The Nation Newspaper

Tag: MARKET

  • Ondo business tycoon now market women president

    Ondo business tycoon now market women president

    A renowned Akure business woman, Mrs Ruth Olowookere (a.k.a Madam Do-Good) has been installed the new President of National Association of Traders and Market Leaders Council of Nigeria (NAMLCN).

    In addition, Madam Do-Good has also been conferred with the chieftaincy title of Erelu of Iyaloja of Nigeria by the Owa of Idanre Kingdom, Oba Fredrick Aroloye.

    The Ologboosere of Idanre, High Chief Olagundoye Olurankise who decorated her on behalf of the monarch said she was picked among millions of Nigerian market women due to her impact on the development of the country.

    According to Olurankise, “Olowookere has been supportive and also contributing her own quota to the economy of the country. She was chosen because she has been doing laudable things to mankind and very humble, respectful, diligent and hardworking.

    ”My advice for her is that she should continue to do good as she had been doing. We appreciate her (and) that is why she was recommended for Kabiyesi and Owa in Council gave her the title”.

    At her installation as NAMLCN’s president in Akure, the Ondo State capital, National Secretary of the association, Alhaji Idowu Alonge described Mrs Olwoookere as a hardworking person, who had connected with some international bodies in order to elevate the market women and men in the country.

    Alonge said, “We installed her as our President because she is highly connected, diligent, humble and educated. You   know in Nigeria, you must be educated in order to strive. Madam Olowookere is educated and we believe she is the best person to speak on behalf of us, the market women and men.

    “As the President of Market Women and Traders, she is expected to travel round the 36 states including Abuja, to ensure the welfare of her members and speak to the Governors if necessary (on their behalf). We are not politicians, we always support the government in power.”

    Olowookere thanked all market women and men in the country for reposing confidence in her as their President.

    She noted that her recent trip to Columbus has fast-tracked assistance for NAMLCN members from international bodies.

    Olowookere said, “as a business woman, I have been in business for years but today, I am giving a certificate to manage the whole world, not Nigeria alone because recently I travelled to Columbus to attend the Commonwealth meeting with women from other countries. So we held a meeting there and everybody discussed what she had in mind.

    “I told them that I want to work for my country, Nigeria, that they should please help all market women and men and they asked us to go and look for a guarantor that they are ready to give us a lot of money to help the traders and market women if we have a guarantor.

    ”I told them that I will guarantee that. I will call all our members and NGO to help Nigerians. So, they ordered me to go back to Nigeria and begin to group them, enlighten them. They are ready to assist us the money with little interest.

    ”Today, (December 13,) we will be joining some groups partially that will be giving out money to the traders and market women. We are starting from Ondo State. Very soon, Ondo State Market women will laugh.  We are also orientating the women that they should not put themselves in the position of begging the government to help them.

    “Government is an entity and if we can put ourselves together we are an entity too. We should be able to generate funds in order to move forward our businesses and how to train our children in our country. In this programme, there is no government input”.

  • Jos: Once upon a model market

    Jos: Once upon a model market

    The Jos Main Market was more than a trading centre. It was also a tourist attraction. Visitors to the state stopped by to take in its beauty, its extensive size, to say nothing of its architecture. Then one day, the beautiful structure was all but reduced to rubble. Blame it on a mysterious fire.

    The market was one of two major reasons why people visited Jos, the Plateau State capital. The other reason was the unique cool weather.

    The beautiful, ultra-modern Jos market was located at the city centre of Jos.

    The market and the weather combined to make Jos probably the most beautiful city in the country, if not in the West Africa.

    The exclusive cool weather of Plateau is no doubt a natural phenomenon, but the Jos ultra-modern market was a very unique man-made beauty.

    When the market was constructed even up till 2011, one could not find its type in any state of the federation. The market had a unique design that made it the most attractive tourist site in the state. People travelled from all over the country to catch a glimpse of it. The tourism impact of the market was such that the federal government counted it as one of its topmost tourism destinations.

    The famous market was constructed by the first military administrator of the state following its creation in 1975, Police Commissioner Joseph Deshi Gomwalk. And indigenous Plateau leader, J. D. Gomwalk thought of a project that will stand the test of time as well as stand the state out. He then came up with the idea of the market. He began constructing it with conviction and maximum attention. Due to the complexity and vastness of the market, its construction lasted more than 10 years. It went on throughout the four years Gomwalk served as the first governor of the state. He handed the same market project to the first civilian governor of the state, Chief Solomon Lar in 1979.

    Considering the huge potentials of the market project, all the administrators who inherited the project cannot resist working for the realisation of the dream of the market. On completion, the market had shop accommodation for at least 3,500 traders. The open space at the base of the market was meant to accommodate at least 2000 shops. It was constructed with provision for banks, restaurants, police station, fire service station, post office, warehouses, car parks as well as office accommodation for market staff, among others. A huge amount of taxpayers’ funds and loans running into billions of naira went into the market project before its completion.

