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Economy

Shelter Afrique to Raise N250bn Housing Bond

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Shelter Afrique Housing bond

By Aduragbemi Omiyale

A pan African housing finance and development institution, Shelter Afrique, is planning to raise about N250 billion housing bond next month aimed to address the housing deficit in Nigeria.

Shelter Afrique was created by African governments to address the need for a sustainable housing delivery system and related infrastructure projects on the continent.

Shareholders include 44 African countries, the African Development Bank (AfDB), the African Re-Insurance Corporation, and Fonds de Solidarité Africain (FSA).

At the moment, Kenya is the highest shareholder with 17.78 per cent, followed by Nigeria with 13.27 per cent of the shareholding, and the AfDB with 12.83 per cent.

But Nigeria intends to increase its stake above Kenya and has pledged to pay the full capital arrear of $28.7 million in Shelter Afrique, according to the country’s Minister of Finance, Ms Zainab Ahmed.

At a meeting with the Group Managing Director and CEO of Shelter Afrique, Mr Andrew Chimphondah, in Abuja, she said the payment would be made in four instalments starting from January 2022.

This development excited Mr Chimphondah, who lauded the Nigerian government for its show of confidence in the institution and a stamp of approval for the organisation’s financial turnaround.

“This is a major milestone which is set to propel Nigeria to become the largest shareholder in Shelter-Afrique when the country meets its capital commitment.

“This is a strong testament of the strong shareholder commitment and support of the Shelter Afrique board and management,” he commented.

He stated that Shelter Afrique will soon commence a roadshow for the N250 billion ($500 million) housing bond to support its affordable housing projects in Nigeria.

“Shelter Afrique has embarked on a defined strategy of developing and deepening local capital markets so that access to local currency which is competitively priced can be made available to Nigerian developers from the Real Estate Developers Association of Nigeria (REDAN), large developers and Tier 1 and Tier 2 banks and primary mortgage lenders.

“The significance of this is that Shelter Afrique will have been successful in dealing with the foreign exchange exposure risks that have crippled many African countries caused by the weakening of local African currencies against hard currencies such as the United States Dollar and the British Pound Sterling,” Mr Chimphondah said.

He thanked Ms Ahmed for supporting the bond issue by the approvals received on critical waivers from the Ministry of Finance, noting that Nigeria was a critical and strategic market for Shelter Afrique.

The CEO further stated that the fund realized from the bond issue will go a long way in addressing the affordable housing shortage in the country, now estimated at 17 million units against the continent’s 56 million units.

“As a response to addressing this housing shortage, Shelter Afrique will implement a transformative strategy that will crowd in additional capital funding into the low-cost large scale affordable housing market in a commercially viable manner,” Mr Chimphondah concluded.

Economy

Naira Crashes at Spot Market, Parallel Market, P2P

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Naira at P2P Market

By Adedapo Adesanya

The Naira had a bad outing against the United States Dollar at the various segments of the foreign exchange (forex) market on Thursday, as the new policy of the Central Bank of Nigeria (CBN) is gradually having a negative effect on the ecosystem.

Business Post reports that the value of the Nigerian currency paired with its American currency depreciated yesterday at the parallel market, the Peer-to-Peer (P2P), and the Investors and Exporters (I&E) windows.

In the P2P forex window, the value of the Nigerian currency slid against the greenback by N10 to trade at N761/$1 compared with the midweek session’s rate of N751/$1.

Also, in the black market, the domestic currency crumbled against the US Dollar by N13 to settle at N740/$1, in contrast to the previous day’s value of N727/$1.

In the same vein, the Naira declined against the Dollar by 17 Kobo or 0.04 per cent in the spot market to quote at N446.00/$1 compared with Wednesday’s N445.83/$1.

In the I&E segment, there was a significant increase in the FX trades by 80.9 per cent or $103.42 million to $231.20 million from the preceding day’s $127.78 million.

However, in the interbank segment, the Naira appreciated against the Pound Sterling by N3.52 to trade at N541.16/£1, in contrast to Wednesday’s N544.68/£1, and against the Euro, it gained N1.25 to quote at N467.43/€1 versus the previous day’s N468.68/€1.

In a related development, the cryptocurrency market was majorly in green territory on Thursday as investors returned to the safe haven following ease to recent pressures about the future of the crypto industry.

Ethereum (ETH) saw its value go up by 4.3 per cent to $1,280.77, Litecoin (LTC) gained 3.7 per cent to trade at $77.86, Solana (SOL) appreciated by 2.7 per cent to $13.67, and Dogecoin (DOGE) improved by 2.6 per cent to $0.0983.

Further, Bitcoin (BTC) jumped by 2.5 per cent to sell at $17,220.53, Binance Coin (BNB) recorded a 2.4 per cent appreciation to trade at $290.17, Cardano (ADA) recorded a 1.6 per cent increase to sell at $0.3139, and Ripple (XRP) grew by 1.1 per cent to $0.3916.

