Nigeria's naira set to devalue as market trading begins

Nigeria's naira is expected to lose around a third of its value when market trading begins on Monday, bringing to an end the central bank's much-criticized fixed exchange rate system.

The naira has been pegged at 197 to the U.S. dollar for the past 16 months but the currency trades at around 350. 

Nigeria's naira is expected to lose around a third of its value when market trading begins on Monday, bringing to an end the central bank's much-criticized fixed exchange rate system.

The naira has been pegged at 197 to the U.S. dollar for the past 16 months but the currency trades at around 350 on the parallel market as a slump in oil revenues has hammered public finances and foreign currency reserves.

‘Nigeria’s vehicle production capacity to hit 200,000 by December’

Made in Nigeria Cars

The National Automotive Design and Development Council (NADDC), yesterday, said the total installed vehicle assemblage capacity in the country will reach 200,000 before the end of the year.

With new automakers, including Century Auto (Toyota), TATA, Coscharis Auto (FORD, Joylong, Dongfeng), Globe Motors (Higer, Globe), Leventis (FOTON -Diamler), Kewalram Chanrai (GM, Mitsubishi) and Tilad (Shinery), Director General of NADDC, Aminu Jalal told The Guardian in a telephone conversation that the companies would add over 100,000 vehicles yearly capacity, bringing the total installed capacity to 200,000 in a single operational shift.

Market gains N205bn, index rises by 2.14%

The stock market gained additional N205bn on Thursday after 32 firms made the gainers’ chart. The Nigerian Stock Exchange All-Share Index, therefore, appreciated by 2.14 per cent at the close of trading on the Exchange’s floor.

The NSE market capitalisation soared to N9.784tn from N9.579tn, while the index rose to 28,489.89 basis points from 27,891.96 basis points.

An aggregate of 618.248 million shares valued at N5.41bn were traded in 6,757 deals.

Nigerian stocks you should consider buying right now

Stocks in Nigeria continue to rise a day after Nigeria's central bank released guidelines for a more flexible foreign exchange market. Chukwuma Anyanwu, Head of Research at GTI securities joins CNBC Africa to review the trading day and discuss which stocks to buy in the new environment

  click link to watch video
http://www.cnbcafrica.com/video/?bctid=4944581491001

New forex policy triggers market rebound

The Nigerian Stock Exchange returned to gains as the Central Bank of Nigeria released the much-awaited framework for the foreign exchange market.

The All-Share Index rallied by 3.17 per cent owing to this development, which  boosted the NSE market capitalisation by N295bn as capitalisation rose to N9.579tn from N9.284tn, while the NSE ASI hits 27,891.96 basis points from 27,034.05 basis points.

An aggregate of 588.427 million shares worth N3.477bn were traded in 5,088 deals at the close of trading on the floor of the Exchange.

NSE reviews composition of market indices

The President, Nigerian Stock Exchange, Mr. Aigboje Aig-Imoukhuede

The Nigerian Stock Exchange has announced the expected review of the NSE 30, and the six sectoral indices of the Exchange, which are NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.

The composition of these indices after the review will be effective on July 1, 2016, the NSE said in a statement on Wednesday. “With the review, we will witness the entry/re-entry as well as exit of some major companies,” it explained.

Livestock Feeds Prepares to Raise N2bn to Boost Operations

Livestock Production

Livestock Feeds Plc has commenced the process of raising additional capital to boost its operations. Shareholders of the company had last year approved that about N2 billion should be raised through a rights issue.
Speaking at the annual general meeting (AGM) of the company in Lagos yesterday, Chairman of Livestock Feeds Plc, Mr. Larry Ettah said the company had begun the implementation of the approval.

….And the CBN Floats the Naira. Effects of the new policy on your Equity investments

The CBN Governor Mr. Godwin Emefiele, announced a while ago, the long awaited modalities for the implementation of the flexible foreign exchange policy. The facts are as follows:

Introduction of a two way quote, which means that buyers and sellers will state prices and quantities they are willing to buy and sell.

·    The CBN also maintained that the 41 items banned last year for access to forex for imports remained banned. 

·     The CBN has also appointed primary dealers for the first time which is expected to help boost FX liquidity in the market.