    But all of a sudden, this market that served as the pride of the nation went up in flames. It took the state fire service two days of intensive battle to put off the fire. When the fire was over, the market was no more, the most beautiful market in the country was gone. The market that took the state over 10 years to complete was turned to ashes by fire within 24 hours. The market lasted for only 17 years. The market got burnt in 2002 when the state was yet to recover its cost of construction. The state had not even paid back half of the loan it acquired from Mid-Land Bank when it got burnt.

    The cause of the fire disaster which occurred  in February 2002 remains unknown till date. Nigerians who either know or have heard about the market mourn its destruction. Former governor of the state, Solomon Lar, who played a positive role in completing the market, wept like a baby when he went to see the extent of damage to the market.

    The disaster sent thousands of traders out of business; it threw thousands of staff out of work, reducing the state tourism to nearly nothing and brought the state economy to its knees. Indeed, no other disaster has affected the state like that of the market. The total loss recorded in the market fire disaster cannot be quantified. Some traders committed suicide following the huge loss they encountered. A commission of inquiry was set up by the then Joshua Dariye administration to ascertain the causes of the inferno. The report of the commission never saw the light of the day.

    Knowing how the market had given the state national and global prominence, it was expected that the state government will move quickly to reconstruct the market considering especially it’s huge economic potential to the state. The state government made promises of reconstructing the market through public-private partnership, but eleven years after the destruction of the market, such promises have not been fulfilled by the state government.

    At the advent of the incumbent administration of Governor Jonah Jang in 2007, government made a proposal to demolish the remaining structures of the market, evacuate it and replace it with a shopping mall of modern and international standard. Jang is yet to offer any reason why he has not done anything on the proposed international shopping mall. But the government has offered reasons why the market will not be rebuilt at the same site. The governor is of the opinion that markets should be decentralised. Two, that such huge market complex at the city centre will cause congestions especially in Jos, the state capital.

    For these two reasons, government has encouraged the construction of two satellite markets in Jos. One is located at Rukuba Road, the other at Katako, both in Jos North Local Government Area of the state. The government also made deliberate efforts towards developing satellite markets in Bukuru, Farin Gada and Dadinkowa.

    Notwithstanding, the construction of the two satellite markets and hope of government to decongest the city center seemed to have failed to yield expected results for government. Thousands of traders have refused to vacate the premises of the Jos main market. Only few of them moved to occupy the satellite markets. The demise of the Jos ultra modern market has only created another ultra-modern problem for the state government. A visit to the market site in Terminus Jos shows the clusters of shops erected by traders at the foot of ruined market. Other traders who do not erect any structure takes on the streets to display their wares for sale. So much so, that vehicles contests usage of the roads with trader’s wares.

    Rather than going to the satellite markets and trade under a roof, traders rather rejected the offer and preferred to trade around the burnt market using umbrella as roof. Any visitor to Terminus today will behold a sea of umbrella roofs used as markets by traders. The umbrella roof remains the most prominent features at Murtala Muhammed way, Ahmodu Bello way, Tafawa Balewa streets, old Bukuru Parks, etc. These features provided by traders have made Jos city centre look like a huge refugee camp.

    This scenario was made possible with buyers trooping to Terminus daily to purchase wares. Today, 70% of buying and selling takes place in Terminus within the vicinity of the main market. In other words, the market that was a tourist delight in Jos is now a source of nightmare to government as activities around the ruined market site now constitute an ultra modern abuse of the state tourism potentials. The skeleton of the ruined market stands tall and it’s stores serves as bunks that provide  accommodation for all manners of criminals in the city.

    Now even amorous activities take place at night in the night. The edifice is also a den for rapists. Several teenage girls have been lured there and attacked. It is also a hide-out for armed robbers who converged there to plan and attack innocent citizens. Parts of the market have been converted to refuse dumps, some other parts used as public toilet by traders.

    The ruin of the market site is now a huge embarrassment to government and citizens of the state.

    As a matter of fact, the much talked-about Plateau State tourism was gone with the absence of the famous market edifice. Apart from the 2007 assurances of Governor Jang that his government will turn the ruin of the market into an international shopping mall, no action has been seen. It appears the Jang administration is keeping their plan on the market close to their chest.

  • ‘Nigerian financial markets susceptible to external shocks’

    ‘Nigerian financial markets susceptible to external shocks’

    Continuing decline in government revenue amidst sustained increase in portfolio inflows might expose Nigerian financial markets to undue risks and shocks from the global financial markets, deputy governor, financial system stability, Central Bank of Nigeria (CBN), Dr. Kingsley Moghalu has said.

