NGA business forum reinforces gas impact on economy

NGA business forum reinforces  gas impact on economyThe Nigerian Gas Association (NGA) will host industry’s prominent and influential executives involved in the oil, gas, liquefied natural gas (LNG) and power generation value chains, the Association’s President Mrs. Audrey Joe-Ezigbo, has said

According to Publicity Secretary, Violin Antaih, the forum, which will bring together governments officials, gas off takers and developers, gas upstream suppliers, pipelines operators, construction firms, equipment providers, and financiers  to its first Gas Business Forum in 2019.

The theme of the forum is: Evaluating the place of gas as a prioritized enabler of Nigeria’s economic diversification agenda.” The venue of the forum is Civic Centre in Victoria Island.

Speakers include the Chairman, Oil Producers Trade Section (OPTS), Paul McGrath; Group Executive Director, Gas & Power, NNPC, Saidu Mohammed; Group Executive Director, BUA Group, Kabiru Rabiu and Folarin Alayande (SSA to the President on ERGP. Others are Managing Director, Shell Nigeria Gas, Ed Ubong; Maryam Shehu, Deputy General Manager, Commercial, Total E&P Nigeria and Chima Ibeneche, former President, Nigerian Gas Association.Policies play a key role in supporting or constraining the progress of natural gas in any countrys’ energy mix, Ezigbo said , adding that the adoption of measures favourable to natural gas could accelerate the penetration of this source of energy  and achieve many economic, technical, social and environmental advantages.

She noted that the key measures expected to be adopted in this regard are market reforms that aim to improve competition and attract gas investments in the upstream and midstream sectors; the facilitation of permits and administrative processes for gas project developments; and pricing or mandated fuel switching to natural gas.

The association’s 20th annual general meeting will be conveyed immediately after the business forum at same venue, she added.

NIBSS extends POS transaction timeout to 45 seconds

The Nigerian Interbank Settlement System (NIBSS) yesterday extended Point of Sale (POS) transactions timeout from 15 second to 45 seconds.

NIBSS Acting Managing Director, Niyi Ajao, who disclosed this during a press briefing in Lagos, said the agency was aware of the poor transaction network going on in the country, and pains it has caused to e-payment users.

He said the move was to improve on poor network quality for e-payment transactions by extending the time it takes to complete a transaction, especially, POS and restore confidence in the e-payment system.

Ajao said that NIBSS facilitated 285 e-payment transactions in 2018, and that the transaction volume will hit 600 million by this year end.

He explained that transaction timeout is the total turn-around-time (TAT) for a POS transaction cycle from the time it is received from a POS to the time a response is sent back to the terminal. “This TAT had been configured at 15 seconds in agreement with banks and processors. However, delayed responses from Issuers after this timeout in recent times could cause authorised debits not to return to the terminal before the set TAT, hence the adjustment to 45 seconds,” he said.

He said there has been several meetings between the Central Bank of Nigeria (CBN), banks and Payment Service Providers on the need to improve transaction quality and provide seamless e-payment services to customers.

According to the NIBSS boss, the adjustment to the timeout will be done on March 22, and is meant to reduce the number of failed transactions in the country.

He said the reversal for failed transactions is one area that NIBSS will henceforth, pay more attention to, so as to strengthen e-payment users confidence in the system.

“Whenever there is a transaction decline the system is supposed to reverse the transaction such that a debited cardholder would receive a reversal credit. Delays on reversal could be caused by platform downtime, network issues at processor level or delayed responses and Issuer/Switch Inoperative – Processor or bank is not available to receive the reversal even when it’s transmitted by NIBSS,” he said.

He said that NIBSS has taken remedial actions in fixing the rising e-payment challenges in the country, by fixing all platform application issues by  February 21; network remediation carried out with concerned Processor and implementation of a secondary process whereby all reversals for any business day are re-transmitted between 10pm and 12 mid-night to return credit back to cardholders through their banks/Processors by March 22.

Decline in Treasury bill rates to persist

THE steady decline in interest rates on treasury bills, TBs, offer in the primary market since last month is expected to continue this week when the Central Bank of Nigeria, CBN, roll over N48.6 billion worth of maturing bills.

