The Nation Newspaper

Tag: investors

  • Investors lose N117b in August downtrend

    Investors in Nigerian equities suffered a net loss of N117 billion in August as a scramble for profit-taking and sell pressure due to financial demand depressed the stock market. Benchmark indices at the Nigerian Stock Exchange (NSE) showed that Nigerian investors recorded average negative return of -0.96 per cent in August, equivalent to a month-on-month capital depreciation of N117 billion.

    Aggregate market value of all quoted equities on the NSE closed August at N12,237 trillion as against N12.354 trillion recorded at the beginning of the month, representing a decline of N117 billion. The All Share Index (ASI)-the value based common index that tracks share prices at the Exchange, also indicated a month-on-month average return decline of 0.96 per cent to close the month at 35,504.62 points as against the month’s opening index of 35,844.00 points. The average year-to-date return declined from 33.37 per cent in July to 32.11 per cent in August.

    The performance in August appeared to underlined a profit-taking trend that followed significant capital appreciation in July 2017, when equities rallied net capital gain of N902 billion as expectations on corporate earnings reports and improved macroeconomic outlook boosted the market to its highest performance in more than 31 months.

    The depreciation in August was particularly driven by considerable declines in share prices in the oil and gas and industrial goods sectors. The NSE Oil and Gas Index slumped by 11.37 per cent in August to bring oil and gas investors to a negative average year-to-date return of -4.40 per cent. The NSE Industrial Goods Index recorded a return of -4.69 per cent in August to cut down the average year-to-date return for the sector to 28.62 per cent. The NSE Insurance Index declined by 2.47 per cent while the NSE Banking Index dropped by 1.27 per cent. However, the NSE Banking Index still showed the biggest eight-month return with a gain of 60.28 per cent while insurance stocks carried a modest 8.91 per cent.

    Against the negative overall market performance, investors in the consumer goods sector recorded impressive gains in August with the NSE Consumer Goods Index appreciating by 11.68 per cent during the period. The average year-to-date return for the sector thus spiraled to 32.87 per cent.

    With the average year-to-date return of 32.11 per cent, investors’ net capital appreciation so far this year dropped to N2.99 trillion as against N3.11 trillion capital gains recorded over the seven-month period. Aggregate market value of all quoted equities and the ASI had opened this year at N9.247 trillion and 26,874.62 points respectively.

    The second half on the whole has seen the market on a positive swing, as a significant rally in July had set the second half on an upswing after equities netted more than N2.2 trillion in capital gains in the first half of the year. The stock market recorded average year-to-date return of 23.23 per cent in the first half, equivalent to net capital gain of N2.2 trillion for the period.

    Aggregate market value of all quoted equities on the NSE closed the first half at N11.452 trillion as against 2017’s opening value of N9.247 trillion, representing net capital gain of N2.205 trillion or 23.85 per cent. The ASI had crossed seven levels to close first half at 33,117.48 points compared with its year’s opening index of 26,874.62 points, representing an increase of 23.23 per cent.

    The rebound represents a major recovery for hard-pressed Nigerian investors, who had lost N3.98 trillion in the past three years. The stock market had been on a losing streak since 2014. Investors lost N1.75 trillion in 2014 and followed this with another loss of N1.63 trillion in 2015. Against the general expectation that political transition and new government will quicken a rebound, equities closed 2016 with a net capital loss of N604 billion. Aggregate market value of all quoted equities on the NSE closed 2016 at N9.247 trillion as against N13.226 trillion recorded at the start of trading in 2014, representing a net capital loss of N3.98 trillion.

    Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, had attributed the recovery at the stock market to positive changes in the polity.

    Chukwu said the market recovery was boosted by the introduction of the Investors and Exporters’ foreign exchange window and the narrowing of exchange rates between official and parallel rates due to policy stimulation by the Central Bank of Nigeria (CBN).

  • $14.1b forex deals attract investors

    $14.1b forex deals attract investors

    Foreign investors’ confidence in the economy is rising. The feat is attributed to the $14.1 billion combined foreign exchange (forex) deals from the Investors’ & Exporters’ FX Window – I&E FX Window- and the Central Bank of Nigeria’s (CBN’s) weekly dollar interventions, The Nation has learnt.

