Economy
FG Flings 41 Items Exempted From Forex Policy By CBN
By Dipo Olowookere
There are strong indications that the Federal Government may set aside the policy of the Central Bank of Nigeria (CBN) regarding the 41 items exempted from foreign exchange market in its newly released 2017 Fiscal Policy Roadmap.
The policy document prepared by the Minister of Finance, Mrs Kemi Adeosun, will, instead, come up with fiscal measures to reduce pressure in the parallel market.
According to the document, the FG “will replace administrative measures on list of 41-items with fiscal measures to reduce demand pressure in parallel market.”
Presenting the document at a programme held in Lagos, Mrs Adeosun said, “The Federal Government’s Fiscal Roadmap is addressing barriers to growth that will drive productivity, generate jobs and broaden wealth-creating opportunities to achieve inclusive growth.”
She stated that the President Muhammadu Buhari administration was determined to return Nigeria to a productive economy rather than one steeped in consumption. To do so, government would tackle the infrastructure deficit to unlock productivity, improve business competitiveness and create employment.
She further said that government would actively partner with the private sector to achieve this by use of a number of new funding platforms, including the Road Trust Fund, which would develop potentially tollable roads, and the Family Homes Fund, which is an ongoing PPP initiative for funding of affordable housing.
According to the minister, the tax provision that allows companies to receive tax relief for investment in roads on a collective basis would be reviewed.
She explained that the existing provision that enabled companies to claim relief for road projects had only been taken advantage of by two companies, Lafarge and Dangote Cement. This was because few companies were large enough to fund roads alone.
The revision would now allow collective tax relief, such that companies will be able to jointly fund roads, subject to approval by FIRS and the Ministry of Works, and share the tax credit. It added that the government would revitalise refineries and increase Diaspora remittances through participation in the buyer support scheme for the Family Homes Fund with a view to increasing the supply of US Dollars to the Nigerian market.
The Roadmap also provides for a fresh audit of the federal government debt profile after which it would introduce a promissory note program to finance verified liabilities and issue debt certificates to contractors of Ministries, Departments and Agencies (MDAs).
These, according to the document, would positively impact on the economy by improving government’s cash flow of businesses, improve banks’ Non-Performing Loans, (NPLs); free up banks’ balance sheet for lending to private sector; and improve business interaction. These liabilities were estimated to be N2.2 trillion and would be addressed with a 10 year Promissory Note Issuance programme in conjunction with the CBN.
“Some contractors had not been paid in the past 4 years and in some cases the banks they were owing refused them access to the funds released, causing delays,” she explained, adding that those receiving the Promissory Notes would be expected to provide a material discount to government. The issuance was a solution to a long term problem that was ‘a drag on economic activity’.
It would also mobilise private capital to complement government spending on infrastructure, through the Roads Trust Fund, Family Homes Fund, while extending infrastructure tax relief to a collective model to attract clusters of corporate entities and expand the provision of infrastructure, in other to drive growth of non-oil sector, especially and the economy in general. There would be incentives for exports which would include restructuring the Export Expansion Grant (EEG) to a tax credit system, as well as rationalised tariffs and waivers in key export sectors. These have been designed to drive import substitution. The document indicated that the federal government would encourage investment in specific sectors through fiscal incentives especially in food processing, mining and power, and would rationalise tariffs and waivers in such priority sectors. In order to expand fiscal space through revenue enhancement and cost consolidation, it would enhance the Customs Single Window (being implemented through a Private Public Partnership (PPP) scheme), introduce template for non-allowable expenses for government agencies, control overhead costs by the Efficiency Unit and implement a continuous risk based audit by the Presidential Initiative on Continuous Audit.
In order to improve fiscal discipline at Sub-National level, the federal government would, from next year, extend the Efficiency Unit to Sub-National level; fast track municipal bond issues to deepen the bond market, as well as conversion to International Public Sector Accounting Standards by all state governments. The government plans to pursue its anti-corruption crusade in the new year with greater vigour and accelerate recoveries process, introduce a whistle-blower scheme, centralised database on recovered assets, asset tracking and a professional management of recovered assets. It also plans to rebalance debt portfolio to extend maturity and optimise debt service cost through rebalancing public debt portfolio with increased external borrowing with a target of 60:40 ratio and extend maturity profile of public debt portfolio, while deploying long-term debt instruments and depending more on concessionary loans.
http://www.vanguardngr.com/2016/12/41-exempted-items-fg-dumps-cbns-forex-policy/
By Aduragbemi Omiyale
Stanbic IBTC Nominees Limited has been commended for its critical role in the Nigerian capital market, especially for safely keeping non-pension assets.
For the past 30 years, the company has provided custody services in Nigeria, and to celebrate this milestone, it was honoured with a closing gong ceremony at the Nigerian Exchange (NGX) Limited.
The milestone reflects the institution’s longstanding contribution to investor confidence and the continued development of the nation’s capital market.
Welcoming the organisation to Customs Street, the chief executive of NGX, Mr Jude Chiemeka, commended its three decades of custody services, recognising the firm’s role in strengthening investor confidence and enhancing market safety.
He highlighted NGX’s continued investment in technology, which he said has enabled over 2.6 million active retail investors to trade on the platform.
“Technology continues to be at the heart of our strategy,” Mr Chiemeka said, noting that a vibrant and secure marketplace remains essential to investor participation.
In his remarks, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, thanked NGX for its continued partnership, saying, “We are thrilled to be here today, commemorating not just our journey, but also the remarkable progress made by the NGX.”
He noted that the collaboration between the two institutions has continued to drive innovation, product development and thought leadership across the industry.