Last week the apex bank sold N89 billion worth of TBs in the primary market at lower stop rates. Stop rate for the 91-Days bills dropped by 15 basis points (bpts) to 10.75 percent from 10.9 percent in the previous auction held on February 27.

The stop rate on the 182-Days bills also dropped by five bpts to 12.5 percent from 13 percent in the previous auction, while stop rate for the 364-Days bills dropped by 152 bpts to 12.85 percent, the lowest since August last year, from 14.37 percent in the previous auction in February.

The Central Bank of Nigeria head office in Abuja, Financial Vanguard analysis of primary market TB auction since January revealed a two month downward trend in rates.

Between the first auction on January 16 and the auction held last week Wednesday (March 13), stop rate on 91-Days bills dropped by 25 bpts to 10.75 percent last week from 11 percent on January 16. Stop rate on 182-Days bills fell marginally by six bpts to 12.5 percent last week from 13.1 percent on January 16.

The biggest decline was recorded by the stop rate for 364-Days bills which fell by 215 bpts to 12.85 percent last week from 15 percent on January 16.

The above trend is driven by massive over-subscription (excess demand) for TBs fuelled by foreign portfolio investors seeking to take advantage of the high interest rate regime in the nation’s fixed income market.

This is reflected by the 88 percent increase in dollar injection by foreign portfolio investors through the Investors and Exporters (I&E) foreign exchange window, which rose to $3.07 billion in the first two months of the year (January and February) from $1.63 billion in Q4’18.

This massive inflow triggered 532 percent over-subscription in the primary market TBs auction held by the CBN on February 27.

The CBN offered and sold N115 billion worth of TBs while total subscription stood at N727.35 billion. This trend was repeated last week, with the primary market auction recording 575 percent over-subscription.

While the CBN offered and sold N89 billion worth of bills, total subscription (investors demand) stood at N600.52 billion.

Confirming this development, analysts at Lagos based Cowry Asset Management Limited said: “Amid demand pressure from the foreign portfolio investors, we saw stop rates fall across tenor days: 91-day, 182-day and 364-day maturities.”

They projected that the huge demand for TBs will persist this week when the CBN offers maturing TBs worth 48.6 billion, as well as further moderation in stop rates.

“In the new week, CBN will rollover T-bills worth N48.57 billion, viz: 91-day bills worth N3 billion, 182-day bills worth N8.39 billion and 364-day bills worth N37.18 billion.

We expect their stop rates to fall amid buy pressure. Amid the N169.44 billion bills maturing, we expect yields to further moderate given the declining stop rates.”

In a bid to mop up the excess liquidity from the unmet demand for TBs in the primary market auction, the CBN on Thursday held secondary market (Open Market Operations, OMO) TB auction, which recorded 23 percent oversubscription.

Total public subscription to the N350 billion worth of bills offered by the apex bank stood at N429.5 billion while the apex bank sold N400.48 billion.

In response, cost of funds rose marginally at the end of the week with average short term rates rising by 1.8 basis points (bpts). Data from FMDQ showed that interest rate on Collateralised (Open Buy Back, OBB) lending rose by 2.0 bpts to 11.17 percent last week from 9.17 percent the previous week. Similarly, interest rate on Overnight lending rose by 1.6 bpts to 11.67 percent last week from 10.08 percent the previous week.

This trend may persist this week in the face of further liquidity mop by the CBN  in response to maturing OMO bills worth N169 billion during the week.

External reserves hit 5weeks high at $43bn The naira appreciated further last week in the I&E window as the nation’s external reserves rose to five weeks high of $43 billion on Thursday.

According to the CBN the external reserves recorded a weekly increase of $381 million last week to $42.987 billion from $42.606 billion on Thursday March 7.

The $42.987 billion recorded last week, March 14 represents the highest level since February 6 when the reserves peaked at $42.991 billion.

 

The rise in reserves may be unconnected to the huge dollar inflow from foreign investors through the I&E window since the beginning of the year. Last week, the volume of dollars traded in the I&E window dropped by 58 percent to $1.7 billion from $4.1 billion the previous week.

However, the naira sustained its upward trend in the market since last month. According to FMDQ, the indicative exchange rate dropped further to N360.18 per dollar last week from N360.42 per dollar the previous week, translating to 24 kobo appreciation for the naira.

