Economy
Equity, Bond Markets Buoy Nigeria’s $12b Capital Inflow in 2017
By Modupe Gbadeyanka
The total value of capital imported into the country in 2017 increased significantly when compared with two years ago.
According to figures released by the National Bureau of Statistics (NBS) few days ago, a total of $12.2 billion was attracted into Nigeria in 2017, an increase of $7.1 billion or 138.7 percent from the figure recorded in 2016.
The stats office said in its report that the growth in capital importation in 2017 was mainly driven by an increase in portfolio investment, which went up by $5.5 billion from the previous year to reach $7.3 billion in 2017, and accounting for 60 percent of capital imported.
During the reference quarter total capital imported when compared with the previous quarter increased by $1.2 billion, the NBS said.
In the fourth quarter alone, the capital inflow was $5.4 billion, representing an annual growth of 247.5 percent, and quarterly growth of 29.9 percent.
During the quarter, portfolio investment, which recorded $3.5 billion, remained the largest component of capital imported and contributed 64.6 percent of the total amount, $5.4 billion.
It increased significantly year on year, recording a rise of 1,123.5 percent or $3.2 billion from $284.2 million to $3.5 billion, expanding faster than the two other components of capital importation; Foreign Direct Investment (FDI) and other investments.
In the fourth quarter of last year, Foreign Direct Investment recorded $378.4 million, which is a year on year increase of 9.8 percent, while Other Investment recorded $1.5 billion, growing by 66 percent when compared with the fourth quarter of 2016.
According to the NBS, in Q4 2017, Foreign Direct Investment hit $378.4 million for the first time since Q4 2015 when it reported $123.2 million. This figure in Q4 2017 was a substantial increase of 221.8 percent when compared to the 3rd quarter, and a 9.8 percent increase compared to Q4 2017. The growth in FDI was mainly driven by Equity Investments, which contributed 99.8 percent, while Other Capital Investment contributed 0.2 percent.
Furthermore, the stats office said Portfolio Investment was the main driver of Capital Importation in the fourth quarter of 2017, with an amount of $3.5 billion, representing a quarter on quarter growth of 25.7 percent.
Year on year, it increased by 1,123.5 percent, which is over 12 times the figure recorded in Q4 2016, $284.2 million.
The increase in Portfolio Investment was driven by a strong growth in Money Market Instruments, which recorded $2.2 billion, the first time since Q3 2013.
Money Market Instruments contributed 63 percent to Portfolio investments. Equity, which had been the main driver of Portfolio investments in previous quarters, dropped by $942.9 million from $1.9 billion in Q3 to $989.2 million in Q4 2017.
On the other hand, Bonds recorded an increase of $194.1 million, from $115.4 million in Q3 to $309.5 million in Q4 of the same year.
Also, Other Investment accounted for 28.4 percent of total capital importation in the fourth quarter of 2017. This category of capital importation grew 65.96 percent year on year, and by 21.2 percent when compared to the previous quarter.
The $1.5 billion recorded by Other Investment was mainly in the form of Loans, which was $1.1 billion in the fourth quarter, followed by Other Claims which recorded $425.7 million, and then Trade credits which reported $10 million, having posted no inflows since Q4 2016.
By Dipo Olowookere
About 0.04 per cent was recovered on Friday from the loss recorded by the Nigerian Exchange (NGX) the previous due to profit-taking.
Yesterday, investors were in the market with renewed vigour, mopping up stocks trading at relatively cheaper prices.
According to data, the insurance counter gained 0.41 per cent, the banking sector appreciated by 0.38 per cent, and the consumer goods index grew by 0.14 per cent.
The gains achieved by these three sectors were enough to lift Customs Street at the close of business despite the 0.26 per cent decline printed by the industrial goods segment and the 0.14 per cent loss suffered by the energy industry. The commodity counter was flat during the session.
A total of 43 equities gained weight on the last trading day of this week, while 26 equities shed weight, indicating a positive market breadth index and strong investor sentiment.
Red Star Express increased its share price by 10.00 per cent to N13.20, NCR Nigeria grew by 9.97 per cent to N128.55, SCOA Nigeria inflated by 9.96 per cent to N14.90, Omatek appreciated by 9.94 per cent to N1.77, and Deap Capital expanded by 9.85 per cent to N4.46.
On the flip side, McNichols decreased by 8.81 per cent to N6.00, Legend Internet crumbled by 7.56 per cent to N5.50, Cornerstone Insurance crashed by 6.48 per cent to N6.35, C&I Leasing contracted by 6.29 per cent to N8.20, and Austin Laz slipped by 5.78 per cent to N3.75.
