The Nation Newspaper

Tag: portfolio

  • Rebalanced portfolio

    •CBN’s directive to banks to lend more to the productive sector is the way to go

    The Central Bank of Nigeria (CBN) just let fly a bitter truth: Nigerian banks should stop being glorified parasites on public sector funds, but lend more to the productive sectors of the economy.

    Speaking at the CBN Monetary Policy Committee (MPC), Edward Lamatek, CBN deputy governor, told the banks to rein in their investment in government securities (Federal Government of Nigeria Bonds and treasury bills) and oil assets; and re-balance their portfolios in favour of emerging opportunities in agriculture, manufacturing and services.

    “The last couple of months have witnessed a sustained improvement in banking sector resilience – industry capital adequacy and liquidity ratios have grown, while the non-performing loans (NPL) ratio is on the decline.”  As a corollary, he called on the banks to “moderate their appetite for government securities and oil and gas assets, in order to gradually re-balance their asset portfolios.”

    The CBN’s directive is only logical. If money chases opportunities to work for the depositor, then it makes eminent sense that banks should be on the look-out for fresh opportunities and new areas of play; instead of getting fixated on government securities (because it is relatively safe) and oil and gas (which though commands a sizeable chunk of the market, appears rather saturated).

    Still, why would banks, with a 125-year industrial experience, be getting this rather trite tutorial from CBN, when they ought to be masters of their turf, that can sniff out profitable opportunities, even with a half nostril? It would appear the rather distorted structure of the economy, in which banks are zeroed to servicing imports, since there had been little or no vibrancy in the local real economy. The sad reality has conditioned banks to mostly short-tenured portfolios, mostly ranging from three to nine months. With such short tenures, banks are not positioned to cater for the local real sector.

    It is good the CBN is referencing its latest directive on the ongoing diversification of the economy, with renewed activism in agriculture, mining, manufacturing and, of course, services.  These are exciting prospects; and the banks themselves would be quite upbeat about more diversified and yet profitable portfolios.

    However, that would hold if the diversification is sustained; and no policy flip-flops truncate it.  That is the end CBN must see to, as it interacts with the fiscal authorities, in arriving at the right economic policy mix. Right now, the prospect appears good. With the election results suggesting the continuation of the incumbent government in power, there would appear less chances of a policy summersault. Still, that is no reason for those involved to lower their guard.

    With a gradually changed but stable policy environment, what is left is for the banks to battle and throw off old habits, which have sustained them all through the economic ancien regime. That would appear the crux of the CBN present sensitisation, as expressed by Deputy Governor Lamatek.

    At the end of the day, a diversified banking asset portfolio is a win-win for all – the trading banks, their depositors, shareholders, the real sector players and even the huge informal economy, as banking services become expanded and deepened. It’s a nice prospect of giving the economy a healthy jab in the arm, via much improved intermediation, across as many sectors as are practicable.

     

  • We have $8.5b portfolio across Nigeria, says World Bank

    We have $8.5b portfolio across Nigeria, says World Bank

    •Lists intervention efforts in Northeast

    The World Bank said yesterday that its entire portfolio across Nigeria currently stands at about $8.5 billion.

    The global financial institution was  shedding  light on its rehabilitation efforts in the Northeast apparently in reaction to the controversy sparked by a statement by its President Jim Yong Kim that President Muhammadu Buhari requested its   special intervention in the zone.

    The projects are located in the 36 states and the Federal Capital Territory, it said.

    It listed its intervention efforts in the Northeast as including a $775 million International Development Association (IDA)  credit for “restoring basic education and health services, agricultural production, and livelihood improvement opportunities through community support development and youth employment.”

    The IDA is an arm of the WB that helps the world’s poorest countries.

    Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.

    The WB, in a statement on its website, said it had to first carry out a Recovery and Peace Building Assessment (RPBA) to enable it “assess the needs of the nearly 15 million people in this region impacted by the crisis.”

    The assessment, it said was conducted in partnership with the United Nations, and the European Union.

    It said it was “working with federal, state and development partners on speeding delivery of critical interventions to the people of the North East who urgently need assistance.”

