterday returnedo to downward trajectory following sell-off that pervaded the equities market resulting in the equities market dropping by 0.21 per cent.

 

The decline was impacted by negative sentiments of investors on blue chip stocks.

 

 

Consequently, the All-Share Index shed 57.27 basis points or 0.21 per cent to close at 27,058.62 index points as against 27.115.89 recorded the previous day while market capitalisation of equities depreciated by N28 billion to close lower at N13.186 trillion from N13.214 trillion as market sentiments returned to the red territory.

 

 

Meanwhile, a turnover of 209.6 million shares in 3,743 deals was recorded in the day’s trading.

 

 

The banking sub-sector was the most active (measured by turnover volume); with 77.4 million shares exchanged by investors in 654 deals. The sub-sector was enhanced by the activities in the shares of GTBank Plc and ETI Plc.

 

 

The premium sub-sector boosted by the activities in the shares of Zenith Bank Plc  and FBNH Plc  followed with a turnover of 54.5 million shares in 1,364 deals.

 

 

The number of gainers at the close of trading session was 27 while decliners also closed at 10.

 

 

Further analysis of the day’s trading showed that Oando Oil Plc and Transcorp Plc topped the gainers’ table with 10 per cent each to close at N3.85 and 99 kobo per share respectively while Chams Plc followed with 9.52 per cent to close at 23 kobo per share. Berger Paints Plc trailed with a gain of 9.49 per cent to close at N7.50 per share.

 

 

On the flip side, Cutix Plc led the losers’ chart with a drop of 9.62 per cent to close at N1.41 per share. PZ Cussons Plc and Union Dicon Plc followed with a loss of 8.33 per cent each to close at N5.50 and 22 kobo per share respectively. May and Baker Plc trailed with 6.83 per cent to close at N1.91 per share.

Continue Reading

Business

U.S. stocks decline after 3-day winning streak

Published

on

U.S. stocks decline after 3-day winning streak

 

U

.S. stocks were little changed on Tuesday after three sessions of gains, as lower Treasury yields weighed on financial shares, offsetting a boost from Home Depot’s better-than-expected earnings.

 

 

After a stormy start to the month on worsening trade tensions, the three main indexes have rebounded sharply, erasing most of their losses from a steep selloff last week on rising hopes of global monetary stimulus.

According to Reuters, the benchmark S&P 500 .SPX is now about 3.6% below its all-time high hit in July. It had fallen as much as seven per cent from its record last week.

 

 

“The markets have been extremely strong over the past few days, so there is a little bit of profit taking,” said Gary Bradshaw, portfolio manager with Hodges Funds in Dallas.

 

 

Losses on the blue-chip Dow and the S&P 500 indexes were tempered by a 4.3 per cent rise in Home Depot Inc (HD.N). Its shares drove a 0.47 per cent gain in the consumer discretionary index .SPLRCD.

 

 

“Home Depot’s earnings show that people are continuing to invest in their homes, a positive for Wall Street and the U.S. consumer,” Bradshaw said.

The S&P 500 banks index .SPXBK slipped 0.81% and the broader financial sector .SPSY fell 0.50 per cent as U.S. Treasury yields slipped on rising prospects of interest rate cuts as well as political tensions in Italy and Britain’s tumultuous exit from the European Union.

 

 

All eyes this week will be on Wednesday’s release of minutes from the Federal Reserve’s July policy meeting and Chair Jerome Powell’s speech on Friday at the Jackson Hole central bankers’ conference.

 

 

Powell’s remarks will be closely monitored for hints if more policy easing is in store, against the backdrop of an ongoing trade war and growing fears of recession, signaled by the inversion of the U.S. yield curve last week.

 

 

At 11:20 a.m. ET, the Dow Jones Industrial Average .DJI was up 4.96 points, or 0.02%, at 26,140.75, the S&P 500 .SPX was down 1.82 points, or 0.06%, at 2,921.83. The Nasdaq Composite .IXIC was up 2.26 points, or 0.03%, at 8,005.07.