However, Binance USD (BUSD) and the US Dollar Tether (USDT) closed flat at $1.00 each.

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Economy

Crude Oil Market Further Declines Despite Supply Disruptions

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crude oil market

By Adedapo Adesanya

The crude oil market settled lower for a fifth session on Thursday as concerns that global economic slowdowns would slash fuel demand outweighed disruptions.

Brent crude lost 1.3 per cent or $1.02 to trade at $76.15 a barrel, while the United States West Texas Intermediate (WTI) crude depreciated by 0.8 per cent or 55 cents to close at $71.46 a barrel.

Traders shrugged off the closure of a major Canada-to-US crude pipeline on Thursday as Canada’s TC Energy said it closed the tap to its 622,000 barrel-per-day Keystone pipeline, which is the primary line shipping heavy Canadian crude from Alberta to the US Midwest and Gulf Coast. The line has had several spills since it began operating in 2010.

Prices rose after the company announced the closure, but the rally disappeared as analysts noted that the US Gulf is likely to have enough inventory to handle short-term outages.

The energy markets are weighed down by fears of an economic slowdown, weakening fuel demand amid the prospect of more US interest rate hikes.

This is coming as US Federal Reserve policymakers meet next week and are likely to announce a 50-basis-point hike in the US central bank’s lending rate while indicating a slower pace of future rate hikes.

Both Brent and US crude hit 2022 lows on Wednesday, unwinding all the gains made after Russia’s invasion of Ukraine exacerbated the worst global energy supply crisis in decades and sent oil close to its all-time high of $147.

The premise has swallowed hopes that China’s easing of its anti-COVID-19 measures will help restore global supply chains and curb inflation.

China’s shift in policy, announced on Wednesday, would allow the country’s economy to pick up the pace, Premier Li Keqiang said on Thursday.

China on Wednesday detailed the most sweeping changes to its strict anti-COVID regime since the pandemic began. Projections from analysts, however, warned that a significant economic reopening is likely months away.

Western officials were in talks with Turkish counterparts to resolve the tanker queues after the Group of Seven (G7) and European Union rolled out new restrictions aimed at Russian oil exports.

Russian oil output could fall by 500,000 to 1 million barrels per day early in 2023 due to the European Union ban on seaborne imports, which started on Monday.

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Economy

Stock Market Down by 0.13% as Investors Offload MTN, Cadbury

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Stock Market Newspaper

By Dipo Olowookere

The winning streaks witnessed on the floor of the Nigerian Exchange (NGX) Limited lately was halted on Thursday as profit-taking in some blue-chip equities pulled down the stock market by 0.13 per cent.

Heavyweights like MTN Nigeria, GTCO, Cadbury Nigeria and FBN Holdings came under selling pressure yesterday, bringing down the exchange at the close of transactions despite the strong investor sentiment.

Business Post reports that the market breadth closed positive on Thursday as the bourse recorded 15 appreciating stocks and 10 depreciating equities led by Capital Hotel, which dropped 9.80 per cent to sell at N2.76. Honeywell Flour declined by 9.09 per cent to N2.20, Coronation Insurance decreased by 8.11 per cent to 34 Kobo, ABC Transport crashed by 7.41 per cent to 25 Kobo, and Cadbury Nigeria depleted by 4.46 per cent to N10.70.

However, the shares of Chams grew by 9.09 per cent during the session to 24 Kobo, RT Briscoe expanded by 7.69 per cent to 28 Kobo, PZ Cussons inflated by 5.50 per cent to N11.50, Livestock Feeds improved by 4.50 per cent to N1.16, and Ecobank increased by 2.86 per cent to N10.80.

Analysis of the sectorial performance showed that the energy index remained unchanged, the industrial goods and the banking counters closed higher by 1.11 per cent and 0.46 per cent apiece, while the insurance and the consumer goods sectors declined by 0.48 per cent and 0.06 per cent, respectively.

As a result, the All-Share Index (ASI) of the NGX slacked by 61.35 points to 48,365.14 points from 48,426.49 points, while the market capitalisation went down by N34 billion to N26.343 trillion from N26.377 trillion.

Yesterday, investors transacted 148.2 million shares worth N3.0 billion in 3,391 deals compared with the 146.2 million shares worth N3.4 billion traded in the midweek session in 2,810 deals, indicating a decline in the trading value by 11.77 per cent, an increase in the trading volume by 1.37 per cent, and a surge in the number of trades by 20.61 per cent.

The most attractive stock for the session was Ecobank, as it sold 23.4 million units and was trailed by FBN Holdings, which traded 25.8 million units. Transcorp exchanged 12.9 million units, Access Holdings transacted 9.6 million units, and Sterling Bank traded 9.2 million units.

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