28 Oct

Daily Watch – Nigeria’s billion dollar Eurobond is half gone, NB, First Bank report profit declines

  • Nigeria has $500 million of commitments from its planned $1 billion Eurobond it intends to issue before the end of the year and any decision to increase the size of the offer will depend on pricing, Finance Minister Kemi Adeosun said on Thursday. “At the moment am focused on the $1 billion,” she said in a video recording at an investor conference in Lagos. Adeosun said the country was “further along” with the African Development Bank for a $1 billion budget support loan than the World Bank due to scheduling issues. “We have pushed World Bank funding into next year’s budget,” she said. She said Nigeria is interested in tapping funds at concessionary rates to develop its infrastructure and that most of the funding it was seeking would carry concessionary terms. Adeosun said expected taxes collection as a percentage of GDP which is currently at 5 percent to hit 7 percent within three years and to reach 10 percent within 5 years.
  • The naira on Thursday appreciated at the forex market barely 24 hours after liquidity challenges forced it to depreciate thrice in six hours. The Nigerian currency gained five points to close at ₦465 at the parallel market, from ₦470 it traded on Wednesday, while the Pound Sterling and the Euro exchanged at ₦565 and ₦505 respectively. Trading at the Bureau De Change window saw the naira close at ₦385 to a dollar, while the Pound Sterling and the Euro closed at ₦560 and ₦503 respectively. It also strengthened against the dollar at the official interbank market as it traded at ₦305 to a dollar, from ₦306.78 traded on Wednesday. H.J Trust CEO, Harrison Owoh, said the naira bounced back as BDCs await the sale of dollars from Travelex, a CBN licenced Forex dealer. Owoh said the Naira would appreciate further by the close of trading when BDCs would have all gotten their weekly Forex allocation from Travelex.
  • Anambra’s agriculture commissioner, Afam Mbanefo has said that the state has reached its target of achieving self-sufficiency in rice production. Mbanefo made the disclosure at a Commodity Alliance Forum/Consultative meeting organised by the state Value Chain Development Programme (VCDP) in Awka. The commissioner said the state government had a production target of 210,000 metric tonnes of rice yearly. “Based on the calculation of our expected yields, we are expecting to realise over 236,000 metric tonnes of rice in 2016 based on the production capacity,” he said. Mbanefo said the calculation was based on all the expected yields of 35 percent of over 14,300 farmers and the activities of programmes like the VCDP and FADAMA. He said the expected yield also included the activities of rice investors in the state including Coscharis farms, Joseph Agro and others.
  • FSDH Merchant Bank listed commercial paper worth ₦14.98 billion on the FMDQ OTC Securities Exchange platform. The CPs represented Series 1 and 2 under FSDH’s ₦30 billion CP Issuance Programme. FMDQ Managing Director, Bola Onadele, said the issuance of the CPs at this time signified increasing confidence in the possibilities of the Nigerian debt capital market. Onadele said that FMDQ was very positive about the potential of a fully-functional DCM in building a sustainable economy. He said the company would continue to support and streamline the market processes and infrastructure to support issuers and investors toward achieving an operationally excellent and competitive DCM. FSDH MD, Rilwan Belo-Osagie, said the CPs were quoted on the FMDQ platform in line with CBN requirements and would facilitate an active secondary market trading of the CPs.
  • Nigerian Breweries has announced an interim dividend of ₦7.93 billion, translating to ₦1 per share for the nine months ended September 30, 2016. The company’s Secretary/Legal Adviser, Uaboi Agbebaku, in a statement on Thursday, said that the interim dividend was declared in spite of the marginal decline in the company’s profit for the period occasioned by the current challenging operating environment. The statement showed that the company’s revenue during the period under review rose to ₦222.72 billion from ₦214.918 billion in the comparative period of 2015. Operating profit stood at ₦37.96 billion against ₦42.77 billion posted in the preceding period of 2015, an 11 percent decline attributed to higher input costs as a result of rising inflation and the naira’s devaluation. It explained that the negative impact of foreign exchange scarcity and the currency’s decline resulted in a 94 percent increase in the company’s net finance costs. Profit after tax dropped to ₦20.10 billion in contrast with ₦26.18 billion recorded in 2015, indicating a decrease of 23 percent.
  • FBN Holdings, the parent company of First Bank, recorded a 15.3 percent drop in profit after tax for the nine-month ended September 30, 2016, to ₦42.5 billion from ₦50.2 billion recorded for the same period last year. Its profit before tax also fell to ₦57.5 billion, down by 3.5 percent from ₦59.6 billion recorded in the corresponding period of 2015. It posted gross earnings of ₦417.3 billion, up by seven per cent year-on-year from ₦390 billion, while its net interest income rose to ₦202.9 billion, up 5.2 percent year-on-year from ₦192.9 billion. The group posted a non-interest income of ₦131 billion, up by 56.5 percent year-on-year from ₦83.7 billion, while operating income of ₦333.9 billion was recorded for the period, up by 20.7 percent year-on-year from ₦276.6 billion. However, total assets rose to ₦5.1 trillion, up by 21.6 percent year-to-date from ₦4.2 trillion; while customer deposits stood at ₦3.3 trillion, up by 10.9 percent year-to-date from ₦2.97 trillion. Its customer loans and advances (net) rose to ₦2.2 trillion, up by 21.6 percent year-to-date from ₦1.8 trillion.
  • Shareholders of Jaiz Bank, Nigeria’s first non-interest bank, on Wednesday unanimously voted to list its shares on the NSE. According to the bank, this will open opportunities for individuals who desire to own equity in the lender. Speaking at the Extraordinary General Meeting of the bank in Abuja, its Chairman, Umaru Abdul Mutallab, said with the shareholders’ endorsement, the bank’s authorised share capital had been sub-divided from 15,000,000,000 ordinary shares of ₦1 each to 30,000,000,000 ordinary shares of 50 kobo each.