Economy
BDC Operators Lament Difficulties in Getting FX Allocations from CBN
By Aduragbemi Omiyale
The Association of Bureaux De Change Operators of Nigeria (ABCON) has expressed frustration at the bottlenecks it encounters in getting foreign exchange (FX) allocations from the Central Bank of Nigeria (CBN).
In a letter to the Director of Trade and Exchange Department of the central, the president of ABCON, Mr Amimu Gwadabe, said some members of the group who funded their accounts for FX allocations were yet to receive their requests to meet up the legitimate critical demand of their clients.
He blamed this on the scrutiny of the documents of the BDCs for collections at the various designated centres, which he said has made ABCON members to be vulnerable to exchange rate risk, suffering significant losses.
In the letter, he appealed to the central bank to adjust and lower its applicable exchange rate below the N1,251/$ it pegged for its members, as the parallel market rate was hovering around the rate of 1,235/$.
“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 per cent are yet to receive their disbursement.
“This is happening in the face of the prevailing open market rate of N1,235/$, which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” a part of the letter said.
“It is in view of the above market developments that we write to appeal to your good selves for readjustments and review downwards of our funding rate of the last tranche (2nd bidding) from N1,251/$ further down to reflect current market rate discovery.
“This became imperative as it is only the consideration of the readjustment downward that will enable our members to upload their holding positions,” Mr Gwadabe added.
However, he praised the CBN for re-introducing BDC operators into the forex market, saying this has helped to strengthen the value of the Naira in the market.
He assured that the group would continue to support the central bank to achieve its policy goals, expressing confidence that the Naira will continue to appreciate further across the market with the increasing sources of foreign exchange inflows aided by the CBN policies
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange fell further by 0.63 per cent on Wednesday, August 13 after closing with two price losers led by Okitipupa Plc and Mixta Real Estate Plc.
Okitipupa Plc lost N21.05 during the session to end at N216.19 per share versus N237.24 per share and Mixta Real Estate Plc declined by 54 Kobo to trade at N5.52 per unit compared with the previous day’s price of N6.06 per unit.
Consequently, the market capitalisation of the bourse decreased by N13.65 billion to close at N2.149 trillion, in contrast to the N2.162 trillion quoted at the preceding session, and the NASD Unlisted Security Index (NSI) shrank by 22.81 points to 3,591.88 points from the previous day’s 3,614.69 points.
Business Post reports that the market ended with three price gainers during the session led by Lagos Building Investment Company (LBIC) Plc, which gained 30 Kobo to settle at N3.38 per share versus N3.08 per share, Industrial and General Insurance (IGI) Plc appreciated by 5 Kobo to end at 53 Kobo per unit compared with the previous day’s 48 Kobo per unit, and Food Concepts Plc chalked up 1 Kobo to finish at N3.11 per share versus N3.10 per share.
There was a 61.3 per cent slide in the volume of securities to 12.3 million units from 31.9 million units, just as the number of deals went down by 21.6 per cent to 29 deals from 37 deals, while the value of securities rose by 715.5 per cent to N925.6 million from N113.5 million.
Okitipupa Plc finished the day as the most traded stock by value on a year-to-date basis with 158.6 million units valued at N5.9 billion, followed by Air Liquide Plc with 507.2 million units worth N4.2 billion, and FrieslandCampina Wamco Nigeria Plc with 43.8 million units valued at N1.9 billion.
The most active stock by volume on a year-to-date basis remained IGI Plc with 1.1 billion units worth N369.1 million, trailed by Impresit Bakolori Plc with 536.9 million units valued at N524.8 million, and Air Liquide Plc with 507.2 million units traded for N4.2 billion.
By Adedapo Adesanya
The Naira moved in different directions at the foreign exchange (FX) market on Wednesday, August 13, appreciating against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) segment and depreciating in the parallel market window.
In the black market, the Nigerian currency lost N5 against the greenback during the session to settle at N1,560/$1 compared with the previous day’s rate of N1,555/$1.
