Economy
Nigeria Grows Foreign Capital Inflows by 594% to $6.3b in Three Months
By Dipo Olowookere
Data released on Friday by the National Bureau of Statistics (NBS) has revealed that the total value of capital imported into Nigeria in the first quarter of this year stood at $6.3 billion.
This, the stats office noted indicated a continuous growth in total Capital Importation into Nigeria in the fourth consecutive quarterly increase since Q2 2017.
NBS disclosed that $6.3 billion worth of the foreign capital attracted by the Africa’s largest market represented a year-on-year increase of 594.03 percent and a 17.11 percent growth over the figure reported in the previous quarter.
Business Post reports that this increase in capital inflow in the first three months of 2018 was driven mainly by Portfolio Investment, which grew from $3.5 billion in the previous quarter to $4.6 billion, accounting for 72.42 percent of the total Capital Importation during the quarter.
The strong growth of Portfolio Investment was mainly due to the increase in Money Market Instruments which recorded a figure of $3.5 billion, accounting for 77.27 percent of total Portfolio Investments in the first quarter.
This sub-category (Money Market Instruments) has grown quite significantly in the past three quarters, recording quarterly growth rates of 603 percent in Q3, 2017, 203 percent in Q4, 2017 and in 62 percent in Q1 2018.
The data showed that Portfolio Investment in the form of Equity and Bonds only recorded $701.61 million and $335.88 million respectively in the quarter under review.
In the report, Business Post gathered that Foreign Direct Investment stood at $246.62 million, falling by 34.83 percent from the figure reported in the previous quarter, and growing by 16.67 percent on a year-on-year basis.
Foreign Direct Investment in Nigeria was still weak when compared to Portfolio Investment and Other Investment, representing only 3.9 percent of total capital imported.
Equity Investment, a sub-category under FDI contributed ($246.61 million) or 99.9 percent of FDI during the quarter, while Other Capital under FDI contributed less than 0.001 percent.
Further check on the data showed that Other Investment recorded $1.49 billion in the first quarter of 2018, declining by 2.29 percent from the previous quarter, however, growing by 289.25 percent compared to the corresponding period of 2017.
This category accounted for 23.67 percent of total Capital Importation in the first quarter of 2018.
As in previous periods, Other Investment was dominated by Loans ($1.27 billion), which accounted for 85.02 percent of Other Investments.
This was followed by Other Claims ($223.49 million), which accounted for 14.98 percent of the category of Capital Importation. Trade Credits and Currency Deposits posted no inflow in the quarter.
The United Kingdom kept its leading role in capital investment in Nigeria in the first quarter of 2018, with $2.25 billion capital invested in Nigeria. This inflow accounted for 35.73 percent of the total of capital inflow in Q1,2018, it was also a 39.89 percent increase from the previous quarter and a growth of 644.55 percent over the corresponding period of last year.
As well as the existence of a historical relationship between the UK and Nigeria, London (the capital of the UK) is also a principal financial center, which explains the high value of foreign capital from the UK.
Since 2010, the UK has accounted for the highest value of capital importation in all but two quarters (both in the second half of 2015).
The country to account for the second most significant value of capital importation was the United States. The US accounted for $1.26 billion in the first quarter of 2018 or 19.99 percent of the total quarterly capital importation.
The US has also been one of the most important investors in Nigeria, usually either the largest or second largest investor country.
The next two largest investors in the first quarter of 2018 were South Africa and Ghana, which recorded $493.22 million and $380.14 million capital inflow into Nigeria in the first quarter respectively.
These two country’s capital investment accounted for 7.82 percent and 6.03 percent of the total quarterly capital importation in Q1 2018.
Capital Importation from South Africa increased by 79.29 percent from the previous quarter and by 673.19 percent relative to the first quarter in 2017.
The first quarter in 2018 was the first time since 2013 that Ghana made a significant capital investment in Nigeria, which made Ghana the fourth largest Capital Importation source country for Nigeria in this quarter.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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