CAPITAL MARKET
Stock market sets new milestone as investors gain over N5tr in four months
Amid uncertainties in the global economy and rising insecurity in the country, the nation’s stock market continued its bullish run, giving hope to patient investors who endured long periods of downturn on the Nigerian Exchange Limited (NGX). After getting to a rock-bottom low for several years, the equities market have recorded an unprecedented upbeat rally since the beginning of the year to emerge the best performing market in Africa and third in the world. NGX’s All Share Index (ASI), an indicator used to track the general market movement of all listed equities on NGX, crossed 53,000 mark to hit a 14-year high for the first time since 2008, as indices soared significantly by N5.4 trillion from the beginning of the year. Specifically, market capitalisation opened the year at 43,026.23 to close on Friday, May 13, at 53,098.46 points for the first time since 2008. Guardian
BANKING
At 26.61%, Banks Maximum Lending Rate Drops to 5-year Low
Amid rising inflation rate that is expected to hike operating cost and plud profitability, banks have reduced maximum lending rate to 26.61 per cent, an over five-year low, the latest data by the Central Bank of Nigeria (CBN) on banks’ deposit and lending interest rates has revealed. The CBN data revealed that In 2016, the maximum lending rate was hovering around 26 per cent and crossed the 31 per cent mark in 2017. The drop involves a decline in lending rates to the real sector of the nation’s economy and increasing deposit rates on bank customers’ deposits. The data on banks’ deposit and lending interest rates showed a 1.4 percentage points drop in the average maximum lending rate from 26.61 per cent in March 2022, as against 27.65 per cent in January 2022. This Day
CBN issues open banking guidelines to boost competition
The Central Bank of Nigeria has issued the regulatory framework for Open Banking in Nigeria in its efforts to enhance competition and innovation in the banking system. It disclosed this in its ‘Operational guidelines for open banking in Nigeria’ released in May, 2022. The guidelines said, “The Central Bank of Nigeria, hereafter called the Bank, had issued the regulatory framework for open banking in Nigeria in its efforts to enhance competition and innovation in the banking system. “The Bank recognised the existence of an ecosystem for Application Programming Interface in the banking and payments system and is aware of various efforts in the industry to develop acceptable standards among stakeholders.” According to the CBN, open banking promotes innovations and broadens financial products and services, which involves sharing of customer data and inter-connectivity of systems, therefore, exposing the participants to risks such as cybersecurity, money laundering, regulatory and compliance, contract management, product management among others. Punch
ECONOMY
Nigeria’s Q1 trade deficit rose by 175%, hit $764m – CBN
The value of Nigeria’s international trade deficit rose by 175.13 per cent from $152.94m in January 2022 to $420.79m in March 2022, according to data from the Central Bank of Nigeria. The International Trade Summary on the CBN’s website shows that the total value of international trade was $28.77bn in Q1 2022, with imports at $14.77bn and export at $14.01bn, showing a total trade deficit of N764.69m. In January 2022, export was $4.74bn and import was $4.89, with a trade deficit of $152.94m. The value of the trade deficit increases further in February 2022 to hit $190.96m, with export at $4.70bn and import at $4.89bn. A massive increase is recorded by March 2022 at $420.79m trade deficit, with export at $4.57bn and imports at $4.99bn. The CBN Governor, Godwin Emefiele, had said in June last year that the country would cut down its import bill in the first quarter of 2022, particularly with the functioning of the Dangote refinery, which would reduce Nigeria’s oil import. Punch
ABCON Calls for Creation of BDCs’ Autonomous FX Trading Window
The President, of the Association of Bureaux De Change Operators of Nigeria (ABCON) Mr. Aminu Gwadabe has urged that Central Bank of Nigeria (CBN) to create a trading window in a bid to enhance dollar liquidity in Nigeria. Also, ABCON announced that they have developed a roadmap campaign plan needed to save the naira from further decline and enhance exchange rate stability. The ABCON National Executive Council yesterday said the move to save the naira was agreed upon by the body at the conclusion of its meeting in Lagos recently where it unveiled strategies for saving the local currency, bridging the exchange rate gaps, and curbing volatility in the forex market. This Day
Impact of Elections, FX Liquidity on Economy
As the 2023 elections draw near, Nume Ekeghe Writes on the Impact of electioneering activities on the economy. With the primaries of the major political parties in Nigeria just around the corner, the economy seems to be taking a backstage as all focus in recent weeks has been on persons jostling for the various political vacancies in the country. Like all the previous election seasons in the country, the naira is changing hands a lot with billions of naira being moved around in recent weeks as politicians and aspiring politicians pulled resources together to pay for the expression of intent forms in their various political parties. However, it seems not only the naira is changing hands as there has been increased dollar demand in the country, further pushing down the value of the naira, particularly in the parallel market which is not officially supervised. This Day
No hike in electricity tariffs – NERC
The Nigerian Electricity Regulatory Commission, NERC has clarified that reviews do not automatically translate into an increase in electricity tariffs. The electricity market regulator made this known in a statement titled ‘Notice of Compliance in Respect of the Biannual Review of the Revenue Requirements of Licenses’ published on Tuesday. According to the NERC, where the impact of improved efficiency in operating parameters for individual licensees exceeded the impact of changes in macroeconomic parameters, end-users might be reduced as exhibited in some tariff classes under the Multi Year Tariff Order, MYTO 2022. The clarification came following backlashes that greeted recent reports of an increase in tariffs by the electricity distribution companies, DisCos. Punch
Telecoms: US, UK firms plan 10,000 tower sites in Africa
In a bid to tackle the problem of lack of telecom network services in rural areas, Loofca International Limited United Kingdom has partnered with Vanu Incorporated, United States, to deploy 10,000 sites across Africa. The duo of Loofca International Limited and Vanu Wireless Nigeria Limited (a subsidiary of the American company Vanu Incorporated specialising in providing telecom operators with access to the solar mobile network in landlocked or poorly covered areas), will provide operators with the telecom infrastructure needed to provide telecom services to the populations living in these areas. The telecom sites built under this project will deploy Vanu’s proprietary technology, designed specifically for rural areas. They will then be made available to first-tier operators such as MTN, Orange, Glo, Airtel , and Vodacom, for voice and data services. Loofca will leverage its presence in several countries on the continent as well as its wide reach. Punch