01 Dec

Daily Watch – Stock Market hits three-year low, Buhari to meet Zuma over MTN fine

  • The Nigerian Stock Market hit a three-year low Wednesday after stocks skidded to yet another loss on the last day of trading for the month of November 2015. The All Share Index lost 0.83% on the day to take the month to date and year to date losses to 6.18% and 20.98% respectively. The market capitalization closed at N9.415 trillion. The All Share Index also closed lower at 27,385.69 the lowest level since December 4, 2012 according to our records. According to the data obtained from the NSE, the exchange has recorded a net FPI outflow of about N53 billion (September YTD) with an outflow of N450.5 billion compared to N390.3 billion in inflows. However, this has also been the trend as FPI outflows have mostly exceeded inflows since we started tracking this data in 2014. Investors alluded to the fact that FPI’s provide the liquidity required to drive liquidity on the bourse and believe the October and November data will not only show a net outflow but an overall drop in FPI transactions (Outflow and Inflow).
  • The Managing Director of the Transmission Company of Nigeria, Mrs. Veronica Osuhor, has resigned her appointment following a directive that she be demoted to the position of a Director from Managing Director. Mrs Osubor is just done 6 months out of her 4 year tenure as Managing Director of TCN. She resigned her appointment after she was told that she will now be reporting to a new Managing Director who is to be appointed by the concessionaire Manitoba Hydro International Limited (MHIL). Manitoba, a Canadian firm has been in a dispute with the Nigerian Management of TCN.
  • Nigeria’s distributable revenues to the three tiers of government rose in October to N473.83 billion, up 21.5 percent from September, boosted by higher non-oil earnings, the finance minister, Kemi Adeosun, said. Non-oil revenue recorded a significant improvement in the month, but intermittent “shut-down and shut-in” for repairs and maintenance at different terminals “continued to impact on crude oil and gas revenue negatively”. Adeosun also said in a statement that the rainy day fund, the Excess Crude Account, remained unchanged at $2.26 billion.
  • President Muhammadu Buhari and his South African counterpart, Jacob Zuma, are set to meet in Johannesburg this week to discuss the US$5.2 billion fine imposed by Nigerian Communications Commission on MTN. MTN Nigeria was fined N1.04 trillion for failing to cut off as many as 5.1 million unregistered SIM cards under Nigeria’s SIM card registration legislation. For the past two weeks, interim MTN Group Executive Chairman Phuthuma Nhleko has been negotiating with Nigerian authorities in an effort to have the fine reduced, and is said to be seeking to have it paid off in tranches.
  • Transnational Corporation of Nigeria Plc popularly known as Transcorp has announced the successful merger of its two power subsidiaries Transcorp Ughelli Power Limited and Ughelli Power Plc. The merged companies are now a single entity called Transcorp Power Limited. The merger, according to the Chief Executive Officer of the new company, Adeoe Fadeyibi, was designed to harmonise the management and operations of Transcorp’s power business for greater efficiency. Greater operational efficiency will undoubtedly lead to higher output in terms of power generation and increased shareholder value. Ughelli Power Plant, the company’s power generating asset, is the nation’s largest fossil-fuel generating plant.
  • The Dangote Group says it has concluded plans to build a power generation plant that will be capable of producing 500 megawatt electricity in Kano. The Group said that in the next few weeks, it would be signing the final memorandum of understanding (MoU) with the Kano State government, as a step towards the official ground-breaking ceremony of the project.