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Economy

26 Stocks Drag Nigerian Market Slightly Lower by 0.06%

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Nigerian Stock Market

By Dipo Olowookere

Trading at the local stock market started off on a bearish note on Monday with 26 equities recording various price declines.

Beta Glass topped the laggards’ chart at the close of transactions today with N7.80k of its share price lost to profit taking to close at N78 per share.

Following Beta Glass on the log was Okomu Oil, which went down by N2.90k to finish at N73.10k per share, and Nigerian Breweries, which depreciated by N2.10k to end at N100.90k per share.

Flour Mills declined today by N1.40k to finish at N24.60k per share, while Dangote Cement fell by N1 to settle at N228 per share.

Business Post reports that the market breadth ended negative as only 21 equities appreciated at the close of business on Monday.

The top gainers’ table was mounted by Lafarge after adding N2.50k to its share value to close at N30.50k per share.

This was followed by Ecobank, which rose by 90 kobo to finish at N22 per share, and United Bank for Africa (UBA), which improved by 25 kobo to end at N9.70k per share.

Oando gained 15 kobo to settle at N5.75k per share, while Forte Oil also appreciated by 15 kobo to finish at N23.55k per share.

It was observed that the mood at the Nigerian Stock Exchange (NSE) on Monday was mixed despite the loss recorded.

Business Post reports that investors were not too happy with the half year earnings of Zenith Bank released today.

The lender posted a sharp decline of over 15 percent in its gross earnings, but its profit appreciated by over 8 percent. The Tier-1 bank also declared an interim dividend of 33 kobo per share, which some said was enough to pacify shareholders.

At the close of transactions today, the stock market marginally closed 0.06 percent lower with the Year-to-Date (YtD) returns closing at -4.61 percent.

The All-Share Index (ASI), which closed at 36,499.67 points last Friday, depreciated on Monday by 20.25 points to settle at 36,479.42 points, while the market capitalization finished at N13.315 trillion after reducing by N7 billion.

A look at the sector performance showed that the NSEIND gained 2 percent, NSEINS10 rose by 1.03 percent, NSEBNK10 appreciated by 0.86 percent and NSEOILG5 increased by 0.42 percent.

However, the only sector that recorded a loss today was the Consumer Goods sector (NSEFBT10), which went down by 0.93 percent. This was mainly influenced by the losses recorded by two of the big boys in the arm, Nigerian Breweries and Flour Mills.

Business Post reports that the volume and value of shares transacted by investors on Monday depreciated by 31.57 percent and 52.21 percent respectively.

While the volume of share went down to 182.3 million from 266.4 million, the value declined to N2 billion from N4.3 billion.

The trades were dominated by financial stocks, which accounted for 126.6 million units worth N958 million, while the equities in the Healthcare sector followed with 14.5 million shares exchanged for N8 million.

United Bank for Africa topped the activity chart with a total of 21.7 million shares worth N208.1 million exchanging hands during the day’s trading.

It was followed by United Capital, which sold 20.4 million units valued at N58.3 million, and Regency Alliance Insurance, which transacted 16.9 million shares worth N4 million.

Access Bank traded 13.9 million equities for N138.7 million, while Union Diagnostic & Clinical Services exchanged 12.7 million shares valued at N4.6 million.

With the market recorded a slight loss today, investors would be hopeful that the bulls will resurface tomorrow.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Economy

FG Raises N130bn from Sukuk Sales for Road Infrastructure

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Sukuk road infrastructure

By Aduragbemi Omiyale

A total of N130 billion has been raised from the sale of Sukuk for the construction and rehabilitation of road infrastructure across the country.

Business Post reports that on November 21, 2022, the Debt Management Office (DMO) opened for subscription N100 billion Sovereign Al ’Ijarah Sukuk.

However, because of the strong appetite shown by the diverse investors, the size of the offer was increased to N130 billion.

According to a statement issued by the DMO, the exercise recorded over 165 per cent subscription level.

The agency described this as “evidence of investors’ confidence in the use and impact of Sukuk in the construction and rehabilitation of road infrastructure across the country.”

It stated that offers were received for the debt instrument, sold at a rental rate of 15.64 per cent per annum, from retail investors, banks, pension fund administrators, assets/fund managers, insurances companies, ethical funds, Takaful operators/non-interest banks, stockbrokers, government agencies, high net worth individuals, trustees and unit trusts.

The DMO assured subscribers of the Sukuk that “the proceeds of the 2022 Sovereign Sukuk, like the previous Sukuk issue proceeds, will be used solely for the construction and rehabilitation of key road projects through the Federal Ministry of Works and Housing and the Federal Capital Territory Administration.”

