Economy
Reps Invite 100 Capital Market Operators for Questioning
By Modupe Gbadeyanka
No fewer than 100 companies operating in the Nigerian capital market have been invited for questioning by the House of Representatives.
The affected firms would be grilled over some sharp practices observed in the nation’s capital market.
The House sub-Committee on Capital Market, Regulation and Compliance chaired by Mr Tony Nwulu is beaming its searchlight on activities at the market after uncovering lots of underhand and sharp practices perpetrated by various companies in the capital market.
Business Post learned that the committee will focus its attention on the corporate governance status, assets valuation and other vital information from the companies being summoned for questioning.
Those who are found to be clean would be commended, while those found guilty would be punished according to the law.
It was gathered that the probe is mainly to make sure firms operating in the capital market adhere strictly to the rules and regulations put in place by the Nigerian government and also to boost confidence of investors.
Chairman of the House sub-committee, Mr Tony Nwulu, while speaking on the development at the weekend, stated that, “We have invited at least 100 companies operating in the market to come speak to the committee on the issues on ground.”
However, he warned that, “Those hiding for now may have every cause to regret because there is no hiding place for them. We want to sanitise the place (capital market) for Nigerians.”
According to him, “Those given a clean bill of health will be highly recommended because some of the companies lived above board but those making false valuation do have a case to answer.”
It was gathered that the probe came up as a result of several petitions received on the alleged sharp practices in the Nigerian capital market.
The legislature hopes to ensure the nation’s capital market is not bastardised, thereby affecting the economy, which is gradually recovering from recession it slipped into two years ago.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has granted Bureaux de Change (BDC) operators temporary access to the Nigerian Foreign Exchange Market (NAFEM), which is the official market, as part of efforts to further strengthen the Naira in the currency market.
The CBN in a notice on Friday said BDC operators would have access to FX at the official market from December 19, 2024, to January 30, 2025, with a weekly cap of $25,000.
Transactions require upfront funding at prevailing rates and must follow a maximum of 1 per cent spread.
The Naira traded at the spot market at N1,541.38/$1 based on computation on the Bloomberg BMatch system computed by FMDQ Securities Exchange Limited.
The CBN recently launched the Electronic Foreign Exchange Matching System (EFEMS) to build transparency in the system, but this excluded street forex hawkers. This initiative has fortified the value of the Naira against the US Dollar at the official market.
The platform, which became operational on December 2, 2024, has enhanced operational efficiency in Nigeria’s FX market, with banks mandated to be on the system to trade forex.
The EFEMS initiative, according to Mrs Omolara Duke, the CBN’s director of the financial markets department, was designed to ensure “transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations.”
Between December 2 when the new electronic trading platform commenced and December 19, 2024, the Naira recorded over N250 gain over the Dollar in the official FX market.
The CBN also issued comprehensive guidelines for the operations of the interbank foreign exchange (FX) trading system via EFEMS, pegging the minimum tradable amount at $100,000, with incremental clip sizes of $50,000.00, to promote transparency and efficiency in the FX market.
This development has forced currency speculators and illicit market operators to look elsewhere, pushing up demand to the parallel market and the BDCs.
To further ease the pressure on these unregulated markets, the CBN will allow BDCs to access the market with the hope of checking demand and further supporting the Naira.
By Adedapo Adesanya
A recent survey by the Central Bank of Nigeria (CBN) says businesses have projected depreciation of the Naira in the first three months of 2025.
In its Business Expectation Survey Report for November 2024, the CBN said despite this expectation, there are several businesses which expressed optimism about the macroeconomic environment.
The report noted that firms’ outlook on the volume of business activities, financial conditions, access to credit, volume of total orders and average capacity utilisation, were pessimistic.
“The overall confidence index (CI) on the macroeconomy indicated that businesses were optimistic in November 2024.
“Businesses expect the Naira to depreciate in the current month, next month and next 3 months but appreciate in the next 6 months,” the report said.
“The optimism on business outlook in the current month is driven by the opinion of respondents from all the sectors.
“The Construction Sector expressed optimism on its operations in the review month.
“The outlook of respondents on the volume of business activities, the volume of total orders, financial conditions, and access to credit were negative in the review month. the volume of business activity respondents expressed optimism on the volume of business activity for the next month and subsequent periods under review,” it added.
The report also showed that businesses hope to employ more workers in the month of December 2024 with the agriculture sector having the highest prospect for expansion.
Meanwhile, the CBN in its latest Consumer Expectation Survey Report said that consumers were pessimistic about the macro economy in November.
According to the CBN report, households projected a rise in the cost of transportation, rent, car/vehicle, house purchase, and medical expenses this month.
The report showed that 61.1 per cent and 57.6 per cent of respondents perceived that prices of non-durable and durable household items, though high, will keep declining this month and next month respectively.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.46 per cent gain on Thursday, December 19, boosted by three stocks, which closed higher at the close of transactions.
Nipco Plc improved its closing price by N13.64 during the trading day to N150.10 per share compared with the preceding trading day’s N136.46 per share, Geo-Fluids Plc gained 33 Kobo to end the session at N3.88 per unit versus Wednesday’s closing value of N3.55 per unit, and UBN Property Plc appreciated by 16 Kobo to settle at N1.89 per share, in contrast to midweek’s closing price of N1.73 per share.
On the flip side, Industrial and General Insurance (IGI) Plc depreciated by 1 kobo to trade at 17 Kobo per unit compared with the preceding trading session’s 18 Kobo per unit.
At the close of business, the market capitalisation of the bourse increased by N4.73 billion to finish the trading day at N1.034 trillion compared with the midweek trading session’s N1.029 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) went up by 13.77 points to wrap the session at 3,017.07 points compared with 3,003.30 points recorded in the previous session.
On Thursday, the volume of securities traded by investors surged by 603.9 per cent to 2.3 million units from the 59.624 units recorded a day earlier.
However, the value of shares traded yesterday slumped by 48.9 per cent to N2.3 million from N4.6 million as the number of deals declined by 12 per cent to 22 deals from the 25 deals carried out on Wednesday.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with 752.3 million units valued at N7.8 billion, and Afriland Properties Plc with 297.7 million units sold for N5.3 million.
Aradel Holdings Plc also remained the most active stock by value (year-to-date) with 108.7 million units valued at N89.2 billion, trailed by Okitipupa Plc with 752.3 million units sold for N7.8 billion, and Afriland Properties Plc with 297.7 million units worth N5.3 billion.
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