    But it explained that its assistance to Nigeria was not limited to the Northeast  as it “continues to be fully committed to helping the Federal Government of Nigeria, the 36 states and the Federal Capital Territory (FCT) reduce poverty and foster prosperity for all Nigerians.”

    It put its entire portfolio in Nigeria at “about $8.5 billion spread across the country.”

    It said: “Under IDA 18, the World Bank Group is doubling its resources to address fragility, conflict and violence at the subnational and national levels and help stabilize places that are affected by high poverty and influx of people.”

    Jim had told reporters in Washington DC on Thursday that the bank was concentrating on the north in line with Buhari’s request.

    “You know, in my very first meeting with President Buhari he said specifically that he would like us to shift our focus to the northern region of Nigeria and we’ve done that.  Now, it has been very difficult. The work there has been very difficult,” he was quoted as saying.

    The statement immediately sparked a controversy in the country, prompting a denial from the Presidency.

    Presidential spokesman, Femi Adesina said the issue was twisted by those who specialize in such act.

    He said what Buhari asked of the World Bank was assistance for  the Northeast which has been ravaged by years of insurgency by Boko Haram.

  • An unimpressive tax portfolio

    According to the Joint Tax Board, there are ten million people (precisely 10,006,304) registered for personal income tax purposes in all the states of the federation including the FCT. Out of this, about 4.6 million or 46% are registered with the Lagos State Internal Revenue Service (LIRS) indicating an average of 153,000 or 1.5% per state for others.

    The National Bureau of Statistics (NBS) has continued to rue the nation’s poor tax credentials. According to the NBS, Nigeria failed to improve on its Value Added Tax (VAT) revenue in the first quarter of 2017 as it recorded N204.77 billion, 1.5 per cent lower than the N207.35 billion it did in the fourth quarter of 2016.

    This was because of inability of the economy to display the anticipated exit from recession in the first quarter.

    According to the NBS, the first quarter of 2017 saw consumption tax of total amount generated being N126.64 billion, which is for non-import VAT for locally manufactured goods.

    High inflation and unemployment rates were the two factors that played some negative roles in VAT performance in the 2016 and first quarter of 2017, in particular.

    In the first quarter of 2016, the bureau said manufacturing sector generated the highest amount of VAT, with N28.73 billion, while other general services shared the balance, VAT being consumer-oriented taxation.

    It further stated that the manufacturing sector was closely followed by professional services and commercial and trading, both generating N20.82 billion and N12.89 billion respectively.

    The bureau stated that mining generated the least, and was closely followed by local government councils and textile and garment industry with N35.07 million, N99.84 million and N230.89 million respectively.

    Compared to the labour workforce of 77 million at the end of 2015 according to the NBS, the number of people in the tax net is only 13%. Ironically even government as the largest employer of labour is not fully compliant in deducting and remitting taxes on the salaries of their workers. This shows why there is a very low correlation between the high public sector wage bill in the budgets and the paltry personal income tax collection nationwide.

    The NBS recently released tax collection data by all 36 states of the federation which totaled N683.6 billion out of which Lagos state accounted for N268billion or 40% of the total revenue collected by all the states of the federation in 2015. In fact, Lagos state collected more than all the other states combined excluding Rivers, Ogun and Delta.

  • StarTimes boosts content portfolio with FOX Life

    FOX Life, an urban contemporary entertainment channel owned by FOX Networks Group (FNG), and customised for Africa, was launched on StarTimes Channel 071 (Antenna) and Channel 132 (Dish) in Nigeria, on October 1.

    The new channel is expected to boost StarTimes growing entertainment portfolio, spice up viewers experience with flamboyant programming and enrich memorable digital TV moments.

    StarTimes Head of Public Relations Mr. Israel Bolaji said the digital TV network was excited to enrich its entertainment and lifestyle menu for improved viewers pleasure with the launch of FOX Life.

    “The new channel would add a touch of magic to viewers’ experience and enhance memorable TV experience with quality programming including interesting television series, dramas, sitcoms, shows and movies, among others. They include some original programming in Africa. F

    OX Life will showcase latest and compelling Hollywood, Brazilian and African programmes including 2016 blockbuster “Real Housewives of Atlanta”, America’s Next Top Model, Clean House, and other thrilling and emotional dramas such as Empire, and Pitch.

