CAPITALDIGEST DAILY NEWS, 24/03/2025

NAIRA-FOR-CRUDE: FUEL PRICE HIKE LOOMS AS DANGOTE, NNPCL TALKS FAIL

The Dangote Petroleum Refinery has temporarily halted the sales of petroleum products in naira as the naira-for-crude talks between the $20bn Lekki-based plant and the Nigerian National Petroleum Company Limited appear to have failed. Following the announcement of the halt in petroleum products’ sales in naira by the Dangote refinery on Wednesday, the cost of loading petrol at private depots in Lagos jumped to N900/litre. It was less than N850/litre before the announcement. Industry experts and oil marketers warned that the halt in naira sales by the Dangote refinery could increase the pressure on the foreign exchange market, as dealers would now have to access the United States dollars in large amounts to buy petroleum products. This came as multiple industry sources familiar with what prompted the failure in the naira-for-crude talk decried the humongous forward sales of crude by NNPCL. They stressed that the national oil company had used large volumes of its yet-to-be-produced crude oil to acquire loans from various international financial institutions, making it tough for the oil firm to have enough crude to supply the domestic market. In a statement on Wednesday, the Dangote Group said the suspension of petroleum products’ sale in naira is temporary. It said, “Dear valued customers, we wish to inform you that the Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars. “To date, our sales of petroleum products in naira have exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.” The refinery also debunked online reports that it was stopping loading due to an incident of ticketing fraud. “This is a malicious falsehood. Our systems are robust and we have had no fraud issues. We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in naira,” the statement said.

SEC PLANS PUBLIC SHAMING OF CAPITAL MARKET VIOLATORS

The Securities and Exchange Commission has announced plans to publicly shame capital market operators found guilty of violating market laws and regulations. The commission, in a statement on its Instagram page on Sunday, said the names of erring operators would be published in its “name and shame” journal as part of a broader strategy to enforce compliance and maintain integrity in the Nigerian capital market. It stated that the measure would be in addition to existing sanctions and penalties outlined in the Investments and Securities Act 2007 and the SEC Rules and Regulations. “This enforcement strategy underscores the commission’s dedication to safeguarding the integrity and stability of the Nigerian capital market, protecting investors, and ensuring strict adherence to established rules and regulations,” the SEC stated. The commission advised stakeholders and capital market operators to take note of the new enforcement approach and ensure full compliance with regulatory requirements. In a recent development, the Securities and Exchange Commission revoked the registration of Mainland Trust Limited as a capital market operator and suspended Centurion Registrars Limited, citing failure to comply with regulatory directives and unresolved complaints. In a circular issued at the weekend, the commission said, “The Securities and Exchange Commission hereby notifies the general public that the registration of Mainland Trust Limited as a capital market operator has been cancelled with immediate effect. It added that the decision was based on “the company’s failure to comply with regulatory directives and non-resolution of several complaints against it.” The commission advised all clients of Mainland Trust Limited to contact the Central Securities Clearing System Plc for guidance on transferring their stocks to another stockbroker.

NIGERIA’S INFLATION RATE DROPS TO 23.18% IN FEBRUARY – NBS

Nigeria’s headline inflation rate eased to 23.18% in February 2025, down from 24.48% recorded in January 2025, according to the latest report by the National Bureau of Statistics (NBS). This represents a 1.30% decrease from the previous month, indicating that price pressures are moderating and are expected to continue easing in the coming months. 12-month average: Rural inflation stood at 27.94%, which is 3.33 percentage points higher than 24.61% recorded in February 2024. Year-on-year: The food inflation rate was 23.51%, a 14.41% drop from 37.92% in February 2024. Month-on-month: Food inflation stood at 1.67% in February 2025. The decline in food inflation was attributed to base-year adjustments, but there was also a notable reduction in the prices of key food items such as yam tubers, potatoes, soya beans, maize flour, cassava, and dried Bambara beans.

