Economy
Business-Friendly Environment Can Push Telcos to List on NSE—Airtel CEO
By Dipo Olowookere
In recent times, there have been concerns about telecommunication companies in Nigeria not being listed on the Nigerian Stock Exchange (NSE).
In June 2015, Speaker of the House of Representatives, Mr Yakubu Dogara, said the National Assembly may have to compel multinational oil, gas and telcos to list a certain percentage of their value on the local bourse.
He contended that there was no justification for these firms not to be on the NSE.
In February this year, Minister of Communications Technology, Mr Adebayo Shittu, ordered all mobile telcos in the country to list their shares on the NSE or face sanctions.
But Managing Director and Chief Executive Officer of Airtel Nigeria, Mr Segun Ogunsanya, has stressed that telecom firms in Nigeria can successfully list on the NSE and contribute significantly to the socio-economic development of the country, barring challenges confronting operators in the sector.
According to him, an enabling business environment, policies that promote ease of doing business and market forces in line with best practices are key factors that can encourage operators to list on the Nigerian bourse.
Mr Ogunsanya made this submission while delivering his presentation entitled ‘Creating an Enabling Environment for Public Listing of the Economy’s Commanding Heights: The Case for Telecoms Sector’ at the 2017 Chartered Institute of Stockbrokers (CIS) Annual National Workshop held in Abuja on Tuesday, July 4, 2017.
Speaking at the occasion, Mr Ogunsanya noted that following the liberalisation of the telecoms sector in 2001, the nation has benefitted in terms of employment creation, attraction of foreign direct investments and social-economic development.
“The sector currently accounts for 10 percent of the nation’s Gross Domestic Product (GDP) and therefore makes it a critical national infrastructure.
“In addition, connectivity among Nigerians has been enhanced with the 145,350,702 active lines as at May 2017, investments in the sector as at Q1 2017 stood at $68 billion with FDI contribution amounting to $35 billion, while over 10,000 direct jobs and 1.3million indirect jobs have been created,” the Airtel chief executive said.
He stressed that telcos were committed to providing qualitative world class telecommunications services and in turn contribute to the socio-economic development of the country.
However, operators are still facing challenges which stifle growth and inhibit services delivery.
Mr Ogunsanya, therefore, urged government to address lingering industry issues such as multiple taxation, prohibitive right-of-way fees, broadband spectrum pricing/ availability among others.
Speaking further, the Airtel CEO noted that high interest rates are a major draw-back on use of debt financing, the fluctuation of foreign exchange rate has adversely impacted use of debt financing, while adverse market conditions occasioned by recession have adversely impacted viability of public equity alternatives.
The CIS Annual Workshop themed ‘Transition from Recession to Global Economic Power: A Working Template for Nigeria’ was a convergence of stakeholders in the nation’s financial services sector.
Present at the workshop were the Chief Executive Officer of the NSE, Mr Oscar Onyema; Director General, Securities and Exchange Commission (SEC), Mallam Mounir Gwarzo; Minister of Finance, Kemi Adeosun; among other top government functionaries, captains of industry and dignitaries.
The programme was organised in conjunction with the Nigerian Capital Market Institute, a training affiliate of SEC, the apex regulator of the Nigerian capital market.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market was up on Friday on increasing expectations the US Federal Reserve will cut interest rates next week, which could boost economic growth and energy demand.
Brent futures rose by 49 cents or 0.8 per cent to $63.75 per barrel and the US West Texas Intermediate (WTI) futures expanded by 41 cents or 0.7 per cent to $60.08 per barrel.
Investors digested a US inflation report and recalibrated expectations for the Federal Reserve to reduce rates at its December 9-10 meeting.
US consumer spending increased moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster labor market and the rising cost of living curbed demand.
Traders have been pricing in an 87 per cent chance that the US central bank will lower borrowing costs by 25 basis points next week, according to CME Group’s FedWatch Tool.
Investors also focused on news from Russia and Venezuela to determine whether oil supplies from the two sanctioned members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) will increase or decrease in the future.
The failure of US talks in Moscow to achieve any significant breakthrough over the war in Ukraine has helped to boost oil prices so far this week.
A loss of Venezuelan oil production in case of a US military intervention will materially impact global benchmark prices as the market will have to replace Venezuela’s heavy crude.
Venezuela is estimated to pump about 1.1 million barrels per day of crude oil at present, so if the US-Venezuela tension escalation into an invasion in the South American country, this volume of crude would be at risk.
Reuters reported that the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine.
Any deal that could lift sanctions on Russia, the world’s second-biggest crude producer after the US, could increase the amount of oil available to global markets, weakening prices.
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