CBN injects $210m into forex market

The Central Bank of Nigeria has injected $210m into the various segments of the market to sustain its intervention in the Inter-Bank Foreign Exchange Market.

CBN Director, Corporate Communications, Mr Isaac Okorafor, made this known in a statement on Tuesday in Abuja.

Okorafor said that the apex bank offered $100m as wholesale interventions and allocated $55m to Small and Medium Enterprises.

He said that another $55m was allocated to customers requiring foreign exchange for business and personal travels, tuition or medical fees.

The director explained that Tuesday’s interventions were in continuation of the bank’s resolve to sustain the high level of stability in the foreign exchange market.

According to him, it is also to continue to ease access to the currency by customers in different sectors.

Okorafor said the CBN was optimistic that the Naira would sustain its run against the dollar and other major currencies around the world, considering the level of transparency in the market.

Meanwhile, in spite of election activities, the Naira continues to maintain its stability in the foreign exchange market, exchanging at an average of N356 to a dollar at the Bureau de Change segment.

Meanwhile, the Naira on Tuesday lost marginally against the dollar at the parallel market in Lagos, closing at N359 to the dollar.

The News Agency of Nigeria reported that the naira had exchanged at N358.8 on Monday.

The Pound Sterling and the Euro traded at N469 and N410, respectively.

At the Bureau De Change segment, the naira was sold at N360 to the dollar, while the Pound Sterling and the Euro closed at N469 and N410, respectively.

Trading at the investors’ window saw the naira closing at N362.3 to the dollar, while market turnover stood at $397.32m.

As the United States and China trade deal gets to a head and the increase in the price of oil at the international market, the nation’s reserves is expected to improve.

Improved reserves and Diaspora inflows will sustain the current stability of the naira at the foreign exchange market.

SEC seals illegal fund management firm

The Securities and Exchange Commission has sealed off the premises of a Lagos-based firm, Growing Circle, for engaging in illegal fund management activities.

The commission explained that the company was shut down for carrying out investment operations that fell within fund management without registration with the apex regulator.

The commission, in a statement on Tuesday, revealed that it had established that the company’s activities also constituted an infraction of the Investments and Securities Act, 2007.

The statement read in part, “They have not registered with SEC and the commission has powers according to Section 13 (w) of ISA 2007 to shut down any company carrying out capital market activities without due registration.

“The mode of operation of the company is that for a new entrant, registration is N10, 000 and the person is not entitled to products while the second category has a registration fee of N16, 000 that entitles the registrant to receive products.

“For anyone to come under the company, he has to come under an up liner since the company engages in networking business.”

It added that for the networking business, the least stage was a starting point with a minimum registration of $50 and an incentive of $15 for a member that introduced two down liners.

It was gathered that the company also engaged in free seminars at its head office for people to learn more about the products and the money-making business with an unbeatable compensation plan and huge bonuses.

However, SEC disclosed that after registration, the members claimed that they did not get any products from the company and all efforts to retrieve their funds proved abortive.

While the company claimed to have a factory in Ogun State, the said factory could not be located even though the products were on display at their Lagos office.

SEC Management said the closure was to end unlawful activities of the company against unsuspecting investors and, therefore, urged investors to ensure that they only deal with fund managers that were registered with the commission.

It added, “The accounts of the company have been frozen and the promoters have been arrested by the Nigeria Police Force and are undergoing interrogation.

“The commission wishes to notify the investing public that the company is not licensed to carry out investments business of any type and as such its operations are illegal.

“SEC, therefore, advises the public to exercise due diligence and caution in the course of making investment decisions. A valid licence of lawful operators can be obtained on the commission’s website by members of the public to confirm the licences of firms with which they intend to carry out investment activities.”

Banks loans to private sector dropped by N455bn to N15.1tn –NBS

The total credit from banks to the economy recorded a decline of N455bn from N15.58tn as of the end of the third quarter of last year to N15.1tn in the fourth quarter.

This is contained in the banking sector report released by the National Bureau of Statistics on Tuesday.

The NBS in the report also said the total number of members of staff in banks increased by 1.8 per cent from 102,821 in the third quarter of 2018 to 104,669 in the fourth quarter.

It said during the fourth quarter of last year, the sector recorded 616,528,697 transactions valued at N39.15tn through electronic payment confirmation.

The report stated that the Nigeria Interbank Settlement System Instant Payments transactions dominated the volume of transactions as it recorded 228,209,423 transactions valued at N23.57tn during the fourth quarter of last year.

