Economy
CBN’s Monetary Policies Boosted Economy, Stock Market—Elumelu
By Dipo Olowookere
Chairman of United Bank for Africa (UBA) Plc, Mr Tony Elumelu, has heaped praises on Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele.
According to the Chairman of Heirs Holdings and Founder of the Tony Elumelu Foundation, the fiscal and monetary policies put in place by the apex bank when Nigeria was in recession in 2016 helped in the putting back the economy on its feet.
Mr Elumelu further said the interventions of the CBN also buoyed the performance of the stock market last year, which closed over 40 percent higher, making it among the top five performers in the world in 2017.
Speaking in an interview with ThisDay, the serial entrepreneur, who is presently in Davos, Switzerland for the World Economic Forum (WEF), disclosed that he has a huge confidence in the nation’s economic recovery especially with the equities market sustaining its gains.
As at the close of business on Tuesday, January 23, 2018, the Nigerian stock market has risen by 16.07 percent this year alone and analysts believe the market will close 2018 higher than last year.
Mr Elumelu praised the Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr Oscar Onyema, saying “their commitment to governance and market integrity has increased investors’ confidence in the market.”
He said further that, “Consolidating on the 42 percent rally in 2017, the benchmark All Share Index has gained 18 percent year-to-date, an unprecedented return in recent times, driven by renewed local and foreign investor confidence in the Nigerian economy and markets.
“The valuation of the Nigerian market, which is currently on a 14.5x P/E, still trades at a discount to its frontier market peers and more so, at a gross undervaluation to emerging market peers, especially when we take the improving fundamentals of the economy in perspective.
“Further reinforcing prospects for the equities market, is the moderating yield on fixed income securities, given the lower interest rate outlook. I fully expect fund managers to continue to allocate increasing money to Nigerian equities.”
Speaking further, the Chairman of Transcorp Plc said, “The fruits of patient and judicious central bank interventions are being rewarded by increasing local and international investor confidence, demonstrated by the recent unprecedented performance of the Nigerian equities market and the broader improvement in the domestic macroeconomic environment.”
According to him, “Nigeria’s external reserves, which are now at almost a five-year-high, have grown to over $40 billion, just as trade and current account balances are now positive. This strong performance underpins the naira today and will indeed ensure its stability in the near and medium term.
“Inflation, which peaked at 18.7 percent a year ago, has continuously trended downwards to 15.37 percent in December 2017, with a benign outlook of further moderation, as both food and core inflation ease.
“These impressive positive developments are a clear demonstration of effective monetary policy management and businesses across Nigeria need to recognise the role of the CBN governor.”
“I salute the unwavering tenacity and enterprise of the CBN governor, Godwin Emefiele, for his initiative in creating the Investors’ and Exporters’ (I&E) window and, more importantly, the commitment of the governor in ensuring the efficient functioning of this market.
“The I&E window has attracted over $15 billion to Nigeria, enhanced the liquidity of the FX market, reduced speculative demand for foreign currency, stabilised the naira and provided the vital foundation for renewed local and foreign investors’ confidence in the Nigerian market,” Mr Elumelu said.
He also commended President Muhammadu Buhari the clear and coherent policy-making framework put in place his administration, including “the positive engagement with the Niger Delta people, which has returned calm to this oil-producing region of the country leading to the current daily production of 2.2 million barrels of oil equivalent.”
However, Mr Elumelu cautioned that Nigeria must translate these recent improvements into a long-term strategy of ensuring economic success for all.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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