It thanked the investors for supporting the federal government’s infrastructure development efforts through Sukuk financing.

“The strong participation of retail investors, ethical funds and non-interest financial institutions in this Sukuk offering attest to the fact that the Government’s objective of promoting financial inclusion through admitting more retail investors and ethical funds into the financial system is being achieved,” it stated.

The debt office promised to “work to sustain the laudable achievements recorded so far in the use of Sukuk issue proceeds for the construction and rehabilitation of Nigerian roads, and thereby, continue to enhance ease of commuting and doing business, safety on our roads, job creation, economic growth, and prosperity of our nation.”

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Economy

Nigeria Sells Retail Bonds for 13.26% at N1,000 Per Unit

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FGN Retail Bonds

By Modupe Gbadeyanka

The Debt Management Office (DMO) has commenced the sale of the Federal Government of Nigeria (FGN) savings bonds for December 2022.

The retail bonds are sold monthly to low-income earners and other interested investors as a way to raise funds from the capital market to finance budget deficits.

For this month’s sale, the debt office is offering the papers in the usual 2-year tenor and 3-year tenor at a coupon rate of 12.255 per cent and 13,255 per cent per annum, respectively.

Subscriptions for the notes started on Monday, December 5, 2022, and will close on Friday, December 9, 2022, according to details of the exercise released by the DMO.

The interest would be paid to subscribers quarterly, i.e., March 14, June 14, September 14, and December 14, while the bullet repayment would be made at the maturity date.

The savings bond is sold at N1,000 per unit, and investors are required to purchase at least N5,000 and a maximum of N50 million.

Intending investors would be expected to contact their brokerage companies on how to purchase the debt instrument.

The retail bonds are backed by the full faith and credit of the Nigerian government and are charged upon the general assets of the country.

The investment tool qualifies as a security in which trustees can invest under the Trustee Investment Act.

It is also a liquid asset for liquidity ratio calculation for banks and qualifies as government securities within the meaning of the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds, amongst other investors.

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Economy

New Cash Withdrawal Limits Will Expose Tax Evaders—Oyedele

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expose tax evaders

By Adedapo Adesanya

The Fiscal Policy Partner and African Tax Leader at one of the country’s leading consultancy companies, PwC, Mr Taiwo Oyedele, has said the new cash withdrawal limits introduced by the Central Bank of Nigeria (CBN) would expose tax evaders, individuals and micro, small, and medium enterprises (MSMEs) in Nigeria.

In a series of tweets seen by Business Post, the tax maverick said that with the restrictions placed on cash withdrawals, many people would be forced to carry out transactions using electronic payments, and small businesses that currently operate mostly on cash would become visible to the tax authorities.

It had been reported the apex bank on Tuesday moved to limit the amount of cash withdrawals Nigerians can make with benchmarks placed at several channels, including over-the-counter, point of sales (POS), and automated teller machines (ATMs).

He explained that the policy would trigger various tax obligations, including income tax, value-added tax (VAT), and Pay-As-You-Earn for small businesses and individuals.

On Income tax, he wrote that “If your business is registered as a company, you may be liable to CIT depending on your annual turnover (i.e. no CIT if your turnover below N25 million, 20 per cent if your turnover is between N25 million to N100 million 30 per cent if your turnover is more than N100m) in addition to Education Tax at 2.5 per cent.

“If your business is not registered as a company, then you will be liable to personal income tax based on graduated taxable income bands between 7 per cent and 24 per cent.”

On VAT, he explained that, “All businesses are required to register for VAT and charge 7.5 per cent on their goods and services except those with annual turnover below N25 million.”

For PAYE, Mr Oyedele explained that employees earning more than N30,000 per month are liable to PAYE, which must be deducted and paid to the tax authority by the employer on a monthly basis.

To this, he noted, “You may also be liable to other statutory contributions such as pension depending on your staff strength.”

For individuals, he noted that as they carry out more transactions, this will make them susceptible to transparency as it will make it easier for the government to track those who are tax evaders.

“The more transactions you make electronically, the more the tax authorities will get the intelligence to track your income and net worth, making it easier to fish you out if you are a tax evader.”

He then advised small business owners to register with relevant tax authorities like the Federal Inland Revenue Services (FIRS) and the state internal revenue services where they operate.

Further, the PwC official called on SME operators to open a separate bank account for their business, “or dedicate one for that purpose if you already have a business account) and don’t mix business with personal transactions.”

The government, on its part, he said, needs to sensitise the general public, especially small business owners, adding that the CBN should ensure a proper handshake with the fiscal authorities.

“For instance, the conditions for excess cash withdrawals could include Tax Identification Number,” he opined.

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