    “FOX Life offers StarTimes subscribers a global entertainment appeal with an interesting blend of lifestyle programmes from local and international scripted and non-scripted content. Asides its array of Hollywood, African and Brazilian series, it is introducing Turkish telenovelas to Nigeria. It also showcases Africa centric programmes and considerations with localised content, focuses on socially relevant positive and local story telling, thereby creating an undisputed perfect home and port of call for young aspirational viewers in Africa, especially female,” said Bolaji.

    The Marketing Director, Mr. Oludare Kafar, added that the new addition is a further step in the digital TV network provider’s quest to continuously enrich its content, grant subscribers more value for their money and offer  refreshing and enjoyable TV experience.

  • Nigeria records 108% foreign portfolio deficit

    •Domestic investors regain confidence

    For every dollar brought into Nigeria this year, more than $2 has been taken out according to a report on foreign portfolio investment (FPI).

    A year-to-date report on FPI obtained at the weekend, indicated that Nigeria suffered a net deficit of 108 per cent in the first two months of the year.

    The FPI outflow worsened in February, as uncertainties persisted over Nigeria’s foreign exchange management.

    The report, coordinated by the Nigerian Stock Exchange (NSE), showed that FP outflow outpaced inflow by 108 per cent. The two-month report showed that foreign outflow totalled N58.20 billion as against foreign inflow of N27.95 billion.

    Total foreign transactions of N86.15 billion represented 42.8 per cent.

    Domestic investors, however, appeared to be stepping in to fill the gap left by the foreign investors. They invested N115.22 billion, representing 57.22 per cent of the total transactions, during the period.

    Monthly analysis showed that FP outflow totaled N31.84 billion as against inflow of N10.94 billion. In the same period last year, foreign outflow was N81.60 billion while inflow was N52.35 billion.

    In January, FPI report showed that foreign inflow stood at N17.01 billion as against outflow of N26.36 billion, representing a deficit of N9.35 billion.

    Total foreign transactions thus were N43.37 billion. Nigerian investors accounted for N40.73 billion or 48.43 per cent of the total turnover of N84.10 billion recorded during the period.

    In the comparable period of January last year, foreign investors appeared less edgy and there were more appetite for Nigerian equities, though the tinge of deficit was also evident then. Foreign inflow was N48.03 billion in January 2015 as against outflow of N51.08 billion. Total foreign transactions stood at N99.11 billion or 52.24 per cent of total turnover of N189.72 billion during the period. Domestic investors accounted for N90.61 billion or 47.76 per cent of total transactions.

    The FPI report further highlighted the downtrend that had marked foreign portfolio investments since 2014.

    The FPI report uses two key indicators-inflows and outflow to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy.

    The NSE report is regarded as a credible gauge of FP’s investments in Nigeria as it coordinates data from nearly all active and major investment bankers, stockbrokers, custodians and other capital market operators.

    Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The 12-month foreign portfolio investment report for 2014 shown that foreign portfolio outflow was N846.53 billion as against inflow of N692.39 billion in 2014, representing a net deficit of N154.14 billion.

    In 2013, total foreign inflow was N531.26 trillion compared with outflow of N510.78 trillion, leaving a positive balance of N20.48 billion.

    In earlier preview for the investment market in the year, the NSE had noted that uncertainty and volatility dominate forecast for the New Year and beyond as Nigeria struggles with commodity price shocks and the resultant impact on the Naira.

    “The downturn from 2015 has already continued into the New Year. Accordingly, we anticipate 2016 to be a challenging year for the capital market and the domestic economy,” NSE stated.

  • Ministerial portfolio: Round vs. square hole

    Ministerial portfolio: Round vs. square hole

    At last, ministers have been allotted responsibilities popularly known as portfolio.  The wait has been long and unwarranted.  Mercifully however the earthquake predicted by some Nigerians did not erupt.  It must be admitted that President Buhari contributed in large measure to the cynicism and speculation.  Making a mountain of a molehill, cabinet formation is a normal thing in other in other climes.  At best the exercise raises whimsical expectation, not the foreboding that Nigerians elevate it.

