Economy
Investors Panic as Lack of Quorum May Stall 2018 MPC Meeting
By Dipo Olowookere
There is anxiety in the Nigerian business space as the first Monetary Policy Committee (MPC) meeting for 2018, scheduled for the third week of January, may not hold due to lack of quorum.
The MPC is a body set up to maintain price stability and support the economic policies of the federal government by formulating monetary and credit policies.
The committee has the Central Bank of Nigeria (CBN) Governor as Chairman; the four deputy governors of the apex bank; two members of the board of directors of the CBN; three members appointed by the President; and two members appointed by the Governor.
By the end of this year, eight positions in the 12-member committee would have become vacant, making it impossible for it to form the quorum required for it to meet.
In October 2017, President Muhammadu Buhari nominated Mrs Aisha Ahmad as a Deputy Governor of the CBN to replace Mrs Sarah Alade, who retired from the bank in June.
He also nominated Professor Adeola Festus Adenikinju, Dr Aliyu Rafindadi Sanusi, Dr Robert Chikwendu Asogwa and Dr Asheikh A. Maidugu as members to fill the positions of four others whose tenure would expire at the end of the year.
Meanwhile, Alhaji Suleiman Barau, another deputy governor of the central bank, who is also a member of the committee, retired recently. The President is yet to name a replacement for him.
But the President’s nominees sent to the Senate for confirmation have not been considered at all. The upper parliament has refused to consider the President’s nominees because of its resolution to suspend all executive confirmation requests for positions not listed in the 1999 Constitution as amended until the Acting Chairman of the Economic and Financial Crimes Commission (EFCC), Mr Ibrahim Magu, was removed.
The Senate last week adjourned to January 9 for its Christmas/New Year recess, while plenary session would begin on January 16.
This development has made uncertain the January meeting of the committee, which has operational independence in setting interest rate as well as designing monetary policy for the country.
Speaking in a chat with THISDAY, the Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, expressed concern over the development.
According to Mr Ekpo, it would create uncertainty among investors.
He said: “There might not be an MPC meeting because they would not be able to form a quorum and if the MPC does not meet it would send a wrong signal to the international investors because it means that there is still uncertainty in the system.
“The way it is now, we are in a limbo and if MPC does not meet, it means that there won’t be decisive actions on monetary policy. The MPC is the engine room for monetary policy and so if they cannot meet to deliberate on the economy and relevant issues, you increase uncertainty in the system.
“The central bank’s mandate is price stability and it is very crucial in any economy. We have always argued that such delays would always cause problem for us.
“So, my advice is that they should stop this delay because it has adverse effect on the economy. So, even if they have to come back from recess and confirm the MPC members, they should do so.”
However, in his reaction, the chief executive of the Financial Derivatives Company Limited, Mr Bismarck Rewane, said there was no need for panic.
Mr Rewane expressed optimism that the new MPC members would be confirmed before the next meeting.
He said: “I don’t think that is a problem. There is still time between now and then. The meeting is not until third week in January for the MPC and I believe the Senate would be able to deal with it before then.”
Nevertheless, when reminded that the Senate would resume fully on January 16, Mr Rewane said: “They would postpone the MPC by one or two weeks! I don’t think it is something to panic about.
“In any case, what does the MPC do? Most of the changes in policy instruments have taken place outside the MPC meeting. So, the MPC has become a ritual. So, there is no need to panic.”
By Adedapo Adesanya
Three bellwether stocks lifted the NASD Over-the-Counter (OTC) Securities Exchange by 0.62 per cent on Friday, December 12 with the NASD Unlisted Security Index (NSI) jumping by 22.20 points to 3,600.43 points from 3,578.23 points.
In the same vein, the market capitalisation of the trading platform increased by N13.28 billion to close at N2.154 trillion from the previous day’s N2.140 trillion.
During the session, Central Securities Clearing System (CSCS) Plc went up by N2.53 to close at N39.71 per share compared with the previous day’s N37.18 per share, Geo-Fluids Plc added 35 Kobo to its price to finish at N5.00 per unit versus Thursday’s closing price of N4.65 per unit, and FrieslandCampina Wamco Nigeria Plc appreciated by 23 Kobo appreciation to sell at N60.23 per share versus N60.00 per share.
It was observed that yesterday, the price of Golden Capital Plc went down by N1.05 to N9.45 per unit from N10.50 per unit, and UBN Propertiy Plc declined by 21 Kobo to N2.01 per share from the N2.22 per share it was traded a day earlier.
