CAPITALDIGEST DAILY NEWS, 05/08/2024

NNPC TARGETS TWO MILLION BARRELS OIL PRODUCTION DAILY

The Nigerian National Petroleum Company Limited has announced its goal to increase crude oil production to two million barrels per day by the end of the year. The country’s daily production rose from 1.27 million barrels in June to 1.6 million in July, according to the Nigerian Upstream Petroleum Regulatory Commission. Speaking during a meeting with Maritime Stakeholders at the Nigerian Navy Headquarters on Tuesday, the Group Managing Director of NNPC, Mele Kyari, expressed optimism that the target would be met, emphasising that NNPC was fully committed to achieving it. Represented by the Managing Director of Pipeline NNPC, Folorunsho Karim, the oil firm’s boss urged security agencies to continue their efforts against oil theft and pipeline vandalism to help the company meet its target. He said, “The target is to increase production to two million barrels by the end of the year, and we are fully committed to doing that. I appreciate the support of the Nigerian Navy in making this possible. “They have been providing significant support, which has resulted in a reduction in oil theft. Pipeline vandalism has also decreased significantly, and there is a lot currently happening in the industry. We hope to sustain this progress to achieve our target of two million barrels per day by the end of the year.”

EQUITY MARKET LOSS EXTENDS TO THIRD CONSECUTIVE DAY

The Nigerian Exchange continued its bearish trend for the third consecutive day this week, as investors lost N32bn due to losses suffered by Berger, Cutix, and Nigerian Aviation Handling Company. Berger, Cutix, and Nigerian Aviation Handling Company dipped 10 per cent, respectively to close at N13.50, N5.13, and N35.10. At the close of trading on Wednesday, the All-Share Index of the local bourse and market capitalisation dipped by 0.06 per cent to 97,774.22 and N55.51tn, respectively, bringing the year-to-date to 31.70 per cent. An aggregate of 1,838,183,450 units of shares was traded in 10,847 deals valued at N23.11bn. The market breadth closed negative as 27 equities gained while 29 equities lost. Leading the gainers’ chart were Industrial and Medical Gases Nigeria, University Press, and Veritas Kapital Assurance Plc, which gained 10 per cent each to close at N14.30, N2.42, and N0.99, respectively. There was a 360 per cent improvement in volume, an 189 per cent improvement in turnover, and the number of deals rose by four per cent. Fidelity Bank recorded the highest volume of 1.33bn traded shares, followed by Zenith Bank with 83.9m units.

CUSTOMERS’ DEPOSITS RISE TO N136TN IN Q1

The value of customers’ deposits in banks has risen to N136tn as of the end of the first quarter of 2024, data from the Nigerian Exchange Limited and banking industry have indicated. In Q1 2024, the banking sector recorded an inflow of about N21tn in new deposits to push the sector’s total deposits to about N136tn, on course to surpass the 2023 financial year’s performance, which stood at N115tn. Total deposits in the banking sector rose by 63 per cent from about N70.5tn in 2022 to about N115tn in 2023 and hit about N136tn in March 2024, representing an increase of 18.26 per cent in three months. Regulatory filings and others made available by industry associations showed impressive growth in deposits across the tiers of the banks, with the middle tier and newly established banks competing well with the larger banks. According to reports, Zenith Bank’s total deposit, which was up by 69 per cent from N8.98tn in 2022 to N15.17tn in 2023, stood at N16.78tn in March. FCMB Group saw its deposits steadily rise from N2.07tn in 2022 to N3.4tn in 2023 and N3.7tn in the first quarter of 2024. Premium Trust Bank, which commenced operations in April 2022, grew its deposit base by 382 per cent from N55bn in December 2022 to N265bn in December 2023 and improved to N309bn in Q1 2024.

PUBLIC DEBT STOCK MAY HIT N130TN BY DEC

Nigeria’s public debt stock is projected to hit N130tn this year, raising concerns about the country’s debt-to-gross domestic product ratio. This was revealed in a report by Afrinvest, an investment management company, titled, ‘Bank Recapitalisation, Catalyst for a $1tn Economy, ‘ unveiled in Abuja recently. Nigeria’s public debt stock, which includes external and domestic debt, stood at N121.67tn in the first quarter of 2024, up from N97.34tn in the fourth quarter of 2023, according to the National Bureau of Statistics, indicating a growth rate of 24.99 per cent on a quarter-on-quarter basis. Afrinvest estimated that the fiscal deficit, total public debt stock, debt-to-GDP, and debt-servicing-to-revenue rate would exceed N13.0tn, N130tn, 55 per cent, and 60 per cent by 2024 year-end, respectively. As of Q1 2024, Nigeria’s public debt stock stood at N121.7tn, comprising N77.5tn (63.6 per cent) in domestic debt and N44.2tn (36.4 per cent) in external debt. The domestic debt includes N44.8tn in Federal Government bonds, N20.3tn in Treasury bills, and N12.4tn in other domestic debt. The external debt is made up of N14.3tn from multilateral creditors, N10.9tn from bilateral creditors, and N19.0tn from commercial creditors. The investment management firm in its report, also said the 2024 budget is based on ‘overly optimistic’ revenue assumptions, which could lead to a repeat of the historically disappointing budget performance.

FIVE BANKS RECORDED N67BN FX GAINS IN H1

Five banks declared N67.89bn in foreign exchange gains in the first half of 2024, according to the analysis of their interim reports by The PUNCH. According to their interim financial results filed with the Nigerian Exchange Limited, the forex gain recorded by the financial institutions for the half year was about 67.89 per cent lower compared N211.42bn posted in the prior period of 2023. The financial institutions reviewed include FCMB Group, Ecobank Transnational Incorporated, Wema Bank, Sterling Financial Holding Company and non-interest bank, Jaiz Bank. In the period under review, FCMB Group recorded forex gains (unrealised) valued at N35.19bn compared to N50.99bn in the same period of the previous year. Throwing more light on the gains, FCMB in its financial statement said, “Foreign currency revaluation gain represents gains realised from the revaluation of foreign currency-denominated assets and liabilities held in the non-trading books. “The Central Bank of Nigeria adopted a more liberal foreign exchange management system in 2023, which resulted in a significant movement in the naira exchange rate against the US dollar from N756.24/$ in June 2023 to N1,488.21/$ (Nigerian Autonomous Foreign Exchange Rate Fixing in June 2024). “The impact of this foreign currency revaluation of net foreign currency-denominated assets and liabilities held in the non-trading books is represented as foreign exchange gains for the period ended 30 June 2024.”