OPEC to scrap April meeting, keeps oil cut in place

OPEC is set to scrap its planned meeting in April and decide instead whether to extend oil output cuts in June, when the market will be able to assess the full impact of U.S. sanctions on Iran and the crisis in Venezuela.

A ministerial panel of OPEC and its allies recommended on Monday that they cancel the extraordinary meeting scheduled for April 17-18, which means the next regular talks would be held from June 25 to June 26.

The energy minister of OPEC’s de facto leader, Saudi Arabia, said over the weekend that the market was looking oversupplied until the end of the year but that April would be too early for any decision on output policy.

“The consensus we heard is that April will be premature to make any production decision for the second half,” the Saudi minister, Khalid al-Falih, said on Monday.

“As long as the levels of inventories are rising and we are far from normal levels, we will stay the course, guiding the market toward balance,” he added.

The United States has been increasing its own oil exports in recent months while imposing sanctions on OPEC members Venezuela and Iran in an effort to reduce those two countries’ shipments to global markets.

Washington’s policies have introduced a new level of complication for the Organization of the Petroleum Exporting Countries as it struggles to predict global supply and demand.

“We are not under pressure except by the market,” Falih told reporters before the Joint Ministerial Monitoring Committee meeting in the Azeri capital, Baku, when asked whether he was under U.S. pressure to raise output.

U.S. President Donald Trump has been a vocal critic of OPEC, blaming it for high oil prices. Many OPEC members have said Trump’s sanctions policies have elevated the market.

OPEC and its allies agreed in December to cut output by 1.2 million barrels per day – 1.2 per cent of global demand – during the first half of this year in an effort to boost prices.

The JMMC, which also includes non-OPEC Russia, monitors the oil market and conformity with supply cuts.

Asked if he had been updated on whether Washington would extend its waivers for buyers of Iranian crude, which are due to end in May, Falih said: “Until we see it hurting consumers, until we see the impact on inventory, we are not going to change course.”

Inventory levels and oil investments are the two main factors guiding OPEC’s action, Falih said, adding that oil industry estimates show that 11 trillion dollars of investments will be needed over the coming two decades to meet demand growth.

Oil inventories in developed countries continue to fluctuate, he said.

“Our goal is to bring global inventory levels down to more normal levels – and even more importantly, to proactively protect against a glut,” he said.

“Another important metric is the state of oil investments … we are not seeing an investment trend that will get us even closer to the required figures.”

Apple launches iPad Air and Mini

Apple Inc in a surprise announcement on Monday launched 10.5-inch iPad Air and a 7.9-inch iPad Mini ahead of its March 25 event.

The iPhone maker had said it would hold a media event on March 25, where it was expected to launch next-generation AirPods, an AirPower wireless charging mat and a new affordable iPad.

The Apple webstore has been down since Sunday evening, prompting speculations of a launch.

Nigeria mulls no bank account, no stock trading policy

Capital market authorities are considering major amendments to the securities market trading rules in a shift that will disallow trading on shares and other securities of investors that did not provide bank account for direct payment of the net proceeds from their transactions.

A draft on amendments to new rules under consideration obtained at the weekend indicated that Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has further amended proposed rules on direct cash settlement (DCS) to include additional review by the Commission’s rules committee and other stakeholders.

Under the direct cash settlement, the stock market will transit from the current dealer-mediated payment system under which proceeds of shares sales are remitted to the dealer for onward remittance to the investor to a new system under which payment will be made directly to the investor’s account.

The new payment system will become the mandatory payment process for the securities market as against the current dealer-mediated payment system. While the previously exposed rules allowed any investor to apply for specific or continuing remittance of his net proceeds to his stockbroker, the amended provisions disallows trading without bank account.

According to the draft, all dealing members shall provide their clients’ bank account details, including Bank Verification Number (BVN) to an approved clearing and settlement entity for purpose of direct cash settlement.

“Where a client does not provide account details, the dealing member shall not execute any sell trade on behalf of the client. Where a dealing member execute a sale trade without account details of the client, the clearing and settlement entity shall ensure that such trade is cancelled prior to the settlement day,” the draft stated.