    He was the special guest of honour and delivered the keynote address on ‘the outlook for the Nigerian economy in 2014’ at the Third Annual Investors Conference organised by CBO Capital.

    According to him, Nigeria’s robust external reserves of $45 billion has been supported by massive inflow of foreign portfolio funds, which have camouflaged the decline in excess crude savings and

    Aggregate foreign capital inflows stood at $7.79 billion at the end of second quarter 2013 compared with $4.53 billion in second quarter 2012. Out of this, foreign direct investment inflow was $1.47 billion or 18.9 per cent while portfolio investment inflow accounted for $6.52 billion or 81.1 per cent.

    “While Federal Government spending overall in 2013 has not been significantly higher than in 2012, oil revenues have continued to decline in spite of the relative stability in oil price and output when compared with preceding years. As a result, Excess Crude savings have fallen from about $11.5 billion at year-end 2012 to less than $5 billion on November 14. External Reserves have remained in excess of $45 billion only because of a massive inflow in portfolio funds. The implication of this is that financial markets are susceptible to external shocks,” Moghalu said.

    According to him, provisional data on gross federally-collected revenue from January to October 2013 stood at N8.292 trillion, out of which oil sector accounted for 69.9 per cent and the non-oil sector contributed the balance of 30.1 per cent. This represented a decline of 12.3 and 9.4 per cent below the proportionate budget estimate in 2013 and the actual receipts in the corresponding period of 2012.

    He noted that the projected gross revenue of N11.34 trillion by the end of December 2013 is expected to fall below the budgeted revenue for 2013 and actual revenue in 2012 by 10.1 and 12.0 per cent respectively.

    The CBN deputy governor outlined that actual Federal Government retained revenue for January to October 2013 stood at N3.19 trillion, representing a shortfall of 21.0 per cent compared with proportionate budget for 2013 while the total expenditure of the Federal Government between January and October 2013 stood at N3.77 trillion, which was lower by 19.7 per cent to the proportionate budget for the same period, but exceeded the cumulative outlay during the same period of 2012 by 2.2 per cent.

    “Given the budgeted expenditure of N5.79 trillion and retained revenue of N4.91 trillion, the fiscal deficit for the year is projected at N887.07 billion or 1.9 per cent of GDP. Between January to October 2013, the fiscal operations of the Federal Government resulted in a deficit of N582.11 billion or 1.5 per cent of GDP and financed mainly through domestic borrowing. The major concern of the CBN is its impact on macroeconomic variables. The bank therefore continued to pursue tight monetary policies in order to contain inflationary pressure. These include the introduction of cash reserve requirement (CRR) of 50 percent on public sector deposits with the deposit money banks (DMBs) to stem liquidity surge,” Moghalu said.

    He noted that while the overall outlook for the Nigerian economy in 2014 is positive, there are some potential headwinds that may lead to further tightening in monetary conditions.

    According to him, it is expected that 2014 will be the year for quantitative easing- tapering in the US and interest rate rises in Europe, both of which will lead to some pressure on the exchange rate and stock prices due to the impact on capital flows.

    He noted that next year being the period that election spending is likely to take place, there could be more pressure to bear from the fiscal side, which may necessitate the continuation of the current monetary tightening mode in response to these eventualities in 2014.

    He stressed the need to sustain and consolidate current efforts to address the lingering challenges of insecurity, infrastructural deficits as well as the threats to oil production such as pipeline vandalism and crude oil theft among others.

    “There is also the need to give greater attention to the diversification of the Nigerian economy away from the current over-dependence on oil export in order to avoid the vagaries in the international oil market and their attendant adverse effects on the domestic economy,” Moghalu said.

    He however underlined that the Nigerian economy is expected to grow strongly in 2014 with the growth to be driven by high oil prices and robust domestic demand.

    According to him, several reforms initiated and pursued by government in 2013 are expected to impact the economy positively in 2014. These include government efforts to improve transportation network and port reform to strengthen economic linkages between sectors, cities and regions and make growth more inclusive; expected passage of the Petroleum Industry Bill (PIB), which is expected to improve local content, ensure technology transfer and job creation; modernisation of agriculture through improved seedling and value chain initiatives which will likely increase agricultural output and financial sector reform through financial inclusion which is expected to further enhance economic growth and job creation through access to financial products and services by a large segment of the informal sector of the economy.

    Moghalu added that power sector reform will reduce cost of doing business and attract local and foreign investors into the industrial and manufacturing sectors of the economy and open job opportunities.