A breakdown of credit to the private sector showed that oil and gas with N3.55tn received the highest credit allocation during the period under review.

This was followed by the manufacturing sector with total loans of N2.23tn.

It read in part, “In terms of credit to the private sector, the total value of credit allocated by the banks stood at N15.13tn as at Q4, 2018.

“Oil and gas and manufacturing sectors got credit allocation of N3.55tn and N2.23tn to record the highest credit allocation as at the period under review.

“As at Q4, 2018, the total number of banks’ members of staff increased by 1.80 per cent quarter on quarter from 102,821in Q3 2018 to 104,669.”

 

Based on the analysis of the report, the agricultural sector received N610.14bn, power and energy, N403.37bn; construction, N614.5bn; trade and general commerce, N1.07tn; while credit to the government was put at N1.36tn.

In the same vein, the real estate sector received a total loan of N622.77bn; finance, insurance and capital market, N1.1tn; education, N57.25bn; Information and Communications Technology N545.49bn; transportation and storage, N289.85bn;  while other sectors got N339.73bn.

Stock market rebounds, investors gain N80bn

The stock market witnessed a rebound on Tuesday as the investors gained N80bn.

The market capitalisation of equities listed on the floor of the Nigerian Stock Exchange increased from N12.004tn on Monday to N12.084tn on Tuesday, while the All Share Index gained 0.67 per cent to close at 32,406.17 basis points from the 32,190.07bps recorded on Monday.

Analysts at Afrinvest Securities Limited said the rebound witnessed by the market was due to buying interest in bellwether stocks such as Zenith Bank Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc as the year-to-date return improved to 3.1 per cent.

Activity level also strengthened as 361.821 million shares valued at N4.160bn exchanged hands in 4,623 deals, representing a 55.4 per cent and 23.7 per cent increase in volume and value traded, respectively.

The top traded stocks by volume were Transnational Corporation of Nigeria Plc (120.2 million units), Zenith Bank (37.3 million units) and FBN Holdings Plc (31.2 million units), while Dangote Cement Plc (N951.6m), Zenith Bank (N925.5m) and GTB (N778m) led the top traded stocks by value.

Performance across sectors was largely bullish as four of five indices closed on a positive note.

The banking sector, which was the biggest loser on Monday, became the biggest gainer on Tuesday as it appreciated by three per cent.

The oil and gas and consumer goods sectors advanced by 0.7 per cent and 0.3 per cent, respectively.

The insurance sector was the fourth gainer, advancing by 0.2 per cent following investor interest in Custodian Investment Plc and Cornerstone Insurance Plc.

On the flip side, the industrial goods index shed 0.2 per cent on account of major sell-offs in Dangote Cement and First Aluminium Nigeria Plc.

Investor sentiment, as measured by market breadth (advance/decline ratio), strengthened to 1.1x from 0.3x recorded on Monday as 16 stocks advanced against 14 decliners.

The top five gainers were Japaul Oil & Maritime Services Plc, Sovereign Trust Insurance Plc, Associated Bus Company Plc, Custodian Investment and Academy Press Plc, which saw respective gains of 9.52 per cent, 9.52 per cent, 9.09 per cent, 8.26 per cent and 8.11 per cent.

The top five losers were First Aluminium, Transnational Corporation of Nigeria, Wema Bank Plc, Unity Bank Plc and Union Diagnostic and Clinical Services Plc, whose respective share prices shed 10 per cent, 9.74 per cent, 9.68 per cent, 9.65 per cent and 6.90 per cent.

“Despite today’s rebound in market performance, we advise investors to trade cautiously as we expect sell pressures to return to the market by close of the week – eve of the rescheduled presidential elections,” analysts at Afrinvest said.

Nigeria got $43bn investments in four years —NBS

Between January 2015 and December 2018, the Nigerian economy attracted a total investment of $43.81bn, investigations have revealed

Based on the official N305 to a dollar exchange rate of the Central Bank of Nigeria, the $43.81bn translates into about N13.36tn

Documents of the country’s investment inflows obtained from the National Bureau of Statistics revealed that the investment came from three main sources.

They were Foreign Direct Investments made up of equity and other capital; Portfolio investment which comprised equity, bond and money market instruments; and other investments which were made up of trade credits, loans, currency deposit and other claims.

Further analysis of the report showed that Nigeria’s foreign exchange policy, the Economic Recovery and Growth Plan and the economic recession witnessed in 2016 largely shaped capital importation over the period.

For instance, investigations showed that prior to the economic recession of 2015, the level of investment inflows was at an upward trajectory.

