CAPITALDIGEST, DAILY NEWS 12 JULY 2021

MONDAY 5/7/2021 – OIL MARKET: PRICE OF BRENT HITS $77.16 PER BARREL AS OPEC, NON-OPEC MINISTERS POSTPONE TALKS The price of Brent, Monday, rose to $77.16 from $76.10 per barrel, in the international market, following the indefinite postponement of the much-expected meeting of the Organisation of Petroleum Exporting Countries, OPEC, and non-OPEC ministers, earlier planned to take decisions, capable of achieving stability in the global market. In an email to Vanguard, yesterday, OPEC, stated: “Upon consultations with HRH Prince Abdul Aziz Bin Salman, Minister of Energy, Kingdom of Saudi Arabia, and HE Alexander Valentinovich Novak, Deputy Prime Minister of the Russian Federation, Chairman and Co-chairman of the OPEC and non-OPEC Ministerial Meeting (ONOMM), the reconvened 18th ONOMM has been called off.” It added: “The date of the next meeting will be decided in due course and we will inform you accordingly. On behalf of the Chairman and Co-chairman, we regret any inconvenience caused.” However, an authoritative oil market source, who pleaded anonymity, said: “The indefinite postponement means that Saudi Arabia and the United Arab Emirate, UAE were not able to reach any agreement after the UAE opposed production cut proposals, referring to it as “unfair” while the Saudis responded with tariff amendments, targeted at affecting its economic rival.” Consequently, the prices of some crudes, including Brent and Bonny Light, rose to $77.16 and $74.12 per barrel respectively, thus indicating over $34 per barrel in excess of the $40 per barrel, which the nation’s 2021 budget was based. However, speaking at the 181st Meeting of the OPEC Conference, July 1, 2021, via videoconference, Dr. Diamantino Pedro Azevedo, Angola’s Minister of Mineral Resources and Petroleum and President of the OPEC Conference, who painted a fairly good picture of the market, had said: “In the seven months since the last OPEC Conference, the global economy has shifted from reverse to forward gear.  Global growth is now expected at 5.5% this year – from a contraction of 3.4% in 2020.     TUESDAY 6/7/2021 – CBN PLEDGES INCREASED INTERVENTIONS TO SMES The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has said the bank will increase its development finance interventions to further support start-ups and small and medium enterprises in the country. Emefiele spoke while delivering the 51st convocation lecture of the University of Lagos, on Monday, with the topic, ‘National development and knowledge economy in the digital age: Leapfrogging SMEs in the 21st century’. According to him, increased access to finance for start-ups and SMEs is highly essential for the nation’s economy to grow. He said special consideration should be given to the strengthening of physical and ICT infrastructure to enable SMEs to perform more efficiently and become globally competitive. He highlighted the critical role of vibrant and growing SMEs to the growth of the economy and the creation of jobs for Nigerian youth. The CBN governor said the potential of SMEs in enhancing economic growth was hampered by limited access to finance, inadequate infrastructure and poor digital penetration. Emefiele urged the government and the private sector to provide more support in addressing the challenges of SMEs in the country. He said policies should incentivise the adoption of innovations that would improve SMEs’ competitiveness and productivity.     WEDNESDAY 7/7/2021 – EXPANDING FINANCIAL INCLUSION THROUGH NON-INTEREST BANKING Non-interest banking is increasingly attracting attention among investors globally, especially in 2019 which saw a double-digit growth in assets. According to a report by bnymellon.com, despite the tumultuous year for global financial markets last year due to the COVID-19 pandemic, there is growing interest on this form on banking instrument due to three reasons—greater appreciation around the role that it plays in responsible investing; geographical interest in markets where it is gaining prominence; as well as digital transformation, which makes it investments more accessible. A Growing Industry, Attracting New Interest Global. In 2019, non-interest banking assets amounted to US$2.88 trillion, the highest recorded growth for the industry since the global financial crisis. The prospects look positive: by 2024, this is set to rise to US$3.69 trillion. But there remains significant opportunities elsewhere in the world, according to the report. That is why in Nigeria, financial institutions have also been positioning themselves to tap from these huge market. One of such is Lotus Bank Limited. The financial institution was recently granted non-interest banking licence by the Central Bank of Nigeria (CBN). Lotus Bank seeks to pursue the mission of creating value and growth for all through digital innovation and best-in-class customer experience for Nigerians. Founded & Chaired by Mrs. Hajara Adeola, who is also the Managing Director of Lotus Capital (the pioneers of non-interest finance in Nigeria), the bank is starting its operations on a solid foundation of experienced leadership and a strong Advisory Council of Experts (ACE).     THURSDAY 8/7/2021 – CURRENCY IN CIRCULATION FALLS BY N65.74BN IN FOUR MONTHS The currency in circulation fell by N65.74bn to N2.741tn at the end of June from N2.81tn in March, the latest figures from the Central Bank of Nigeria showed on Wednesday. According to the CBN, the currency in circulation, which stood at N2.796tn at the end of April, fell to N2.791tn in May. The CBN defined the currency in circulation as currency outside the vaults of the central bank – that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks. The CBN said it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria. It said this approach involved tracking the movements in currency in circulation on a transaction-by-transaction basis. According to the CBN, for every withdrawal made by a Deposit Money Bank at one of CBN’s branches, an increase in CIC is recorded; and for every deposit made by a DMB at one of CBN’s branches, a decrease in CIC is recorded. The transactions are all recorded in the CBN’s CIC account, and the balance on the account at any point in time represented the country’s currency in circulation. On the performance of monetary aggregates, the CBN said broad money supply grew by 1.15 per cent in April 2021, compared with 0.04 per cent in March 2021.     FRIDAY 9/7/2021 – STOCK MARKET ENDS FOUR-DAY GAINING STREAK, LOSES N27BN The Nigerian stock market ended a four-day gaining streak as the market capitalisation of equities dropped by N26.68bn to N20.04tn on Thursday. The Nigerian Exchange Limited’s All-Share Index declined by 0.82 per cent to 38,469.87 basis points from 38,501.31 on Wednesday. The volume of shares traded plunged by 19.54 per cent from 296.10 million shares valued at N2.56bn traded in 4,507 deals on Wednesday to 238.24 million shares worth N2.58bn exchanged in 3,927 deals on Thursday. By volume of shares traded, Transnational Corporation of Nigeria Plc led others as 34.44 million of its shares were traded in 149 deals. Zenith Bank Plc was the most traded stock by value as N590.35bn worth of its shares were traded. There were more losers than gainers at the end of trading on the floor of the NGX, with 16 companies recording losses as against 12 gainers. Prestige Assurance Plc lost 10.00 per cent to close the day at N0.45 per share. It was followed by Pharm-Deko Plc as its share price fell by 9.70 per cent to close at N1.21. The other top losers were University Press Plc (-7.88 per cent), Coronation Insurance Plc (-5.08 per cent) and Mutual Benefits Assurance Plc (-4.65 per cent). On top of the gainers’ list was NEM Insurance Plc, which gained 10.00 per cent close at N2.20 per share. Courtville Business Solutions Plc followed closely with a 9.52 per cent gain as it ended the day at N0.23 per share. The Nigerian Aviation Handling Company Plc, Caverton Offshore Support Group Plc and Transnational Corporation of Nigeria Plc were the other top gainers with 5.71 per cent, 4.42 per cent, and 4.40 per cent respectively.