Author Archives: Mr. Toyin Olaogun

Nigeria’s inflation hit 22.79% in June

Nigeria’s headline inflation rate accelerated for the sixth consecutive time to 22.79 per cent in June 2023, according to data by the National Bureau of Statistics released Monday.

The inflation rate in Africa’s biggest economy rose to a new 17-year high of 22.79 per cent in June 2023 from 22.41 per cent in the previous month.

The NBS report read, “In June 2023, the Headline inflation rate rose to 22.79 per cent relative to May 2023 headline inflation rate, which was 22.41 per cent. Looking at the movement, the June 2023 Headline inflation rate showed an increase of 0.38 percentage points when compared to May 2023 headline inflation rate.

“On a year-on-year basis, the Headline inflation rate was 4.19 percentage points higher compared to the rate recorded in June 2022, which was 18.60 per cent. This shows that the Headline inflation rate (year-on-year basis) increased in June 2023 when compared to the same month in the preceding year (i.e., June 2022).”

Food and non-alcoholic beverages (11.81 per cent) led the list of items that contributed to the rising inflation figure.

The World Bank had projected that the removal of fuel subsidy would contribute to the country’s increasing inflation.

In its June 2023 Nigeria Development Update, the bank said, “The removal of the petrol subsidy is anticipated to cause a temporary increase in inflation in the upcoming months before contributing to disinflation in the medium term.”

First Bank, Ecobank, others drag equity market down by N257bn

Losses experienced in the FBN Holding Plc, Ecobank Transnational incorporated, and other financial services stocks dragged the local bourse by N257bn at the end of last week as the market capitalisation closed at N34.069tn.

The All-Share Index also dropped by 470.68 base points or 0.75 per cent to close at 62,569.73.

Ecobank Nigeria Limited and FBN Holdings are currently entangled over the recent acquisition of FBN Holdings shares by an entity associated with businessman, Oba Otudeko, a former chairman of the latter over an alleged unsettled debt of N13.5 bn.

Also, all other indices finished lower except for NGX Oil and Gas, NGX Lotus ll and NGX Industrial Goods Indices which appreciated by 1.43 per cent, 0.72 per cent and 9.01 per cent respectively, while the NGX ASeM and NGX Sovereign Bond Indices closed flat.

A total of 5,246 billion shares worth N63.417bn were traded in 57,234 deals by investors on the floor of the Exchange last week, compared to a total of 9,831 billion shares valued at N145.408bn that exchanged hands last week in 54,478 deals. This indicated a 46.64 per cent drop in the volume of stocks traded last week compared to the previous one.

Leading the activity chart of the Nigerian Exchange Limited last week was the Financial Services Industry (measured by volume) with 3,494 billion shares valued at N38.032bn traded in 28,633 deals; contributing 66.60 per cent and 59.97 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 451,410 million shares worth N2.186bn in 3,147 deals. The third place was the ICT Industry, with a turnover of 332.705 million shares worth N5.638bn in 4,207 deals.

Trading in the top three equities namely United Bank for Africa, Transnational Corporation Plc and FBN Holding Plc (measured by volume) accounted for 1.222 billion shares worth N15.523bn in 8,260 deals, contributing ing 23.28 per cent and 24.48 per cent to the total equity turnover volume and value respectively.

Twenty-nine equities appreciated during the week lower than 78 equities in the previous week. Seventy-seven equities depreciated higher than 25 in the previous week, while 50 equities remained unchanged, lower than 53 recorded in the previous week.

Atop the gainers table was Daar Communications whose shares appreciated by 50 per cent to close at N0.30. John Holt gained 44.80 per cent to close at N1.81. Ahead of a proposed merger with Dangote Sugar Refinery and Dangote Rice, the stocks of Nascon Allied Industries Plc went up by 22.49 per cent to close at N28.05.

The shares of financial services dominated the losers table with the likes of FBN Holdings losing 22.17 per cent to close at N15.80, Ecobank stocks lost 23.03 per cent to close at N12.70, Wema bank lost 25.55 per cent in its share value to close at N4.05, Sterling Holdco lost 25.42 per cent to close at N3.11, Fidelity bank stocks suffered a 24.97 per cent dip to close at N6.70. Amidst reports of proposed expansion into several African countries, the shares of Access Holdings depreciated by 20.27 per cent to close at N14.95.

NASCON Allied Industries to merge with Dangote sugar, rice companies

Makers of Dangote Salt and Seasoning, NASCON Allied Industries, has announced a proposed merger with two other companies, Dangote Sugar Refinery Plc and Dangote Rice Limited.

This was disclosed in a corporate notice filed on the Nigerian Exchange Limited on Thursday indicating a closed period ahead of the company’s next board meeting.

The company said, “The meeting of the Board of Directors of the Company scheduled to be held on Tuesday, July 25, 2023, will in addition to the Unaudited Financial Statements of the Company for the Half Year ended June 30, 2023 (H1, 2023 Results) consider the proposed merger of the Company with Dangote Sugar Refinery Plc and Dangote Rice Limited.”

During closed periods, all insiders are prohibited from dealing in the shares of a listed company.

Based on post-filing requirements, one of the parties to the merger, Dangote Sugar Refinery Plc, also revealed that its directors will be considering the proposed merger at its next board meeting scheduled to hold later this month.

“The meeting of the Board of Directors of the Company scheduled to be held on Friday, July 28, 2023, will in addition to the Unaudited Financial Statements of the Company for the Half Year ended June 30, 2023 (H1, 2023 Results) consider a proposed merger of the Company with NASCON Allied Industries Plc and Dangote Rice Limited,” part of the notice said.

