Economy
SEC Targets Trillions of Naira from Non-Interest Capital Market
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has said it plans to enhance the non-interest capital market because of its capability to boost liquidity in the financial markets by trillions of Naira.
The Director-General of SEC, Mr Lamido Yuguda, while speaking with the executives of the Non-Interest Financial Institutions Association of Nigeria (NIFIAN) in Abuja over the weekend, said the market segment was given attention in the 10-year Capital Market Master Plan.
According to him, in the next three years, the plan is to ensure that 25 per cent of the total value of the Nigerian capital market is from the non-interest sector.
“We are talking of trillions, which means that we are not scratching the surface right now. Both the market and the commission need to do more. We are working on ensuring that we have a framework that looks at issues relating to the non-interest capital market and ensures we tackle them.
“There are many opportunities in the market right now for non-interest products. The biggest players right now are the pension fund. PenCom is interested that whatever product is there have some basic risk management features in them, but I think there is a lot that we can do.
“You talk about the Sukuk market and the move towards complexities, I would say that even the simple Sukuk, we have not had enough of it.
“When we came in 2020, it was only the sovereign Sukuk and the subnational Sukuk from Osun State. We have tried to attract interest to the product by doing many seminars and rejoining IFSB fully. We also tried to encourage private issuers and show the potential of the Sukuk to other players in the market. This is a simple product but a very powerful one,” he said.
Mr Yuguda stated that Nigeria needs to adopt the normal Sukuk forms where money is raised via Sukuk, assets are built and then cash flows are generated from the assets which then flow back to the Sukuk holders.
“That’s the traditional way, which happened in countries like Malaysia. Malaysia has a lot of hotels and resorts, and the key financing tool they have used is the Sukuk. They understand the power of this Sukuk instrument. It’s a collateralised form of lending; the asset is built and belongs to the people who have contributed money.
“You can see the cash flows coming back. These hotels are increasing in output in the economy in which it is located. People are working, earning more income. The investors are happy because they are receiving the cash flows, and the country is getting more prosperous as people from other parts of the world go there to have a good life,” the SEC chief stated.
The DG emphasised the need for all stakeholders to create more awareness, as there is a lot of ignorance and misconceptions among others about Sukuk, and they all need to be addressed.
“A lot of countries have made tremendous progress which I think we can learn from. Once people see it and it works, we will get many interested in the sector.
“The commission is ready to commit human and material resources to ensure that the market grows to the level we want. We are interested in the market’s growth as that will positively affect the country’s economy,” Mr Yuguda stated.
He disclosed that the agency has just exposed the rules for Shariah advisors in its drive to grow this market segment, noting that Shariah governance is crucial, considering that compliance with Shariah rules and principles is important in non-interest capital market operations/transactions.
“The market is developing fast, and there is a need for the proper regulation of those that will drive the process. The provision of the rules is in line with local and international best practices. The regulatory organization in the Nigerian Financial System, such as CBN and NAICOM, had issued such guidelines to provide clear and good Shariah governance in their respective sectors.
“Making the Shariah Advisory service a registrable function in the market will assist in effective implementation of the proposed consolidation of the Shariah governance rules and will also be an additional source of revenue to the Commission,” the commission stated.
Speaking earlier, The President of NIFIAN, Mr Hassan Usman, urged SEC to provide a framework for non-interest finance to avoid operators’ misuse of the platform.
Mr Usman stated that Nigerians need more awareness of the non-interest capital market. He stated that the association is interested in programmes that will increase the enlightenment of the product and boost its contributions to market capitalisation.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 0.89 per cent on Tuesday, August 4 amid renewed buying interest in unlisted stocks.
During the session, the market capitalisation added N24.07 billion to end at N2.739 trillion compared with Tuesday’s N2.715 trillion, while the NASD Security Index (NSI) gained 40.11 points to quote at 4,563.96 points compared with the preceding day’s 4,523.85 points.
The NASD OTC Exchange ended the trading session with two price losers and three gainers, led by Central Securities Clearing System (CSCS) Plc, which chalked up N7.80 to close at N119.80 per unit versus the previous session’s N112.00 per unit. Afriland Properties Plc increased its value by N1.27 to N23.95 per share from N22.68 per share, and Nitrox Industrial Gases Plc expanded by N1.15 to N21.15 per unit from N20.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc slid by N8.64 to sell at N144.00 per share compared with the previous day’s N152.64 per share, and 11 Plc dipped by 1 Kobo to end at N225.00 per unit, in contrast to Monday’s closing price of N225.01 per unit.
