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CAPITALDIGEST DAILY NEWS 11 OCTOBER 2021

MONDAY 4/10/2021 – NIGERIA’S PETROLEUM IMPORTS EXCEEDED EXPORTS BY $43.56BN –OPEC The amount spent on the importation of petroleum products into Nigeria in 2020 is $43.46bn higher than the revenue which the country earned from the export of petroleum products in the same year. In its 2021 report on the latest values of petroleum exports and imports of member nations of the Organisation of Petroleum Exporting Countries obtained in Abuja on Friday, OPEC stated that Nigeria exported $27.73bn worth of petroleum products in 2020. It also revealed that the value of the country’s petroleum imports in 2020 was $71.285bn, which indicated that Nigeria’s petroleum imports exceeded its exports by $43.56bn during the review period. Further analysis of OPEC’s latest petroleum imports and exports’ figures showed that Nigeria’s imports of petroleum products consistently exceeded the nation’s exports for five years. Although Nigeria is a major producer of crude oil and gas, the country largely depends on imported petroleum products that are refined in foreign nations. This is because Nigeria’s refineries have remained dormant for several years, despite repeated turn around maintenance which were done by successive governments on the facilities. Sunday PUNCH, for instance, had exclusively reported in August this year that foreign refineries processed crude oil valued at N2.39tn to ensure domestic supply of refined petroleum products in Nigeria. The report stated that figures obtained from the Nigerian Nigerian National Petroleum Corporation showed that the N2.39tn crude oil was processed during a 13-month period. It stated that foreign refiners processed 145.86 million barrels of oil for Nigeria between March 2020 and March 2021, as this was due to the non-functional state of Nigeria’s refineries located in Warri, Port Harcourt and Kaduna. In the latest OPEC data seen on Friday in Abuja, the cartel stated that Nigeria’s petroleum exports were $27.29bn, $37.98bn, $54.51bn and $45.11bn in 2016, 2017, 2018 and 2019 respectively. On the other hand, the country’s petroleum imports in 2016, 2017, 2018 and 2019 were $46.55bn, $49.51bn, $73.85bn and $93.97bn respectively. TUESDAY 5/10/2021 – PURCHASE PRICE INFLATION RISES ON FOREX CHALLENGE –REPORT Unfavorable exchange rate movement exerted pressure on cost, leading to a rise in purchase price inflation. Stanbic IBTC Bank Nigeria disclosed in its Purchasing Managers Index report for the third quarter of 2021. The report however added that private sector activity continued to expand but intense cost pressures weighed on growth. Part of the report read, “Material scarcity and unfavourable exchange rate movements exerted upward pressures on costs, however, leading to a record rate of purchase price inflation. “Subsequently, this fed through to a steep rise in selling prices.” The PMI report stated that Nigeria’s private sector concluded the third quarter of 2021 with a modest expansion in business conditions. Quicker uplifts were seen in new orders, employment and stocks of purchases, but output growth moderated for the second month running. Nevertheless, it added, optimism improved to a seven-month high. The report stated that “The headline figure derived from the survey is the Purchasing Managers’ Index™. ‘Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.” It added that the headline PMI registered at 52.3 in September, little- change from 52.2 in August, and indicative of a 15th consecutive monthly expansion. Central to the improvement was a solid and accelerated rise in new orders, which panellists mostly linked to the securing of new clients.   WEDNESDAY 6/10/2021 – CBN’S STRATEGIES TO SAVE NAIRA FAILING, SAYS LCCI The Lagos Chamber of Commerce and Industry has said that the Central Bank of Nigeria’s effort to save the naira is only redirecting forex transactions to third parties, increasing pressure on the exchange rate. President of LCCI, Mrs Toki Mabogunje, said this during the chamber’s ‘The state of the economy’ address on Tuesday. She said, “It is however noted that whenever there is a free fall of naira exchange rate at the parallel market segment, as we are currently witnessing, the CBN applies demand containment and/or price control measures as seen from the 43 items ban and quest to peg the exchange rate of the Naira. “Tightening measures have always failed to stabilise the exchange rate in Nigeria; it only redirects FX transactions to the underground arrangement, with unintended consequences of increased pressure on the exchange rate and creating wide premium between the official and parallel market exchange rate (N162 premium gap between I&E window rate of N412 (CBN) and the parallel market rate of N574 (EIU)).” Mabogunje added that the forex market was still faced with liquidity challenges and many investors couldn’t access foreign exchange for the importation of raw materials, equipment, and critical inputs for production and processing.   THURSDAY 7/10/2021 – BANKS START INTEGRATING E-NAIRA APP Banks have started to onboard the e-Naira feature on their applications. In its latest update, the Guaranty Trust World app has integrated a e-Naira feature. However, when opened, the bank said, “Kindly note that you will need to download and onboard on the CBN e-Naira speed wallet app to create your e-Naira username and password.” Recall that the Central Bank of Nigeria recently postponed the planned unveiling of the country’s digital currency, e-Naira. According to the CBN, the e-Naira wallet is a digital storage to hold the e-Naira. It added that it would be held and managed on a distributed ledger, and required to access, hold and use e-Naira. The bank said, “Your e-Naira wallet offers a great way of making purchases with retailers on-site, transferring or sending money while tracking rewards programmes. “You can link the e-wallet to your bank account or pay as you go with a prepay option. “In addition, the embedded security token system makes your information unreadable to fraudsters because tokens are randomly generated every time you make a payment.”   FRIDAY 8/10/2021 – STOCK MARKET GAINS N33BN AS VOLUME JUMPS 103% The Nigerian Exchange Limited gained N33.32bn in market capitalisation as trading finalised on its floor on Thursday after trading volumes jumped by 102.75 per cent. The NGX All-Share index rose by 0.16 per cent to close at 40,829.15 basis points from 40,765.20bps the previous day just as the market capitalisation of stocks increased from N21.24tn to N21.28tn. At the end of trading on the floor of the NGX, a total of 812.30 million shares valued at N10.58bn were traded in 4,863 deals compared to 400.65 million shares worth N3.48bn in 5,145 deals. FBN Holdings Plc was the most traded stock on Thursday as it occupied 27.14 per cent of the total volume of trades and 44.37 per cent of the total value of trades on the exchange. Analysing by sectors, the NGX Banking index, Industrial Goods and Consumer Goods indices saw gains while the NGX Insurance index fell. Market sentiment as measured by market breadth was positive as 23 companies gained, relative to 20 losers. University Press Plc topped the gainers’ chart with a 9.92 per cent increase to close at N1.44 per share. Coming next was Presco Plc which rose by 5.92 per cent, ending the day at N85.00 per share. Other top gainers were CHAMS Plc (+4.76 per cent), Universal Insurance (+4.76 per cent), and Ecobank Transnational Incorporated (+3.45 per cent).

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