However, at the onset of the economic crisis few months after the inauguration of President Muhammadu Buhari, findings showed that investment inflow recorded a sharp decline to almost half of the 2014 value of $20.76bn dropping to $9.65bn in 2015.

Further analysis of the report revealed that in 2016, the value of investment inflow remained depressed, decreasing by $4.55bn from $9.65bn in 2015 to $5.1bn.

It, however, noted that a recovery began in 2017, as investors raised their stake by $7.1bn to $12.2bn.

In the 2018 fiscal period, the country attracted about $16.81bn investment, the NBS data showed.

In 2018, the largest amount of investment inflow by type was received through portfolio investment, which accounted for $11.8bn or 70.20 per cent.

This was followed by other investment, which accounted for $3.81bn or 22.69 per cent of total capital, while Foreign Direct Investment had $1.19bn or 7.11 per cent of total capital imported in 2018.

In terms of destination, the report stated that the United Kingdom emerged as the top source of capital investment in Nigeria in 2018 with $6bn. This, it noted, accounted for 35.74 per cent of the total capital inflow in 2018.

This was followed by the United States with $3.57bn;  South Africa, $1.15bn; the United Arab Emirates, $937.19m;  Belgium, $886.08m; and Singapore, $780.87m.

Others were Ghana, $626.44m; Mauritius, $560.87m; The Netherlands, $373.08m; and Switzerland, $355.98m.

The Executive Secretary, Nigeria Investment Promotion Commission, Yewande Sadiku,  had said that the government was committed to attracting fresh investments in key sectors of the economy.

Sadiku said the commission now had a seamless collaboration with the states to enable it to monitor closely investments inflow into the country, as a one-stop centre.

She said the commission was working with key stakeholders to see more Nigerians invest in the country, adding that the current efforts of the NIPC in working more closely with the states was to increase the level of investment inflow into the country and to ensure seamless collaboration and proper tracking.

She said, “We are interested in seeing more Nigerians invest in the country, and we have a Domestic Direct Investment model now in the commission and we are working with the National Bureau of Statistics to track investments inflow into the country.”

“The current efforts of the NIPC in working more closely with the states is to increase the level of investment inflow into the country, and to ensure seamless collaboration and proper tracking.”

Honda to close only British factory in 2021

Honda Motor said it will shut its only plant in Britain in 2021, a decision the Japanese car maker said was based on changes in the global market and not related to Brexit.

The company will also stop making its Civic car model at its Turkey plant from 2021, but plans to continue its operations in the country, Honda Chief Executive, Takahiro Hachigo, told a news conference in Tokyo.

The announcement comes a day after a British lawmaker said Honda will announce the closure of the Swindon factory in southern England, resulting in 3,500 job losses in what is seen as a big blow to UK’s auto industry before Brexit.

The plant closure will be one of several by automakers reassessing their presence in the UK and Europe.

Two weeks ago, bigger Japanese rival Nissan canceled plans to build its X-Trail sport utility vehicle in Britain.

Last month, Britain’s biggest automaker Jaguar Land Rover, and Ford Motor Co separately announced sweeping job cuts in Europe.

For Honda, declining demand for diesel vehicles, tougher emissions regulations and uncertainty over Britain’s expected departure from the European Union next month have clouded its manufacturing prospects in the region.

The automaker said more than a year ago it will close one of its Japan plants in 2022 in an effort to consolidate production as it focuses on new vehicle technologies.

Honda built over 160,000 vehicles at Swindon where it makes the hatchback version of its popular Civic model, accounting for a little more than 10 per cent of Britain’s total output of 1.52 million cars.

But it has struggled in Europe in recent years, and the industry faces a number of challenges including declining diesel vehicle demand and tougher regulations alongside the uncertainty over Britain’s departure from the European Union, due next month.

Justin Tomlinson, a Conservative lawmaker for Swindon who voted for Brexit in 2016, said he had met with the business minister and representatives from Honda who had confirmed the plans.

“They were due to make a statement tomorrow morning, it’s obviously broken early,” Tomlinson, lawmaker for North Swindon, told Reuters.

“This is not Brexit-related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”

Honda said it would not be providing any comment on the “speculation”.

“We take our responsibilities to our associates very seriously and will always communicate any significant news with them first,” the firm said.

Honda announced in October 2017 it would stop making vehicles at its Sayama plant in Japan by 2022 as it grapples with a shrinking domestic market.

Like many of its global rivals, Honda is trying to streamline its operations as it invests heavily to develop electric vehicles and self-driving cars, transforming itself from simply a manufacturer of cars into a mobility company.