·         The exchange rate will be market determined and the CBN will also participate in the market occasionally. 

·     The CBN also announced the introduction of new financial products such as FX Futures where businesses who need dollars in the near-distant future can now hedge by buying at a price today but get the dollars delivered when they actually need it.

Nigeria’s Central Bank Throws in Towel on Defending Naira

Nigeria’s central bank said it will allow the naira exchange rate to be market-driven, setting the stage for a devaluation of the currency when the new system comes into effect June 20.

The Central Bank of Nigeria will select a group of around 10 primary dealers through which the naira will be traded. There will only be one exchange rate and the bank will intervene in the market “as the need arises,” Governor Godwin Emefiele told reporters in Abuja, the capital, Wednesday.

“We’re talking about an open, transparent two-way system,” Emefiele said. “It’s intended we don’t have speculators and rent-seekers. I don’t expect that any other exchange rate will be recognized.”

BREAKING NEWS: NIGERIAN CBN FLOATS THE NAIRA

Details coming up shortly

European Stocks Rebound as Miners Rise, Inditex Buoys Retailers

A rally in miners and retailers lifted European stocks after a five-day rout, while traders speculated that the Federal Reserve’s latest policy review will offer encouragement to beleaguered markets.

Glencore Plc climbed 5.1 percent, helping commodity producers post the biggest increase of the 19 industry groups on the Stoxx Europe 600 Index, as metals advanced. Inditex SA pushed retailers ahead with a 3.4 percent rise after the maker of Zara clothing reported better-than-expected first-quarter profit. Banks in peripheral nations led gains on a gauge of lenders.

FG releases N280bn to six ministries, 50 agencies

The Federal Government on Tuesday announced that it had so far released N280bn from the N350bn set aside for capital projects as contained in the 2016 budget.

It stated that the funds had been sent to the Federal Ministry of Finance for onward disbursement to six ministries and over 50 agencies, adding that the funds were for ongoing projects and for new ones.

This is coming as the Bureau of Public Procurement stated that it had projected to save N48bn for the government through the electronic procurement system, while implementing the 2016 budget.

CBN to release flexible exchange rate policy today

The new flexible exchange rate policy will be released today (Wednesday), the Acting Director, Corporate Communications of the Central of Bank of Nigeria, Mr. Isaac Okoroafor, has said.

The CBN’ Monetary Policy Committee had on May 24 risen from its bi-monthly meeting and announced plans to adopt greater flexibility in the management of foreign exchange.

Okoroafor, who told our correspondent on Tuesday that the policy would be unveiled on Wednesday, did not elaborate on the modality. However, our correspondent gathered that the Governor, CBN, Mr. Godwin Emefiele, would release the blueprint during a news conference scheduled to hold at the apex bank’s headquarters in Abuja by noon.

Forex guidelines’ delay plunges naira to N367/$

The naira yesterday relapsed to N367 to a dollar in the paralell market from Friday’s close of N365, as traders react to Central Bank of Nigeria’s (CBN’s) delay in releasing the guidelines for the flexible foreign exchange policy.

The plunge in naira’s value, traders said, followed the rise in forex demand as fuel marketers and other forex users shop for the greenback to meet their obligations abroad.

President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe said the naira will continue to fall until the CBN releases the much awaited forex policy guidelines.

A CBN source said the guidelines for the flexible foreign exchange policy may be released before the end of the week, and would define the fate of the naira against the dollar.

Germany’s 10-Year Bond Yield Declines Below Zero for First Time

Germany’s 10-year government bond yields tumbled below zero for the first time on record as a weakening global economic outlook fuels demand for perceived havens.

The nation joined Japan and Switzerland in having 10-year bond yields of less than zero. The plunge in yields, which has been driven by European Central Bank’s policy of negative interest rates and asset purchases, has accelerated after the weakest U.S. payrolls data in almost six years was reported June 3, and as polls indicate Britain’s vote on remaining or exiting the European Union is too close to call.

“Nobody buys bunds at these yield levels thinking they are attractive,” said Jussi Hiljanen, head of European macro- and fixed-income strategy at SEB AB in Stockholm. “Demand for haven assets is being driven by fear of Brexit and growth concern. Investors are buying bunds as a hedge against uncertainty.”

