CAPITALDIGEST DAILY NEWS, 13/01/2025

MARKETERS, OIL FIRMS SIGN DEAL TO BUILD 50,000BPD REFINERY

Nigeria’s effort to boost its refining capacity seems to be paying off, as petroleum product retailers signed a deal with three oil companies to establish a 50,000 barrels per day capacity refinery. On Wednesday, the Petroleum Products Retail Outlet Owners Association of Nigeria signed an agreement with Claridge Petroleum Company Ltd, Oasis Petrochemical Products Limited, and Afrintech. The National President of PETROAN, Billy Gillis-Harry, told our correspondent exclusively that the agreement was signed to give Nigerians affordable fuel. According to him, the refinery would be sited in Akwa-Ibom State. Gillis-Harry told The PUNCH that PETROAN had earlier signed a deal with the three companies to import “cheaper fuel” into the country. It could be recalled that the association said in November that it would import and sell PMS below the cost offered by the Dangote refinery and the Nigerian National Petroleum Company Limited. However, Gillis-Harry said the import agreement had been cancelled for the establishment of a refinery.

EQUITY MARKET RECORD N793BN GAIN

The Nigerian Stock Exchange recorded a positive close on Thursday, with the All-Share Index rising by 1.25 per cent to close at 105,530.74 points, up from 104,230.73 points. In line with the growth in the ASI, the market capitalisation surged by N793bn, closing at N64.351tn. This increase brings the year-to-date gain to 2.53 per cent, the month-to-date gain to 2.51 per cent, and the week-to-date gain to 2.23 per cent. A total of 481,686,150 units of shares were traded in 12,824 deals, valued at N12.82bn. Despite the positive market sentiment, the market breadth closed negative, with 34 stocks advancing while 25 stocks declined. MTNN led the gainers with a 10 per cent increase, rising from N220.00 to N242.00, while HONYFLOUR followed with a 9.89 per cent gain, moving from N8.29 to N9.11. Other gainers included Universal Insurance Company (up 9.86 per cent),  Transcorp Hotels (up 9.78 per cent), and Ikeja Hotel (up 9.31 per cent).

INFLATION, BOND SELLOFF TRIGGER GLOBAL STOCK MARKET SLUMP

Global stock markets faced downward pressure on Thursday, as the recent surge in inflation and a widespread bond selloff continued to affect investor sentiment, Reuters reported.The U.S. dollar remained near its highest levels in over a year, while U.S. Treasury yields saw an uptick following recent signs of resilience in the U.S. economy, which prompted markets to lower expectations for Federal Reserve rate cuts. According to Reuters, the Federal Reserve’s December policy meeting minutes, released on Wednesday, revealed concerns that the Trump administration’s proposed tariffs and immigration policies could prolong the fight against inflation. It added that further volatility in the Treasury market was sparked by a CNN report suggesting that Trump was contemplating declaring a national economic emergency, potentially paving the way for new tariffs on both allies and adversaries. As a result, markets are now pricing in a modest 25-basis-point rate cut in 2025, with roughly a 60 per cent chance of a second cut. This uncertainty has contributed to fragile global stock market sentiment, leading to declines in Asian equities on Thursday.

BDCS STRUGGLE TO MEET N2BN RECAPITALISATION DESPITE EXTENSION

Some Bureau De Change operators are still struggling to meet the fresh N2bn recapitalisation threshold of the Central Bank of Nigeria despite the extension they received in December. The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, disclosed this in an exclusive chat with The PUNCH on Saturday. In a circular issued in May 2024, the CBN released fresh guidelines for the operations of the Bureau De Change in Nigeria, which include two new categories of licenses with different capital bases. According to the new rules, BDCs in the Tier 1 category would be required to have a minimum capital requirement of N2bn, pay N1m as a non-refundable application fee, and N5m as a non-refundable license fee. The apex bank disclosed that Tier 2 BDCs would be required to have a minimum capital base of N500m, N0.25m as a non-refundable application fee, and N2m as a non-refundable license fee. In December, ABCON revealed that the CBN has extended the deadline for BDC operators to recapitalise by six months, indicating that the new deadline was now June 3, 2025.Highlighting the level of activities geared toward meeting the new capital base, Gwadebe said, “I think compliance is still very lukewarm. A lot of our members are still saying it is difficult for them to meet up. However, I don’t have a record of who has complied, and it is difficult for me to say the level of compliance, but I know that the majority of our members are still talking about difficulties in meeting the requirements.

NIGERIA SECURED $7.6BN INVESTMENTS AT AFRICA FORUM – ADESINA

Nigeria has secured $7.6bn in investment interests at the Africa Investment Forum 2024, which took place in Rabat, Morocco, from December 4 to 6, 2024. The announcement was made by the President of the African Development Bank, Dr Akinwumi Adesina, in a post on his X (formerly Twitter) account on Saturday. Dr Adesina expressed optimism about the potential impact of the investment interests, highlighting the presence of several Nigerian state governors at the forum  “I am delighted the Africa Investment Forum 2024 mobilised $7.6bn of investment interest for Nigeria. It was great to have several state governors: Lagos, Kaduna, Kastina, Kwara and Plateau, and (later) Ogun. We will keep working to support and boost investments to Nigeria,” his post read. The Africa Investment Forum, established by the African Development Bank and its partners, is a platform that seeks to fast-track investments into projects across the continent. Last year’s event attracted over 2,300 participants, including global investors, African business leaders, and government officials.