    As expected two incongruous sections of our society have gone almost hysterical; they are the defenders of the South-east interest and some elements of the fragmented Afenifere – Renewal or old.  These negative elements above have seen Nigeria through their narrow lenses, virtually ignoring the interest of others. Examples litter the Nigerian political space.  In the old Western State, some ethnic groups were more equal than others, while some with no resources other than their brain, controlled all the apparatus of government, smiling to the banks with proceeds of fat contracts; others, specifically Ondo Province, now Ondo and Ekiti states, were glued to the groundswell of poverty.  Thanks to education, they struggled to lift themselves up.  Today a cosmetic gesture like persuading aging but compassionate Reuben Fasonranti to remain in a non- functioning post does not clear the rot and discrimination of the past.

    More importantly, were these Afenifere stalwarts not party to the political prostitution of our recent past?  Were they not beneficiaries of the cash and carry modus operandi of the last administration when even Yoruba Obas were not spared the bait?  What was their pleading?  The Jonathan administration would implement the Confab resolution on ‘True Federalism’?  This was   the height of naivety, because apart from constitutional roadblocks.  Jonathan’s body language was misread by these apostles.

    And now the South-eastern “defenders”. One would have been amused were the facts not so daunting.  Remember the policy of the last administration, when more than 70% of all ‘juicy’ political  and public service appointments went to the two South-eastern zones, while the rest of the country comprising the  ‘North’ and South-west shared the miserable leftover.  In fact the West did not have more than five percent of these national positions.

    In the circumstance which I have enumerated above and in the light of the spread and relative importance, of the ministerial slots, President Buhari has been very courageous and fair.  He has shown that his heart is bigger than his physical features and that Nigeria remain his constituency.

    Yes it true the West has fared better.  But should that zone be always relegated?  It is no secret to observe that for over half a century – since the Balewa years, the West has been the loser.  Even when our man from Owu was president, we knew what class of people, men and women, caught his eyes.  His penchant for selecting his friends and associates is legendary and the Yoruba people will never forget this easily.

    This distribution of ministerial portfolios has been seen to be just.  It is necessary to state here that except the Ministry Of Justice, a professional is not necessarily the best materials to head a ministry.   Any one with solid educational and ethical background can head any ministry.  The important requirements are competence and commitment, not pre-knowledge of the beat you are going to preside over.  The exception perhaps is the justice ministry where the minister or attorney-general will direct law officers of state to take certain legal actions or in exceptional cases, take on the job himself.  He has to be a lawyer.

    The situation is like the appointment of permanent secretaries where any competent director could be elevated to take charge of any ministry, except justice where in most cases he is also Solicitor- General.

    Some have argued that some ministers are overburdened or that some are light-weight.  None is light-weight among the ministers.  The Minister of Labour and Productivity for example, will perhaps be one  of the busiest among his peers.  Ask the last minister, Emeka Nwogu, he had sleepless days adjudicating industrial disputes.  It needs the quiet disposition of an Ngige to hold that position.  Yes, Fashola is probably over-burdened.  In 2011 I voted for a non-existent Buhari/Fashola ticket.  It was a fruitless effort, but I made my point.  Isn’t Fashola itching towards my dream now?  But what area of life has this young- aging man failed?

    Kayode Fayemi is manning the solid minerals department with crude oil dipping and the country’s   finances running down elsewhere.  Apart from well-known doggedness, Fayemi is a frontiers man, knocking at the door all the time.  He will not only regularize illegal mining, he will attract direct private local and foreign investments in the vital area.

    Lai Mohammed? Dissemination of information and combative resistance to demagoguery has been his turf for decades.  Mrs. Kemi Adeosun because of her reputation is a gift to the Buhari Administration.  Unpretentious and tenacious there will be no pretences of yesteryears in our financial management.   She is not likely to subject Nigerians to lecture and tutorials, unlike her predecessor, the mighty Queen to Breton Wood Conference.

    Audu Ogbe comes from the area known as the basket food of the nation. With a favourable climate and input to otherwise agrarian business all over Nigeria, we are likely to meet our food demands soon. And so the story goes on.