    The I&E FX Window has since April attracted $7.6 billion foreign investors’ cash into the economy. The CBN has injected nearly $6.5 billion into the economy within the period to settle forex obligations mainly at the retail end of the market.

    Last week, the CBN, in its drive to sustain the improved dollar liquidity, injected $100 million into the Secondary Market Intervention Sales (SMIS) for spot and short tenored forwards not exceeding 60 days.

    The forex rates across all segments traded within a tight band. At the official market, the naira opened at N305.70/$1 and closed at N305.80/$1 due to daily interventions by the CBN. Similarly, the domestic currency traded flat at the parallel market, closing at N370/$1 all through the week.

    However, at the Nigeria Autonomous Foreign Exchange Market (NAFEX) segment, rate appreciated on all trading days, opening at N360.66/$1 and closing at N359.25/$1, which represent a 0.4 per cent appreciation week-on-week.

    Analysts expect rates to hover at current levels this week as the CBN continues its drive to deepen liquidity via Wholesale and Retail markets interventions in various segments.

    The I&E FX window, also called willing-buyer, willing-seller window, allows foreign investors to find buyers for their dollars at a mutually-agreed price. The CBN controls about 15 per cent of all the transactions carried out in the window.

    Both the I&E FX Window and CBN’s intervention’s cash, the National Bureau of Statistics (NBS) quarterly capital importation report for the second quarter said, led to improved investor confidence in the economy as well as better macroeconomic condition.

    It said the economy has witnessed improvement in capital inflows, as  total capital inflows surged 97.3 per cent quarter-on-quarter to $1.8 billion from $0.9 billion in the prior quarter and improved 72 per cent year-on-year from $1 billion in the second quarter of last year.

    Foreign Portfolio Investment (FPI) accounted for the largest proportion (43 per cent, $0.8 billion) in the second quarter , followed by Other Investments (41.7 per cent, $0.7 billion) and Foreign Direct Investment (15.3 per cent, $0.3 billion).

    By sectoral contribution, inflows classified as Shares (52 per cent, $0.9 billion), Oil & Gas (10.6 per cent, $0.2 billion) and Telecommunication (9.7 per cent, $0.1 billion) attracted the bulk of capital inflows.

    Afrinvest West Africa Limited Managing Director Ike Chioke is not surprised by the jump in foreign inflows, given the recent development in the FX market, particularly the launch of the I &E FX window in April.

    “The largest volume of foreign inflows was recorded in May, underlining the positive impact of FX market transparency and flexibility on investor confidence. The knock-on effects of strong portfolio flows are already evident in performance of the domestic equities market which has historically been driven by FPIs,” he said.

    He explained that investors took advantage of the erstwhile attractive valuation of the market, driving the benchmark index year-to-date return to 36.4 per cent as at August 25, from a negative position of -6.2 per cent in the first week of April.

    He said the impact of the increased foreign inflows was also evident in real sector performance, as Manufacturing Purchasing Managers’ Index (PMI) readings for all the months in the second quarter of this year showed expansion in the sector.

    Chioke said that despite the broad-based nature of rekindled confidence in the economy, the recovery is still fragile.  Sustaining such the recovery in the short term would require the I & E FX window remaining flexible. He said any moves to distort the current operations/flexibility of the window could lead to a repatriation of funds.

    The Afrinvest chief also confirmed in an emailed report that since the launch of the I & E FX Window in April, the turnover of transactions in the window has exceeded $7.6 billion adding that its key attraction remains that rates are market determined.

    He said the improved FX liquidity is broadly driven by spate of FX intervention by the CBN – which has been bolstered by relatively stable oil prices and improved production volumes. Thus, we expect investors to continue to watch the two variables in taking investment decisions.

    On the equities, as the earnings season draws to a close, performance of the benchmark index was mixed last week as the All Share Index (ASI) rose on three of five trading sessions.

    Also, the last of Tier-1 lenders yet to release first half 2017 results submitted audited financials with better than expected performance reported across earnings metrics.

    Nonetheless the impressive results from the Tier-1 banks, the All Share Index ended the week in the red, down 0.7 per cent week-on-week  while year-to-date gain moderated to 36.4 per cent. Also, market capitalisation fell by N94.5 billion to settle at N12.6 trillion.

  • Investors dump govt bonds for quoted equities

    Investors appear to be showing increasingly less appetite for fixed-income securities as Nigerian equities continue to sustain double-digit lead ahead of the most attractive fixed-income securities.

