06 Mar

Daily Watch – Trade balance goes north, DMBs get 24hr FX clearance window

  • The FG announced on Sunday that mortgages below ₦5 million would not attract the initial payment of 10 percent equity from off-takers. It stated that this was part of efforts to ensure the provision of affordable housing to Nigerians, especially the low-income earners. The Minister of State for Power, Works and Housing, Mustapha Shehuri, stated this while inaugurating a 125-unit housing estate that was financed by the Federal Mortgage Bank of Nigeria and developed by Messrs LCK Projects in Enugu. “This will translate to the affordability of housing for Nigerians and will also create employment opportunities for our teeming youths,” a statement from the ministry quotes Shehuri as saying.
  • Nigeria’s trade balance turned positive in the fourth quarter of 2016 after exports rose by more than half, the NBS said on Saturday, the first positive reading since the same quarter a year ago. But Africa’s largest economy shrank 1.5 percent over the course of the full year due to lower oil revenues and a shortage of hard currency, its first annual contraction in a quarter of a century. With limited manufacturing capacity, Nigeria imports most of what it consumes. Fourth-quarter imports rose 46.4 percent from the previous year to ₦2.31 trillion ($7.6 billion), the statistics bureau said. But exports more than compensated for that rise, jumping 53.5 percent in value terms from a year earlier to ₦2.98 trillion, the statistics bureau said. The balance of trade for the fourth quarter was ₦671 billion. The net trade balance stood at minus ₦290 billion ($953 million) for all of 2016.
  • The CBN says it will direct commercial banks to sell business and personal travel allowances to retail customers within 24 hours of filing a demand request. This follows complaints that some banks are delaying the sale of forex to retail customers in contrast to the new forex policy issued by the regulator two weeks ago. It also said that banks would be compelled to open forex transaction compartments in all branches across the country, to enhance the ease of forex transactions to Nigerians. A bank source told Channels Television that all commercial banks will be asked to have electronic forex rate display systems in all their branches to aid transparency and promote the disclosure of going rates to their retail customers.
  • Nigerian pirates have released seven Russian and one Ukrainian sailors after they were captured last month on the cargo ship the BBC Caribbean, Russian news agencies reported on Sunday, citing a human rights activist in Crimea. The sailors were released after talks between the owners of the ship and pirates. Interfax news agency quoted human rights activist Pavel Butsay, in the city of Sevastopol, as saying the sailors were at a Frankfurt airport and planned to return home next week. Butsay told TASS news agency that a ransom was paid but did not reveal the sum.
  • International Energy Insurance shareholders have given the company’s Interim Board the approval to recapitalise the company for growth and competitiveness. The fresh capital when injected would enhance the firm’s working capital, improve IT infrastructure, meet solvency requirement as well as for investment opportunities. Speaking at the 42nd yearly general meeting, held in Kano, the shareholders approved that the directors in conjunction with the technical committee should further recapitalize the company by raising an additional ₦9 billion, which when added to initial recapitalization approval of ₦4 billion given at its 41st yearly general meeting amounts to a total approved limit of ₦13 billion. The company’s directors were also authorised to constitute a technical committee of the board and shareholders to renegotiate and restructure the company’s indebtedness to Daewoo Securities (Europe).
  • Vitafoam has posted a PBT of ₦522.7 million in its 2016 operations, against ₦489.5 million achieved in the corresponding period in 2015. The company’s PAT also grew from ₦196 million in 2015 to ₦412 million during the review period. However, total revenue declined from ₦15.15 billion to ₦12.19 billion in 2016. The improved performance in profit, according to the chairman, Bamidele Makanjuola, was due to a cost optimisation strategy adopted to control the rising cost of operations. He added that the company also streamlined production processes across major plants to enhance efficiency. Addressing shareholders during the company’s 55th yearly general meeting held in Lagos at the weekend, Makanjuola explained that the firm’s turnover was impacted largely by the forex upsurge and declining purchasing power which ultimately affected the cost of operations adversely. “Consequently, all our plants operated at approximately 40 percent of installed capacity, using mostly chemicals procured at prohibitive prices from local suppliers, coupled with the astronomical rise in banks’ lending rate,” he said.