Japan has repeatedly warned it could pull investments in Britain, which it had seen as a gateway into Europe, if London does not secure a Brexit deal favorable for trade.

The recently agreed EU-Japan trade agreement means tariffs on cars from Japan to the continent will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.

Honda’s announcement would come just over two weeks after bigger Japanese car maker Nissan canceled plans to build its X-Trail sport utility vehicle in Britain.

In January, Britain’s biggest automaker Jaguar Land Rover said it would cut 10 per cent of its workforce, mainly at home, due to sluggish sales to China and a slump in European diesel demand.

“The car industry in the UK over the last two decades has been the jewel in the crown for the manufacturing sector – and now it has been brought low by the chaotic Brexit uncertainty,” said Des Quinn, national officer for the automotive sector at Unite, Britain’s biggest trade union.

Honda said last month it would shut its British operations for six days in April to help counter any border disruption from Brexit.

It was also preparing to front-load some production at its plant to ship overseas or build up inventories.

Nissan, Honda and a third Japanese car maker, Toyota Motor Corp, together account for roughly half of the cars built in Britain.

Honda which has been building more cars for sale outside of Europe in recent years, said earlier this month its production volumes at Swindon would be reduced to 570 cars per day and that it would make job cuts.

“This reduction in volume will not have any impact on our permanent resource levels and is in line with our current production plans,” the company said.

Global shares slip from four-month high

European and Asian shares hovered near four-month highs on Tuesday as investors took heart from some progress in Sino-U.S. trade talks, while the yen dribbled lower as Japan’s central bank said it could ease policy again.

World markets were struggling a bit for direction after a slow but buoyant start to the week and with a fresh round of Sino-U.S. trade talks, this time in Washington, being held later.

Stocks traders were largely happy to keep their powder dry.

Europe’s main bourses spent most of their first hour dithering before eventually heading lower after a subdued Asian session had seen most markets there barely get out of first gear. Currency dealers had at least a bit more to keep them busy.

The yen had slipped to 110.70 per dollar after Japan’s central bank governor had said it could redeploy stimulus if the yen’s relative strength this year hurt the economy and inflation prospects.

The euro was just above $1.13 after more talk of ultra-cheap ECB bank loans, while Sweden’s crown dived to a 2-year low against the dollar as inflation data came in weak just two months after a rise in interest rates.

“Stokkie (dollar vs Swedish crown) is off to the races,” said TD Securities’ head of global research, Richard Kelly.

“You had especially weak inflation and as you see (from the yen and euro) it comes against this backdrop of central banks becoming more dovish again,” although he also said that bond markets has seen far less reaction to the Swedish data. Most other currencies were stuck in familiar ranges.

Sterling was flat at $1.2923, with the ongoing Brexit talks between Britain and the European Union overpowering strong employment and wage data, while the Australian dollar held at $0.7112.

The precious metals market was more animated, with palladium surging to a record high of $1,471.0 per ounce as stricter emissions standards are seen increasing demand for the auto catalyst metal.

Gold held around $1,323.66 per ounce after earlier rising to a near 10-month high of $1,327.64 too.

Oil prices were mixed, with Brent futures off 29 cents at $66.21, although that was not far from Monday’s $66.83 which was the highest since mid-November. U.S. crude futures added 21 cents to $55.8.

E-mini futures for the S&P 500 and the Dow were a shade weaker ahead of a busy day of U.S. earnings, including from the world’s biggest retailer Walmart which is expected to report a 1.8 percent increase in revenue.

In Asia, Japan’s Nikkei nudged up 0.1 percent after holding flat for most of the day. Australian shares climbed 0.3 percent to a 4-1/2 month peak, after gaining over 8 percent so far this year, partly on expectations the central bank could ease policy to temper pressure on growth.

Chinese shares slipped into the red though after surging in the previous session, with the blue-chip index off 0.2 percent.

HSBC – Europe’s biggest bank – saw its shares fall 3 percent as it missed forecasts due to slowing growth in its two home markets of China and Britain.

The results spoke to a wider problem for European banks, which are struggling to return to growth after a decade of post-crisis restructuring due to a worsening global economic outlook.

Trade talks were also dominating headlines again with a new round of negotiations between the United States and China expected in Washington on Tuesday, and follow-up sessions at a higher level later in the week.

Reports of progress in the talks have kindled hopes among investors that the two countries can reach a compromise in their trade war by a March 1 deadline, although few details from the talks have emerged.