    Downsizing the numbers of ministries and merging some departments and agencies of the Federal Government, Nigeria seems set, for the first time, to face the realities of our problems which by today’s political lexicon we call challenges.  The Buhari government must be put on its toes; no white-washing and at the same no coal-tarrying.

     

    • Fasuan MON, JP writes from Ekiti State.

  • Portfolio palaver

    It is no longer news that all the 36 ministerial nominees forwarded to the Senate for confirmation scaled through.

    But what is on the front burner now is the confusion whether all the ministers-designate will get portfolio, and if not, who will get portfolio and who will not?

    Senate President Bukola Saraki, for the first time since taking office, rose to the occasion in defending the interest of his party, the All Progressives Congress (APC) during the screening and confirmation of the nominees.

    He stood his ground against the Peoples Democratic Party (PDP) senators who staged a walk-out during the exercise.

    Saraki, no doubt, did exactly what his predecessor, Senator David Mark, would have done for his party, the PDP, in similar circumstances.

    The Senate President, who personally brought the letter conveying the list totaling 36 confirmed nominees to President Muhammadu Buhari, believed that the exercise was carried out within record time because of the high quality of nominees sent to Senate.

    But prior to the time of submitting the list, there have been misunderstanding surrounding whether all the confirmed ministers will get portfolios.

    President Buhari in an interview in New Delhi, India where he participated in the third summit of the India-Africa Forum a fortnight ago had warned that not all the 36 ministers designate will act in substantive capacity as some of them will only sit in the cabinet to fulfill constitutional requirements.

    Stressing that not all the ministers designate will get portfolio, he also declared that Nigeria is broke and couldn’t pay salaries of large cabinet like under former President Goodluck Jonathan.

    But some Nigerians immediately faulted the president’s remarks and accused him of demarketing Nigeria.

    Others also seemed confused concerning Buhari’s remarks on the portfolios and his declaration that not all the 36 Ministers designate will be substantive ministers.

    The confusion was compounded by a contrary report in a newspaper last week, which quoted a presidential aide, claiming that there will be portfolio for all the 36 ministers designate.

    But President Buhari reiterated his earlier position within one week while receiving the list of confirmed ministerial nominees from Saraki last Tuesday.

    He said: “If I can remember, there must be a member from each of the 36 states. That was why I limited the number of my nominees to that number, 36.

    “I think there is some enthusiasm in some parts of the Presidency today that said portfolios are to be given to the 36.

    “The constitution certainly said there must be one member of the cabinet from all the states but the constitution did not say I must have 36 ministries.” He said

    He went on: “I will explain that details. Because of the economic imperative, to have a lot of ministers, substantive ministers, let me put it that way, whatever somebody speculated in some of today’s newspapers, I think that the economy as I have seen it now since my sitting here for the last four months, that we are so much battered. Although some people are saying I am giving bad publicity and scaring away investors.

    “But I am confirming to them that we are truthful, that we need them to come and help us help ourselves by getting in industries, manufacturing and services.

    “They know our needs. The economy of human resources, I believe will make them eventually come and help us.

    “I assure you that we will follow the constitution and all the 36 will be sitting in the cabinet as the constitution stipulates.” He added

    Now that the President has cleared the air and maintained that he did not mince words on the issue of portfolio, definitely, no minister designate will still be in doubt concerning the matter.

    The president’s statement might also have increased underground lobbying by some of the ministers designate in order to emerge substantive ministers at the end of the day.

    But such move may not achieve much as the President already knows who he will make a substantive minister and who among them will only sit in the cabinet.

    Buhari has been fully grounded on each of the ministries and parastatals before the ministers designate came on board and knows where to place each minister.

     

    Orientation for ministers

     

    President Buhari last Thursday and Friday took a step further towards bringing the desired change of his administration to the people.

    He organized retreat for the Ministers designate and impressed on them the need to purge themselves of anything that will stand on their way and key into the change agenda of the administration.

    Before last week, Buhari had not only taken time to receive briefs from permanent secretaries in the various ministries and head of agencies, he also gave them an insight into the direction the government was taking during the briefings.

