Economy
FG’s Readiness to Tackle FX Constraints Gladdens NGX
By Aduragbemi Omiyale
The Nigerian Exchange (NGX) Limited has expressed its excitement over the readiness of the federal government to address the lingering foreign exchange (FX) constraints in the country.
The chief executive of the bourse, Mr Temi Popoola, who lamented the negative impact of the forex shortage on the market, said he was optimistic that the administration of Mr Bola Tinubu would tackle the issue head-on.
During his inauguration on Monday, Mr Tinubu tasked the Central Bank of Nigeria (CBN) to adopt a single exchange rate system to restore investors’ confidence in the Nigerian economy.
Speaking on Thursday in Lagos at the closing gong ceremony to commemorate the centenary anniversary of the International Court of Arbitration (ICC), Mr Popoola noted that forex limitations have continued to challenge the nation’s economy.
He noted that the NGX trades between $250 million to $300 million a day, but due to the FX crisis in the country, this has continued to decline.
“We are hopeful and beginning to see that the new administration wants to tackle FX constraints. At the NGX, we will continue to appreciate our partners.
“We are truly delighted to welcome the ICC to the exchange, and at NGX, we will continue to build on partnerships just to ensure that companies will be able to come and raise capital,” Mr Popoola, represented by the Divisional Head of Capital Markets at NGX, Mr Jude Chiemeka, stated.
Responding, the Secretary General of ICC, Mr John Denton, noted that the ICC, with 400 million members in 170 countries, play a critical role in ensuring appropriate advocacy with the government and global business community on effective means of enabling the private sector, provide training and capacity building to link Nigerian businesses unto the extraordinary global platform of the national chamber of commerce.
Mr Denton said one of the key aims of the ICC is to enable global trade while expressing excitement that the market sustained a bullish tilt in three consecutive trading sessions.
According to him, this bodes well, especially for investors’ confidence under the new administration and is critical to keeping the market competitive and transparent.
Commending the NGX for its giant strides in innovation and technology, Mr Denton said this aligns with the ICC objectives, which is a critical part of its role in developing the private sector and enabling the private sector to operate effectively.
“We are looking at 30-40 sovereign states with serious debt and liquidity issues, and yet on a global basis, that is dismissed as something to be worried about and not something to be acted on.
“What that means is that the advanced economies are not prepared to work harder on the debt forgiveness issue, resolution issue because if these countries fall over, it will be terrible. We think this is fundamentally wrong, which is what we are working on.
“Working with a group like the NGX who understand what is required to keep the markets moving will be very helpful too,” the ICC scribe said.
By Adedapo Adesanya
Nigerian billionaire investor, Mr Femi Otedola, has announced plans to invest $100 million in the Dangote Refinery, which plans to list later this year.
Mr Otedola disclosed this on Wednesday after leading a delegation of top executives from First HoldCo on a visit to the Dangote refinery.
“On a personal note, I’ve appealed to him (Aliko Dangote). I’ve been here with him 25 times, so my compensation is he’s going to allocate to me shares worth $100 million in the private placement,” the billionaire said.
Mr Otedola had previously denied that he had any stake or funded the construction of a 650,000 barrels per day facility.
The announcement marks his next big move after increasing his stake in First Holdco as well as buying a $10 million property in London.
Mr Dangote last year said the refinery could sell up to 10 per cent stake in the listing, which is valued at about $5 billion. It is aiming for a valuation of up to $50 billion for Dangote refinery.
The billionaire is planning to make the IPO a cross-border listing to enable the refinery to draw investments from domestic and international investors.
Mr Dangote, this week, said the IPO is designed to democratise wealth creation and give Africans direct access to participate in the continent’s industrial transformation.
On his part, Mr Dangote, president of the Dangote Group, says the company is targeting a private placement of about $2 billion for the refinery.
While the actual date for the IPO is yet to be announced, Mr Otedola’s early investment indicates value and could spur other high-net-worth individuals to show interest.
Mr Otedola, an ally of Mr Dangote, led top executives of First HoldCo on a tour of the refinery and the fertiliser plants in the Lekki free trade zone area.