President Donald Trump said last week he might extend the March 1 deadline, which would stop an immediate increase in tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent.

Reflecting changing sentiment, Chinese shares have risen rapidly so far this month, with MSCI’s China A shares index up 6.5 percent, by far the best performance among major markets despite China’s weakening economy.

Additionally, investors are now seen returning to riskier asset markets after the U.S. Federal Reserve signaled earlier this year it could halt rate hikes in light of U.S. economic softness.

“In the last week, it seems like global central banks have started a possible process of monetary easing,” Bank of America-Merrill Lynch strategist Ajay Singh Kapur said in a note.

“If so, this would be very positive for Asia/EM stocks,” Kapur added.

Customs January revenue is N117.7b

The Nigeria Customs Service (NCS) in January 2019, recoded a revenue collection of N117.792billion it was gathered yesterday.

This is an indication that the Service exceeded its collection of N79.26billion in January last year by N38.53b.

A summary of the monthly revenue collection for January this year, which was obtained from the Customs Headquarters in Abuja yesterday, showed that the Service collected N60,101,134,387.04 cash from import duty.

The document noted that it collected N12,150,327,576.41 excise duty and N7,344,973 ,717.62 under Federation Account levies.

According to the summary, the NCS collected N16,793,781,143.36 non-Federation Accounts levies and a Value Added Tax of N21,256,080,630.51. The collections totaled N117,792,457,223.18 in the month of January, 2019.

The NCS had last year exceeded its revenue target when it collected a total of N1.22trillion.

Its Comptroller-General, Col. Hameed Ali (rtd) had on January 28 this year, boasted that although the Federal Government had only given the organisation a revenue collection target of N887billion, with the provision of the right equipment, the Service could surpass its target.

As at August last year, the NCS had collected  N792billion.

A breakdown of the revenue collection showed that it generated N96.6 billion in January, N79.26 billion in Februar, N87.58 billion in March and N94.3 billion in April.

It also generated N100.5 billion in May, N98.4 billion in June, N94.9 billion in July and N140.4 billion in August respectively.

‘World Bank’s funded project on course’

The Project Implementation Unit, World Bank Growth and Employment Project (GEM) has assured stakeholders its funded project is on course in the country.

The Unit, in a statment yesterday, said contrary to insinuations to the contrary, GEM, a $160million World Bank-funded project, being implemented by the Ministry of Industry, Trade and Investment (FMITI), is a success story. It said it has contributed to the diversification of the  economy, by supporting sectors that have high growth potential and creating massive employment.

The project supports Micro, Small and Medium-sized Enterprises (MSMEs) operating in five high potential sectors of the economy, which are information communications technology (ICT), entertainment, tourism, hospitality, light manufacturing and construction.

It also offers more direct support to firms channelled through a platform- called the Business Innovation and Growth (BIG) Platform – to provide various trainings, technical assistance and grant schemes

At the end of 2016, the World Bank rated the GEM project “unsatisfactory and underperforming” and considered scrapping it. But after three years of operation, the project has low deployment and was not meeting its job creation and economic development objectives, so it had to be restructured

Oil rises to $66 on U.S, China deal, others

Oil prices rose yesterday, extending last week’s gains amid rekindled hopes that the United States (U.S.) and China could reach a trade deal. Also, there is growing signs of a tightening market, driven by the Organisation of Petroleum Exporting Countries (OPEC’s) production cuts and U.S. sanctions on Iran and Venezuela.

WTI Crude  traded up 0.80 per cent at $56.43, while Brent Crude eased off earlier gains to trade down 0.02 per cent at $66.24.

Economic analysts say this is a healthy devleopment for Nigeria’s budget 2019 currently under the consideration of the National Assembly. The budget has $60 as its benchmark. The extra cash will hopefully enable the Federal Government to fund the massive infrastructure propjects in Africa’s largest oil producing country with monolithic revenue base.

Still, Brent Crude is currently on track for its best performance in a first quarter of a year since 2011. So far into 2019, oil prices have gained around 25 per cent.

On Friday afternoon, oil prices reached their highest in three months and the highest so far this year, with Brent Crude exceeding $65 a barrel for the first time since November 2018. Bigger-than-expected cuts from OPEC and its de facto leader and largest producer Saudi Arabia helped push prices up. This bullish signal combined with renewed optimism coming from both the U.S. and China that they had made some progress in last week’s trade talks.

Representatives of the world’s two largest economies will be meeting in Washington this week for another round of trade talks and the markets, including the oil market, are currently banking that the worst of a trade war could be averted