Recall that NASCON had weeks back announced the appointment of Thabo Mabe as its substantive managing director and Fatima Aliko-Dangote as a non-executive director.

For the financial year ended December 2022, NASCON recorded revenue growth of 76.6 per cent to N58.8bn from N33.3bn in 2021, supported by growth in salt (up 79.8 per cent) and seasonings (up 50.0 per cent) sales. Cost of sales rose by 60.6 per cent to N34.2bn as against N21.3bn declared in 2021, while gross profit jumped by 105.2 per cent from N12bn in 2021 to N24.5bn in the period under review, operating expenses rose 59.9 per cent to N15.2 bn compared to N9.5 bn in 2021.

Profit after tax increased by 84.1 per cent to N5.5bn for the year, compared to N3.0bn achieved in 2021. Earnings per share also increased to N2.06 in 2021 compared to N1.12 in 2021.

No plan to sell NNPCL shares -official

There is no decision yet by the Federal Government as regards selling the shares of the Nigerian National Petroleum Company Limited to the public through an Initial Public Offering, The PUNCH gathered on Thursday.

An online medium had reported on Wednesday that the NNPCL missed the deadline for the launch of its Initial Public Offering, stating that this was contained in the national oil company’s latest quarterly report.

In accordance with the Petroleum Industry Act, the oil firm transitioned from a state-run corporation to a commercial venture on July 19, 2022.

NNPCL’s Group Chief Executive Officer, Mele Kyari, had during the transition ceremony in Abuja, stated that the company would be ready to launch an IPO by mid-year in 2023.

During an IPO, the shares of a firm are sold to institutional investors interested in owning stakes in that particular company.

But when contacted by our correspondent on Thursday, and asked to state what caused the delay in the IPO declaration and whether the oil firm had fixed a new date for the public offering, the Chief Corporate Communications Officer, NNPCL, Garba-Deen Muhammad, said it was not the decision of the oil company, but the government.

He was also asked to state how much was NNPCL targeting or expecting from the exercise, and how much was the share expected to sell for.

Other questions include which investment banks were underwriting the offering, and whether ordinary Nigerians could buy the shares, or whether it was meant for only accredited and institutional investors.

But in a very brief response by Muhammad, he said, “Shareholders have not decided. It’s not an NNPC decision. Government will decide when to sell, how much to sell down and at what value.”

A look into the Petroleum Industry Act 2021 showed that the shareholders of the NNPCL include the Federal Government, represented by the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated. The shares are held in equal portions by the two ministries.

This means that, in effect, the shareholders of NNPCL are the Nigerian people. The PIA was passed in 2021 with the goal of overhauling the Nigerian oil and gas industry. One of the key provisions of the PIA is the corporatisation of NNPC, which means that it will be transformed into a limited liability company.

This will allow the oil firm to operate more independently and efficiently, and it will also make it easier for the government to attract private investment in the oil and gas sector.

The PIA also stipulates that the government must sell a portion of its shares in NNPCL to the public within five years of the law coming into effect. This will allow more Nigerians to participate in the ownership of the country’s oil and gas resources.

 

Naira Crashes to N776.90/$1 at Official Market, N788/$1 at Black Market

It was a very bad day for the Nigerian Naira at the official market and the black market on Friday as it further depreciated against the American Dollar.

Though its value also weakened in the Peer-to-Peer (P2P) segment of the foreign exchange (FX) market during the session, it was marginal compared with the heavy beating it suffered in the two other forex windows.

In the Investors and Exporters (I&E) category, the Naira lost N14.27 or 1.87 per cent against the US Dollar on the final trading session of the week to sell at N776.90/$1 compared with the preceding day’s rate of N762.63/$1.

It closed lower despite not coming under heavy forex demand pressure, as data obtained showed that the value of transactions was $73.42 million, 25.5 per cent or $25.18 million lower than the $98.60 million quoted on Thursday.

In the same vein, the domestic currency depreciated against its United States counterpart on Friday by N8 to quote at N788/$1, in contrast to the previous day’s price of N780/$1.

In the P2P arm of the market, the local currency lost 58 Kobo against the greenback yesterday to sell for N788.88/$1 compared with the previous day’s exchange rate of N788.30/$1.

A look at the value of the Naira to the Pound Sterling at the spot market showed that it further crashed by N4.10 to close at N966.34/£1 versus N962.24/£1 and against the Euro, it shed N3.94 to finish at N826.82/€1 versus N822.88/€1.

The cryptocurrency market was bullish during the session amid a flurry of fresh industry turmoil and stress in global financial markets.

The predictions that the US Federal Reserve could raise borrowing costs this month increased after stronger-than-expected private payrolls data, which affected how investors view risk assets.

Bitcoin (BTC) rose 0.1 per cent to $30,232.06, Ethereum (ETH) grew by 0.2 per cent to $1,862.25, Solana (SOL) gained 6.4 per cent to sell at $21.46, Binance Coin (BNB) appreciated by 0.7 per cent to $235.70, Cardano (ADA) improved by 0.6 per cent to $0.2833, and Litecoin (LTC) grew by 0.1 per cent to $97.04.

On the flip side, Dogecoin (DOGE) depreciated by 0.6 per cent to $0.0652, and Ripple (XRP) lost 0.4 per cent to close at $0.4669, while the US Dollar Tether (USDT) and Binance USD (BUSD) remained flat $1.00 each.