    Nigerian equities opened yesterday with average year-to-date return of 42.2 per cent, still showing positive return after adjustments for inflation rate and interest rate. Inflation rate stands 16.10 per cent while the Monetary Policy rate (MPR)-the benchmark for interest rate, is 14 per cent.

    Domestic sovereign bond issue by the Federal Government has seen declining participation over the past five months, in spite of gradual increase in the coupon rate or interest rate.  The Federal Government had in March 2017 introduced the Federal Government of Nigeria (FGN) Savings Bond (FGNSB) to woo retail investors to the sovereign debt market and deepen capital formation. The minimum subscription was fixed at N5,000 while the maximum was pegged at N50 million.

    With a fixed quarterly interest payment of above 13 per cent, the FGNSB offers guaranteed return. With equities on the downtrend in the first quarter, the FGNSB had been hailed as a highly attractive investment.

    But a report by FSDH Merchant showed that subscription to the FGNSB has been on the decline since the first issue in March. The amount allotted has dropped consistently from N2.07 billion in March 2017 to N400.57 million in July 2017. The total number of investors in the FGNSB has also dropped from 2,575 in March 2017 to 779 in July 2017.

    However, the coupon rate on the two-year FBNSB, which was 13.01 per cent in March 2017 had risen to 13.39 per cent in July 2017 while the coupon rate on the three-year bond, which was 13.79 per cent in April, the first time a three-year bond was issued, had risen to 14.39 per cent in July 2017.

    Between March 2017 and July 2017, a total amount of N5.15 billion was raised through the FGNSB. The highest amount allotted so far was N2.07 billion in March 2017 while the lowest amount was N400.57 million in July 2017. The coupon rates for the August 2017 offer are 13.535 per cent and 14.535 per cent for the two-year bond and three-year bond respectively.

    FSDH pointed out that the August FGNSB bond issues carried higher coupon rates than the July issues and represent the highest coupon rates since inception.

    “The persistent increase in the coupon rates has not attracted enough subscription to the bond despite the steady decrease in the inflation rate in the country since January 2017. One of the factors we can attribute to this development is the rally that dominated the equity market in Nigeria since the introduction of the bond in March 2017,” FSDH stated.

    According to analysts, the rally that has dominated the equity market in Nigeria since the introduction of the FGNSB has been a major factor for the low participation.

    Analysts noted that low awareness of the benefits and characteristics of the bond; its low liquidity at the secondary market and the high yield on the Nigerian Treasury Bill (NTB) are other factors responsible for the low participation.

    With the benchmark index at the NSE indicating average return of 51.47 per cent between March 01, 2017 and August 9, 2017, many retail investors appeared to have diverted funds to the equity market to take advantage of capital appreciation.

    Investors in Nigerian equities had netted N902 billion in capital gains in July 2017 as expectations on corporate earnings reports and improved macroeconomic outlook boosted the market to its highest performance in more than 31 months.

    Aggregate market value of all quoted equities on the NSE closed July at N12.354 trillion, representing an increase of N902 billion on N11.452 trillion recorded at the beginning of the month. The All Share Index (ASI)-the value based common index that tracks share prices at the Exchange, also indicated a month-on-month average return of 8.23 per cent to close the month at 35,844.00 points as against its opening index of 33,117.48 points for the month.

    The average year-to-date return for the seven-month period stood at 33.37 per cent. This implied that investors have so far earned N3.11 trillion in capital gains over the seven-month period.

    Aggregate market value of all quoted equities and the ASI had opened this year at N9.247 trillion and 26,874.62 points respectively.

    The July rally further consolidated the performance of the equities market and set the second half on an upswing after equities netted more than N2.2 trillion in capital gains in the first half of the year.

  • Akeredolu woos investors as Air Peace makes maiden flight to Akure

    Akeredolu woos investors as Air Peace makes maiden flight to Akure

    Ondo State Governor Oluwarotimi Akeredolu (SAN) yesterday reiterated his administration’s determination to make the state attractive to local and foreign investors.

    He spoke at Akure Airport as a private commercial airline made its maiden flight to the state.

    The governor, who said the development marked the beginning of great happenings in the state.

    Akeredole urged the residents to avail themselves of the services provided by the airline.