Tuesday’s trading data showed that the volume of securities rose by 9.0 per cent to 1.6 million units from 1.5 million units, and the number of deals climbed by 6.5 per cent to 33 deals from 31 deals, while the value of securities dropped by 26.9 per cent to N47.6 million from N65.2 million.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 76.9 million units exchanged for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date with 3.4 billion units transacted for N8.4 billion, followed by Infracredit Plc with 2.3 billion units sold for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
A 0.38 per cent loss was suffered by Nigerian stocks on Tuesday on the back of continued selling pressure from investors embarking on profit-taking.
Data from the Nigerian Exchange (NGX) Limited showed that the contraction was influenced by the 1.78 per cent decline recorded by the insurance sector, the 0.24 per cent slip printed by the consumer goods index, and the 0.09 per cent drop posted by the energy space, offsetting the 0.75 per cent growth achieved by the banking sector and the 0.21 per cent growth recorded by the industrial goods segment.
Investor sentiment was weak during the trading day, as the bourse ended with 13 price gainers and 40 price losers, representing a negative market breadth index.
LivingTrust Mortgage depreciated by 10.00 per cent to N3.42, Multiverse also shed 10.00 per cent to N22.95, McNichols dropped 9.92 per cent to N5.45, Thomas Wyatt dipped by 9.87 per cent to N3.56, and Eterna lost 8.57 per cent to trade at N33.00.
On the flip side, AVA Capital improved by 9.94 per cent to N9.95, Livestock Feeds expanded by 9.71 per cent to N8.65, Neimeth increased by 8.43 per cent to N9.00, AIICO gained 3.47 per cent to settle at N4.18, and Oando grew by 3.30 per cent to N36.00.
A total of 1.6 billion equities valued at N28.7 billion exchanged hands in 54,160 deals yesterday versus the 923.0 million equities worth N37.9 billion traded in 72,544 deals on Monday, indicating a 73.35 per cent surge in the trading volume, a 24.27 per cent decline in the trading value, and a 25.34 per cent slip in the number of deals.
The busiest stock was Japaul, which transacted 904.4 million units for N2.7 billion. Sterling Holdings sold 54.0 million units valued at N431.9 million, FCMB exchanged 49.5 million units worth N545.9 million, Chams traded 44.9 million units for N199.2 million, and Neimeth sold 42.4 million units worth N327.8 million.
Business Post reports that the All-Share Index (ASI) gave up 927.70 points to 244,802.83 points from 245,730.53 points, and the market capitalisation receded by N599 billion to N158.016 trillion from N158.615 trillion.
By Adedapo Adesanya
The Naira put up a better performance against the United States Dollar in the various segments of the foreign exchange (FX) market on Tuesday, August 4.
In the parallel market, it improved its value by N5 to settle at N1,400/$1 compared with the previous day’s value of N1,405/$1, and at the GTBank forex desk, it appreciated by N1 to close at N1,373/$1, in contrast to the preceding session’s N1,374/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) segment, the Nigerian currency gained N2.28 or 0.17 per cent against the greenback to quote at N1,362.55/$1 compared with the N1,364.83/$1 it was exchanged a day earlier.
Also in the official market, the local currency appreciated against the Pound Sterling during the session by N6.48 to finish at N1,831.41/£1 versus N1,837.89/£1, and chalked up N5.22 on the Euro to sell at N1,568.71/€1 versus N1,573.93/€1.
Interbank FX transactions increased 14 per cent day-on-day as market makers’ activities raised total Dollar volume exchanged to $156.23 million, more than 132 per cent above $137.05 million in turnover at the previous close.
The interbank FX turnover rose despite a marginal rise in deals at the NFEM window as data from the central bank put Tuesday’s quote at 139 from 138.
As for the cryptocurrency market, major tokens were mixed as global stock indexes hit fresh records on renewed enthusiasm for artificial-intelligence-related shares.
With cheaper oil, easing rate expectations and a strong risk-on rally in equities supporting digital assets, analysts say crypto appears to be driven by internal market dynamics rather than macroeconomic factors, even as traders watch for a potential Strait of Hormuz deal.
It was reported overnight that Iran and Oman were close to an agreement to reopen the Strait of Hormuz, with an announcement targeted for Wednesday.
Binance Coin (BNB) grew by 1.8 per cent to $600.54, Bitcoin (BTC) rose by 0.9 per cent to $64,199.86, Solana (SOL) jumped by 0.8 per cent to $73.95, and Ethereum (ETH) advanced by 0.7 per cent to $1,867.21.
But Cardano (ADA) depreciated by 1.9 per cent to $0.1908, TRON (TRX) dipped by 0.6 per cent to $0.3268, Dogecoin (DOGE) slumped by 0.5 per cent to $0.0698, and Ripple (XRP) crashed by 0.4 per cent to $1.06, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
