IMF Looks into Nigeria’s Request for Financial Help
By Dipo Olowookere
The International Monetary Fund (IMF) on Tuesday said it has received a request for financial assistance from Nigeria.
On Monday, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had said at a news conference in Abuja that federal government was looking to source for $6.9 billion from the IMF, World Bank and the African Development Bank (AfDB).
She had said while the sum of $3.4 billion would be borrowed from the IMF, $2.5 billion will come from the World Bank and $1 billion from AfDB.
In a statement obtained by Business Post from the IMF on Tuesday, its Managing Director, Ms Kristalina Georgieva, stated that Nigeria requested the financial help under the Fund’s Rapid Financing Instrument (RFI).
She explained that this emergency financing would allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds for priority health expenditures and protect the most vulnerable people and firms.
“We are working hard to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible,” the IMF chief said.
Ms Georgieva noted that, “Nigeria’s economy is being threatened by the twin shocks of the COVID-19 pandemic and the associated sharp fall in international oil prices.
According to her, President Buhari’s administration is taking a number of measures aimed at containing the spread of the virus and its impact, including by swiftly releasing contingency funds to Nigeria’s Centre for Disease Control (NCDC) and working on an economic stimulus package that will help provide relief for households and businesses impacted by the downturn.
Mr Buhari released the sum of N5 billion to the agency and N10 billion to the Lagos State government to fight the pandemic.
On Monday, the Finance Minister confirmed that the President approved the withdrawal of $150 million from the sovereign Wealth Fund to be shared to states of the federation to assist them with running their states.
NDEP Pulls Down Unlisted Stock Exchange by 0.08%
By Adedapo Adesanya
Niger Delta Exploration and Production (NDEP) Plc sank the NASD Over-the-Counter (OTC) Securities Exchange by 0.08 per cent on Thursday, June 1, rubbing off the gains posted by three other stocks on the platform.
The share price of NDEP Plc went down by N9.09 to N245.05 per unit from the N254.14 per unit it closed a day earlier.
As earlier stated, it suppressed the growth printed by the trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and Acorn Petroleum Plc.
FrieslandCampina Wamco Nigeria Plc grew by 20 Kobo to N70.20 per share from the previous session’s N70.00 per share, CSCS Plc added 8 Kobo to close at N14.00 per unit versus Wednesday’s value of N14.08 per unit, and Acorn Petroleum Plc gained 1 Kobo to close at 14 Kobo per unit versus 13 Kobo per unit.
At the close of business, the market capitalisation of the unlisted stock exchange fell by N840 million to N1.007 trillion from N1.008 trillion, while the NASD Unlisted Securities Index (NSI) depreciated by 0.61 points to 728.37 points from 728.98 points.
At the close of transactions yesterday, investors traded a total of 1.0 million units of securities, in contrast to the 5.4 million units of securities transacted in the preceding session, indicating a slump of 80.7 per cent.
However, the value of shares exchanged by the market participants went up by 194.3 per cent to N189.5 million from N64.4 million, as the number of deals declined by 16.7 per cent to 15 deals from 18 deals.
Geo-Fluids Plc closed as the most traded stock by volume (year-to-date) for selling 832.1 million units valued at N1.3 billion, followed by Industrial and General Insurance (IGI) Plc with 627.7 units worth N49.4 million, and UBN Property Plc with 395.9 million units valued at N336.6 million.
Also, VFD Group Plc was the most traded stock by value (year-to-date) for exchanging 10.7 million units valued at N2.4 billion, trailed by Geo-Fluids Plc with 832.1 million units worth N1.3 billion, and FrieslandCampina Wamco Nigeria Plc with 17.1 million units valued at N1.2 billion.
Crude Oil Jumps as US Reps Pass Contested Debt Bill
By Adedapo Adesanya
Crude oil increased on Thursday as the US House of Representatives’ passage of a bill to suspend the debt ceiling helped to offset the impact of rising inventories in the country.
Brent jumped by 2.3 per cent or $1.68 to $74.28 per barrel, as the US West Texas Intermediate (WTI) expanded by 3 per cent or $2.01 to settle at $70.10 a barrel.
Both benchmarks recovered from two-straight sessions of losses after the House passed a bill late on Wednesday to suspend the US government’s debt ceiling and improve chances of averting a default.
The Republican-controlled House voted 314-117 to send the legislation to the Senate, which must enact the measure and get it to President Joe Biden’s desk before a Monday deadline when the federal government is expected to run out of money to pay its bills.
The legislation temporarily removes – the US federal government’s borrowing limit through January 1, 2025.
The timeline will allow President Biden and Congress to set aside the politically risky issue until after the November 2024 presidential election.
It would also cap some government spending over the next two years, speed up the permitting process for certain energy projects, claw back unused COVID-19 funds and expand work requirements for food aid programs to additional recipients.
With this good as done, the market’s focus has also shifted to a June 4 meeting of the Organisation of the Petroleum Exporting Countries and its allies, including Russia, collectively called OPEC+.
According to Reuters, sources noted that the alliance is unlikely to deepen supply cuts at the Sunday meeting, but some analysts maintained that it is a possibility as demand indicators from China and the US have been disappointing in recent weeks.
Pressure came as US crude oil stockpiles rose unexpectedly last week, as imports jumped and strategic reserves dropped to their lowest since September 1983.
According to data from the Energy Information Administration (EIA), an inventory build of 4.5 million barrels was reported for the week to May 26.
At 459.7 million barrels, crude oil inventories in the U.S. are around 2 per cent below the five-year average for this time of the year.
The market will also be looking at the next moves by the US Federal Reserve and what it would do concerning its interest rates.
Naira Crumbles at Parallel Market After CBN Devaluation Denial
By Adedapo Adesanya
The Naira tumbled against the Dollar in the parallel market on Thursday after the Central Bank of Nigeria (CBN) refuted reports that it had devalued the local currency to N630/$1 in the official market.
The central bank described the news report as fake news, urging members of the public to disregard it as it had not authorised such.
This affected the value of the Nigerian currency on the streets yesterday as it lost N10 against the US Dollar to close at N750/$1 compared with Wednesday’s value of N740/$1.
In the official segment, which is also the Investors and Exporters (I&E), the domestic currency traded flat against the greenback during the session at N464.67/$1 despite the value of foreign exchange (forex) transactions rising by 53.3 per cent or $87.24 million to $250.98 million from $163.74 million.
In the Peer-2-Peer (P2P) segment, the local currency appreciated against its American counterpart by N9 to trade at N755/$1 versus the preceding day’s rate of N764/$1.
The Naira closed flat against the Pound Sterling on Thursday at N574.37/£1 but appreciated against the Euro by N2.31 to close at N493.58/€1 compared with the midweek session’s N495.89/€1.
In the cryptocurrency market, there was a renewed interest as optimism was injected into the assets, with top coins tracked by Business Post performing well.
Bitcoin (BTC) appreciated by 1.3 per cent to $27,201.31, Ethereum (ETH) improved its value by 2.0 per cent to $1,894.80, Litecoin (LTC) went up by 4.1 per cent to trade at $95.39, Ripple (XRP) recorded a 2.3 per cent gain to quote at $0.5193, and Cardano (ADA) appreciated by 2.2 per cent to trade at $0.3733.
Further, Solana (SOL) made a 2.1 per cent rise to sell at $21.12, Binance Coin (BNB) jumped by 1.2 per cent to sell for $308.33, and Dogecoin (DOGE) added 0.6 per cent to sell at $0.0722, while, the US Dollar Tether (USDT) and Binance USD (BUSD) remained unchanged at $1.00 each.
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