    The flight into Akure, the state capital, marked the beginning of a Private Public Partnership (PPP) arrangement between the state government and Air Peace, a private airline.

    The governor praised God for making the development possible, describing the arrival of Air Peace in the state as the beginning of great economic revival.

    He hoped the initiative would stimulate the industrial growth of the All Progressives Congress (APC) change mantra, adding that before long, cargo services would begin at the airport to assist the export of farm produce to the United States of America (U.S.A.) and other foreign countries.

    Akeredolu said: “Today marks another giant step in our determination to develop Ondo State. The commencement of commercial flights into Akure will no doubt reduce the stress, risk and wear and tear that our people go through to go to Lagos.

    “More importantly, it will open up the state to local and foreign investors who can now access our state from Lagos in under one hour. It is another chapter in our determination to make sure that we leave Ondo State better than we met it.”

    The governor hailed the airline for showing interest in the state.

    The Chief Operating Officer (COO) of Air Peace, Allen Onyema, expressed delight with the arrangement.

  • Anambra massacre sending wrong signal to investors, says ex-Tanzanian president

    The former President of Tanzania, Dr. Jakaya Mrisho Kikwete, has described Sunday’s massacre at St. Philip’s Catholic Church, Amakwa-Ozubulu in Anambra State, as sickening.

    He declared that the killing of innocent worshippers during early morning mass, would send a wrong signal to investors.

    Kikwete, an economist, who stated these yesterday as the keynote speaker at the opening of the annual conference of the African Bar Association (AFBA) at Hotel Presidential, Port Harcourt, Rivers State capital, explained why most African countries are poor.

    The conference, with the theme: “Dissecting the Legal and Regulatory Framework for Doing Business in Africa,” was also attended by Governor Nyesom Wike, and his counterpart in Sokoto State, Aminu Waziri Tambuwal, both lawyers.

    The ex-Tanzanian president said: “Legacies of colonial exploitation still linger on in Africa. Economies of African countries were designed to meet the needs of the colonial masters. Most products of Africa are still being exported raw.

    “Africans must take share of the blame for not transforming the colonial economies. There is need for new economic order, rule of law, strong institutions and political stability. Africa is the fastest growing economy in the world. A lot still needs to be done to improve the investment climate in Africa. There will be no development without investments.

    “African countries must put in place friendly business policies and improve the business environment to attract investors. With conflicts, wars, terrorism, political instability, impunity and corruption, the attraction of Africa for doing business will be reduced. What happened in Anambra State on Sunday is sickening. Everything should be done to stop it, in order not to send wrong signal to investors. We should make it easy to do business in Africa.

    “Investment is the food and oxygen that nourish an economy. Without investment, the economy stagnates, shrinks and retrogresses. Attracting investments should be top priority. Investments can be sourced from local and foreign entrepreneurs. Investments are attracted to areas with conducive environment.”

    Dr. Kikwete also stated that emphasis should be placed by African leaders on peace, stability, strong institutions, tackling corruption and impunity, respect for human rights, with investment policies designed to benefit all stakeholders, without shortchanging anybody.

    Wike, in his remarks, stated that the Niger Delta state was safe, despite yesterday morning’s hijack of a commercial bus on East West Road and the kidnap of the 16 passengers, who were marched into the forest in the Emohua axis of Rivers.

    He claimed his administration had tackled insecurity, in conjunction with security agencies, which according to him, recorded tremendous success.

    The governor of Sokoto State urged Africans to always live in peace,  harmony and believe in themselves.

    Tambuwal urged stakeholders to always promote development on the African continent, despite the surmountable challenges, while positively portraying Africa as a continent of peace and hope, not of conflict, crisis or war.

    AFBA President Hannibal Uwaifo stated that the association made a lot of progress, forging cooperation among bar associations and taking centre stage at international legal discourse.

    Uwaifo said: “We must not forget what brought this continent to this sorry state – Weak institutions, rampant corruption, impunity, red-tapism, uncoordinated immigration and customs’ rules and self-inflicted blockades hampering free movement of human and material resources, people and human rights abuses, to state a few.

    “We fail to enforce women, children and minority rights, in a continent where 90 per cent of its citizens wallow in abject poverty, while the rulers and economic saboteurs live in opulence.