    Other experts who facilitated panel discussions and sessions at the conference included Dr. Doyin Salami, Consultant and Member of the CBN monetary Policy Committee, Mr. Ike Chioke, Managing Director, Afrinvest, Mr. Dave Uduanu, Managing Director, Pension Alliance Limited, Mr. Hewett Benson, Executive Director, Asset Management Corporation of Nigeria, Mr. John Cross of Mirabaud Bank, Switzerland, Mrs. Sanyade Okoli, Director, Travant Capital and Mr. Raj Kulasingam, Senior Counsel, Dentons, among others.

    Speaking on the rationale behind investors conference, executive director, CBO Capital, Bex Nwawudu, said the key objective was to raise awareness for domestic investment activity in private equity.

    According to him, in spite of the fact that next year heralds the forthcoming elections, it has become important to highlight the fact that Nigeria still has numerous viable and profitable investment opportunities.

    “In essence, what we are showing people is that there is a burgeoning and growing private equity industry in Nigeria, and that we are part of it,” Nwawudu said.

    He noted that with this conference, CBO Capital brought together industry practitioners from all spheres to actually sit down together and talk about the various transactions that can be completed in the alternative and unlisted space.

  • Firm targets global market

    Venus Processing and Packaging Limited (VPPL), a member of Primlaks Group, has unveiled its Sympli brand of Individually Quick Frozen (IQF) fruits and vegetables at the ANUGA food expo in Cologne, Germany.

    The company, in a statement made available to The Nation, said IQF technology involves quick freezing of freshly harvested fruits and vegetables to lock in all their vitamins, nutrients and natural goodness.

    VPPL, the only company from Nigeria to exhibit at the fair, showcased various Sympli products that included Nigerian chillies such as ‘Atarodo’, ‘Sombo’ and ‘Tatase’; local delicacies like ‘Yam Fries’, ‘Yam Chunks’ and ‘Dodo’, as well as fruits like pineapple, papaya and mango, which were packaged in consumer-friendly standard pack sizes and were delivered in ready-to-use state for frying, steaming, microwaving or any other method preferred by customers.

    Group Chief Executive of Primlaks Group, Mr Ravi Hemnani, explained that the company chose to unveil its various products at the fair because of the desire to showcase Nigerian products in the international market.

    “ANUGA, being the world’s largest food and beverage fair with nearly 7,000 exhibitors from 100 countries and about 155,000 visitors from 185 countries, gave us the ideal platform to fulfill our export objectives. We are particularly focused on reaching the large population of Africans in the Diaspora, especially in Europe, America and the Middle East who present huge potential for foreign exchange earnings.

    “IQF offers a lot of benefits, particularly because they give high levels of vitamins and anti-oxidants. Prior to participating at ANUGA, VPPL had made heavy investment in research and packaging and secured local and international certications to achieve the delivery of products that meet world-class standards.

    “We pioneered fruit and vegetable IQF production in Nigeria because we observed that Nigeria suffers from an estimated 40 per cent post-harvest loss that should not be allowed to continue and we know that IQF has the potential to stop this unacceptable waste,”he added.

    Hemnani said: “We believe that our efforts will help in achieving the objectives of the Federal Government’s agricultural transformation agenda and offer Nigeria a huge revenue earning opportunity.”

    Hemnani also said he was excited at the turn out of visitors and potential business partners to VPPL’s stand at ANUGA.He said: “The cooking station that we set up at the venue encouraged them to try yam fries, plantain chips and ‘dodo’ with Nigerian chilli sauce that we proudly displayed as ‘Product of Nigeria’.”

    He further said that enquiries have been pouring in from leading local supermarkets and department stores and that the company has plans to also meet the needs of the local market in Nigeria.

  • First Lady lifts community with N10m market, assures on social amenities

    First Lady lifts community with N10m market, assures on social amenities

    Kugbo community, an uptown district within the FCT metropolis, Abuja, received a major boost recently, with the formal launching of a N10million ultra-modern market, by Nigeria’s First Lady, Dame Patience Jonathan.

    While lauding the community for their diligence and resilience over the years, Dame Patience, who was represented on the occasion by Hon. Esther Gbonkumu, further assured that she would make adequate representation on their behalf geared towards accelerated development of the neighbourhood.

    “I thank you fostering the spirit of cooperation among yourselves and wish to assure you that President Jonathan’s administration remains committed to the welfare of Nigerians irrespective of social status”, she said.

    Speaking further, she said: “I’m particularly happy that Kugbo community has maintain the peace over the years and will not hesitate to tell the appropriate authorities about your plight and will ensure that within the shortest possible time all your needs like good access roads, potable water, schools, hospitals and many more amenities are provided for you,” adding: “President Jonathan always keeps his promise so be rest assured that he won’t disappoint you.”

    Also speaking on the occasion, Dr. Rejoice Jenifer Madike, Director-General, Initiative for Actualisation of Gender Equality in Nigeria and Princess Barnawa Nwoko, Director-General, Women for Jonathan Support Group, North-West Zone, observed that the current administration was committed to the welfare of women in general, even as they both assured the community that all their aspirations in terms of social amenities would be met by President Jonathan.

