Economy
Senate Holds Talks on Banks’ High Interest Rates
By Dipo Olowookere
The high interest rate being charged by commercial banks in the country has caught the attention of the Senate and this would be discussed during plenary this week.
Senate President, Mr Bukola Saraki, told reporters on Saturday in Ilorin, Kwara State that he and his colleagues will look into the matter with a view to prevailing on the lenders to cut the rate.
Mr Saraki noted that the high interest rates being charged by commercial banks on loans to customers could have adverse effect on the country’s economy, particularly for entrepreneurs who need borrowed funds to stay afloat and contribute to the Gross Domestic Product (GDP).
The Senate President said during the talks, the Senate would take a decision on the interest rates being charged by commercial banks as he said the prevailing rates were too high and discouraging to genuine industrialists and entrepreneurs who need to accommodate the cost of money alongside other costs to fix prices of goods and services.
“If we genuinely want to stimulate local manufacturing and development of the small and medium enterprises so as to generate employment and help our national economy to recover from recession, then people must be able to borrow money at reasonable interest rates. It is difficult for manufacturers to survive while borrowing at about 28 percent,” he said.
Speaking on the journey thus far, after being at the helm of the Senate and the National Assembly as a whole for the past two years, the Senate President said: “I am comfortable with the support that I have received from my colleagues. One thing that makes the 8th Senate different is that we take initiative.
“For example, a bill like the PIGB would have been easier to pass as an executive bill—however, based on how united we are and focused on the greater good, the passage of the PIGB goes to show Nigerians the competencies of the Senators of the 8th National Assembly.”
Mr Saraki said the 8th Senate has scored many firsts since its inception and that it has fulfilled its mandate through the passage of several critical economic reform bills, opening of the National Assembly’s budget, and its investigations that have helped in the fight against corruption.
“We are a focused Senate. We are also a people-oriented Senate. We are a Senate of many firsts, if you look at the passage of the Petroleum Industry Governance Bill, the opening of the National Assembly Budget, the passage of Bills like the Ports and Harbors Reform Bill and the Credit Bureau Scheme, you will see that we take governance very seriously.
“Over time, through our work like the Treasury Single Account (TSA) investigation; the NEITI Report investigation; and the North East Humanitarian Response investigation, we have shown that this is a Senate that does not sweep things under the carpet. We are working to pass Bills, enshrine transparency, and do things that matter to everyday Nigerians”, the Senate President said, “This is because we know what families across the nation are going through and we are working to try to create more opportunities for them.”
Mr Saraki also said, “Over the last two years, our focus has been on the economy, the economy, and the economy. You will soon see how the ‘Made in Nigeria’ amendment to the Public Procurement Act will open more opportunities for Nigerians.
“Additionally, starting with the implementation of the 2017 budget, the Senate will be defending Nigerian businesses by letting them know that if they find any government ministry, department or agency that is not patronizing ‘Made in Nigeria’ as a first option, they should let us know, and we will take appropriate action.”
When asked why the Senate decided to pass the governance aspect of the Petroleum Industry Bill first, the Senate President said: “One of my first meetings after becoming the Senate President was a meeting with consultants and stakeholders to find out why the Petroleum Industry Bill had always failed to pass in the past.
“When the reason became clear, we decided to take the first part of the Bill that has to do with governance, transparency and accountability in order to make the system more efficient for the country.
“By doing this, we have sent a message to international investors who have been previously unsure about what laws govern our petroleum industry that the country is truly ready for more investment in this sector.”
Speaking on the recent passage of the Nigerian Football Federation Bill by the 8th Senate, the Senate President described it as “A very important Bill that will transform the administration of football in the country. It is very personal to me because as a club owner, I am happy that this Bill will make the administration of football to be in-line with international best practices.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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