    “There are no good roads and no plan for the future. Our legal system, which should be the bedrock of investment confidence, is not unaffected by the malaise of corruption and other inefficiencies that have permeated the African society. The legal profession is in crisis and we need urgent solutions. Lawyers engage in unethical and unprofessional practices.”

    The president of AFBA also stated that end must now come to the human rights abuses being perpetrated by the Cameroonian government against the people of Southern Cameroon.

    In his remarks, the Chairman of the Nigeria Forum of AFBA, Inuwa Abdul-Kadir, assured that the members of the association would have hitch-free conference.

    The Alternate Chairman of the Local Organising Committee (LOC) of AFBA, Ibrahim Eddy Mark, who is also the association’s Vice-President, Budget and Finance, in his welcome address, noted that the LOC scored high in security arrangement, while pledging to do more during the entire period of the conference, in view of the “negative and untrue” allegations of insecurity in Rivers by persons he described as those whose stock in trade was to see everything bad in the state.

    Mark reiterated that the security agencies had done the needful, while lauding their dexterity and tactical disposition, adding that Port Harcourt defeated three other contestants to win for Nigeria, the host of the annual conference.

  • Equities hit two-year high as investors gain N194b on N114b deals

    Equities hit two-year high as investors gain N194b on N114b deals

    Nigerian equities hit their highest level in two years at the weekend as increased bargain-hunting for quoted shares sustained a bullish trend that had seen investors with N902 billion net capital gain in July. Investors recorded net capital gain of N194 billion last week as bargain-hunters overran a major profit-taking breather that started the week to sustain four consecutive positive trading sessions.

    Major indices at the Nigerian Stock Exchange (NSE) showed increased momentum of activities and continuing investors’ appetite for quoted shares. Average week-on-week gain stood at 1.52 per cent last week, equivalent to net capital gain of N194 billion. The sustained rally over four trading sessions nudged the average year-to-date return to 39.26 per cent at the weekend.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) rose from the week’s opening value of N12.705 trillion to close the week at N12.899 trillion. The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange, also rose from its index on board of 36,864.71 points to reach a new high of 37,425.15 points at the weekend.

    Investors traded a total 2.52 billion shares worth N114.12 billion in 23,546 deals during the week, compared  to a total of 2.21 billion shares valued at N30.64 billion traded in 26,287 deals in the previous week. Financial services stocks accounted for 1.51 billion shares valued at N16.35 billion in 12,511 deals; representing 59.9 per cent and 14.3 per cent of the total equity turnover volume and value respectively. The industrial goods sector rode on the back of negotiated deals on Dangote Cement to record a turnover of 441.91 million shares worth N89.36 billion in 1,282 deals. The conglomerates sector placed third with a turnover of 184.61 million shares worth N701.67 million in 929 deals.

    The three most active stocks were Dangote Cement, Access Bank and Zenith International Bank, which altogether accounted for 833.97 million shares worth N95.97 billion in 3,203 deals, contributing 33.1 per cent and 84.1 per cent of the total equity turnover volume and value respectively.

    With 38 gainers to 28 losers, most sectoral indices at the Exchange also closed positive. The NSE 30 Index, which tracks the 30 most capitalised companies, recorded a week-on-week average return of 1.24 per cent. The NSE Consumer Goods Index recorded the highest average gain of 4.87 per cent. The NSE Insurance Index appreciated by 2.81 per cent while the NSE Industrial Goods Index inched up by 0.07 per cent. However, the influential NSE Banking Index depreciated by 1.64 per cent while the NSE Oil and Gas Index dipped by 3.05 per cent.

    Low-priced stocks were ahead of the bullish run. C & I Leasing recorded the highest gain, in percentage terms, of 44.9 per cent to close at N1 per share. Dangote Sugar Refinery followed with a gain of 37.3 per cent to close at N14.91. Linkage Assurance rose by 27.1 per cent to 75 kobo. Nascon Allied Industries appreciated by 26.9 per cent to close at N12. Livestock Feeds rallied by 19.2 per cent to close at 93 kobo. Cadbury Nigeria rose by 12.9 per cent to N11.80 while Jaiz Bank gained 12.1 per cent to close at 74 kobo.