    He has consistently insisted that it was not going to be business as usual in the conduct of government’s business and activities.

    Declaring the retreat open, Buhari said: “We must count ourselves privileged to have been chosen among millions of our compatriots at this historic time to be the instruments that will deliver the change we have promised.

    “The work of restoration and renewal is urgent and immense. The expectations of Nigerians are high. Our determination to succeed and change the fortunes of our country must be equal to the challenge.

    “I have invited you to join me in this urgent mission for our country. I am convinced that in accepting this invitation you are also equally determined to take part in this patriotic undertaking.

    “It is important that you are fully acquainted with the direction and priorities of this Government so that we can all move together as a team.

    “Our economic focus will be policies that will ensure inclusive growth and we will count our achievements based on the number of Nigerians we move out of poverty.

    “It is expected that we make the running of Government at all levels as lean as possible, avoid waste and conserve resources. As ministers, you must be the vehicle that will administer the change.

    “I would also expect you to be even more determined to work as a team, and to live up to the high standards of probity and integrity which Nigerians expect of us,” he said.

    Besides urging them to observe the rule of law and avoid impunity, the President also advised them not to fail to share information among themselves.

    So, it’s now left for the ministers to embrace the change agenda and join the moving train to give Nigerians the much awaited change.

     

  • Foreign portfolio flow hits N778b in eight months

    Foreign portfolio transactions totalled N777.59 billion in the first eight months of this year as foreign investors continued to dominate transactions at the Nigerian capital market.

    The latest report on foreign portfolio investment (FPI) in Nigeria also showed that speculative foreign portfolio transactions might have contributed significantly to the sustained recession at the Nigerian stock market.

    The eight-month report for the period ended August 31, 2015, released yesterday, indicated that foreign investors accounted for 54.36 per cent of total transaction value during the period but the larger proportion of foreign portfolio transactions were outflows rather than inflows. The preponderance of sale transactions to buy transactions by the foreign investors left Nigeria with a deficit FPI position of N43.39 billion during the eight-month period.

    Total foreign portfolio outflow stood at N410.49 billion over the eight-month period, representing 52.8 per cent of the total foreign portfolio transactions of N777.59 billion. Total foreign inflow totalled N367.10 billion, 47.2 per cent of total foreign flow. Domestic investors accounted for N652.92 billion, 45.64 per cent of the market’s total transaction of N1.43 trillion during the eight-month period.

    The FPI report, coordinated by the Nigerian Stock Exchange (NSE), uses two key indicators-inflows and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy.

    Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE. The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active and major investment bankers, stockbrokers, custodians and other capital market operators.

    In what appeared to underline the steep decline in the stock market over the months, month-on-month analysis showed continuous trend of deficit FPI position. Total foreign inflow in August stood at N33.06 billion as against outflow of N48.07 billion, bringing total foreign transactions to N81.13 billion. Domestic investors contributed N64.56 billion, representing 44.31 per cent of the total transactions of N145.69 billion.

    Total transactions in July stood at N170.83 billion, consisting of N107.47 billion from foreign investors’ transactions and N63.36 billion from domestic investors, a ratio of 62.91 per cent to 37.09 per cent. Foreign transactions however included N58.83 billion outflow and N48.64 billion inflow, indicating a deficit of N10.19 billion.

    The eight-month FPI report is broadly in line with the half-year report, which had shown that about 52 per cent of total foreign transaction value were divestments. Foreign investors, who dominated the Nigerian capital market, had taken out more funds than they invested in the first half as investors waited for the political transition and clear macroeconomic and monetary policy direction of the new government.

    Total foreign portfolio investment outflow in the first half stood at N303.59 billion as against inflow of N285.40 billion, representing a deficit of N18.2 billion. The half-year deficit represents a relatively larger value given the significant undervaluation of the Nigerian equities and the extended deficit Nigeria had suffered since 2013.

     

     

    Nigeria had recorded a net foreign portfolio deficit of N154.14 billion in 2014, overriding a modest positive net flow of N20.48 billion recorded in 2013. The 12-month foreign portfolio investment report for 2014 had shown that foreign portfolio outflow was N846.53 billion as against inflow of N692.39 billion in 2014. In 2013, total foreign inflow stood at N531.26 billion compared with outflow of N510.78 billion.