Benchmark German 10-year bund yields fell two basis points, or 0.02 percentage point, to 0.002 percent at 8:51 a.m. London time, after touching minus 0.004 percent, the least since Bloomberg began collecting the data in 1989. The 0.5 percent security due February 2026 rose 0.215, or 2.15 euros per 1,000-euro ($1,125) face amount, to 104.815.

Yields Tumble

While the collapse in yields is good news for governments that are reaping lower borrowing costs and in some cases command a fee to hold investors’ money, it’s a sign that even after pouring in record amounts of stimulus, central banks are still struggling in their efforts to boost growth and inflation.

The securities join the more than $2.8 trillion of euro-region debt that already has yields below zero, according to the Bloomberg Eurozone Sovereign Bond Index, meaning investors who buy the debt now and hold its to maturity will receive less than they paid.

The German 10-year yield has slid from 0.63 percent at the end of 2015. So far the drop in yield isn’t showing signs that it will ignite a reversal similar to what happened in April last year, when the previous record was followed by a selloff that pushed yields up by a full percentage point in less than two months.

The ECB began its asset-purchase program, or quantitative easing, in March 2015 to help push annual consumer-price growth closer to its goal of just under 2 percent. Prices have declined on an annual basis the past two months and the inflation rate hasn’t touched 2 percent in more than three years. The Frankfurt-based central bank boosted its monthly bond purchases this year and officials are now committed to buying 80 billion euros a month until at least March 2017.

Source: Bloomberg

Stock market sheds N45bn as 22 firms lose

The Nigerian Stock Exchange recorded a loss of N45bn in its market capitalisation on Monday after the shares of 22 firms depreciated in value.

The NSE All-Share Index dropped points at week open, shedding 0.47 per cent amid mixed performances in key sectors.

A total of 152.329 shares worth N2.290bn exchanged hands in 3,406 deals. In all, only 15 stocks appreciated in value.The market capitalisation slid to N9.308tn from N9.353tn, while the NSE ASI fell to 27,103.38 basis points from 27,232.62 basis points at the close of trading on the Exchange’s floor.

NIGERIA CONSUMER PRICE INDEX MAY 2016

In May, the Consumer Price Index (CPI) which measures inflation recorded a relatively strong increase for the fourth consecutive month. The Headline index increased by 15.6% (year-on-year), 1.9% points higher from rates recorded in April (13.7%). The increase in rates in May relative to April reflects an overall increase in general price level across the economy as all divisions which contribute to the Headline index increased at a faster pace in May. 

click link to download full report

https://drive.google.com/file/d/0B7bfqve2E3QrMFZKcHlNRkwzZVE/view?usp=sharing 

IHS completes consolidation deal with Helios Towers Nigeria

IHS Holding Limited, the largest mobile telecommunications infrastructure provider in Africa, Europe and the Middle East, has completed the acquisition of Helios Towers Nigeria Limited (HTN) 1,211 diversified tower sites throughout Nigeria.

HTN and IHS established the mobile telecommunications infrastructure industry in Nigeria in the early 2000s and this transaction, which was first announced on March 10, is the first in-market consolidation in Africa.

Under the terms of the transaction, IHS acquired the entire issued share capital of HTN and now has full operational control of the underlying business. Business will continue as usual for HTN’s towers which will be seamlessly integrated into the IHS network and connected to IHS’s state of the art network operating centre, which monitors each tower 24 hours a day, seven days a week.

Power: Planned Transmission Repairs to Cut Supply by 300MW

Nigeria’s meagre power generation and supply capacity will in the next couple of weeks experience more distress with the planned shutdown of the 300 megawatts (MW) Agip Okpai power plant in Delta State.

According to a communique of the monthly meeting held in Kano between Minister of Power, Works and Housing, Mr. Babatunde Fashola and operators in the country, the closure was necessary to allow the Transmission Company of Nigeria (TCN) undertake repair works on its vandalised 55 kilometre transmission line within the region.

FG to assist states raise funds from capital market

Minister of Finance, Mrs. Kemi Adeosun

The Federal Government on Monday said it would encourage state governments to raise long-term funds from the capital market to finance capital projects.