 

 

Shares of Netflix Inc (NFLX.O) were the biggest drag on the S&P 500, losing 3 per cent after Walt Disney Co (DIS.N) announced its streaming service would launch in Canada and the Netherlands on November.

Eight of the major S&P sectors were trading lower. The energy sector .SPNY lost 0.60 per cent, weighed by lower oil prices.

 

 

Medtronic Plc (MDT.N) gained 4.5 per cent, and was among the biggest gainers on the S&P 500, after the medical device maker raised its full year adjusted profit forecast.

 

 

Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE and for a 1.25-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and five new lows, while the Nasdaq recorded 35 new highs and 54 new lows.

 

 

Continue Reading

Business

Domestic institutional market decreases by 53% to N45bn

Published

on

Domestic institutional market decreases by 53% to N45bn

LOW SENTIMENTS

Domestic transactions decreased by 66.68 per cent from N3.556 trillion in 2007 to N1.185 trillion in 2018

T

he institutional composition of the domestic market reduced significantly by 53.04 per cent from N96.64 billion in May 2019 to N45.38 billion in June 2019, according to a report obtained from the Nigerian Stock Exchange.

 

 

Further checks showed that the value of domestic transactions executed by retail investors significantly outperformed institutional investors by 54.00 per cent.

 

 

A comparison of domestic transactions in the current and prior month (May 2019) revealed that retail transactions increased by 228.43 per cent from N47.23 billion in May 2019 to N155.12 billion in June2019.

 

 

As at 30 June 2019, total transactions at the nation’s bourse increased by 34.42 per cent from N221.13 billion (about $713.7 million) in May 20195 to N297.25 billion (about $970.1million) in June 2019.

 

 

According to the report, the performance of the current month compared to the performance in the same period (June 2018) of the prior year revealed that total transactions also increased by 58.29 per cent.

 

 

In June 2019, the total value of transactions executed by domestic investors significantly outperformed transactions executed by foreign investors by 34.00 per cent.

 

 

A further analysis of the total transactions executed between the current and prior month (May2019) revealed that total domestic transactions increased by 39.36 per cent from N143.87 billion in May to N200.51billion in June 2019.

 

 

In contrast, total foreign transactions also increased by 25.22 per cent from N77.25 billion (about $252.1 million) to N96.74billion (about $315.7 million) between May and June 2019.

 

 

Highlights of the performance of the market over the last decade revealed that over a 12-year period, domestic transactions decreased by 66.68 per cent from N3.556 trillion in 2007 to N1.185 trillion in 2018 whilst foreign transactions increased by 97.88 per cent from N616 million to N1.219 trillion over the same period.

 

 

Total foreign transactions accounted for about 51 per cent of the total transactions carried out in 2018, while domestic transactions accounted for about 49 per cent of the total transactions in the same period.

 

 

The actual performance referenced 2019A (2019 actual) shows that total foreign transactions carried out year till date (YTD) is about N472.78 billion whilst total domestic transactions YTD is about N614.67 billion.

 

 

Acting Director General of the Securities and Exchange Commission, SEC, Ms. Mary Uduk, said recently that the outflow had led to sell pressure accumulating into depressed prices.

 

 

This, she said, was one of the reasons the commission is mapping out strategies to build confidence in the market and encourage more retail investors.

 

 

The Nigerian Stock Exchange (NSE) also said that currently there were about three million retail investors in the Nigerian capital market, representing only three per cent of the total adult population in the country.

 

 

The Divisional Head, Trading Business, Mr. Jude Chiemeka, disclosed this recently at the maiden edition of Retail Investor Workshop tagged ‘Investment Masterclass; Making your money work’ organised by the NSE.

 

 

According to Chiemeka, “Nigeria has a population of over 190 million people and is the second largest economy in Africa. However, the current Financial Inclusion indices of 48 per cent leave much to be desired.