Yesterday, 539.9 million shares valued at N16.7 billion were transacted in 48,023 deals versus the 1.0 billion shares worth N31.6 billion executed in 51,227 deals in the preceding day, implying a shrink in the trading volume, value, and number of deals by 46.01 per cent, 47.15 per cent, and 6.26 per cent apiece.
Zenith Bank was the most active for the day with 54.6 million stocks sold for N3.8 billion, Jaiz Bank traded 41.5 million units worth N359.4 million, Secure Electronic Technology transacted 37.7 million units valued at N39.2 million, Access Holdings exchanged 30.5 million units for N699.2 million, and Lasaco Assurance transacted 27.2 million units worth N68.3 million.
When the market closed for the day, the All-Share Index (ASI) went up by 72.21 points to 166,129.50 points from 166,057.29 points and the market capitalisation gained N31 billion to N106.354 trillion from N106.323 trillion.
By Adedapo Adesanya
It was a positive ending for the Naira this week after it further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, January 16 by N1.33 or 0.09 per cent to sell for N1,417.95/$1 compared with the previous day’s N1,419.28/$1.
The domestic currency also gained N2.41 against the Euro in the official market to close at N1,647.51/€1 versus the preceding session’s closing price of N1,649.92/€1, however, it suffered a N7.97 loss against the Pound Sterling in the same market window to trade at N1,901.32/£1, in contrast to Thursday’s closing price of N1,893.35/£1.
In the same vein, the Nigerian Naira depleted against the Dollar at the GTBank FX counter by N2 to quote at N1,427/$1 compared with the previous day’s N1,425/$1, but strengthened against the greenback at the black market yesterday by N5 to settle at N1,485/$1 versus the N1,490/$1 it was exchanged a day earlier.
Improved supply conditions helped keep the market within range as exporters’ and importers’ inflows in addition to non-bank corporate supply enhanced liquidity as the Central Bank of Nigeria (CBN) made no visible intervention.
Stronger external inflows from foreign portfolio investors (FPIs) and improving current account dynamics, continue to align with structural support in the wider economy.
Nigeria has seen projections of a stronger economic or gross domestic product (GDP) growth and lower inflation in 2026, with these forecasts citing improved macroeconomic fundamentals and reform impacts.
As for the cryptocurrency market, it was mixed following selloff in precious metals and lower US stocks appeared to be denting crypto sentiment.
Gold and silver, both of which also enjoyed big rallies earlier this week, tumbled 1.2 per cent and 5 per cent, respectively while key US stock indexes — the Nasdaq, S&P 500 and Dow Jones Industrial Average — all reversed from early gains to modest losses in Friday trade.
Dogecoin (DOGE) shrank by 2.2 per cent to $0.1370, Ripple (XRP) slipped by 0.8 per cent to $2.05, Ethereum (ETH) went down by 0.7 per cent to $3,228.56, and Bitcoin (BTC) slumped by 0.6 per cent to $95,086.80.
Conversely, Litecoin (LTC) appreciated by 3.2 per cent to $74.48, Solana (SOL) rose by 0.4 per cent to $143.70, Cardano (ADA) jumped by 0.2 per cent to $0.3942, and Binance Coin (BNB) increased by 0.1 per cent to $935.88, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher amid lingering worries about a possible US military strike against Iran, a decision that may still occur over the weekend.
Brent crude settled at $64.13 a barrel after going up by 37 cents or 0.58 per cent and the US West Texas Intermediate (WTI) crude finished at $59.44 a barrel after it gained 25 cents or 0.42 per cent.
The US Navy’s aircraft carrier USS Abraham Lincoln was expected to arrive in the Persian Gulf next week after operating in the South China Sea.
Market analysts noted that it doesn’t seem likely anything will happen soon. However, the weekends have become the perfect time for actions so as not offset the markets.
The market had risen after protests flared up in Iran and US President Donald Trump signalled the potential for military strikes, but lost over 4 per cent on Thursday as the American president said Iran’s crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.
Iran produces approximately 3.2 million barrels per day, accounting for roughly 4 per cent of global crude production, so it was not a coincidence that markets rallied sharply through Tuesday and Wednesday as President Trump canceled meetings with Iranian officials and posted that “help is on its way” to Iranian protesters, raising fears of potential US military strikes that sent prices surging toward multi-month highs.
Weighing against those fears are potential supply increases from Venezuela.
The Trump administration is exploring plans to swap heavy Venezuelan crude for US medium sour barrels that can actually go straight into Strategic Petroleum Reserve (SPR) caverns, since not all all oil belongs in the reserve.
According to Reuters, the Department of Energy is considering moving Venezuelan heavy crude into commercial storage at the Louisiana Offshore Oil Port, while US producers deliver medium sour crude into the SPR in exchange.
Analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
Some investors covered short positions ahead of the three-day Martin Luther King holiday weekend in the US.
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