It said rather than the states looking at the banking sector to raise funds, the capital market would be assisted to play its role in economic development.

The Minister of Finance, Mrs. Kemi Adeosun, stated these at a meeting with stakeholders in the market, led by the Chairman, Capital Market Master Plan Council, Mr. Olutola Mobolurin.

Adeosun said the assistance to be given to the state governments in raising funds from the capital market had been captured in the Fiscal Restructuring Plan, which was already approved by the National Economic Council.

Deposits in banks shrink by N1.03tn June 13, 2016

The harsh economic conditions facing the country have led to a drastic reduction in customers’ deposits in banks with the industry recording a decline of about N1.03tn in total deposit, 

The Bankers Committee has sent a proposal to the Central Bank of Nigeria to limit across-the-counter withdrawals to N10,000, following a major drop in customers’ deposit.

The proposal, according to a reliable source, is being considered by the apex bank through the Banking and Payment Systems Department.

A document obtained by our correspondent from the Central Bank of Nigeria on Friday showed that between April 2015 and April 2016, the total deposits of bank customers with the Deposit Money Banks dropped by 5.6 per cent or N1.03tn from N18.54tn to N17.51tn.

Interbank rate rises as excess liquidity persists

The nation’s overnight interbank rate rose to an average of four per cent on Friday, up from three per cent the previous week, as the Central Bank of Nigeria’s attempt to mop up excess liquidity from the banking system faltered.

Traders said the CBN failed to sell Treasury bills at its Open Market Operation window twice last week because commercial banks were asking for higher returns than the bank was willing to offer.

The CBN, however, sold 206-day bills worth N93.18bn ($468.24m) on Monday, and retired N129.61bn of matured OMO bills, leaving the system with more cash, Reutersreported.

Morgan Stanley Clashes With Goldman on Bonds as Market Surges

Morgan Stanley says 2016’s bond market rally has further to run. Goldman Sachs Group Inc. says benchmark Treasury yields may be poised to jump.

The two fixed-income powerhouses are at odds as bonds surge this year. Yields from Japan to New Zealand tumbled to records Monday, while benchmark Treasuries advanced for a fifth day. Investors are rushing to debt as the U.K. debate over leaving the European Union drives demand for the safest assets. The Federal Reserve meets Tuesday and Wednesday, following data that showed the slowest job growth in almost six years. Bank of Japan officials gather June 15-16.

ECB Says Oil-Price Slump Not the Global Boon It Might Have Been

Cheaper oil prices since 2014 have probably been of little net benefit to the global economy and may even have been a drag on growth, according to the European Central Bank.

“While most of the oil-price decline in 2014 could be explained by the significant increase in the supply of oil, more recently the lower price has reflected weaker global demand,” the ECB said on Monday in an article from its Economic Bulletin. “Although the low oil price may still support domestic demand through rising real incomes in net oil-importing countries, it would not necessarily offset the broader effects of weaker global demand.”

UK approves N4.74bn for solar power in Nigeria

United Kingdom Prime Minister, David Cameron

The United Kingdom, through its Department for International Development, has approved N4.74bn (£16.7m) for the development of electricity from solar energy in Nigeria.

According to SolarNigeria, the agency in charge of the programme in Nigeria, the funds from the UK DFID will be used to scale the market for solar home lighting and power across the country through to 2020.

In a statement issued in Abuja, the agency stated that it was helping capable solar vendors and financiers to rapidly expand their capacity to reach consumers with financed solar solutions, adding that pilot programmes in 2015 provided capacity building grants of £1.5m to 16 companies.

Brexit Risk Rattles Markets as Stocks Sink With Pound; Yen Jumps

Growing anxiety over the prospect of the U.K. exiting the European Union spooked investors worldwide, hammering equities and weakening the British pound as safe-haven demand spurred gains in the Japanese yen, sovereign debt and gold.

Brexit Watch: The pound, the polls, and the probability of Brexit, all in one place

European shares fell for a fourth day as the MSCI Asia Pacific Index slid by the most in two months and U.S. stock index futures dropped. The pound slumped to an eight-week low after a poll showing a 10 percentage-point lead for Britain to leave the EU sent it tumbling late on Friday. The yen rose toward its strongest level since 2014 as 10-year bond yields dropped to records in the U.K., Japan and New Zealand. Oil retreated after a report showed an increase in U.S. drilling rigs, while gold climbed to a four-week high. The price of bitcoins jumped amid speculation supply will tighten.