However, in the official market, it gained N2.47 or 0.16 per cent on the Dollar to close at N1,534.91/$1, in contrast to the N1,537.38/$1 it was traded at on Tuesday.
Sadly, in the spot market, the local currency depreciated against the Pound Sterling yesterday by N8.91 to sell for N2,082.45/£1 versus the preceding session’s N2,073.54/£1 and lost N4.57 against the Euro to settle at N1,796.21/€1 compared with the N1,791.64/€1 it was transacted a day earlier.
Pressure eased in the market as updated FX data showed external reserves increased further, settling at $40.229 billion, marking this is the first time since January that reserves have crossed the $40 billion threshold.
This buildup likely reflects sustained Foreign Portfolio Investment (FPI) inflows and a recent surge in non-bank corporates, which indicates that the Central Bank of Nigeria (CBN) can continue to back the Naira as expected.
As for the crypto market, it was up as investors eye the Federal Reserve going for a 25 basis point cut in the September meeting as pressure is ramping up on policymakers to consider deeper easing.
The US central bank has been reluctant to cut interest rates, but investors see the possibility as crypto could likely gain if it happens, barring any other factors.
Cardano (ADA) surged by 16.9 per cent to $0.9849, Solana (SOL) appreciated by 4.5 per cent to $204.76, Dogecoin (DOGE) rose by 4.2 per cent to $0.2452, Ethereum (ETH) grew by 2.5 per cent to $4,736.21, Binance Coin (BNB) went up by 2.4 per cent to $855.49, Bitcoin (BTC) improved by 2.0 per cent to $121,602.01, and Ripple (XRP) increased by 0.9 per cent to $3.24.
But, Litecoin (LTC) closed lower by 0.7 per cent to $129.84 during the trading day, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited surrendered its control to the bears on Wednesday, closing lower by 0.13 per cent when trading activities ended for the day.
The decline was influenced by profit-taking in most of the sectors, despite the insurance and the energy indices closing green by 7.94 per cent and 0.12 per cent, respectively.
It was observed that the consumer goods space lost 0.91 per cent, the banking index depreciated by 0.53 per cent, and the industrial goods counter went down by 0.33 per cent.
As a result, the All-Share Index (ASI) decreased by 191.09 points to 145,864.80 points from 146,055.89 points and the market capitalisation moderated by N121 billion to N92.284 trillion from N92.405 trillion.
Sell-offs in large-cap stocks like GTCO, Zenith Bank, Lafarge Africa, Nigerian Breweries and others caused the downfall of Customs Street yesterday as the market breadth index remained positive and investor sentiment still strong after closing with 53 price gainers and 21 price losers.
Thomas Wyatt lost 10.00 per cent to trade at N3.42, UPDC slipped by 7.94 per cent to N8.00, Legend Internet tumbled by 6.35 per cent to N5.60, Berger Paints slumped by 6.16 per cent to N32.00, and Champion Breweries depreciated by 5.75 per cent to N16.38.
On the flip side, Learn Africa, Tripple Gee, Prestige Assurance, FTN Cocoa, and Caverton gained 10.00 per cent each to finish at N7.70, N5.17, N2.42, N6.93, and N7.92 apiece.
A total of 1.3 billion shares worth N20.2 billion were traded in 30,749 deals at midweek versus the 1.3 billion shares valued at N24.3 billion transacted in 31,155 deals in the preceding session, showing a shortfall in the trading value and number of deals by 16.87 per cent and 1.30 per cent apiece, as the trading volume remained unchanged.
Universal Insurance topped the activity chart after it sold 193.4 million units for N282.4 million, Japaul traded 123.2 million units worth N390.0 million, Veritas Kapital exchanged 93.2 million units valued at N260.1 million, Access Holdings transacted 85.0 million units worth N2.4 billion, and Sterling Holdings traded 68.2 million units valued at N552.6 million.
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