“We are dedicated to raising standards within the industry as part of Standard Bank Group. Our focus remains driving the growth and development of Nigeria’s capital market. Indeed, Nigeria is our home, and we drive her growth,” he added.
The chief executive of Stanbic IBTC Nominees, Mr Babatunde Majiyagbe, reflected on the evolution of the business from the era of physical share certificates stored in fireproof vaults to today’s fully dematerialised market, where securities are held electronically.
“We started with holding custody of physical certificates, investing in vaults with fire and dust protection, so those certificates could be presented when needed,” Mr Majiyagbe recalled, noting that while the market has evolved significantly, the commitment to service excellence has remained unchanged.
“What has endeared a lot of investors to the market is that they are dealing with a reputable organisation like ours. We are high on good governance, and high on technology, making the process of investment in Nigeria easier,” he said.
Mr Majiyagbe added that Stanbic IBTC Nominees’ role goes beyond just attracting foreign portfolio investment (FPI) and capital.
“For us, it’s not just about FPI; but also about the value we have delivered over 30 years. Stanbic IBTC Nominees continue to be the eyes and ears of foreign and domestic investors in our market,” he stated.
Mr Majiyagbe added that the firm has also supported the development of market rules and safeguards, noting: “We have, over the years, advocated for growth, change, transformation and stability in our capability to provide services to domestic and foreign portfolio investors continuously.”
The deputy chief executive of Stanbic IBTC Bank and Chairman of Stanbic IBTC Nominees, Mrs Bunmi Dayo-Olagunju, said the next phase of growth will build on the institution’s legacy of trust.
“For 30 years, we’ve delivered growth, security, and client confidence. That’s why investors have stayed with us and why new business keeps coming.
“Our target for this new phase of growth is simple: build on that trust and ride the acceleration in Nigeria’s economic activity.
“With custody, settlement, capital raise, and advisory integrated on one platform, we’re not just a custodian. We’re an infrastructure. We look forward to building on that trust for generations to come, serving both local and international clients. Hopefully, we’ll have another 100 years of maintaining that trust with local and international markets,” Mrs Dayo-Olagunju said.
By Dipo Olowookere
The positive market breadth index recorded by the Nigerian Exchange (NGX) Limited could not save it from further claws of the bears on Friday.
The major performance indicators, the All-Share Index (ASI) and the market capitalisation, depreciated by 0.03 per cent and 0.01 per cent, respectively.
The ASI was down by 78.58 points to 245,283.68 points from the previous day’s 245,362.26 points, and the market capitalisation receded by N14 billion to N158.326 trillion from Thursday’s N158.340 trillion.
Business Post reports that market participants traded 943.0 million equities valued at N46.7 billion in 55,480 deals compared with the 2.1 billion equities worth N230.8 billion transacted in 48,231 deals a day earlier.
This implied that the trading volume shrank by 55.10 per cent, the trading value reduced by 79.77 per cent, and the number of deals surged by 15.03 per cent.
An analysis of the sectoral performance showed that the consumer goods space crashed by 0.60 per cent and the energy index went down by 0.09 per cent.
However, the banking sector improved by 1.90 per cent, the insurance counter expanded by 0.75 per cent, and the industrial goods segment soared by 0.10 per cent.
There were 33 appreciating stocks and 29 depreciating stocks during the last trading session of the week and month of July, indicating bullish investor sentiment despite the poor outcome.
CAP lost 9.97 per cent to trade at N128.25, Veritas Kapital depreciated by 9.49 per cent to N1.43, Vitafoam Nigeria slipped by 7.70 per cent to N179.80, The Initiates dipped by 6.67 per cent to N28.00, and NAHCO crashed by 6.63 per cent to N155.00.
Conversely, Eterna gained 10.00 per cent to sell for N33.00, Consolidated Hallmark also grew by 10.00 per cent to N8.36, McNichols expanded by 9.52 per cent to N5.75, Honeywell Flour increased by 8.96 per cent to N18.25, and First Holdco chalked up 8.00 per cent to quote at N129.55.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its bullish run on Friday, July 31, by 0.99 per cent.
This raised the NASD Security Index (NSI) by 43.54 points to 4,431.71 points from 4,388.17 points, and lifted the market capitalisation by N26.13 billion to N2.659 trillion from N2.633 trillion.
The growth came amid a significant decline in the activity level, as the volume of securities decreased by 73.0 per cent to 690,990 units from 2.6 million units, the value of securities slid by 15.0 per cent to N75.0 million from the preceding session’s N88.3 million, and the number of deals contracted by 31.6 per cent to 26 deals from the 38 deals recorded a day earlier.
The most active stock by value on a year-to-date basis remained Great Nigeria Insurance (GNI) Plc, with a turnover of 3.4 billion units valued at N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.6 million units exchanged for N5.5 billion.
The most active stock by volume on a year-to-date basis was also GNI Plc, with the sale of 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
Investor sentiment was bullish yesterday after a positive market breadth index triggered by five price gainers and two price losers, led by 11 Plc, which gave up N14.99 to close at N225.01 per share versus the previous day’s N240.00 per share, and MRS Oil Plc, which shed N14.55 to settle at N132.00 per unit versus N146.55 per unit.
However, Nipco Plc gained N41.50 to sell at N456.50 per share compared with the preceding session’s N415.00 per share, FrieslandCampina Wamco Nigeria Plc appreciated by N12.93 to N147.93 per unit from N135.00 per unit, Nitrox Industrial Gases Plc improved by N1.00 to N20.00 per share from N19.00 per share, CSCS Plc soared by 54 Kobo to N102.00 per unit from N101.46 per unit, and Industrial and General Insurance (IGI) Plc jumped by 1 Kobo to 50 Kobo per share from 49 Kobo per share.