Shelter Afrique invests N22.5bn in housing

Minister of Power, Works and Housing, Babatunde Fashola

A pan-African finance company, Shelter Afrique, has spent over N22.51bn on housing initiatives in Nigeria, the Minister of Power, Works and Housing, Mr. BabatundeFashola has said.

In a statement made available to our correspondent, the minister said that between 2005 and 2010, Shelter Afrique in Nigeria had financed 23 initiatives with a total sum of N10.435bn ($52,175,000) and another N12.08bn ($60,400,000) over the last three years on 10 interventions.

“Of these initiatives, 15 represented lending for construction of housing projects, out of which the largest was for $7m for 376 houses of different types; and 251 service plots, followed by 287 mixed housing units for a cooperative society; 55 housing units and 100 service plots and the least was for 16 maisonettes. This is the intervention on the supply side of housing to provide houses,” he said.

No respite for capital market this week – Analysts

The capital market is unlikely to see advancements in the performances of indices this week owing majorly to the continued delay by the Central Bank of Nigeria in developing the new foreign exchange framework for the country, analysts have said.

The Nigerian Stock Exchange was unable to shake the previous week’s negative mood particularly as a result of this inaction. Consequently, the NSE All-Share Index pared on four out of five trading days to accumulate a week-on-week loss of 1.45 per cent.

This performance pegged the year-to-date return of the index at -4.92 per cent. Volume and value of transactions during the week waned by 24.02 per cent and 32.05 per cent in the same order.

BREAKING: Telecoms giant MTN agrees to pay Nigerian $1.7 billion fine

South African telecoms giant MTN said Friday it would pay a $1.7 billion fine to the Nigerian government in a “full and final settlement” over its failure to disconnect unregistered mobile phone users.

The company said in a statement that “MTN Nigeria has agreed to pay a total cash amount of Naira 330 billion over three years.”

Africa’s biggest wireless operator was fined $3.9 billion last year and has since been in negotiations with the government over the payout.

Source: The Punch Newspaper

How Far Can Oil Rally? Options Investors Bet on Surge Above $100

Oil investors are buying contracts that will only pay out if crude rises well above $100 a barrel over the next four years -- a clear sign some believe today’s bust is sowing the seeds of the next boom.

The options deals, which brokers said bear the hallmarks of trades made by hedge funds, appear to be based on the belief that current low prices will generate a supply crunch as oil companies cut billions of dollars in spending on developing fields. The International Energy Agency forecasts that non-OPEC supply will suffer its biggest decline in more than two decades this year.

FG plans Eurobond with investors’ roadshow

The Minister of Finance, Mrs. Kemi Adeosun, says the Federal Government will continue to engage international investors as it explores fundraising options.

She stated this in Abuja on Thursday after a non-deal roadshow in London earlier in the week.

Adeosun was joined by officials from the Debt Management Office and the Central Bank of NigeriaThe one-day event, which took place on Tuesday,  was attended by 65 representatives of European and global fund managers, Adeosun said, adding that the event was aimed at updating existing bond holders on the Federal Government’s economic strategy.

Pound Volatility Intensifies for Sixth Week as Brexit Vote Nears

Trader expectations for price swings in the pound climbed for a sixth week to a fresh seven-year high as anxiety about a potential British exit from the European Union gripped investors.

The gauge of one-month volatility goes beyond the June 23 referendum to encompass the aftermath of the vote. Sterling headed for its second weekly decline versus the dollar with less than two weeks before the U.K. decides on whether to remain in the world’s biggest single market. 

The pound tumbled as much as 1.1 percent on June 6 after polls signaled a lead for voters who support leaving the 28-nation bloc. It climbed as much as 1.5 percent the following day as later polls suggested more support for the ‘Remain’ camp and amid speculation a mistyped transaction had triggered automatic orders to avoid losses.

Oil slump, opportunity for economic restructuring, says minister

The Federal Government has acknowledged that Nigeria has been rendered helpless by the crude oil industry and its price volatility.

The Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, stated this during the national conference of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture.

He said, “Everywhere the President has travelled to, and at every opportunity he has had to speak to investors and businesses at home and abroad, he has reiterated the determination of this administration to ensure a long-overdue fundamental restructuring of the Nigerian economy. Our view is that there is no better time than now. (When the price of oil is hovering around historically low levels). 

NSE records first gain of N64bn this week

The market capitalisation of the Nigerian Stock Exchange appreciated by N64bn at the close of trading on the Exchange’s floor on Thursday with Unity Bank Plc, Nestle Nigeria Plc and Total Nigeria Plc emerging as the top gainers. The market recorded 18 gainers and 17 laggards at the close of trading.

A total of 182.676 million worth N1.58bn exchanged hands in 3,631 deals.The NSE market capitalisation appreciated to N9.370tn from N9.306tn recorded on Wednesday, while the All-Share Index also rose to 27,284.83 basis points from 27,098.18 basis points.

Why Brexit Doesn't Necessarily Mean a U.K. Recession

With Britain's referendum less than two weeks away, the outlook seems decidedly gloomy. Bank of England Governor Mark Carney has warned Brexit consequences could possibly include a “technical recession,” defined as two consecutive quarters of falling economic output. 

This chart shows why it's worth delving deeper into the different forecasts. While the majority of economists say a vote to leave will spark a slowdown, the Treasury is in the minority predicting an outright recession.

U.K. House Prices Seen Dropping for First Time Since 2012

U.K. house prices look set to dip for the first time since 2012 amid uncertainty before Britain’s vote on European Union membership and as a new tax on buy-to-let properties and second homes kicks in.

Home prices in central London are already falling, according to May data from the Royal Institution of Chartered Surveyors. While they continue to increase modestly across the rest of the U.K., 10 percent more respondents predicted that they will fall than expect them to rise in the coming three months. The U.K. capital and East Anglia will be worst hit, the report shows.

RICS members “constantly are now talking about uncertainty,” Chief Economist Simon Rubinsohn said in an interview on Bloomberg Television’s “On The Move” with Guy Johnson. “Obviously the referendum is a big story. The tax changes are also really having an impact.”

Emefiele to meet bank CEOs over sacking, forex policy

Godwin Emefiele, CBN Governor

Barring any last-minute change in plans, the Governor of Central Bank of Nigeria, Mr. Godwin Emefiele, will today (Thursday) meet with Managing Directors and Chief Executive Officers of all the Deposit Money Banks in the country.

The meeting, which is scheduled to hold at the headquarters of the apex bank in Abuja, according to findings, may consider the massive sacking of workers in the banking sector.

The PUNCH had last week reported that Ecobank Nigeria sacked over 1,040 of its employees, while Diamond Bank Plc and Skye Bank also disengaged 200 and 175 members of their workforce respectively.A total of about 1,400 workers had so far been sacked between last week and Wednesday by Deposit Money Banks in a move to prune down the number of workforce in the sector.

U.K. Bond Yield Falls to Record Low as Brexit Vote Approaches

The U.K.’s 10-year government bond yield dropped to a record before the nation’s referendum on European Union membership.

Gilts rallied with Treasuries as investors seek havens as global economic optimism cools, and before Britain votes June 23 on whether to remain in the bloc. The Bank of England may ease policy if the nation decides to leave, according to Mohit Kumar, head of rates strategy at Credit Agricole SA’s corporate and investment bank unit. That’s supporting the U.K.’s sovereign debt, even as concern it may quit the EU has made the pound the worst-performing Group-of-10 currency this year.

Naira tumbles to 371 as dollar scarcity persists

The continuing pressure on the naira rose sharply on Wednesday with the local currency tumbling to a new low of 371 against the United States dollar at the parallel market. It had closed at 361 per dollar on 

The delay by the Central Bank of Nigeria in explaining how the proposed flexible exchange policy will work has increased speculation on the currency.

According to foreign exchange dealers at black markets in Lagos, Abuja and major airports across the country, the dollar was sold for between 367 and 373 on Wednesday.Foreign exchange dealers and investors said the delay had caused uncertainty in the foreign exchange market and fuelled hoarding of hard currencies.