The rules indicated that settlement of all sale exchange-traded securities shall be made by direct payment into the client’s account within the clearing and settlement entity’s stipulated settlement cycle.

The draft stipulated that settlement of exchange-traded securities carried out on a securities exchange shall be done by direct payment into the client’s account by an approved clearing and settlement entity. Where a client seeks to opt out, the client will write a letter and the dealing member shall notify the clearing and settlement entity of such letter not less than three business days prior to executing any sale trade on behalf of the client.

All clearing and settlement entities and the dealing members of registered exchanges are mandated to ensure compliance with the rules.

Where any clearing and settlement entity violates the provisions of the rules, such entity shall be liable to a penalty of not less than N10 million in addition to any other sanction which the Commission may impose.

Also, where a dealing member violates the provisions of the rules, it shall be liable to a penalty of not less than N1 million and a fine of not less than three times the value of the amount settled, in addition to any other sanction the Commission may impose.

The proposed rules are expected to further strengthen capital market’s campaign against identity theft and shares fraud. The rules are also expected to forestall the use of securities market for money laundering and other illicit financial transactions.

While infraction rate has reduced drastically, fraudulent sale of client’s shares remains a major concern at the securities market.

Authorities at the Nigerian capital market and law enforcement agencies have stepped up efforts to tackle the problem of shares fraud and identity theft, otherwise known as unauthorised sale of client’s shares. The Nigerian Stock Exchange (NSE) recently launched an amendment to existing rules and regulations, which enables it to henceforth maintain a record to be known as “Blacklist” in which it will keep records of all corrupt persons and indicted officials who are deemed unfit to engage in stock market activities.

In the new amendment, the NSE has now been mandated to formally open a “blacklist” for the purpose of records of corrupt persons. The amendment, approved by the SEC, strengthened the Exchange’s zero tolerance for infractions and places greater responsibility on all capital market operators.

Those to be included in the “blacklist” included any person that the Exchange determines that he or she no longer entitled to privileges, services, recognition or access to the Exchange and its facilities as well as those not permitted to deal or transact with or be employed by a dealing member or person.

The rule applies to dealing member, an authorized clerk, an employee or director of a dealing member, a sub-broker, or any other capital market operator.

A check indicated that about 90 per cent of the existing blacklisted persons were due to unauthorised sales of client’s shares. Other ranking crime was manipulation of the market or share prices.

The Nation had recently reported that the Economic and Financial Crimes Commission (EFCC) was investigating about 35 fraud cases at the Nigerian capital market.

Although the full details of the cases could not be disclosed due to legal confidentiality and ongoing investigations, a review of the preliminary findings indicated that most cases relate to fraudulent sale of clients’ shares and diversion of clients’ funds, impersonation and false representation of products and services.

SUNU sets growth plan

SUNU Assurance Plc has said it is determined to grow its business consistently over the next five years to become one of Nigeria’s 10 largest underwriting companies.

The Managing Director, SUNU Assurance Plc, Samuel Ogbodu, disclosed this at a press conference in Lagos.

He said the company had experienced a remarkable turnaround since the acquisition of the former Equity Assurance Plc by SUNU Assurance Group in 2016.

He added that the insurance company had been transformed from a struggling one on the brink of bankruptcy to a viable insurance company in Nigeria, with a growing reputation for professionalism and prompt claims payment.

Ogbodu said the company would leverage on SUNU Group’s expansive retail knowledge and expertise to drive retail insurance in Nigeria and build long-term growth.

According to him, with a population of more than 180 million, Nigeria has huge potential for retail insurance and SUNU Assurances will deploy its expertise to dominate the market.

He said the board and management were committed to running the company in the most professional way with a view to creating values for shareholders and other stakeholders.

The Executive Director, Strategy and Performance, SUNU Assurance, Karim Dione, gave the assurance that the new core investor had long-term strategic interest in Nigeria, as there was vast untapped potential.

According to him, SUNU Group is an African group that knows the peculiarities of the African markets with proven expertise to survive despite operating challenges.

The Executive Director, Technical and Operations, SUNU Assurance Plc, Adeleke Hassan, said the company had professional system of risk management and evaluation that enabled it to determine reasonable pricing for its products and services and respond actively to claims.