 

 

“Financial Iiclusion is a priority of stakeholders in the capital market, and the Nigerian Stock Exchange makes it a primary concern to contribute towards the achievement of Nigeria’s National Financial Inclusion Strategy of reducing the proportion of adult Nigerians that are financially excluded to 20 per cent in the year 202.0”

 

 

Chiemeka noted that the exchange recognised the need to improve investor participation, and is leveraging recent capital market initiatives such as the Tiered KYC requirements for capital market investments, as well as promoting the introduction of globally competitive investment products with low entry thresholds, to achieve financial inclusion goals.

Continue Reading

Business

Disbursement of lower naira denominations guidelines out

Published

on

Disbursement of lower naira denominations guidelines out

T

he Central Bank of Nigeria (CBN) has released guidelines for the disbursement of lower denominations of the naira through micro-finance banks (MFBs) across the country.

 

 

According to the guidelines posted on the apex bank’s website yesterday, all microfinance banks must have a Composite Risk Rating (CRR) of above average in the most recent Risk Based Supervision (RBS) target examination before they were considered for the scheme.

 

 

The guidelines stated, among others,  that: “The MFBs shall accept a mixture of new and Counted Audited Clean (CAC) banknotes under the intervention scheme; the MFBs shall give 20% of any withdrawal in lower denomination banknotes subject to a maximum of N50,000.00.

 

 

“Where beneficiaries withdraw more than once a day, the disbursement under the initiative will apply to only one transaction per day.”

 

 

It further stated: ”The MFBs shall exchange banknotes subject to a maximum of N50,000.00 for customers with accounts and N10,000.00 for customers without accounts.

“The MFBs shall not exchange for same beneficiary more than once a week.”

 

 

The guidelines also warned MFBs against hawking, hoarding or using of funds obtained under the intervention for any other purpose.

Continue Reading

Business

SME Clinic: Unity Bank partners Signal Alliance, Businessday

Published

on

SME Clinic: Unity Bank partners Signal Alliance, Businessday

Unity Bank has hosted the maiden edition of Small and Medium Enterprises  (SME) clinic in conjunction with Signal Alliance and Businessday newspaper as a capacity building workshop to bridge knowledge gap.

 

 

The SME clinic was designed to boost SMEs operators in leveraging effective branding and marketing strategy expected to play a key role in creating added value for products and making start up become a big brand enterprise.

 

 

Coming on the verge of the 5th industrial revolution and the need to put SMEs ahead of the fast paced developments, the clinic provided platform to expose participants drawn amongst fintech operators, retailers, social services, schools, contractors, professional service firms, wholesalers, manufacturers, hospitality, NGOs, clubs and associations, supplies and agric value chain to the opportunities available as convergence of technology and human begin to take center stage.

 

 

Commenting on the clinic, the Head of SME, Unity Bank Plc, Opeyemi Ojesina, said that as a key market focus contributing about 48 per cent of the national GDP in the last five year, 50 per cent of industrial jobs and nearly 90 per cent of the manufacturing sector in terms of number of enterprises, hosting a capacity building initiative of this nature enables the bank to have more insight for enhancing financial inclusion plan for SMEs.

 

 

He further stated that as a leading bank in the advocacy for SME, Unity Bank has developed innovative products for SMEs aimed at enhancing greater access to financial services, financial advisory and cluster marketing initiatives.

 

 

Participants were of the view that the SME clinic gave practical insights into techniques for creating distinctive brand concept centered on consumers and appreciated the three entities that organized the workshop.

The Chief Technology Officer, Signal Alliance, Mr Uchechi Nwaukwa, used the platform to launch CloudGo, an IT product built on Microsoft cloud platform.

 

 

As a “solution that enhances communication, collaboration and scales innovation for business becomes a necessity” he further stated that “the product is a results of huge investment in IT infrastructure which helps to overcome upgrade challenges, enhance data protection and disaster recovery challenges faced by small businesses.

Continue Reading

Business

Transactions: Making investor protection paramount

Published

on

Transactions: Making investor protection paramount

As a way of boosting market confidence, it is important for regulators to constantly carry investors along as regards policies and changes in transactions. Chris Ugwu writes

 

I

n stock exchanges world over, there are standard and post-listing requirements that quoted companies must constantly meet to avoid regulatory hammer.