    Speaking earlier, Mrs. Beatrice Enyia Monyon, Founder/National President, Voice of Women in Nigeria (VOWIN), a non-profit, nongovernmental organisation, while lauding the First Lady for her pet project, Women for Change and Development Initiative, which according to her has given concrete expression to the transformation agenda of President Goodluck Jonathan’s administration, appealed that Kugbo community was in dire straits in terms of infrastructural development.

    Echoing similar sentiments, General Adoga Harrison (rtd), President, Kugbo Residents Association, noted that the gap in infrastructure, has rendered the community prostrate as well as made life miserable for them, especially the menace of road accident which has claimed many lives of women and children due to lack of a pedestrian crossing.

    The highpoint of the occasion was the presentation of the handicraft and other ensembles by the women in the community and a tour of the produce market by the First Lady and her entourage.

     

  • Industrial, ethical stocks lead stock market’s returns

    Investors who staked their funds on industrial goods and ethical stocks have made almost a double of average return by other investors as non-financial stocks strengthen their increasing dominance at the Nigerian stock market.

    Year-to-date return analysis at the Nigerian Stock Exchange (NSE) showed that investors in industrial goods stocks and selected stocks that complied with non-interest, low gearing standards of Islamic investments have the highest returns in the stock market.

    Market’s opening data provided by the NSE on Monday showed that companies that engage in manufacturing of industrial goods such as cement and paints have generated the highest returns for investors.

    Investors in industrial goods stocks have earned twice the returns in the banking, oil and gas, insurance and consumer goods sectors and they are leading market’s overall average return by some 25 percentage points.

    The NSE Industrial Goods Index is the benchmark for four subgroups including building materials, electronic and electrical products, packaging and containers and tools and machinery. However, it is dominated by building material stocks, especially cement and paints manufacturing companies.

    The NSE Industrial Goods Index consisted of 10 leading stocks out of the 26 companies listed in the sector. The representative stocks were selected based on their market capitalisation and liquidity. The benchmarked stocks included Ashaka Cement, Lafarge Cement Wapco Nigeria, Dangote Cement, CAP, Cement Company of Northern Nigeria (CCNN), Berger Paints, Cutix, Portland Paints & Products Nigeria, Beta Glass, and Paints and Coating Manufacturing Company.

    The NSE Industrial Goods Index showed a year-to-date return of 53.99 per cent, according to the values-on-board at the start of the market on Monday. Ethical stocks under the NSE-Lotus Islamic Index (NSE-Lotus II) trailed with a year-to-date return of 43.81 per cent, more than a triple of return in the financial services sector.

    The NSE Lotus II is the first index created to track the performance of Shari’ah compliant equities on the NSE and also the first index to be developed in collaboration with local partners. It was developed by the NSE in conjunction with Lotus Capital Limited. The NSE Lotus II excludes stocks in industries such as alcohol, interest-based financial services, tobacco, arms and ammunitions, gambling, piggery and other businesses regarded by Muslims’ laws as unlawful.

    The NSE Lotus II is constituted by 15 stocks, screened and selected by a Shari’ah advisory board. Five of the stocks that constituted industrial index- Ashaka Cement, CAP, CCNN, Dangote Cement and Lafarge Cement also formed part of the benchmarked stocks under the ethical index stock. Others included Cadbury Nigeria, Julius Berger Nigeria, GlaxoSmithKline Consumer Nigeria, National Salt Company of Nigeria, Nestle Nigeria, Nigerian Aviation Handling Company (Nahco), Okomu Oil Palm, PZ Cussons Nigeria and Unilever Nigeria Plc.

    The All Share Index (ASI), the common value-based index that tracks all equities on the NSE, posted a year-to-date return of 28.56 per cent. The NSE 30 Index, which tracks the 30 most capitalised stocks, has returned 26.23 per cent so far this year. The NSE Consumer Goods Index, which tracks mostly fast moving consumer goods companies, indicated average return of 220.43 per cent while the NSE Oil and Gas Index, which serves as benchmark for the downstream oil sector, recorded a year-to-date return of 23.48 per cent.

    Financial services indices showed the least returns among the main indices. The NSE Banking index indicated the lowest return of 13.74 per cent while the NSE Insurance Index has returned 13.98 per cent. The report underlined growing concerns about diminishing influence of banking stocks, which hitherto have domineering influence on the overall market situation at the Exchange.

    The NSE Lotus II was by introduced by the NSE to increase the breadth of the market and create an important benchmark for investments as the alternative non-interest investment space widens. The NSE had reasoned that NSE Lotus II would serve as an important diversification tool for ethically minded investors and portfolio managers both locally and from around the world, who seek to profitably invest in emerging African equities market. It is also expected to serve as a general benchmark for ‘ethical’ funds and also basis for creating Mirror Funds, Index Funds, Exchange Traded Funds, Index options and other instruments, which would broaden the range of financial instruments being traded on the NSE.

