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 Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange weakened by 0.22 per cent on Tuesday, April 28, with the market capitalisation down by N4.8 billion to N2.420 trillion from N2.425 trillion, and the NASD Unlisted Security Index (NSI) down by 9.01 points to 4,044.96 points from 4,053.97 points.
During the session, the price of Central Securities Clearing System (CSCS) Plc went down by N1.82 to N767.05 per share from N78.87 per share, while FrieslandCampina Wamco Nigeria Plc appreciated by N1.90 to N100.00 per unit from N98.10 per unit.
According to data, the value of trades increased by 265.7 per cent to N27.1 million from N7.4 million units, and the volume of transactions surged by 305.2 per cent to 1.3 million units from 319,831 units, while the number of deals decreased by 6.9 per cent to 27 deals from 29 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.8 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also finished as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.
On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.
It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.
The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.
The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.
The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.
Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.
Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.
Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.
However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.
By Adedapo Adesanya
Oil was up by nearly 3 per cent on Tuesday as persistent worries about supply constraints from the closed Strait of Hormuz continued, with Brent futures for June rising by $3.03 or 2.8 per cent to $111.26 a barrel, and the US West Texas Intermediate (WTI) crude futures growing by $3.56 or 3.7 per cent to $99.93 a barrel.
An earlier round of negotiations between the United States and Iran collapsed last week after face-to-face talks failed.
Ship-tracking data showed significant disruptions in the region, with six Iranian oil tankers forced to turn back due to the US blockade, but some traffic is still moving.
Prices trimmed some of the advances after the United Arab Emirates (UAE), the fourth-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), said on Tuesday it would exit the group on this Friday, May 1, 2026.
This dealt a blow to the oil-exporting group and its de facto leader, Saudi Arabia.
The UAE could quickly add between 1 million and 1.5 million barrels per day of output. However, with the Strait of Hormuz effectively closed, analysts said that there’s nowhere for that supply to go.
The UAE joined OPEC in 1967, but tension with Saudi Arabia over production quotas has been building for years.
Under the OPEC+ deal, the country has been held to roughly 3 million barrels per day while sitting on capacity above 4 million. It has been pushing toward 5 million barrels per day by 2027, and that target is hard to achieve with quotas built around someone else’s view of the market.
The war in Yemen broke whatever was left of diplomatic patience.
President Donald Trump said he was unhappy with the latest Iranian proposal to end the war. The proposal would avoid addressing the nuclear programme until hostilities cease and Gulf shipping disputes are resolved.
The Idemitsu Maru, a Panama-flagged tanker carrying 2 million barrels of Saudi oil, and an LNG tanker managed by the Abu Dhabi National Oil Company (ADNOC) crossed the Strait on Tuesday, shipping data showed.
Vortexa data showed that the amount of crude oil held around the world on tankers that have been stationary for at least seven days rose to 153.11 million barrels as of April 24.
The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 1.79 million barrels in the week ending April 24. The official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
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