03 Jul

Daily Watch – Nigerian equities lose ₦1.13 trillion in Q2, AMCON has had enough of ‘liars’

  • Nigeria’s earnings from crude oil and gas, which accounted for 93.3 percent of total export earnings during the review period, increased by 10.1 percent to $13.426.53 billion in Q1 2018 when compared with the preceding quarter. The country has recorded an improvement in oil its crude oil exploration as exports stabilised in the first quarter at 1.9 million barrels per day. In comparison, the 2018 budget benchmark is 2.3 million barrels per day. Earnings from non-oil and electricity exports also increased by 12.3 per cent to $967.08 million in Q1 2018 when compared with the preceding quarter. Export earnings rose by 10.2 per cent to US$14.393.61 billion in Q1 2018 when compared with Q4 2017. It also indicated an increase of about 44.4 percent when compared to Q1 2017. New CBN data showed that payments for import of goods to the economy in the review period grew by 13.9 percent to $8.641.60 billion, above the level recorded in the preceding period.
  • AMCON says there will be no more room for negotiation with debtors. CEO Ahmed Kuru said the company is tired of debtors coming to their office and “telling lies” about wanting to embark on a staggered payment which they ended up never complying. He said most parts of the ₦5.4 trillion had been with the banks for five years before AMCON bought them over saying the debtors are yet to pay after seven years. “Resolutions through staggered plans have never worked. Let us not forget that before those loans were transferred to AMCON they have been with the banks for over five years,” he said. Kuru added that more than 80 per cent of AMCON’s recoveries are as a result of either forfeiture or taking over of businesses or outright cash payment.
  • The FMDQ OTC Securities Exchange and S&P Dow Jones Indices, a global provider of financial market indices have commenced co-branding of indices. Both organisations had in 2017 signed a cooperation agreement to create and launch co-branded fixed income indices. The activation of that co-branding indices began last Friday with the branding of S&P/FMDQ Nigeria Sovereign Bond Index. According to FMDQ, the S&P/FMDQ Nigeria Sovereign Bond Index, formerly branded as S&P Nigeria Sovereign Bond Index, tracks the performance of local currency denominated sovereign debt publicly issued by the government of Nigeria in its domestic market.
  • The rise in the US Fed rate, the prevailing economic uncertainties in the country, as well as the potential risks posed by Nigeria’s forthcoming general election, are all factors that combined to determine the negative performance of Nigerian equities in Q2 2018. Nigerian equities recorded a net capital depreciation to the tune of ₦1.13 trillion between April and June 2018, according to Nairametrics. This development, which represents about a 7.77 per cent average loss, is a sharp contrast to 8.53 per cent gain in Q1 during which time equities gained ₦1.384 trillion. Economic and political uncertainties influenced investors’ decisions during Q2, even as profit-taking fluctuations also played a major role.
  • Mutual Benefits Assurance has been granted approval by the Securities and Exchange Commission on its plan to raise ₦2 billion through right issue towards its five-year strategic plan. According to the Chairman, Akin Ogunbiyi, the funds realised from the rights issue will be used to fund the company’s recapitalisation and growth plan, provision of additional working capital and financing the expansion of IT facilities to support its enlarged operations. The company will sell its shares to existing shareholders by way of rights issue of 4,000,000,000 ordinary shares of 50 kobo each at 50 kobo per share on the basis of one new ordinary shares. The acceptance list for the rights issue opens on 6 August and will close on 14 September.