CAPITALDIGEST, DAILY NEWS. 14 FEBRUARY 2022
MONDAY 7/2/2022 – DEPOTS HOARDED PETROL BEFORE SUBSIDY REMOVAL SUSPENSION – RETAILERS
Retailers of Premium Motor Spirit, popularly called petrol, said on Friday that the recent petrol queues in parts of Abuja, Nasarawa and Niger, among others, surfaced because some private depot owners were hoarding the commodity as they awaited subsidy removal. The Federal Government had last week suspended its plan to remove fuel subsidy in June this year. It also proposed to extend the subsidy removal implementation period by 18 months. The retailers told our correspondent that petrol supply was disrupted by the depot owners, who got products from the Nigerian National Petroleum Company, were skeptical about the policies of the Federal Government on petrol subsidy. They said the recent comments by government officials that petrol subsidy might stop in February or mid-2022 made some private depots hoard PMS, causing a reduction in supply and queues at many retail outlets. The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, said issues around subsidy removal were not taken lightly by operators in the downstream oil sector. He said, “They (government) said they want to fully deregulate. That statement and similar ones, which some ministers made that by 2022 we are going to start full deregulation, made some PDOs decide to hoard or withhold their products. “They (PDOs) are doing this to be able to match up with the cost of petrol when it rises above N300/litre upon full deregulation. Now, this became a bottleneck in terms of the chain of demand and supply.
TUESDAY 8/2/2022 – INVESTORS COMMIT N3.36TN TO FG BONDS IN 12 MONTHS
Investors committed about N3.36tn to Federal Government bonds between January and December 2021, according to an analysis of the FGN Bond Auction results available on the website of the Debt Management Office. Bond oversubscriptions hit N1.61tn within the period under review, indicating the investors’ strong appetite for FGN bonds. An analysis of the breakdown for each month showed that Federal Government bonds for January worth N150bn were oversubscribed by N88.28bn. The total subscription received from investors for the bonds was N238.28bn, comprising N91.84bn for the 16.2884 per cent FGN March 2027 bonds; N106.37bn for the 12.5 per cent FGN March 2035 bonds; and N40.07bn for the 9.8 per cent FGN July 2045 bonds. The auction result added that out of the 125, 99 and 77 total bids for the tenures, 73, 44 and 28 bids were successful. The Federal Government bonds for February worth N150bn were also oversubscribed by N39.51bn. The total subscription received from investors for the bonds was N189.51bn, comprising N77.05bn for the 16.2884 per cent FGN March 2027 bonds; N72.33bn for the 12.5 per cent FGN March 2035 bonds; and N40.13bn for the 9.8 per cent GFN July 2045 bonds. The auction result added that out of the 78, 53 and 60 total bids for the tenures, 31, 20 and 30 bids were successful.
WEDNESDAY 9/2/2022 – STOCK MARKET DOWN N79BN ON PROFIT-TAKING IN BUA FOOD, OTHERS
The stock market of the Nigerian Exchange Limited (NGX) yesterday sustained the down trend of prior day as profit-taking witnessed in BUA Foods Plc and 20 others caused a N79billion decline in the market capitalisation. The overall market capitalisation value lost N79 billion to close at N25.357 trillion, while the NGX All-Share Index declined by 146.15 basis points or 0.31 per cent, to close at 47,057.24 basis points. The stock market negative performance was driven by price depreciation in large and medium capitalised stocks which are; BUA Foods, MTN Nigeria Communications (MTNN), Unilever Nigeria, Fidson Healthcare and United Capital. Market sentiment, as measured by market breadth, was negative, as 21 stocks lost, relative to 18 gainers. Presco recorded the highest price gain of 10 per cent to close at N104.50, per share. NEM Insurance followed with a gain 9.97 per cent to close at N3.31, while Ikeja Hotel gained 9.77 per cent to close at N1.46, per share. SUNU Assurance went up by 9.09 per cent to close at 36 kobo, while AIICO Insurance appreciated by 5.80 per cent to close at 73 kobo, per share. On the other hand, Courteville Business Solutions led the losers’ chart by 7.27 per cent to close at 51 kobo, per share. UACN Property Development Company (UPDC) followed with a decline of 5.66 per cent to close at N1.00, while University Press lost 5.41 per cent to close at N2.45, per share. Unilever Nigeria lost 4.36 per cent to close at N13.15, while BUA Foods shed 4.04 per cent to close at N61.80, per share.
THURSDAY 10/2/2022 – CBN EXTENDS FIVE PER CENT INTEREST RATE ON INTERVENTION LOANS
The Governor, Central Bank of Nigeria, Godwin Emefiele, has said that that bank will extend its five per cent interest rate on its intervention loans introduced to cushion the effect of COVID-19 on the economy by one year. He disclosed this at a Bankers’ Committee press briefing in Abuja which was also held virtually. Emefiele said to restore stability to the economy by providing assistance to individual households, SMEs and businesses that had been severely affected by the pandemic, as well as by the lockdown measures, it reduced the interest rate on CBN intervention loans from nine to five per cent. He said, “Although interest rates on our various intervention facilities were expected to revert to nine per cent effective March 1, 2022, we are announcing that the rates would remain at five per cent for another year in view of the promising trajectory we have established in economic growth and job creation. “In effect, the concessionary interest rate of five per cent on our intervention facilities would now be extended until March 1, 2023.”
FRIDAY 11/2/2022 – NAIRA SLIDES AGAIN, EXCHANGES FOR 417.51/DOLLAR
The naira continued its downward trend as the dollar was sold for N417.51 at the official market on Thursday This was contained in the data obtained from the Central Bank of Nigeria’s official website, showing the exchange rate result and its Monthly Moving Average. According to the data, the dollar sold for N417.51 while it was bought at N416.51. With the development, the naira took a dip in devaluation against the US dollar, 24 hours after it recorded a slight gain at the spot market segment. However, the FMDQ website where forex is officially traded, in its own data, showed the naira closed at N416.67 to the dollar at the close of trading on Thursday. This represents a 0.3 or 0.10 per cent devaluation from the N416.37 it exchanged in the previous session on Wednesday, with $109.75 million recorded as foreign exchange turnover at the close of business, on Thursday. The naira oscillated to an intraday high of N410.00 and a low of N444.00 before closing at N416.67 on Thursday, and stood at the same range it had been trading since the opening of business this week.