SUNU Assurance Group had in 2016 acquired 60 per cent equity of the former Equity Assurance Plc and renamed the company SUNU Assurance Nigeria Plc.

SUNU Assurance also has operations in 12 Franco-phone African countries and the acquisition of Equity Assurance was a major entry strategy into the Anglo-phone countries.

The National Insurance Commission had approved the appointment of Ogbodu and Hassan. Ogbodu is a chartered insurer and a member of the Society of Fellows of the Chartered Insurance Institute of Nigeria.

Hassan is a consummate chartered insurer with more than 25 years cognate experience in the insurance industry, spanning broking to underwriting businesses.

CBN, Travelex to enhance BDCs’ role in economy

The place of Bureau De Change industry in the economy of Nigeria cannot be over-emphasised because it plays important roles and the government has special interest in the activities of operators in the sub-sector.

Travelex Nigeria Limited stated that it was determined to assist the operators make informed assessment of their activities in the foreign exchange market with a view to enhancing their performance going forward.

Travelex stated that in partnership with the Central Bank of Nigeria, it had concluded arrangements for a one-day seminar for practitioners in the BDC industry with the theme, ‘The BDC industry in Nigeria: Retrospect and prospect’ in Abuja.

The General Manager, Travelex Nigeria, Anthony Enwereji, said the seminar would have in attendance the Governor, Central Bank of Nigeria, Mr Godwin Emefiele, as the keynote speaker.

Enwereji added that the deputy governor, Financial Systems Stability Directorate, CBN, Aisha Ahmad, would speak on the ‘Review of CBN forex policies and guidelines on BDC operations (2015-2018)’, while the Chief Executive Officer, Economic Associates, Ayo Teriba, would address the audience on ‘Analysis and proposals for strengthening Nigeria’s end-user forex policy.’

The seminar, according to the statement, would feature the Executive Chairman, Economic and Financial Crimes Commission, Ibrahim Magu, who was expected to speak on ‘Anti-corruption and anti-money laundering laws and regulations as they concern BDCs in Nigeria.’

In its avowed commitment to see the growth of the BDC industry in Nigeria, Travelex stated that it had consistently interfaced with operators to bring them to speed with international best practices.

It recalled that Travelex also held a similar session in September last year to cater to the BDCs in the southern part of the country, during the countdown to the 2019 general elections in Nigeria to help BDCs guard against facilitating illicit financial flows associated with the season of campaign financing.

It was stated at that time that African countries lost more than $50bn annually through illicit financial flows.

The statement said, “This event had become an annual programme as part of Travelex contribution to the society. This year’s event is intended to address the BDCs operating in the northern part of the country.”

Travelex Group is a foreign exchange company founded by Lloyd Dorfman and headquartered in London. Its main businesses are international payments, bureaux de change, and issuing prepaid credit cards for use by travellers as well as global remittances.

Peacock, Turkish airline partner to boost cargo, airfreight

Image result for Peacock, Turkish airline partner to boost cargo, airfreightPeacock Aviation and Allied Services Limited, in collaboration with Turkish Airlines Cargo, has agreed to deliver efficient and on-time cargo services in order to boost Nigeria’s airfreight subsector.

The strategic partnership with the Turkish mega carrier follows year-long negotiations, which culminated in the appointment of Peacock Aviation as its sole appointed cargo agent across the Nigerian territory.

The deal guarantees shippers in Nigeria the lowest possible air freight rates on a wide range of general and special goods on the airline’s vast global route network.

A statement made available to The PUNCH, indicated that the Executive Chairman of Peacock Aviation, Aare Segun Phillips, led the partnership which was unveiled on March 12, while the Turkish Airlines team was led by the General Manager, Lagos, Mr. Yunus Ozbek, in the presence of representative of Wema Bank Plc, who are the financial partners to the deal.

Announcing the partnership, Phillips said, “This partnership was made in heaven specifically with our customers in mind. We want to enhance their airfreight experience in a consistent and sustainable way.

“Peacock Aviation and Turkish Airlines bring immense strategic values to the table: we have a large customer base and a strong presence across Nigeria while Turkish Airlines boasts a vast global route network, high technology equipment, and huge capacity to handle all sizes, nature and types of cargo worldwide. It’s a win-win for everyone, particularly our customers.”

