CAPITALDIGEST DAILY NEWS. SEPTEMBER 6, 2021.

MONDAY 30/8/2021 – NNPC INCURS N756.99BN PETROL SUBSIDY IN SEVEN MONTHS The Nigerian National Petroleum Corporation incurred N756.99bn petrol subsidy cost from January to July this year, the latest data obtained from the corporation show. The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery’, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in global oil prices. The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the sharp drop in crude oil prices. The PUNCH had reported on August 9 that the landing cost of petrol imported into the country increased to a new high of N249.42 per litre on July 30 from N240.17 per litre as of June 25. The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced. Data from the corporation showed that it incurred N25.37bn subsidy in January, N60.40bn in February, N111.97bn in March, and N126.30bn in April and N114.34bn in May. The subsidy cost rose from N143.29bn in June to N175.32bn in July, according to the NNPC. In a document seen by our correspondent, the national oil company said, “Out of the value shortfall of N143,286,281,752.62, the sum of N103,286,281,752.62 was applied on the gross domestic receipts before arriving at the net receipt of N67.28bn in order to make funds available for JV cost recovery to sustain the existing production level. The balance of N40bn will be deducted in subsequent months. “The July 2021 value shortfall of N175,317,701,294.80 & outstanding balance of N40bn will be deductible from the August 2021 proceeds due for sharing at the September 2021 FAAC meeting.” While marketers have continued to stress the need to allow market forces to determine the pump price of petrol and do away with subsidy, it remains uncertain whether the discussions between the Federal Government and labour unions will lead to the deregulation of petrol prices.   TUESDAY 31/8/2021 – NAIRA FALLS TO ALL-TIME LOW OF 527 AGAINST DOLLAR The naira extended its decline on Monday, sliding to an all-time low of 527 against the dollar at the parallel market. The local currency, which has been on a downward trend in recent weeks, fell to 524 against the greenback on Friday from 522/$1 on Thursday. At the Investors and Exporters’ window, the naira, however, strengthened to 411.63/$1 on Monday from 412/$1 on Friday, according to FMDQ Group. The naira had strengthened to 506/$1 on August 4 after plunging to 525/$1 at the parallel market on July 28, a day after the Central Bank of Nigeria stopped foreign exchange sales to Bureaux de Change. The CBN Governor, Mr Godwin Emefiele, had on July 27, at the end of the Monetary Policy Committee meeting, announced the stoppage of forex sale to the BDCs, saying they had turned themselves into ‘agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria.’   WEDNESDAY 1/9/2021 – EXTERNAL RESERVES GAIN $500M IN ONE WEEK, NEAR $34BN Nigeria’s external reserves rose by $500m in one week to the highest point in more than two months, according to the latest data from the Central Bank of Nigeria. The reserves, which have been wobbling in recent weeks, jumped from $33.43bn on August 23 to $33.93bn on Monday, the highest since June 11. The CBN data showed that the reserves fell to a record low of $33.09bn on July 12 from $34bn on June 10. In a related development, the naira appreciated against the dollar on Tuesday at both the parallel market and the Investors’ and Exporters’ foreign exchange window. The PUNCH had reported on Tuesday that the naira extended its decline on Monday, sliding to an all-time low of 527 against the dollar at the parallel market. It, however, rose to 526 against the greenback at the parallel market on Tuesday. The local currency, which had been on a downward trend in recent weeks, fell to 524/$1 last Friday from 522/$1 on Thursday. At the Investors and Exporters’ window, the naira strengthened further to 411.08/$1 on Tuesday from 411.63/$1 on Monday, according to FMDQ Group. The naira had strengthened to 506/$1 on August 4 after plunging to 525/$1 at the parallel market on July 28, a day after the Central Bank of Nigeria stopped foreign exchange sales to Bureaux de Change. The CBN Governor, Mr Godwin Emefiele, had on July 27, at the end of the Monetary Policy Committee meeting, announced the stoppage of forex sale to the BDCs, saying they had turned themselves into “agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria.”   THURSDAY 2/9/2021 – NIGERIA’S EUROBONDS DEBTS RISE BY $9.37BN IN FIVE YEARS Commercial loans obtained by Nigeria through Eurobonds rose from $1.50bn as of December 31, 2015 to $10.87bn as of December 31, 2020, indicating a $9.37bn or 625 per cent increase in five years. The debt stock remained at $1.5bn from 2015 to 2016, but rose to $6bn by 2017, indicating a $4.5bn or 300 per cent rise within a year. It further rose to $10.87bn in 2018, signifying an increase by $4.87bn or 81 per cent. It remained at this figure till the end of 2020. However, the Federal Government still intends to seek more funding through Eurobonds, which would increase Nigeria’s Eurobonds debt stock. The PUNCH reported that the Federal Government had appointed transaction advisers to facilitate the issuance of Eurobonds in the international capital market, according to a statement issued by the Debt Management Office. The institutions approved by the Federal Executive Council as transaction advisers include JP Morgan, Citigroup Global Markets Limited, Standard Chartered Bank, Goldman Sachs, Chapel Hill Denham Advisory Services Ltd, FSDH Merchant Bank Ltd, White & Case LLP, and Banwo& Ighodalo. The DMO said it would speed up Eurobonds issuance activities based on the transaction advisers ‘approval, with the issuance of Eurobonds raising funds for the New External Borrowing of N2.34tn (about $6.2bn) provided in the 2021 Appropriation Act to partly finance the deficit. It added that the funds raised would be used to finance different projects in the budget, while boosting foreign exchange inflow, increasing Nigeria’s external reserves, and supporting the naira exchange rate. The PUNCH had also reported that the Minister of Finance, Budget and National Planning, Zainab Ahmed, during press briefing in Abuja on Monday said that the government planned to raise about €3bn through Eurobonds to fund budget deficit.   FRIDAY 3/9/2021 – STOCK MARKET HALTS LOSING STREAK, INVESTORS GAIN N35BN Investors in the equities market of the Nigerian Exchange Limited gained N35.44bn fueled by buyer interest in large-cap stocks on Thursday after three consecutive days of losses. The NGX All-Share Index rose by 0.17 per cent to 39,252.19 basis points from 39,184.18bps on Wednesday while the market capitalisation increased to N20.45tn from N20.42tn the previous day. The NGX Premium Index, consisting of the large-cap stocks on the bourse, grew by 0.44 per cent on the back of gains recorded by Dangote Cement Plc, Zenith Bank Plc, United Bank for Africa Plc, and FBN Holdings Plc, among others. Analysing by sector, the NGX Banking, NGX Industrial and NGX Insurance indices appreciated by 0.19 per cent, 0.44 per cent, and 1.07 per cent, respectively at the end of trading on the floor of the exchange, while the NGX Oil & Gas, and the NGX Consumer Goods indices fell by 1.22 per cent and 0.06 per cent, respectively. Trading activity increased as the volume of shares exchanged on Thursday jumped by 54.84 per cent from 169.30 million shares valued at N1.42bn in 3,449 deals on Wednesday to 262.14 million shares worth N2.00bn traded in 3,955 deals. Market sentiment, as measured by market breadth, was negative as 16 firms gained compared to 18 losers. Prestige Assurance Plc’s share price increased by 4.35 per cent, closing at N0.48 per share. Other top gainers on Thursday were Wema Bank Plc (3.66 per cent), AXA Mansard Insurance Plc (3.49 per cent) and Julius Berger (2.97 per cent).