     

  • SEC mulls 10-year master plan for capital market

    SEC mulls 10-year master plan for capital market

    Securities and Exchange Commission(SEC)has launched an elaborate market-wide consultation aimed at developing a long-term strategic master plan for sustained development of the capital market.

    SEC on Monday inaugurated three committees to conduct a holistic review of similar emerging markets and develop blueprints to structure the market for global competitiveness. The committees included the 10-year master plan committee, non-interest products committee and literacy committee.

    Former Chairman of Accenture Nigeria, Mr Adedotun Sulaiman chairs the master plan committee; Mrs. Hajara Fola Adeola chairs the non-interest committee while President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun chairs the literacy committee.

    Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, said key areas will include investor protection and education, professionalism, product innovation and expansion of the role of the capital market in economic development will be covered.

    She said the long-term development committee will consider relevant factors that impact market growth and develop strategies for robust governance for improved efficiency, transparency and enhancement of the market stability.

    According to her, necessary recommendations with clear and actionable quarterly and annual milestones that will lead to a world class capital market are expected to be coordinated into a blueprint.

    She added that Nigeria’s growth plan would take into consideration successful growth strategies in other jurisdictions.

    On the bearish trend on the NSE in recent period, Oteh pointed out that global factors were partly responsible for the downtrend at the Nigerian stock market.

    “But despite the challenges, the Nigerian capital market is still doing better compared to other emerging markets like China, Indian, Indonesia, Brazil, among others,” Oteh said.

    She noted that ongoing reforms have strengthened the capital market as investors are now trading on companies with good fundamentals while there is improved transparency and fuller disclosures.

     

  • Forex market hit by N1tr public sector fund withdrawal

    The N1 trillion public sector funds withdrawn from banks on August 7 is taking its toll on the foreign exchange (FOREX) market. The withdrawal followed the decision of the Central Bank of Nigeria (CBN) to raise the Cash Reserve Ratio (CRR) from 12 per cent to 50 per cent.

    The CRR is the portion expressed as a percentage of banks’ deposit balances, which lenders must have as reserve in cash, with the CBN.

    The regulator’s plan was to mop up excess liquidity from the system, have less naira in circulation and get the currency strengthened. But the Managing Director, Bluewall Bureau De Change Limited, Lucky Aiyedatiwa, said the reverse had been the case.

    He said rather than the naira appreciating, the currency has been dropping in value. The naira on Friday retreated for three consecutive days, after the CBN and oil companies failed to selle the needed dollars to strengthen the currency.

    The naira last week lost 50 kobo at the inter-bank market, to close at N163.60 to a dollar from N163.10 to a dollar. The Bureau De Change (BDC) and parallel market were in line with the trend in the inter-bank market, both markets lost 100 kobo to close at N164.50 to a dollar and N165 to a dollar respectively

    The naira has fallen 4.6 per cent against the dollar this year.

    Aiyedatiwa said: “Forex market is not funded. There has been a serious reduction in dollar supply into the interbank and autonomous markets. The condition has put pressure on both markets.”

    However, he said the market position remained temporary, and would be corrected as soon as dollar inflows from the Nigeria National Petroleum Corporation (NNPC) and CBN improve.

    Debate among Federal Reserve officials over whether to reduce monetary stimulus has roiled financial markets since May. Oil companies in Nigeria, which sell the dollar mainly at the end of the month to pay domestic expenses, are the second-biggest supplier of dollars after the CBN.

    CBN spokesman, Ugochukwu Okoroafor told The Nation on phone that there is nothing to worry. He said the naira should be allowed to find its feet, adding that what is happening is temporary.

    He said the impact of the CRR hike on the naira will not be immediate, adding that over time, the naira will stabilise. The CBN auctions foreign exchange on Mondays and Wednesdays.

    The banking watchdog offered $600 million at the Wholesale Dutch Auction System (WDAS) last week while a total of $525.1 million was sold. This comprised $266.6 million on Monday and $258.5 million on Wednesday’s auction. The Marginal rate at both auctions remained at N155.76 to a dollar.

    Analysts said the CBN support for the naira notwithstanding, strong demand pressure from corporate to meet dollar obligations would continue to influence its depreciation. Also, the down-side risk of declining oil receipts still exist, as Nigeria receives over 70 per cent of its forex inflows from oil proceeds. Also, decline in oil revenue is expected to affect Nigeria’s balance of trade position and ultimately, the value of the naira.