On his part, Ozbek said, “We have a longstanding relationship with Peacock, which is a very professional company. That’s very important for us because Turkish Airlines is the flag carrier of Turkish Republic, with 40 per cent owned by the Turkish government for the Turkish people while 50 per cent is in the open market for everybody. We also have a lot of investors from all over the world. That gives us a lot of responsibilities.”

LCCI cautions govt over forex ban on textile imports

The Lagos Chamber of Commerce and Industry has advised the Federal Government to reconsider the Central Bank of Nigeria’s ban of forex to textile importers.

It argued that given the position of Nigeria in Africa as a leader in fashion, the range of fabrics produced by the Nigerian textile industry could not support the industry in terms of the quantity and quality.

The Director-General, LCCI, Muda Yusuf, said this in a statement made available to our correspondent on Sunday.

Yusuf, who noted that his submission was not to diminish the importance of the local textile industry in any way or the significance of the nation’s industrialisation, however, added that this was to underscore the importance of a strategic approach to industrialisation.

The LCCI DG said before such policy pronouncement, the government ought to have strengthened the capacity of domestic industries, enhanced their competitiveness and reduced their import dependence as espoused in the Nigeria Industrial Revolution Plan.

Yusuf said, more importantly, the power issue must be addressed, as it was almost impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.

He said, “Today, Nigeria is clearly the leader in Africa as far as the fashion industry is concerned.  Currently, the range of fabrics produced by the Nigerian textile industry cannot support the fashion industry in terms of quantity and quality.

“This vibrant industry should not be sacrificed on the altar of textile industry regeneration. This submission is not to diminish the importance of textile industries in any way or the significance of industrialisation.  It is to underscore the importance of a strategic approach to industrialisation.

“The starting point is to strengthen the capacity of domestic industries, enhance their competitiveness, and reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan.

“More importantly, the power issue needs to be addressed.  It is almost impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.

“Textile production is energy intensive.  This is a high energy cost environment and it is very difficult for any energy intensive sector to survive.”

Listing other implications of the CBN’s ban on forex for textile import, he said the exclusion had grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry in the country.

He said the industry was one of the fastest growing industries and had created amazing opportunities for many young Nigerians to express their creativity and innovation, adding that the sector was estimated at N5tn, with about 500,000 jobs.

He said, “The industry provides significant value addition to fabrics, whether imported or domestically produced.  The policy contemplation of the CBN will put all of these at risk.”

Yusuf stated that trading in textiles was also a major economic activity in the country, both in the northern and southern parts of the country, and hundreds of thousands were making their living from there.

He said, “It is a market that responds to changing tastes and fashion trends in the country and beyond.

“Hundreds of thousands of women and men make a living in the marketing of textiles.  The policymakers cannot afford to ignore this segment of economic players.  The traders are the bridge between the producers and the consumers.

“It is, therefore, very important for policymakers take into account the full ramifications of the consequences of policies and collateral outcomes.”

Yusuf explained that the textile industry had been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it had remained stagnant.

He said, “Some of them have even gone into receivership as they could not repay their loans.  The lesson is that we should deal with the fundamental issues of production competitiveness in our economy.

“The textile industry needs to be saved from the excruciating burden of high operating and production cost.”

Yusuf added that in order for the local textile industry to experience a boom as in the line of Executive Order, President Muhammadu Buhari should order that all uniforms of military and paramilitary institutions should be made from Nigeria- produced textiles.

He said, “This is a low hanging fruit that could be explored while the issue of high production cost is being addressed.”

Yusuf, however, commended the FG on its move to create special economic zones in the six geopolitical zones in the country, describing it as a step in the right direction.

He stated, “The Bank of Industry has also done a great deal to provide funding for industries, textiles inclusive.  But we need to deal with the fundamentals.

“In the meantime, as we progress to the next level of the Buhari administration, policy coordination and collaboration among the economic ministries and agencies is imperative.  There should be collaboration and coordination between the CBN, the Finance Ministry, Budget and Planning and Trade and Investment on trade policy issues.

“The boundaries of monetary policy need to be properly defined.  Exclusion of sectors from the forex market is not a monetary policy issue. It is a trade policy matter.”