The team also visited key project sites such as the jetty, a facility built by Dangote industries to receive large vessels.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further chalked up 0.32 per cent on Wednesday, May 20, spurred by price appreciation in 11 Plc, and Central Securities and Clearing System (CSCS) Plc.
11 Plc, which used to be known as Mobil, added N22.11 to sell at N243.21 per unit compared with the previous day’s N221.10 per unit, and CSCS Plc gained N1.19 to trade at N71.81 per share versus Tuesday’s N70.62 per share.
The growth posted by the duo raised the market capitalisation by N8.04 billion to N2.495 trillion from N2.487 trillion, and lifted the NASD Unlisted Security Index (NSI) by 13.44 points to 4,171.19 points from 4,157.75 points.
Yesterday, there were two price losers, led by Nipco Plc, which shed N22.60 to close at N287.00 per unit compared with the preceding day’s N309.60 per unit, and FrieslandCampina Wamco, which lost 84 Kobo to sell for N150.95 per share, in contrast to the N151.79 per share it was traded a day earlier.
The volume of trades recorded at midweek dipped by 99.9 per cent to 2.3 million units from 1.9 billion units, the value of transactions fell by 93.7 per cent to N334.2 million from the preceding session’s N5.3 billion, and the number of deals went down by 43.3 per cent to 34 deals from 60 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion sold for N6.5 billion, and CSCS Plc with 60.9 million units exchanged for N4.1 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Adedapo Adesanya
The Naira broke its weakening streak in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, May 20, after it appreciated against the US Dollar by 53 Kobo or 0.04 per cent to trade at N1,373.34/$1, in contrast to Tuesday’s closing rate of N1,373.87/$1.
The domestic currency also improved its value against the Euro in the official FX market during the midweek session by N1.99 to close at N1,592.53/€1 compared with Tuesday’s closing value of N1,594.52/€1, but depreciated against the Pound Sterling at the official FX market during the midweek session by 39 Kobo to trade at N1,840.00/£1 versus the previous day’s value of N1,839.61/£1.
Data from GTBank FX bench showed that the Naira appreciated against the Dollar yesterday by N2 to sell at N1,379/$1 versus N1,381/$1, but closed flat in the parallel market at N1,390/$1.
The performance of the local currency in the different segments of the forex market comes as the Central Bank of Nigeria (CBN) insisted that it is no longer aggressively intervening in the foreign exchange market to defend the Naira, as it held interest rate steady despite happenings in the global economy.
Governor of the apex bank, Mr Yemi Cardoso, disclosed after the Monetary Policy Committee (MPC) meeting in Abuja on Wednesday that the structure of Nigeria’s foreign exchange market has changed significantly under the ongoing reforms, adding that increased market liquidity has reduced the need for heavy intervention by the CBN.
Currency traders and investors are expected to continue monitoring CBN policy direction, foreign portfolio inflows, crude oil earnings, and external reserve performance as key indicators influencing the naira’s trajectory in the coming months.
According to Mr Cardoso, the CBN will continue with its current policy direction to sustain the fight against inflation and stabilise the exchange rate.
He described exchange rate stability as the centrepiece of the apex bank’s policy toolkit and stressed the need for stronger collaboration between monetary and fiscal authorities to reduce inflationary pressures in the economy.
As for the cryptocurrency market, it was in green on Wednesday as the US Securities and Exchange Commission (SEC) is delaying the launch of a recent wave of “novel ETFs,” including those that offer prediction-market style event contracts, to consider the implications of introducing the new products.
Prediction markets have become one of crypto’s hottest use cases over the past 18 months and now consistently record more than $15 billion in monthly trading volume across markets spanning from sports and elections to financial results and cultural events.
Dogecoin (DOGE) appreciated by 2.2 per cent to $0.1058, Solana (SOL) grew by 1.99 per cent to $86.42, Binance Coin (BNB) jumped 1.6 per cent to $652.01, TRON (TRX) rose by 1.4 per cent to $0.3604, Bitcoin (BTC) improved by 0.8 per cent to $77,769.62, Ethereum (ETH) soared by 0.5 per cent to $2,135.25, and Ripple (XRP) gained 0.5 per cent to quote at $1.37.
However, Cardano (ADA) dropped 0.4 per cent to trade at $0.2490, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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