     

  • Low-priced stocks lead stock market returns

    Low-priced stocks lead stock market returns

    Less than a quarter of quoted companies on the Nigerian Stock Exchange (NSE) performed above average market returns with low-priced stocks, otherwise known as penny stocks, dominating the highest returns table.

    Eight-month year-to-date analysis of the stock market showed a major reversal last month as equities lost N510 billion to almost reverse previous gain of N581 billion in July. The reversal in August shaved average year-to-date capital gains at the Nigerian equities market from about N3.03 trillion by the end of July to N2.52 trillion by the end of August. Indexed, average returns at the market shrank to 29.10 per cent for the eight-month period as against 35.03 per cent recorded by the seventh month.

    In simple value terms, the eight-month capital gain of N2.52 trillion still surpassed total gains of N2.44 trillion recorded for the entire 2012, although substantially lower than N3.03 trillion recorded by July 2013. However, the average indexed return of 29.10 per cent fell below return of 35.03 per cent recorded by July. Average full-year return had stood at 35.45 per cent in 2012.

    Most equities were almost flat while several other stocks witnessed depreciation, underlying the hangover of the recent recession, which has continued to haunt several stocks, especially in the insurance and information and communication sectors.

    Investors warmed up to low-priced brewers as preference for equities with relatively low prices appeared to be growing on the back of substantial returns by the penny stocks.

    As against July when 42 stocks performed above average, eight-month year-to-date returns by 45 stocks were higher than the average benchmark return of 29.10 per cent. However, most top-fliers also witnessed considerable declines in their returns compared with the closing positions in July.

    Jos International Breweries, Transnational Corporation of Nigeria (Transcorp), International Energy Insurance, Prestige Assurance, Total Nigeria, Ecobank Transnational Incorporated (ETI) and GlaxoSmithKline Consumer Nigeria (GSK) made the new list of above-average stocks, four other stocks including International Breweries, Diamond Bank, NEM Insurance and Ashaka Cement dropped from the top gainers’ list. The most dramatic advances were in the breweries sector, where low-priced brewers became the toasts of investors. Champion Breweries, which had closed July with a year-to-date of 220.7 per cent, consolidated its returns to 310.36 per cent while Jos International Breweries, which fell short of the 35.03 per cent average in July, recorded year-to-date return of 91.50 per cent by end of August.

    While few stocks moved their positions on the returns table and returns were lower in several instances, the structure of the top stocks remained largely unchanged. Forte Oil remained atop with eight-month return of 402.85 per cent. Evans Medical followed with a return of 342.53 per cent. Livestock Feeds placed fourth with a return of 197.22 per cent. Presco posted a return of 119.94 per cent. International Energy Insurance (IEI), which had completed the restructuring of its shares by reducing number of outstanding shares and re-pricing the remaining ones, recorded an increase of 116 per cent. However, IEI’s return may still largely be subjective and due mainly to revaluation of the stock as it has not been actively traded after the restructuring. Julius Berger Nigeria retained year-to-date return of 115.61 per cent. In spite of substantial decline in recent period, investors in Wema Bank still have 100 per cent return on the opening values of their investments this year.

    Other above-average stocks included Transcorp, 33.33 per cent; UAC of Nigeria, 30.95 per cent; UACN Property Development Company, 37.12 per cent; Seven-Up Bottling Company, 71.43 per cent; Dangote Sugar Refinery, 81.67 per cent; Honeywell Flour Mills, 52.15 per cent; Northern Nigeria Flour Mills, 55.01 per cent; National Salt Company of Nigeria, 36.88 per cent; Cadbury Nigeria, 82.24 per cent; Nestle Nigeria, 33.57 per cent; PZ Cussons Nigeria, 35 per cent; ETI, 29.67 per cent; Sterling Bank, 47.4 per cent; United Bank for Africa, 60.75 per cent; Union Bank of Nigeria, 40.14 per cent; Aiico Insurance, 51.61 per cent; Continental Reinsurance, 60.53 per cent; Prestige Assurance, 29.41 per cent, Wapic Insurance, 41.38 per cent while Stanbic IBTC Holdings recorded a return of 47.55 per cent.

    Others were Fidson Healthcare, 90.57 per cent; GSK, 29.71 per cent; May and Baker Nigeria, 47.74 per cent; Courteville, 36 per cent; CAP, 55.89 per cent; Cement Company of Northern Nigeria, 69.06 per cent; Dangote Cement, 48.32 per cent; IPWA, 52 per cent; Lafarge Cement Wapco Nigeria, 58.89; Conoil, 45.37 per cent; Eterna, 53.77 per cent; MRS Oil & Gas, 52.10 per cent; Total Nigeria, 30.26 per cent; Red Star Express, 56.67 per cent, ABC Transport, 54.0 per cent while McNichols, with a return of 85.19 per cent, was the only second-tier stock on the above-average list.