    The six-month report for the period ended June 30, 2015 showed that foreign portfolio investors accounted for about 53 per cent of total transaction value during the period while domestic investors accounted for 47 per cent. Total transactions stood at N1.114 trillion, with domestic investors accounting for N525 billion.

    The report however showed a month-on-month recovery in June. Total foreign inflow stood at N42.67 billion as against outflow of N26.98 billion in June, totaling N69.65 billion. Total transactions stood at N203.45 billion, with domestic investors contributing N133.80 billion. The foreign-domestic ratio stood at 34.24 per cent/65.76 per cent in June.

    In May, total foreign inflow had stood at N38 billion as against outflow of N41.77 billion, totaling N79.77 billion. Total transactions thus stood at N145.45 billion, with domestic investors accounting for N65.68 billion. Foreign investors accounted for 54.84 per cent while domestic investors accounted for 45.16 per cent.

    The market had recorded its first positive flow in April, after successive declines throughout the first quarter. Total foreign inflow rose to N54.20 billion in April as against outflow of N49.75 billion, representing a modest positive net inflow of about N4.45 billion. Total foreign transactions thus stood at N103.95 billion as against total domestic transactions of N102.91 billion during the month.

    In March, foreign portfolio outflows of N52.41 billion outpaced inflows of N50.15 billion. The first quarter had seen steady foreign portfolio deficits as investors weighed macroeconomic and political risks. Foreign outflows totaled N81.60 billion in February 2015 as against inflow of N52.35 billion, indicating a significant increase on the downtrend that started the year when foreign portfolio outflow was N51.08 billion against inflow of N48.03 billion.

    The 12-month foreign portfolio investment report for 2014 had shown that foreign portfolio outflow was N846.53 billion as against inflow of N692.39 billion in 2014, representing a net deficit of N154.14 billion. In 2013, total foreign inflow stood at N531.26 trillion compared with outflow of N510.78 trillion, leaving a positive balance of N20.48 billion.

     

  • Ripples over Obanikoro’s portfolio

    Ripples over Obanikoro’s portfolio

    It’s no longer news that controversial Lagos politician, Musiliu Obanikoro, has been assigned the Ministry of Foreign Affairs as minister of state 2, the third in line in hierarchy.

    While his opponents within and outside the Peoples Democratic Party (PDP) argue that the portfolio is belittling of Koro’s status, another school of thought believe that the former senator’s new ministerial posting was a strategic move by President Goodluck Jonathan to divert ceaseless attention from the minister who has been enmeshed in series of controversies, chief of which is his alleged involvement in the manipulation of the last Ekiti governorship election. And for those who believe Obanikoro’s influence has diminished his influence in the ongoing campaign of his party, particularly in Lagos State, a source revealed that the minister will continue to play a pivotal role in the presidential and governorship campaign in Lagos State in the next few days.

    The minister, it was gathered, was instrumental in the holding of almost all the strategic consultations the president had with several interest groups in the state within the last few weeks.

  • Foreign portfolios hit N801b in Q3

    Foreign portfolios hit N801b in Q3

    Foreign investors staked N801.25 billion and dominated transactions on Nigerian equities within the nine-month period ended September 30, 2013.

    The latest report on the foreign portfolio investment flow by the Nigerian Stock Exchange (NSE) obtained by The Nation showed that foreign investors dominated transactions during the nine-month period, accounting for 50.81 per cent of total transactions during the period.

    The report indicated that total transactions at the NSE within the period stood at about N1.58 trillion, with foreign portfolio investors accounting for N801.25 billion while domestic investors accounted for N775.77 billion. Domestic investors thus accounted for 49.19 per cent within the nine-month period.

    However, while foreign investors flowed in more funds than they took out in the first half, they took more money out than they invested since the beginning of the second half, showing a sustained trend of profit-taking in the second half.

    But with the significant inflows in the first half, net position by the third quarter still remained positive. Total foreign inflow closed September at N416.73 billion as against total outflow of N384.52 billion. Investment flow so far in the second half has followed the same pattern, with more outflow than inflow. Besides, the foreign portfolio investment report showed month-on-month slowdown in both the total foreign transactions and foreign portfolio inflow while there was an increase in outflow during the period.