    On the downside, Morison Industries led the losers with a drop of 16.9 per cent to close at N1.13. Red Star Express declined by 12.4 per cent to N4.38. Cutix lost 9.9 per cent to close at N2.19. University Press dropped by 9.3 per cent to N2.63. NPF Microfinance Bank dipped by 9.1 per cent to N1.20 while Mobil Oil Nigeria lost 8.3 per cent to close at N232 per share.

    Also traded during the week were a total of 1.166 million units of Exchange Traded Products (ETPs) valued at N16.169 million in 17 deals compared with a total of 1.732 million units valued at N13.711 million traded in 19 deals two weeks ago.

    In the sovereign bond market, a total of 5,850 units of Federal Government bonds valued at N5.702 million were traded in seven deals as against a total of 750 units valued at N0.695 million traded in eight deals in the previous week.

     

  • Fed Govt’s Savings Bond opens for investors at high yields

    The Federal Government has offered for subscription two-year and three-year Savings Bonds to investors at 13.535 per cent and 14.535 per cent. The monthly offer opens today and ends on Friday.

    A statement from the Debt Management Office (DMO) said the two-year bond will be due in August 2019 and the three-year bond has a maturity date of August 2020.

    The offer has a minimum subscription of N5,000 with increases thereafter in multiples of N1,000 up to a maximum subscription of N50 million.

    The Debt Office said the bond is backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders.

    The DMO stated that the savings bond will help broaden the country’s funding base.

    The Federal Government Savings Bond is targeted primarily at retail investors to enable them contribute to the development of the country, while also earning good returns on a safe investment in a Sovereign instrument.

    It was launched by the DMO in March and is issued every month through stockbroking firms trading on the Nigerian Stock Exchange. It promotes savings culture and enhances financial inclusion.

    Since its introduction, the bond has attracted a lot of new investors to the FGN Securities market with its attractive features.

    The income earned on the bond is exempted from taxes and it can be traded in the secondary market on the Nigerian Stock Exchange (NSE).

  • FG offers monthly Savings Bond at 13.535%, 14.535% for investors

    FG offers monthly Savings Bond at 13.535%, 14.535% for investors

    The Federal Government has offered for subscription two-year and three-year Savings Bonds to investors at 13.535 per cent and 14.535 per cent, respectively from today Monday, August 7 to Friday, August 11, 2017.
    A statement from the Debt Management Office (DMO) released on Sunday said the two-year bond will be due in August 2019, while the three-year bond has a maturity date of August 2020.
    According to the statement, “the offer has minimum subscription of N5,000 with increases thereafter in multiples of N1,000 up to a maximum subscription of N50 million.”
    According to the DMO, “the bond is backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders.”
    The DMO stated that the savings bond will help broaden the country’s funding base.
    The FGN Savings Bond is targeted primarily at retail investors to enable them contribute to the development of the country, while also earning good returns on a safe investment in a Sovereign instrument.
    The FGN Savings Bond was launched by the DMO in March 2017 and is issued every month through stockbroking firms trading on the Nigerian Stock Exchange.
    The FGN Savings Bond is promoting the savings culture in the country and enhancing financial inclusion.
    Since its introduction in March, the FGN Savings Bond has attracted a lot of new investors to the FGN Securities market with its attractive features.
    The income earned on the FGN Savings Bond is exempted from taxes and it can be traded in the secondary market on the Nigerian Stock Exchange.
  • Nigeria, Singapore agree to protect investors from double taxation 

    Nigeria, Singapore agree to protect investors from double taxation 

    The Nigerian and Singaporean governments have agreed to protect their respective investors from double taxation.

    As a result of this agreement, the volume of trade between both countries from 2011 to 2015 which stands at N 846 billion is expected to increase significantly.

    The agreement was sealed in Abuja Wednesday evening at the Ministry of Finance and it was witnessed by top officials of both countries.

    The Minister of Finance, Mrs Kemi Adeosun, in her comments said the pact between Nigeria and Singapore has clearly spelt out taxing rights of each country in respect of different income derived from each country.

    The agreement according to Adeosun “will assist prospective investors know their income tax obligation in the other country as well as available tax incentives; and spells out clearly tax jurisdiction of each country in respect of all possible areas of business activities which give rise to taxation.”

    Adeosun stated that the negotiation of the avoidance of double taxation agreement between both countries was held in Singapore from 28th to 30th October 2013 and was concluded in October 2014, after all outstanding issues had been resolved.