    But while the downside remained muted, some 13 stocks recorded significant losses. Vono Products Plc showed the highest year-to-date loss of 66.32 per cent. It was followed by Trans Nationwide Express, which recorded negative return of -64.03 per cent. John Holt trailed with 62.94 per cent while Costain (West Africa) placed fourth with -56.02 per cent.

    Other top losers included Chellarams, -22.77 per cent; NPF Microfinance Bank, -33.05 per cent; Deap Capital Management, -46.04 per cent; Morison Industries, -42.07 per cent; Pharma Deko, -28.85 per cent; Thomas Wyatt, -38.64 per cent; Capital Hotel, -27.43 per cent; Learn Africa, -21.88 per cent and Juli Plc, which opened this week with eight-month loss of 26.62 per cent.

    Equities’year-to-date performance was moderated by the bearishness that dominated August as poor earnings by banks dampened investors’ appetites. Aggregate market value of all equities closed August at N11.497 trillion from its month’s opening value of N12.007 trillion, indicating a month-on-month drop of 4.25 per cent. The All Share Index (ASI), which doubles as benchmark index for all equities on the NSE and country index for Nigeria, slipped by 4.39 per cent from 37,914.33 points to 36,248.53 points, representing a drop of 4.39 per cent or about 1,666 points.

    Nigerian equities had consolidated their bullish rally in July as market capitalisation added N581 billion to throttle back to N12 trillion. Aggregate year-to-date return improved from six-month value of N2.45 trillion to N3.03 trillion by the end of July. After the downtrend in June, the market was particularly spectacular in July with a month-on-month average return of 5.08 per cent.

    Aggregate market value of all equities closed July at N12.007 trillion as against its opening value of N11.426 trillion for the month. The ASI also rose from month’s opening index of 36,164.31 points to close at 37,914.33 points.

    The stock market had closed the first half with average return of about 28.8 per cent, equivalent to N2.45 trillion in capital gains. Aggregate market value of all equities on the NSE had closed the first half at N11.426 trillion as against its value-on-board of N8.974 trillion that started the year, representing an increase of 27.3 per cent. The ASI had risen from last year’s opening index of 28,078.81 points to close the first half at 36,164.31 points.

    The first-half performance was moderated by the downtrend in the latter half of June, which saw the month closing as the most bearish month with a loss of N649 billion. Equities had shown brighter performance in the first five months with whooping capital gains of N3.10 trillion. Aggregate market capitalisation of all equities had closed May at N12.075 trillion while the ASI had indicated a five-month average return of 34.6 per cent.

     

  • Nigfund outperforms market’s average

    The Nigeria International Growth Fund (Nigfund) has recorded a year-to-date growth of 35 per cent in net asset value so far this year, putting investors in the mutual fund in better stead than an average investor in the stock market.

    Average returns at the stock market shrank to 29.10 per cent by the end of August as against 35.03 per cent recorded by the seventh month.

    Nigfund’s net asset value meanwhile grew by 35 per cent during the eight-month period just as the mutual funds increased its subscribers’ base by 16 per cent. Nigfund is currently valued at about N2 billion.

    The fund manager to Nigfund, Investment One Financial Services Limited, has promised to further diversify the portfolio and subscribers of the fund with a view to building on returns to investors.

    Investment One recently acquired Nigfund from Fidelity Bank Plc following necessary regulatory and unitholders’ approvals.

    Executive Director, Corporate Services, Investment One Financial Services, Mrs Abimbola Afolabi-Ajayi, said the company was poised to bring its wealth of experience as a foremost asset management company to bear on Nigfund in order to provide unitholders optimal and efficient services.

    According to her, the acquisition is part of Investment One’s aim of being a one-stop shop for comprehensive investment services and the first point of call for insightful and innovative financial solutions.

    She said the company was committed to achieving the overarching objectives of creating long term capital appreciation and regular dividend distribution to unitholders through deployment of investment strategies that are supported by diligent and indepth research analysis, which cover all aspects of Nigerian and international market.

    She pointed out that Nigfund was one of the most cost-efficient mutual funds in Nigeria with expense ratio of some three per cent as against industry’s average of about four per cent and Securities and Exchange Commission’s (SEC’s) limit of five per cent.

    She outlined the benefits of Nigfund as a balanced mutual fund which has its investments spread strategically in equities, real estate and other liquid assets.

    “We have a research team that supports the fund manager’s investment decision, we are very innovative and we have incisive market knowledge that we will bring to bear on the fund,” Afolabi-Ajayi said.

    She urged Nigerians to embrace mutual funds noting that mutual funds reduce investment risks to low-income retail investors while providing them with above average returns.

    She added that Investment One would step up its investment education to enlighten Nigerians on the benefits of savings, investments and collective investment schemes such as Nigfund.