CAPITAL MARKET
Stock Market Begins Week Positive, Gains N28bn
The market capitalisation o f the Nigerian Exchange (NGX) yesterday rose by N28 billion amid sustained investors bargain hunting in 28 stocks. The NGX All-Share Index (ASI) increased by 42.71 basis points or 0.10 per cent to close at 43,897.13 basis points. Similarly, the overall market capitalisation size gained N28 billion to close at N23.651 trillion. The upturn was impacted by gains recorded in large and medium capitalised stocks, amongst which are; Dangote Cement, BUA Foods, MRS Oil Nigeria, Vitafoam Nigeria and PZ Cussons Nigeria. This Day
BANKING
Standard Chartered to Shutdown 50% of its Nigerian Branches
Standard Chartered is closing about half its Nigerian branches as it moves to expand its digital banking. People familiar with the matter stated that the international bank took the decision as the finance industry comes under pressure from mobile money providers. The London-listed lender’s local unit already started to shut some offices in December and would eventually operate only 13 branches in the West African nation, a document seen by Bloomberg News showed, down from about 25 previously. This Day
Bank loans to govt rise by 23% in nine months, hit N2.1tn
Bank loans to government have risen by 22.59 per cent, hitting N2.17tn as of the end of September 2021 from N1.77tn recorded in December 2020. This represents a N400bn increase within the nine-month period. This was contained in the Central Bank of Nigeria report titled, ‘Deposit Money Bank’s sectoral allocation of credit.’ According to the figures, bank loans to the government rose from N1.88tn as of the end of March 2021 to N2.03tn in June 2021, and N2.12tn in August 2021. The report further showed that the DMBs’ total loans to the private sector stood at N22.8tn as of September, 2021. Punch
ECONOMY
CBN may increase interest rate this year, says report
A new report has said likely stronger dollar demand will convince the Central Bank of Nigeria of the need to tighten monetary conditions as with the trend across global central banks to manage foreign exchange reserve depletion. Sigma Pensions said this in the report titled ‘Nigeria 2022 outlook: Consolidating on recovery but persisting large imbalances present headwinds’. According to the report, the large fiscal borrowing requirements amid less liquid financial system conditions in 2022, relative to the last two years, suggest ample scope for heightened market expectations about higher interest rates. Punch
Devalue currency further, raise interest rates, IMF tells Nigeria, others
The International Monetary Fund has advised emerging economies including Nigeria to allow their currencies to depreciate in response to tighter funding conditions and an imminent policy tightening by the Federal Reserve Bank of the United States. The Washington-based lender also counselled the Central Bank of Nigeria and the apex banks of emerging economies to raise their benchmark interest rate in preparation for the Fed policy tightening. The IMF disclosed this in a blogpost titled, ‘Emerging Economies Must Prepare for Fed Policy Tightening,’ on Monday. Punch
Nigeria’s oil sector is expected to exit recession in 2022 as its crude production rebounds from the 1.6mbpd low base in 2021 towards a range of 1.8-1.85mbpd which will, in turn, upturn Nigeria’s external balance through 2022. According to a recent report by Sigma Pensions, entitled: “Nigeria 2022 Outlook: Consolidating on recovery but persisting large imbalances present headwinds”, the nation’s external imbalance is expected to improve as oil export receipts will normalise to trend levels amid persisting import demand suppression on account of the Central Bank of Nigeria (CBN)’s currency policy. The Sun
World Food Prices Dip by 0.9% in December 2021
The Food and Agriculture Organisation (FAO) food price index has revealed that world food prices fell slightly in December 2021 by 0.9 per cent, noting that the price is still up 23.1 per cent from December 2020. According to FAO, prices for vegetable oils and sugar fell significantly from lofty levels, as its Vegetable Oil Price Index declined 3.3 per cent in December, with weaker quotations for palm oil and sunflower oil reflecting subdued global import demand that may be linked to concerns over the impact of rising Covid-19 cases. This Day