 

 

These include regular dissemination of information about the financial performances and any changes that could affect their operations.

 

 

Conversely, in Nigeria, many listed firms have been violating this important obligation, thereby keeping investors in the dark about their financial health among others.

 

 

These lapses in adherence to the principles of corporate governance have contributed mainly to crisis at the stock exchange even as most countries have recovered from the global financial meltdown.

 

Many ignorant investors have burnt their fingers by investing in some dormant companies, which do not furnish the market with their financials.

 

 

Following serial infractions by market players, the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange wielded the big stick by either giving notice to some companies on intention to delist or have completely delisted them from its official list for violating post-listing requirements.

 

 

Some have, however, chosen to delist voluntarily when they no longer have the capacity to play in the market. It was also found out that most of the companies that delisted voluntarily from the bourse had cited harsh economic climate and parent company buy-out as reasons.

 

 

According to a report obtained from the Nigerian Stock Exchange website, about 101 firms has delisted from the exchange in the last 17 years.

 

 

The reaffirmed commitment by the regulator to do anything to compel operators in the market to obey the rules guiding it informed the decision to tighten the noose on market infractions and other miscellaneous capital market crimes.

 

 

However, shareholders have continued to lament the delisting of companies by the regulatory authorities, noting that the actions have not given investors desired benefits as it lacks protection of shareholders’ funds.

 

 

Some delisted firms

 

 

Some of these companies that have been delisted due to one reason or the other include Pinnacle Point Group Plc, Afroil Plc, Starcomms Plc, Big Treat Plc, Starcomms Plc, Nigeria Wire & Cable Plc, Nigerian Sewing Machine Manufacturing Plc, Stokvis Nigeria Plc, Jos International Breweries, West Africa Glass Industries Plc, Navitues Energy Plc, Nigerin Ropes Plc, P.S Mandrides Plc, African Paints (Nigeria) Plc ,Afrik Pharmaceuticals Plc, among others.

 

 

Dissenting voices

 

 

Some shareholders in the capital market have demanded better protection for investors in the country, following the delisting process.

 

 

The shareholders, who lamented that investors, especially domestic retail investors, always suffered significant losses whenever companies were delisted, said there was need for the exchange to provide more information about how it arrived at its decision.

 

 

The leaders of shareholder groups, who spoke to our correspondent, questioned the exchange on delisting companies without engaging investors.

 

 

The Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said: “Unfortunately, the Nigerian Stock Exchange is not communicating with shareholders. As they delist these companies, they don’t care for the fate of shareholders that they are meant to protect.”

 

 

Okezie argued that although the exchange said it was protecting the shareholders, the move has been to  the detriment of shareholders in the long run, especially if the companies were going concerns but just having difficulties submitting their financials.

Okezie, who described the move as hostile, said there were many questions left unanswered.

 

 

He said: “The NSE needs to go all out to find out the exact state of the companies. To find out if they can overcome their problems in a short while rather than taking the hostile decision to delist them.”

 

 

Okezie said that market regulators must pursue friendly policies and initiatives to push the market forward.

 

 

He said that the bank nationalisation policy to a large extent affected investor confidence in the market.

 

 

He said that the current leadership of the SEC and NSE had done well with the introduction of various initiatives and zero tolerance on fraudulent capital market operators.

 

 

Shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN), who also bemoaned the delisting companies by the regulatory authorities, said it did not augur well for average investor and the nation’s capital market.

 

 

National Coordinator Emeritus, ISAN, Sir Sunny Nwosu, said: “Yes, there are some (of the companies) that look dilapidated and there are some for which I think they (the exchange) should have done a lot of consultation, especially with the shareholders because we have suffered a lot in the system.”

 

 

He said that there was need for friendly policies and regulation by capital market regulators.

Nwosu said that lack of proper compensation to investors that lost their funds during the market meltdown contributed to poor investor confidence in the market, whereas brokers were given forbearance package.

