Economy
Any Rate Cut by MPC Will Lead to Negative Real Yield—FSDH
By Modupe Gbadeyanka
Analysts at FSDH Research have warned that any attempt by the Monetary Policy Committee (MPC) to cut rate at its meeting next week will lead to a negative real yield, with a possible significant capital flight from Nigeria by foreign investors.
FSDH, in its latest report obtained by Business Post, said it expects the committee to still hold the rate at 14 percent.
Members of the MPC will meet next week and observers are keenly awaiting outcome of the meeting.
FSDH noted that the value of the Naira recorded a mixed performance but show relative stability since the last MPC meeting in July 2017.
The value of the Naira depreciated at the official market, while it closed unchanged at the parallel market.
The inter-bank market rate depreciated marginally by 0.07 percent to N305.95/$ on September 15, 2017 from N305.75/ $ on July 25, 2017.
The parallel market closed unchanged at N367/ $ on September 15, 2017 same as at July 25, 2017.
It said the premium between the inter-bank and parallel markets averaged about N61 after the last MPC meeting in July 2017 and September 15, 2017 from an average of N66 during the period between the MPC Meeting of May and July 2017 meeting.
“A rate cut will lead to a negative real yield, with a possible significant capital flight from Nigeria by foreign investors. Thus, a hold decision is appropriate,” the report said.
FSDH also noted that the yields on NTBs decreased in August 2017, compared with July 2017. At the NTBs auction, average yield on the 91-day was down at 13.82 percent in the month of August compared with 13.93 percent recorded in July 2017.
The average 182-Day NTB stood at 19.02 percent in August 2017, down from 19.11 percent in July 2017. The average 364-Day NTB yield also closed lower at 22.73 percent in August 2017, from 22.80 percent in July 2017.
“The yields on the FGN Bonds that we monitored closed higher in August 2017 over the preceding month. The average yield on the 16 percent FGN June 2019 increased to 16.84 percent in August from 16.62 percent in July.
The 16.39 percent FGN Jan 2022 closed at 16.33 percent in August 2017, marginally higher than 16.13 percent in July 2017; the 10 percent FGN Jan 2030 also closed at 16.43 percent in August 2017, higher than 16.12 percent in July 2017.
“We expect the yields on the fixed income securities to trend downward going forward. This is because of FX stability, plans of the FGN to refinance part of the local debt into foreign debt and the positive GDP growth rate expected going forward,” it said.
The report also said the monetary aggregates (narrow money and broad money) as at July 2017 show that the annualised growth rate in money supply is below the target that the CBN sets for the year 2017.
The broad money supply (M2) decreased by 5.08 percent to N22.20trn in July 2017 from N23.39trn in December 2016. This is lower than the CBN’s growth rate target of 10.29 percent for the year 2017.
The net domestic credit increased marginally by 1.92 percent to N27.16trn in July 2017 from N26.65trn in December 2016.
The annualised growth rate in the net domestic credit in July 2017 was 3.29 percent, below the target growth rate of 17.93 percent for 2017.
The net domestic credit to the Federal Government increased by 6.88 percent to N4.99trn in July 2017 from N4.67trn in December 2016. The net domestic credit to private sector also increased marginally by 0.87 percent to N22.17trn in July 2017 from N21.98trn in December 2016.
The CBN has maintained tight monetary policy to curb high inflation rate and ensure FX stability.
“Looking at the developments both in the domestic and international markets, a hold in rates at this meeting will be appropriate in order to sustain the current growth rate in the economy. However, the MPC may adjust the asymmetric corridor around the MPR to signify easing.
“Meanwhile, fiscal measures in the forms of tax relief and tariff adjustment are required to boost economic activities,” the report said.
By Adedapo Adesanya
The Central Securities Clearing System (CSCS) Plc has declared the first interim dividend in its history after posting its financial results for the first half of 2026, reflecting robust earnings growth, improved operating efficiency and stronger capital market activity.
The board approved an interim dividend of N1.00 per ordinary share for the six months ended June 30, 2026, citing the company’s strong cash generation, resilient balance sheet and confidence in the sustainability of its earnings.
The interim payout represents about 56 per cent of the total dividend of N1.78 per share paid for the 2025 financial year, underscoring its strong earnings momentum while preserving financial flexibility to invest in technology, innovation and future growth.
CSCS recorded one of the strongest financial performances in its history during the review period, with total operating income rising by 92 per cent to N18.51 billion from the corresponding period of 2025.
The growth was driven by higher transaction fee income as capital market activity strengthened, continued expansion in depository services, increased collateral management revenues and stronger contributions from data and technology-enabled services. Investment income also improved as the company optimised its investment portfolio.
Despite the sharp rise in revenue, operating expenses increased by only 38 per cent, reflecting disciplined cost management and the scalability of the company’s business model.
As a result, operating profit surged by 186 per cent to N10.11 billion, while profit before tax climbed by 115 per cent to N13.21 billion. Earnings per share also rose significantly to 190.1 kobo from 109.1 kobo in the corresponding period of 2025.