    The Federal Executive Council at its meeting of November 16, 2016, approved the content of the agreement and authorized Adeosun to sign the agreement on behalf of Nigeria, following the resolution of all outstanding issues.

    Singapore was identified as a suitable tax treaty partner for Nigeria because it is currently one of the fastest growing economies in the world with a highly developed and successful free-market economy.

    The volume of trade between the two countries from 2011 to 2015 stands at N846 billion, the absolute Balance of Trade was N222 billion in favour of Nigeria while Balance of Trade net of petroleum export stood at N42 billion in favour of Singapore. In terms of the volume of Foreign Direct Investment from Singapore to Nigeria, Adeosun said between 2010 and March 2015 the figure stood at $908.8 million.

    Some of the areas of economic cooperation between Nigeria and Singapore are consumer electronics, information technology products, pharmaceuticals and medical technology products, and financial services, among others.

    Adeosun signed the agreement on behalf of the Federal Government, while Singapore’s Minister of State for Trade and Investment, Dr Koh Poh Koon signed for his country.

    In his comments at the event, the Singaporean trade minister said that “the agreement would send a strong signal to investors from both countries about the commitments of the two countries to stimulate investments.”

    He prayed “that both governments will happily ratify both agreement so that it sends a strong signal to business communities from both sides that both our governments are committed to ease of doing business. This will enable companies to be able to look at investments from both sides with seriousness.”

    Adeosun said “this treaty with Singapore is important because it is consistent with Nigeria’s on-going efforts to expand its treaty network.”

  • Investors earn N902b gain in July rally

    Equity ivestors in Nigerian capital market netted N902 billion in capital gains in July 2017 as expectations on corporate earnings reports and improved macroeconomic outlook boosted the market to its highest performance in more than 31 months.

    Aggregate market value of all quoted equities closed July at N12.354 trillion, representing an increase of N902 billion on N11.452 trillion recorded at the beginning of the month. The All Share Index (ASI)-the value based common index that tracks share prices at the Exchange, also indicated a month-on-month average return of 8.23 per cent to close the month at 35,844.00 points, as against its opening index of 33,117.48 points for the month.

    The average year-to-date return for the seven-month period stood at 33.37 per cent. This implied that investors have so far earned N3.11 trillion in capital gains over the seven-month period. Aggregate market value of all quoted equities and the ASI had opened this year at N9.247 trillion and 26,874.62 points respectively.

    The July rally further consolidated the performance of the equities market and set the second half on an upswing after equities netted more than N2.2 trillion in capital gains in the first half of the year.

    The stock market recorded average year-to-date return of 23.23 per cent in the first half, equivalent to net capital gain of N2.2 trillion for the period.

    Aggregate market value of all quoted equities on the NSE closed the first half at N11.452 trillion as against 2017’s opening value of N9.247 trillion, representing net capital gain of N2.205 trillion or 23.85 per cent. The ASI had crossed seven levels to close first half at 33,117.48 points compared with its year’s opening index of 26,874.62 points, representing an increase of 23.23 per cent.

    The rebound represents a major recovery for hard-pressed Nigerian investors, who had lost N3.98 trillion in the past three years. The stock market had been on a losing streak since 2014. Investors lost N1.75 trillion in 2014 and followed this with another loss of N1.63 trillion in 2015. Against the general expectation that political transition and new government will quicken a rebound, equities closed 2016 with a net capital loss of N604 billion. Aggregate market value of all quoted equities on the NSE closed 2016 at N9.247 trillion as against N13.226 trillion recorded at the start of trading in 2014, representing a net capital loss of N3.98 trillion.

    Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, had attributed the recovery at the stock market to positive changes in the polity.

    Chukwu said the market recovery was boosted by the introduction of the Investors and Exporters’ foreign exchange window and the narrowing of exchange rates between official and parallel rates due to policy stimulation by the Central Bank of Nigeria (CBN).

    He noted that the improvement in foreign exchange market and overall macroeconomic performance encouraged foreign portfolio investors to reconsider and redirect funds to Nigerian equities, which supported the domestic investors’ base.

    He added that the ongoing revision of the investment guidelines for pension funds administrators (PFAs), which includes mandatory investment off a certain percentage of pension funds in equities, also encouraged many PFAs to take early positions in equities ahead of the release of the final guidelines.