Economy

Weekly Report: Equity Market Loses N1.32trn amid CBN Rate Hike

Published

2 months ago

July 28, 2024

Admin

Equity investors on the Nigerian Exchange Ltd. (NGX) experienced a significant loss of N1.32 trillion in the just concluded week.

The downward performance was driven by selloffs in Tier-one banking stocks namely: Zenith Bank, Guaranty Trust Holding Company (GTCO), and also Dangote Cement, Dangote Sugar, African Prudential, among others.

Specifically, investors reacted negatively to the Central Bank of Nigeria’s (CBN’S) hike in the Monetary Policy Rate (MPR) announced within the week.

The News Agency of Nigeria (NAN) reports that CBNs Monetary Policy Committee (MPC) on Tuesday announced another increase in the country’s MPR by 50 basis point to 26.75 per cent, from 26.25 per cent.

Dr. Yemi Cardoso, CBN Governor, said the decision was in response to the continued inflationary pressures.

He noted that it was important to deal with inflation, as the apex bank was concerned over the impact of the inflation on ordinary Nigerians and businesses.

The NGX) All-Share Index and Market Capitalisation depreciated by 2.33 per cent each to close the week at 98,201.49 and N55.605 trillion respectively, against 100,539.40 and N56.929 trillion posted in the previous week.

Similarly, all other indices finished lower with the exception of NGX MERI Value which appreciated by 0.72 per cent while the NGX ASeM and NGX Sovereign Bond indices closed flat.

Also, 20 equities appreciated in price during the week, lower than 37 equities in the previous week.

Forty-seven equities depreciated in price, higher than 34 in the previous week, while 84 equities remained unchanged, higher than 80 recorded in the previous week.

Secure Electronic Technology Plc led 46 declined equities on the losers’ table by 26.32 per cent to close at 42k per share.

Sovereign Trust Insurance Plc led 19 other advanced equities on the gainers table by 14.29 per cent to close at 56k per share.

Meanwhile, a total turnover of 3.557 billion shares worth N47.220 billion in 42,871 deals was traded during the week by investors.

This is in contrast to a total of 2.827 billion shares valued at N42.366 billion that exchanged hands last week in 44,277 deals.

The Financial Services Industry measured by volume led the activity chart with 2.011 billion shares valued at N25.783 billion traded in 24,350 deals.

This contributed 56.52 per cent and 54.60 per cent to the total equity turnover volume and value respectively.

The Services industry followed with 1.020 billion shares worth N3.216 billion in 1,846 deals.

The third place was the Agriculture industry, with a turnover of 168.028 million shares worth N647.859 million in 1,473 deals.

Trading in top three equities namely: Tourist Company of Nigeria Plc, FCMB Group Plc and Abbey Mortgage Bank Plc measured by volume accounted for 1.876 billion shares worth N8.511 billion in 935 deals.

This contributed 52.73 and 18.02 per cent to the total equity turnover volume and value respectively.

Looking ahead to the coming week, Analysts at Cowry Asset Management Ltd., predicted that bearish trend is expected to persist.

The analysts said this is because market players would continue to digest the outcome of the recently published economic data and the interest rate hike by the apex bank.

They noted that the continued rise in yield levels within the fixed income and money market spaces is likely to maintain the unattractiveness of equities, as investors opt for the appealing yields.

“Nonetheless, a mildly positive performance is anticipated on the back of continued earnings releases and attractive dividend declarations by corporations in the coming week.

“As the market structure and fundamentals evolve, investors are advised to position themselves in stocks with sound fundamentals to navigate the prevailing conditions effectively,” the analysts stated.

(NAN)

Economy

Naira Nosedives Further in parallel market

Published

3 days ago

September 14, 2024

Kayode Sanni-Arewa

The Naira continued its downward trend on Friday, depreciating to N1,660 per dollar in the parallel market.

This represents a slight decline from the N1,655 per dollar traded on Thursday.

In a similar vein, the Naira depreciated to N1,546.41 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday. According to data from FMDQ, the indicative exchange rate for NAFEM fell from N1,649.76 per dollar on Thursday, indicating a marginal appreciation of N103.35 for the Naira.

However, the gap between the parallel market and NAFEM rates widened significantly, increasing to N113.59 per dollar from N5.24 per dollar the previous day. This growing disparity highlights the ongoing instability in the foreign exchange market.