    In September, total foreign inflow was N26.14 billion as against outflow of N27.88 billion, bringing total foreign transactions to N54.02 billion. Total transactions at the stock market during the month stood at N108.19 billion, out of which domestic investors contributed N54.17 billion or 50.07 per cent.

    In August, foreign inflow had stood at N31.12 billion as against outflow of N39.76 billion. Total foreign transactions thus stood at N70.88 billion, 52.26 per cent of the total turnover of N135.63 billion recorded for the month.

    Foreign investors had took out nearly a double of every penny they invested in the Nigerian stock market in July, unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the Nigerian stock market.

    The seven-month report for the period ended July 2013 had indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

    Total foreign transactions thus slowed to N93.71 billion in July as against N150.24 billion in the previous month. However, foreign investors remained dominant in stock market’s transactions with 62.53 per cent of the aggregate foreign-domestic transactions in July, an increase on 51.13 per cent recorded by foreign investors in June.

    With the outflow in July, net foreign investment declined from about N73 billion by June to N42.59 billion by July.

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Total foreign transactions in the Nigerian market for the seven-month period stood at N676.25 billion, 50.73 per cent of aggregate transactions of N1.33 trillion by foreign and domestic investors during the period. Breakdown of foreign transactions during the seven-month period showed inflow of N359.47 billion as against outflow of N316.88 billion. Nigerian investors accounted for N656.85 billion over the seven months.

    Foreign investors had capitalised on general market optimism in July ahead of the release of the first half earnings reports of quoted companies to monetize and rebalance their portfolios. Nigerian equities had consolidated their bullish rally in July with capital gains of some N581 billion. 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 All Share Index (ASI), which doubles as benchmark index for all equities on the Nigerian Stock Exchange (NSE) and country index for Nigeria, also rose from month’s opening index of 36,164.31 points to close at 37,914.33 points, a month-month average positive return of 5.08 per cent.

    First-half report on foreign portfolio investment flow had shown that total transactions-including buy and sell deals, by foreign investors totaled N582.64 billion, accounting for 49.24 per cent of total turnover at the NSE during the period.

    The report had indicated that in most instances, foreign investors flowed in more funds than they took out, leaving the stock market with a positive net foreign investment of about N73 billion within the period. Foreign portfolio inflow stood at N327.66 billion as against outflow of N254.98 billion.

    Total turnover value at the NSE during the first half was N1.18 trillion with both foreign investors and domestic investors dominating transactions in three months each. But while foreign investors had maintained gradual and steady increase and decline in portfolio adjustments, Nigerian investors showed large fluctuations.

    Nigerian investors dominated the market within the first two months and were supplanted by foreign investors in March and April. Nigerian investors regained dominance in May and were equally displaced by foreign investors in June.

    Foreign investors accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June respectively.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June.

    The report underlined the structural outline of Nigerian investors, which was skewed in favour of institutional investors. For instance, institutional Nigerian investors accounted for 66.7 per cent or N95.78 billion of domestic investors’ turnover in June 2013 while retail investors contributed 33.3 per cent or N47.81 billion.

    The report had shown stronger momentum in foreign portfolio investments in the stock market as the 2013 first half report was substantially above six-month average over the past five years.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and last year. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolios were particularly the main drivers of transactions on the NSE in the past two years, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and 2012.

    The report underlined the early positioning of the foreign investors, who had saw through the prospects of Nigerian equities amidst the downtrend and the rampant herd instinct of the domestic investors, who mostly usually look at recovering market.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.

    Market pundits said the investment flows at the stock market might underline concerns over the future earnings of banks, following a relatively low fundamental performance in the third quarter. Most banks reported marginal growth in profit in the third quarter as they struggled with reduced income streams and high cost of funds and operations induced by new regulations by the Central Bank of Nigeria (CBN).

    Banks remain the dominant subsector at the NSE, although reduction in number of quoted banks and increased capitalisation of non-bank multinationals have reduced the hitherto overbearing influence of banking stocks on overall market situation.