The organisation also recorded improvements in operating efficiency. Its cost-to-income ratio declined to 45.4 per cent from 63.2 per cent a year earlier, while operating profit margin improved to 54.6 per cent from 36.8 per cent.
According to the company, the results demonstrate not only the benefits of stronger market activity but also the resilience of its operating model and its ability to convert revenue growth into higher profitability, improved shareholder returns and sustainable long-term value creation.
Commenting on the interim dividend, the Chairman of CSCS Plc, Mr Temi Popoola, said the board’s decision reflected confidence in the firm’s financial strength, earnings quality and long-term strategic direction.
He said the strong performance was driven not only by increased market activity but also by sustained improvements in operational efficiency, disciplined cost management and the continued diversification of revenue streams.
Mr Popoola noted that the Board remained committed to balancing shareholder returns with investments in technology, innovation, resilience and new growth opportunities that would strengthen CSCS’ position as Nigeria’s leading financial market infrastructure and one of Africa’s foremost post-trade institutions.
The chief executive of CSCS Plc, Mr Shehu Yahaya Shantali, attributed the strong performance to the resilience of the entity’s business model, the dedication of its workforce and the confidence of market participants.
He said the first-ever interim dividend demonstrated the company’s ability to translate strong earnings growth and improved operating efficiency into enhanced shareholder value.
Mr Shantali added that CSCS would continue to strengthen its core market infrastructure, invest in technology and innovation, diversify its revenue base and enhance value creation for stakeholders while supporting the development of Nigeria’s capital market.
By Aduragbemi Omiyale
The national scale long-term issuer rating of Axxela Limited has been upgraded by GCR Rating to A+(NG), just as its short-term issuer rating was affirmed with a stable outlook.
The rating firm upgraded the long-term issue rating for Axxela Funding 1 Plc’s N16.4 billion series 1 senior unsecured bond to A+(NG), while the N11.5 billion series 1 senior secured bond was lifted to A+(NG)(EL).
GCR noted in a note that the actions reflect the leading gas and power portfolio company’s robust business model, strong earnings performance, and sustained financial profile, reinforcing its ability to deliver long-term value while maintaining financial discipline.
Axxela’s recent achievements have been driven by its continued focus on responsible growth, customer satisfaction, and creating lasting value for national development.
“The ratings upgrade by GCR is a strong endorsement of Axxela’s disciplined approach to business. Beyond recognising our financial strength, it reflects the resilience of our business model and the confidence in our strategic direction.
“Over the past few years, we have continued to make significant strides across the business by expanding our natural gas infrastructure, strengthening our operational footprint, advancing our sustainability agenda, and maintaining an unwavering commitment to operational excellence and safety,” the chief executive of Axxela, Mr Moshood Olajide, commented on the development.
As the company continues to advance its long-term growth strategy, the upgraded ratings reinforce confidence in Axxela’s credit profile, financial resilience, and ability to create enduring value for investors, customers and other stakeholders.
By Adedapo Adesanya
The Ministry of Solid Minerals Development and the National Identity Management Commission (NIMC) have strengthened their partnership to deploy digital identity technology, aiming to combat illegal mining and enhance security in Nigeria’s mining sector.
Speaking while receiving the Director-General and management of NIMC on a courtesy visit to his office in Abuja, the Minister of Solid Minerals Development, Mr Dele Alake, described the commission as a critical institution in Nigeria’s development architecture, stressing that effective governance could not be achieved without a credible identity management system.
“NIMC occupies a critical position in translating policy into reality. It is pivotal to the development of any nation because governance today is driven by data, technology and credible identity systems,” he added.
He noted that inadequate identification systems had weakened enforcement efforts over the years, allowing illegal mining activities to flourish in mineral-rich communities.
“Without identification, we cannot trace or track, and insecurity will flourish. In the solid minerals sector, we need effective monitoring of both legal and illegal operations.
“A credible identity ecosystem will strengthen regulation, improve enforcement and support our efforts to sanitise the sector,” Mr Alake said.
The minister identified technology, statistics, data gathering and digital identity as critical enablers for evidence-based policymaking, improved regulatory oversight, efficient licensing, investment promotion and national development.
On her part, the DG of NIMC, Mrs Abisoye Coker-Odusote, highlighted several opportunities for collaboration between both institutions, noting that the newly enacted NIMC Act has positioned Nigeria to fully embrace a digital governance ecosystem.
She explained that deeper integration of identity management into the solid minerals sector would facilitate database integration across government institutions, enhance regulatory compliance, strengthen security and law enforcement, improve monitoring of operators, and provide stronger support for the implementation of Community Development Agreements (CDAs) in mining host communities.
Mrs Coker-Odusote added that NIMC’s upgraded digital infrastructure is capable of supporting government institutions in building reliable databases, improving transparency and delivering more efficient public services.
Both institutions said they would immediately begin implementing technology-driven initiatives under the partnership, expressing confidence that expanding access to trusted digital identities for miners and other eligible residents would enhance accountability and strengthen governance in the solid minerals sector.