There was a significant improvement in the level of activity for the day, as the volume of transactions increased by 6.2 per cent to 37.4 million units from the previous day’s 35.2 million units, the value of trades went up by 265.1 per cent to N4.9 billion from N1.4 billion, and the number of deals soared by 13.80 per cent to 33 deals from 29 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the last trading day of this week as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, the second spot was taken by Okitipupa Plc with 178.9 million units traded for N9.5 billion, and third space was occupied by a new comer in MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc also finished the session as the most active stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units valued at N420.3 million, and Impresit Bakolori Plc with 537.0 million units sold for N524.9 million.
By Dipo Olowookere
The bullish run on the Nigerian Exchange (NGX) Limited continued on Friday with a further 1.00 per cent growth buoyed by gains recorded by Guinness Nigeria, Champion Breweries, and others.
Data showed that the consumer goods space expanded by 1.53 per cent during the last trading session of the week, as the insurance counter grew by 0.51 per cent, and the industrial goods sector marginally gained 0.01 per cent.
However, the banking index depreciated by 0.54 per cent due to a pocket of profit-taking, and the energy industry shrank by 0.09 per cent, while the commodity sector closed flat.
Guinness Nigeria gained 10.00 per cent to trade at N217.80, Morison Industries rose by 9.84 per cent to N4.69, Champion Breweries jumped by 9.69 per cent to N14.15, Austin Laz grew by 9.66 per cent to N2.27, and C&I Leasing appreciated by 9.62 per cent to N5.70.
Conversely, eTranzact lost 10.00 per cent to finish at N12.60, Chellarams slumped by 9.00 per cent to N13.20, Eunisell depleted by 9.89 per cent to N75.15, Africa Prudential moderated by 9.77 per cent to N12.00, and DAAR Communications decreased by 9.18 per cent to 89 Kobo.
The busiest stock on Friday was Access Holdings with 107.6 million units sold for N2.2 billion, Consolidated Hallmark traded 59.9 million units worth N245.8 million, Zenith Bank transacted 48.2 million units valued at N3.1 billion, Transcorp Power transacted 42.8 million units for N13.1 billion, and Champion Breweries exchanged 36.4 million units valued at N510.2 million.
At the close of business, a total of 602.8 million units worth N30.7 billion exchanged hands in 20,550 deals yesterday, in contrast to the 529.7 million units valued at N12.3 billion traded in 18,159 deals on Thursday, representing a surge in the trading volume, value, and number of deals by 13.80 per cent, 149.59 per cent, and 13.17 per cent apiece.
Business Post reports that the All-Share Index (ASI) soared during the session by 1,485.89 points to 149,436.48 points from 147,950.59 points and the market capitalisation moved up by N945 billion to N95.264 trillion from N94.319 trillion.
By Adedapo Adesanya
An intervention of the Central Bank of Nigeria (CBN) in the foreign exchange (FX) market eased the pressure on the Naira on Friday.
The apex bank sold forex to banks and other authorised dealers in the official window to defend the domestic currency, helping to calm the FX demand pressure, with the Nigerian currency appreciating against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 0.11 per cent or N1.57 to sell at N1,454.50/$1 compared with Thursday’s closing price of N1,456.07/$1.
Also, the domestic currency improved its value against the Pound Sterling in the official market yesterday by N3.95 to close at N1,946.15/£1 versus the previous day’s N1,950.11/£1 but lost 10 Kobo on the Euro to quote at N1,706.46/€1 compared with the N1,706.36/€1 it was exchanged a day earlier.
At the black market segment, the Nigerian Naira maintained stability against the Dollar during the session at N1,470/$1 and also traded flat at N1,463/$1 at the GTBank forex counter.
Despite the sigh of relief, demand pressures outweighed the robust supply from the CBN and inflow from offshore players looking to participate at the OMO bills auction.
Gross FX reserves increased for the twenty fifth consecutive week, growing by a strong $396.84 million week-on-week to $45.44 billion.
As for the cryptocurrency market, it was down on Friday as pressure remained after Federal Reserve chair Jerome Powell’s speech on Wednesday, which hinted at a possible rate cut pause in January. As a result, markets now expect only two rate cuts in 2026 instead of three.
However, Chicago Federal Reserve President Austan Goolsbee, who was against a December rate cut, said he expects more in 2026 than the current median projection.
Ethereum (ETH) slumped by 5.1 per cent to $3,090.61, Solana (SOL) declined by 4.5 per cent to $132.79, Cardano (ADA) depreciated by 3.8 per cent to $0.4103, and Dogecoin (DOGE) dropped 2.5 per cent to trade at $0.1373.
In addition, Bitcoin (BTC) lost 2.4 per cent to sell at $90,342.74, Litecoin (LTC) tumbled by 1.9 per cent to $81.86, Binance Coin (BNB) fell by 0.6 per cent to $886.93, and Ripple (XRP) slipped by 0.5 per cent to $2.02, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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