FG PLANS TO RAISE N300BN VIA MARCH BOND AUCTION

The Federal Government, through the Debt Management Office, has announced a bond offer for subscription by auction on March 24, 2025, to raise a total of N300bn this month. The issuance comprises a N200bn five-year bond and a N100bn nine-year bond, aimed at raising funds for government financing. According to the offer circular released by the DMO, the bond sale is in line with the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004. Successful bidders will have their allocations settled on March 26, 2025. The March 2025 bond auction will consist of two re-opened instruments: the N200bn 19.30 per cent FGN APR 2029 (5-year reopening) and the N100bn 19.89 per cent FGN MAY 2033 (9-year reopening). The bonds are being offered at N1,000 per unit, with a minimum subscription of N50,001,000, and in multiples of N1,000 thereafter. As re-openings of previously issued bonds, the coupon rates are already set. Successful investors will pay a price based on their yield-to-maturity bid, along with accrued interest on the instrument. The bonds will pay interest semi-annually, with full repayment at maturity. The Federal Government-backed securities qualify as trustee investment assets, making them suitable under the Trustee Investment Act. They also qualify as government securities under the Company Income Tax Act and Personal Income Tax Act, granting tax exemptions for pension funds and other institutional investors. Additionally, they are classified as liquid assets for bank liquidity ratio calculations and are listed on the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange. The DMO assured investors that the bonds are secured by the full faith and credit of the Nigerian government and are backed by the general assets of the country. Investors can subscribe to the bonds through Primary Dealer Market Makers, which include financial institutions such as Access Bank, First Bank of Nigeria, Zenith Bank, United Bank for Africa, Guaranty Trust Bank, Stanbic IBTC, Standard Chartered Bank, and others. The DMO noted that it reserves the right to allot bonds at its discretion.

NGX MARKET CAP DROPS TO N65.8TN

The Nigerian Exchange recorded a decline in market capitalisation at the close of trading on Thursday, as the All-Share Index dropped marginally by 0.05 per cent. The total market capitalisation fell to N65.8tn, reflecting a weaker investor sentiment in the equities market. Also, a total of 310,527,528 shares were exchanged in 10,182 deals, amounting to a market value of N6.24bn. This represents a sharp 77 per cent decline in trade volume, a 50 per cent drop in turnover, and a 15 per cent decline in the number of deals compared to the previous trading session on Wednesday, March 19, 2025. Out of the 124 stocks that participated in trading, 14 recorded gains, while 28 equities closed in the red. Computer Warehouse Group emerged as the top gainer, appreciating by 9.64 per cent to close at N9.10 per share. It was followed by Veritas Kapital Assurance, which gained 8.41 per cent to close at N1.16; Deap Capital Management & Trust, which rose by 7.61 per cent to close at N0.99; and Wapic Insurance, which appreciated by 4.26 per cent to close at N2.45 per share. On the losing side, Livestock Feeds led the laggards, shedding 9.57 per cent to close at N7.65 per share. Royal Exchange followed with an 8.24 per cent decline, closing at N0.78, while Custodian & Allied lost 6.98 per cent to close at N20.00. UPDC also suffered a 6.23 per cent drop to close at N2.86, while Chams Plc and Ellah Lakes Plc recorded losses of 5.16 per cent and 4.46 per cent, respectively, closing at N2.02 and N3.00 per share. Fidelity Bank recorded the highest volume of traded shares, 40 million units, followed by Veritas Kapital Assurance, 37.2 million shares. Nigerian Breweries and Zenith Bank also featured among the most active stocks, trading at 27 million and 22.9 million shares, respectively. Other key indices showed mixed performances, with the Top 30 Index losing 0.02 per cent, recording a one-week decline of 1.16 per cent but a year-to-date gain of 2.04 per cent. The Consumer Goods Index appreciated by 0.39 per cent but suffered a 1.01 per cent decline over the week. However, it maintained a year-to-date gain of 4.53 per cent. The Insurance Index gained 0.13 per cent but recorded a weekly decline of 1.9 per cent and a year-to-date loss of 4.04 per cent. The Main Board Index inched up by 0.02 per cent but dropped by 1.37 per cent over the week, despite maintaining a year-to-date gain of 0.73 per cent. Additionally, the Industrial Index remained unchanged but reflected a weekly loss of 3.42 per cent and a year-to-date decline of 2.31 per cent and the Oil & Gas Index also remained flat but showed a one-week decline of 1.75 per cent and a year-to-date loss of 8.27 per cent.