Economy

FCT, Ogun, Lagos receive 1,000 CNG kits

Published

3 days ago

September 14, 2024

Kayode Sanni-Arewa

The Federal Government says it has commenced distribution of fresh Compressed Natural Gas kits to some states of the federation in its drive to foster rapid adoption of CNG.

This was disclosed Friday by an official of the Presidential Compressed Natural Gas Initiative, Moses Onate, during an inspection of the CNG kit warehouse located in Ibafo, along the Lagos-Ibadan Expressway, Ogun State.

With the hike in fuel prices, many drivers claimed they have been struggling to keep their businesses afloat.

The exercise, which the Federal Government said could reduce the cost of transportation by over 40 per cent started in Abuja and Lagos.

Speaking on the distribution Onate noted that states like Lagos, Oyo, Kaduna, Ogun and the FCT would be getting 1,000 conversion kits to continue the conversion initiative.

Onate added that of the 1,000 kits made available to the warehouse, 450 have been distributed to Kaduna and Abuja while 550 would be distributed to Lagos, Ogun and Oyo.

He said, “As of this morning, 450 have gone out to Kaduna and Abuja. 550 will be going to Lagos, Oyo, and Ogun states today.”

He also said the FG had not got any negative feedback on the kits distributed previously.

According to him, there are up to 10 CNG conversion centres in Lagos State alone.

“This initiative will seriously help people as regards the cost in the sense that fuel is around a thousand naira now, but CNG is around N210/N230.

“The gross margin between what fuel is being sold for and CNG price will have a lot of positive impact on everybody. We will live to enjoy CNG,” he said.

In his reaction, a pipeline engineer at the warehouse, Austin Nwaodhu, urged motorists and vehicle owners to adopt the CNG initiative stressing that it offers a cheaper alternative to fuel because of its low consumption rate, and user-friendliness.

He added that CNG did not emit much fumes into the atmosphere which could cause harm to members of the public.

“CNG is a good initiative by the president that will help to bring down the cost of running a vehicle compared to petrol. It will bring down the cost of running our cars.

“It is friendly to the environment and does not emit fumes unlike petrol,” Nwaodhu stressed.

Economy

Petrol Price Unveiled As Dangote Refinery Begins Supply in Nigeria on September 15

Published

3 days ago

September 14, 2024

Kayode Sanni-Arewa

The much-anticipated arrival of Premium Motor Spirit (PMS), better known as petrol, from Dangote Refinery is set to take place on Sunday, September 15. According to sources cited by Businessday, the Lagos-based refinery is prepared to commence distribution of its refined petrol to marketers across Nigeria.

In preparation for the launch, marketers have been advised to dispatch their trucks to the refinery today (Friday) for loading. This significant initiative is expected to bolster the country’s fuel supply, reduce dependence on imports, and alleviate the existing challenges faced by consumers.

Despite the imminent entry of Dangote’s petrol into the market, Naija News reports that fuel prices are expected to remain stable for the time being. Initially, Dangote Refinery plans to supply 25 million litres of petrol daily through the Nigeria National Petroleum Company (NNPC) Trading Limited.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed readiness to procure PMS from Dangote Refinery, provided that the price is lower than their current acquisition costs. IPMAN President Abubakar Maigandi stated that members are keen to explore purchasing arrangements but await clarity on Dangote’s pricing structure.

“After a meeting with our members today, we are ready to buy petrol from Dangote Refinery as long as the price remains competitive,” Maigandi explained. He noted that NNPCL, the sole importer of petrol, currently sells to marketers at an average price of N875 per liter. Consequently, petrol is sold at N930 to N940 depending on sourcing conditions, with a depot price of up to N990 per liter.

Maigandi emphasized that if Dangote Refinery offers a more attractive price, there is no reason for marketers to avoid its products. “We have no issue with Dangote Refinery,” he affirmed.

This statement follows comments from Edwin Devakumar, Vice President of Dangote Industries Limited, who suggested that local petroleum marketers are hesitating to purchase from the refinery despite competitive pricing. During an X space session hosted by Nairametrics, he claimed that only 3 percent of local marketers have shown interest in the new petrol from Dangote.

As the launch date approaches, all eyes will be on the impact of Dangote’s petrol on the Nigerian fuel market and the potential shift in purchasing habits among local marketers.