Economy
Index Reports Six Quarter High in Business Confidence
By Dipo Olowookere
A resurgence in economic confidence was experienced by credit professionals in the final quarter of 2016, according to the UK’s latest Credit Managers’ Index (CMI). Yet bad debt remains a risk with only 13% of credit managers expecting a decline in 2017.
Full results from the quarterly barometer of the Chartered Institute of Credit Management (CICM) have now been released; the CMI’s headline Index closed up 0.5 points to 59.8, ending a successive three-quarter fall. It is the highest result since Q2 2015 and only the fifth time in the CMI’s seven-year history it has climbed above 59.0.
The Index measures confidence in manufacturing (up 6.2 points to 61.2) and services (up 3.6 points to 59.0), in what Philip King, Chief Executive of the CICM, highlights as rising optimism from credit professionals across the board:
“What is also good to see is the Index is back on its historical tracking of the FTSE All Share, following the brief and negative divergence in Q3 2016,” he says.
The CMI retracted by 1.4% in Q3 while the All Share rose 2.3%. “This compares to the CMI’s 8.1% and All Share’s 3.1% rises in Q4,” Mr King adds. “Which means the CMI has easily mitigated its Q3 losses, and is now back on track with one of the UK’s most important measures of economic confidence.”
The CMI, sponsored by trade credit risk management experts Tinubu Square, is important because it gauges nationwide levels of credit being sought and granted by credit managers across the UK and acts as a primary indicator of actual levels of business being conducted. It consistently maps the FTSE All Share Index and the EU Economic Sentiment Indicator.
The survey also found 32% of respondents saw bad debts increase across 2016, with only 13% expecting bad debts to drop in 2017. 20% expect debts to continue rising, but most worryingly a further 28% remain unsure about how debts will change, and are budgeting for rises.
Michael Feldwick, Head of Tinubu Square UK, said: “The findings reflect conversations we are having across sectors, where there is a general concern about debt continuing to rise. Some seem more concerned than others however, such as the construction industry. It particular highlights the need to monitor and manage trade credit risks closely, some customers are telling us that trade credit insurers appear to be slowly becoming more cautious as their loss ratio and cost ratio increases.”
Further analysis of the results show regional differentiation – Wales, Northern Ireland and Yorkshire and Humber have all dipped below a 52-point threshold; six regions including the North West, South West and East Midlands are reporting scores of over 60.0 points; and London (which fell to a concerning 50.2 in Q3 2016) has risen over the threshold to close at 59.0.
“It is very important for London as the driving force of the UKs economy to display positive results, and it is good news to see that its decrease was only short-term,” Mr King adds.
Of the 19 sectors measured in the CMI, 16 have a CMI score above the 52-point threshold. Only Personal and Household Goods (44.0), Automobiles and Parts (45.0) and Banks (47.0) reported lower than hoped-for results.
“Meanwhile, volatility levels are continuing to stabilise and that may signal a positive future in terms of economic confidence and the outlook for growth,” Mr King continues. “But the uncertain geo-political circumstances surrounding the new US administration and Brexit have the ability to do lasting damage to our economic indicators.”
The CMI is a diffusion Index, producing scores of between one and 100 (typically in a range of 40 – 60). Ten equally weighted factors are included – three favourable and seven unfavourable and the Index is calculated on a simple average of the 10 factors.
By Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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