Mr. Moses Igbrude, ISAN Secretary, noted that the issue of penalties must be readdressed by market operators for confidence building.

 

 

Igbrude said that some companies had delisted from the exchange due to penalties while new companies were afraid to list.

 

 

He added that SEC and NSE should encourage companies to embrace share buy-back initiative instead of approving share reconstruction, which he said was being used by companies to rob investors.

 

 

He noted that market regulators should be fair in their regulations and penalties, adding that penalties were being paid from shareholders funds’ and was also discouraging investor confidence.

 

 

Regulators’ commitment to investor protection

 

 

SEC had recently restated its determination to ensure that investors were adequately protected in all transactions.

 

 

This was stated by Acting Director General of the SEC, Ms. Mary Uduk, during a meeting with the Association of Corporate Trustees in Abuja.

 

 

Uduk, who was represented by Acting Executive Commissioner, Operations of the SEC, Mr. Isyaku Tilde, said it was the responsibility of the SEC to ensure that investors are not short changed in any transactions.

 

 

Uduk said it was to this end that the commission is taking steps to reduce transaction costs in a bid to ensure that investors do not bear unnecessary costs.

 

 

“We are doing a lot to boost investors’ confidence in our market. But I want to say that both local and foreign investors are very good for the market. For instance, the foreign investors, because they trade their shares all of the time it leads to price discovery as against the local investors that just takes a long term view on their investments.

 

 

“Investors’ fears can be of two folds, firstly they could be afraid because they feel that capital market operators will mismanage their investments, secondly is looking at the volatility of the market that makes investors sceptical.

 

 

“For the first scenario, we have a number of initiatives that we have put in place to boost investors’ confidence. We have the E-Dividend mandate system, the Direct Cash Settlement as well as multiple subscription in place.

 

 

“For the second category, investors have to take ownership of their investments. They have to be able to monitor their investments, attend annual general meetings as well as read the annual reports sent out to them,” she noted.

 

 

The Acting DG said investors were also protected through the National Investors Protection Fund (NIPF) Risk Based Supervision that enables SEC to supervise the operators to ensure that they do not do what they are not supposed to do.

 

 

According to her, the complaints management framework enables investors to know where to complain to and how long it takes for such complaints to be resolved. For those of the investors that are averse to risk, they should get their financial advisers to advise them properly on where to invest.

 

 

“We also advise retail investors to invest in Collective Investment Schemes and Mutual Funds because those are managed independently by professionals and they are diversified thereby reducing risks. We are committed to protecting investors in the work we do.

 

 

“We will keep working on our rules and the possibility of amending them when the need arises, we want more transparency in the market so that investors will feel comfortable and the market can be better,” Uduk added.

 

 

The NSE in an effort to achieve a world class capital market had also reiterated its commitment to maintain zero tolerance posture on dealing member firms and quoted companies on violations of rules and regulations.

 

 

This on the back of the exchange’s determination to shift gears to drive innovations centered on increasing global visibility for the Nigerian capital market in the current year.

 

 

The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, while speaking at an investors’ forum, said the exchange would sustain a zero-tolerance stance on dealing member firms and listed companies’ violations.

 

 

Last line

 

The regulatory action is necessary in order to protect the investing public from trading in securities of entities with no current information regarding their financial status.

 

 

It is, therefore, advisable for the regulators to carry shareholders along on all market activities in order to boost market confidence.

Continue Reading

 

 

 

 

 

ABUJA MAN REVEALS (FREE) SECRET FRUITS THAT INCREASED MANHOOD AND LASTING POWER IN 7DAYS

 

… CLICK HERE TO GET IT!

 

 

 

Categories

Facebook

Trending

Take advantage of our impressive online traffic; advertise your brands and products on this site. For Advert Placement and Enquiries, Call: Mobile Phone:+234 805 0498 544. Online Editor: Tunde Sulaiman Mobile Phone: 0805 0498 544; Email: tunsul2@gmail.com. Copyright © 2018 NewTelegraph Newspaper.

%d bloggers like this: