SEC vows to transfer unregularised shareholdings to development fund -Page 6
Labour decries FG’s failure to pay electricity workers disengaged 4 years ago -Page 5
NSE trading closes on negative trend, index down -Page 8
NNPC to sell petrol directly to marketers -Page 4
Fuel scarcity: Senate to grill Kachikwu, Baru, DPR today -Page 9 JANUARY 4, 2018
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VOL 11
FINANCIAL WATCH Bringing all your financial & business news
Union Bank N50bn Rights Issue Records 20.3% Over-Subscription By Ezekiel Enejeta In a notice issued to the Nigerian Stock Exchange, on Friday, Union Bank announced the results of its N50 billion rights issue. The bank had offered 12,133,646,995 Ordinary Shares of 50 Kobo each on the basis of five New Ordinary Shares for every Seven Ordinary Shares at N4.10 Kobo per share. The offer opened on September 30, and closed on October 30, 2017. Chapel Hill Advisory Partners Limited was the Lead Issuing House to the Rights Issue; while FSDH Merchant Bank Limited and Stanbic IBTC Capital Limited were Joint Issuing Houses. Proceeds from the offer will be used to enhance the Bank's regulatory capital requirement and enable it take advantage Continue on Page 8
$550m new Satellites : FG gets full funding By Helen Okolo The Minister of Communication, Alhaji Adebayo Shittu, on Wednesday said China EXIM bank
had agreed to pay the entire 550 million dollars for the procurement of the new satellites. Shittu disclosed this to State House Correspondents
after a close door meeting to updated President Muhammadu Buhari on the approved procurement of two new satellites from
China at the cost of 550million dollars. The minister explained that the initial agreement was
that the China EXIM bank would provide 85 per cent of the total cost ($550 million) while Nigeria Cont. On page 8
Forte Oil worst performing stock on NSE in 2017 By Haruna Magaji
(NAN) from the exchange indicated that For the second year the stock, which opened running, Forte Oil trading in 2017 at maintained its leadership N84.43, dropped by as the worst performing 48.50 per cent to close stock on the Nigerian the year at N43.48 per Stock Exchange (NSE) in share. 2017 in percentage terms. NAN reports that Statistics obtained by the Forte Oil in 2016 also News Agency of Nigeria emerged the worst
performing stock in 2016 in percentage terms having dropped by 74.42 per cent. The stock, which opened trading in 2016 at N330, depreciated by 74.42 per cent to close trading at N84.43 per share. University Press
followed with a loss of 46.23 per cent to close at N2.28 compared with N4.24 it opened for the year. MRS Oil shed 36.49 per cent to close at 27.46 against N43.24, while Mobil Oil lost 30.25 per cent to close at N194.60 in contrast with the
year’s opening price of N279 per share. Julius Berger dipped 27.42 per cent to close at N28 against N38.58 and Conoil, which opened for 2017 at N37.48, decreased by 25.42 per cent to close at N28 per share. ...Cont. On page 4
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Expert says Most Nigerian banks are lying prostrate Cont’d from page 1 of winning election. The bank realised that the sector that creates employment more is the informal sector. The informal sector players do not need to employ large number of workers. So, the rating does not factor in the multi-nationals, but the informal sector; sectors that could be affected drastically by any government policy and how the government is making things easy for them to embark on their business. They (World Bank) set nine criteria which a country must meet. After examining the country, the bank realised that the present administration’s economic team led by the Vice President, Prof. Yemi Osinbajo, has changed the strategy previously adopted at the airports, collateral registry, that is, the CBN assisting the small businesses to grow in the country. It is different from the Fitch rating which stated that the credit rating of commercial banks in the country is moving towards BB(minus). The reason for this was that they discovered their revenue could no longer support their liabilities. The criteria for ease of doing business are different from that of the Fitch Rating. In 2018, what do you think the Central Bank of Nigeria (CBN) should do differently to boost the country’s economy? A lot of experts claim that the government has no business in business. But what happens when the businessmen fail is that the government must rise up and address the challenge. That is what we call intervention. The apex bank (CBN) has been intervening in FINANCIAL WATCH
different sector including real estate, manufacturing and others. The CBN has become the lender of last resort to businesses and this should not be a regular event as presently constituted. But the CBN has now taken that permanent role because most of our commercial banks are lying prostrate. If CBN continues in that position, it would be difficult for the economy to come up. The CBN is the one giving the loans that the bank should have given by way of different intervention funds. Do not forget that the banks too need the CBN to survive. A certain report by the National Bureau of Statistics stated that money already collected by commercial banks from the CBN so as to remain healthy is alarming. That was the same window the former CBN Governor, Mallam Sanusi Lamido Sanusi shut, which led to some banks to merge; the same window has now been opened for the banks to survive. When the federal government does that persistently, intervening in every sector, one would not be
Group Managing Director of CFL Group, Mr. Lai Omotola able to really place such economy in capitalist or socialist category. Although you said that the banks lying prostrate, some banks recently declared profit. Is this not at variance with your assessment of the banks? I have been thought in accounting classes that accounting is a matter of opinion. It is half full and half empty. Profitability is all about opinion. I can declare profit, but it does not translate to Naira and Kobo for the shareholders. And the logic is this: rather than give the investors profit in cash form, banks asked them to plough it back through increase in shares. And because accounting is an opinion, it is responsible for some banks that ran into crisis in the United States. They juggle the numbers and present the statistics to the shareholder and customers. One needs to understand
that the main source of income for any bank is to sell money. They do that through issuance of loans. When the banks are not lending, how are they making the required profit? They can also make the profit through investing in government bonds that is zero risk than do otherwise. It is the belief that Nigeria’s economic challenges needs thinking out of the box to overcome. Do you share this view? One does not need to think out of the box because the problems confronting Nigeria’s economy are mundane. Our challenges do not really require that one thinks out of the box. It is not Japanese economy or Chinese economy. The problem of the Nigerian economy is benchmarked on what the citizens would eat. All we are eating are 70 percent imported, creating a situation where
Petrol scarcity: Buhari summons stakeholders By Haruna Magaji Presidency on Tuesday in Abuja summoned critical stakeholders in the nation’s oil sector and the leadership of security agencies in the country to end the scarcity of petrol in the country. The News Agency of Nigeria (NAN) reports that the meeting, presided by the Chief of Staff to the President, Alhaji Abba Kyari, is being held behind closed doors. The meeting is also being attended by the Minister of Petroleum, Mr Ibe Kachikwu, DirectorGeneral of the Directorate of State Service (DSS), Lawal Daura, and the Group Managing Director (
GMD) of the Nigeria National Petroleum Corporation (NNPC). Maikanti Baru. Others attending the meeting are the Comptroller-General of Immigration, Alhaji Muhammed Babandede, some presidential aides and other stakeholders in the oil industry. President Muhammadu Buhari had on Jan. 1, during a nationwide broadcast, expressed sadness over the unnecessary hardships inflicted on Nigerians during the Christmas and New Year celebrations following acute petrol scarcity across the January 4, 2018
country. He attributed the hardships to the activities of a few but heartless individuals working within the nation’s oil and gas sector. Buhari, however, reiterated the determination of his administration to get to the root of the persistent petrol scarcity, and ensure that whichever groups were behind this manipulated blackmail would be prevented from doing so again. The scarcity is
said to be caused by greedy marketers who tried to take undue advantage of the high inter-state movements during the season.
too many people are chasing the dollar. That is why dollar is high. Such arrangement must be changed. That does not require any special economic strategy. All that is required is “old economics” to solve. There is nothing serious about the Nigerian economy that cannot be resolved. From my research, I have realised that the economic team in any country is not about bridging crowd together. The thinkers for the economy cannot be more than four. Those are the like minds. But when you bring 36 governors together for them to discuss on the country’s economy, what happens during that discussion would be quota system. But when the team has only four or five persons in strategic positions, things will change dramatically. This should comprise of the Governor of Central Bank of Nigeria (CBN), Minister for Finance, Minister for Works, Power & Housing, Minister for Transportation and Group Managing Director of Nigerian National Petroleum Corporation. What they needed to turn Nigeria’s economy around is to create activities. When I mean activities, it indicates that the ministries embarking on things that can stimulate the economy. For instance, if Minister of Housing says I want to build one million houses and I need 1,000 contractors. Through that, he will be creating activities through the length and breadth of Nigeria. But what you find is that all the houses would be built by two contractors. If you do your research properly, for the past 20 years, in the ministry of Works & Housing, if they have the budget of N150 billion, the number of contractors working there are not more than five. They collect all the major contracts. For these contractors, whenever they collect any contract, they are not employing anyone new. They already have all that is required to Continue on page 4 Page 3
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Cont’d from page 1 NAN reports that Total trailed with a loss of 23.09 per cent to close at N229.95 against the year’s opening price of N299, while TransNationwide dipped by 22 per cent to close at 78k in contrast with N1 posted in 2016. 7UP which opened the year at N129 declined by 20.95 per cent to close at N101.97, while Nigeria Enamelware lost 20.80 per cent having closed the year at N23.33 against N29.33, among others. The Chief Operating Officer, InvestData Ltd., Mr Ambrose Omordion, attributed Forte Oil’s loss for two straight years to non-payment of dividend in 2016 financial year and weak earnings. Omordion said that mixed performance posted by the company in 2017 and unclear business plan or direction to investing public on the happenings in the company or where it was heading to, contributed to the development. He also attributed the University Press depreciation to dwindling dividend payout and unimpressive numbers, as increasing cottage industries operation continued to affect its bottom line. Conversely, Dangote Sugar was the best performing stock in percentage terms during the review period. It improved by 227.33 per cent to close at N20 per share against the opening price of N6.11. International Breweries trailed with a growth of 194.59 per cent to close at N54.50 compared with N18.50 and Fidelity which opened at 84k rose by 192.86 per cent to close at N2.46 per share. Fidson increased by 189.06 per cent to close at N3.70 against opening price of N1.28 and Dangote Flour Mills inched 185.88 per cent Having closed the year at N12.15 per share FINANCIAL WATCH
NNPC to sell petrol directly to marketers By Ezekiel Enejeta The Nigeria National Petroleum Corporation (NNPC) will sell petroleum products directly to marketers, it was learnt yesterday. The middlemen in the chain are to be eliminated in one of the moves to combat fuel scarcity. A meeting of the committee of
stakeholders set up at the removal of Petrol intermediary tDepot and the Presidential Villa Support Fund (PSF) also Petroleum Products Against N4.25 opening reportedly took the known as subsidy. Marketers Association price. decision yesterday. A source close to (DAPPMA), from who the Stanbic IBTC Minister of State for yesterday’s meeting said: independent marketers improved by 176.69 Petroleum Resources, were getting the fuel. “We have already told per cent to close at Dr. Emmanuel Ibe One of the fundamental them that it is only the N41.50 in contrast Kachikwu, chaired the decisions that the meeting NNPC that will be able with N15, while May meeting at his office to import the PMS. The arrived at was that there & Baker garnered yesterday. marketers cannot import will be no increase in the 176.60 per cent to They predicated their price of the petrol. the PMS because of the close at N2.60 against decision on the rising The Nation learnt that cost of the crude oil. 94k it opened for the the minister raised a price of crude oil which “This has also caused year. committee to look into the led to the increases price the price of the PMS to FBN Holdings Premium Motor Spirit of petrol. increase. Thus, if the increased by 162.69 (PMS) scarcity that Although the NNPC is marketers import it at per cent to close the crippled transportation in supposed to supply 50 the rate at which they year at N8.80 per the country in December per cent of the products are selling it now, share against N3.35, last year. to complement the automatically they while C & I Leasing The source said that: marketers, no other cannot sell it at N145 per rose by 158 per cent to “The discussion was how group is able to import litre.” close at N1.29 to make the fuel available petrol now because of The Federal compared with the nationwide.” the price. Government, it was opening year’s figure The have formed a Its landing cost is learnt, resolved to supply of 50k. committee from today’s N171 per litre and the products directly to the Omordion linked meeting to look into how Federal Government has independent marketers Dangote Sugar growth said nobody should sell to remove the middlemen to solve this fuel problem. to improved numbers The Chairman, Depot and above N145. in the distribution chain and 50k interim The marketers and reduce the cost of the Petroleum Products dividend as a result of Marketers Association stopped importing the petrol. backward integration product, making NNPC Owing to the decision, (DAPPMA), Mr. Dapo that reduced operating the sole importer since the Federal Government Abiodun, raised hope that petrol supply will soon cost due to sugarcane has removed the stabilie. farms. He also attributed the International By Ezekiel Enejeta They said the Central President, Association of Breweries gain to its Bank of Nigeria’s Bureau De Change merger with Intafact The naira closed at 363 per regular interventions Operators of Nigeria, Beverages Ltd and United States dollar at the through the injection of Alhaji Aminu Gwadabe, Pabod Breweries Ltd parallel market on dollars into the market has warned that as the major factor Tuesday, the same rate it would deter currency spending by politicians that move the price as closed before the New Year speculators from making ahead of the 2019 earnings remained break on Friday. a bet on the local general elections may weak The local currency, which currency. threaten the stability of He said that infusion has been hovering around The naira has been the naira. of the three major 365/dollar for some hovering at 360/dollar at Efforts by the CBN and players would boost months, rose to 364/dollar the Investors and critical stakeholders like numbers as market as the Christmas holiday Exporters FX Window, the BDCs led to the share increases. approached. while it has been quoted convergence of rates Omordion said that The naira later rose to at 306.05 at the official between the parallel Fidelity Bank’s growth 364/dollar last week before market, the level at market and the BDC was due to closing at 363/dollar on which the central bank segment. oversubscription of its Friday. has been intervening. Eurobond, which Foreign exchange traders The CBN has been Meanwhile, most of boosted investors’ and currency analyst had injecting dollars into the Africa’s main currencies confidence and as well predicted that the naira forex market on weekly will remain at a steady improved positive would be stable during the basis in the past few level as foreign markets numbers. Christmas and New Year months. remain sluggish over the holidays. Meanwhile, the holidays.
Naira closes at 363/dollar after new year break
January 4, 2018
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Labour decries FG’s failure to pay electricity workers disengaged 4 years ago By Haruna Magaji THE National Union of Electricity Employees, NUEE, has said it is sad that about 1,000 former staff of the defunct Power Holding Company of Nigeria, PHCN disengaged four years ago are yet to receive their severance benefits. President of NUEE, Mr Martin Uzoegwu, disclosed this during the National Executive Council, NEC, a meeting of the union in Lagos. Uzoegwu said it was worrisome that the disengaged workers who had put in many years in service had yet to be paid their benefit by the Federal Government. ”This is corruption and unfair labour practice. We advice the government to put necessary machinery in place to ensure that these ex-workers receive their severance benefit.’ The NUEE president said the objective of the meeting was to brainstorm on issues arising from privatisation and post privatisation of power sector. In one of their protests, the aggrieved
former workers in Oyo District, protested what they referred to as “nonpayment of our entitlements by the immediate past administration of former President Goodluck Jonathan”. The aggrieved retirees, some of who looked dejected, took to the streets, appealing to President Muhammadu Buhari to save their souls. During the protest, the retired workers said besides months of unpaid salaries, their unsettled terminal benefits which included severance payment, retirement gratuity, death benefits and pension deduction, among other entitlements, “are still pending with the federal government”. According to their spokesman, Mr. Bolanle Ojelabi, all the collective agreements reached between the union and government in the power sector had been breached. He said presently, the pension deductions of retired workers from July, 2012 till date had
not been effected, adding that those who retired statutorily are yet to be paid their gratuity.
not been paid a dime as severance entitlements. “Other issues begging for urgent attention of the present While pointing out administration include verbal disengagement of that the death benefits of those who verified casual workers died in active service from the sector without remuneration and are yet to be paid to institutionalisation of their families, casual/contract Ojelabi, who wept appointments.” profusely, lamented that What is more, “no fewer than 10 of our immediately after colleagues have died of retirement, the management of the high blood pressures defunct company and other ailments that were not terminal, due to solicited for extension of lack of funds to take care our service for six months with fixed of their health. amount of payment on “Since we joined the PHCN till our retirement monthly basis. We in October 2013, we have entered into a written agreement, but yet to be
fulfilled till today”. According to him, before the expiration of the Jonathan administration, the Bureau of Public Enterprise announced that money for payments of all outstanding entitlements of disengaged workers of the defunct power sector had been released to the Accountant-General of the Federation (AGF). Ojelabi urged the present administration to verify and ascertain the submission with a view to addressing the issues raised without further delay as the flagrant denial of the retired workers right has inflicted unprecedented pain on them.
Marketers agree to N145, beg FG for incentives By Ezekiel Enejeta Oil marketers on Wednesday agreed with the Federal Government to allow the pump price of petrol to remain at N145 per litre, reversing their previous stance on the pricing of the commodity. On Tuesday, the Chairman, Depot and Petroleum Products Marketers Association, Dapo Abiodun, had stated that the marketers could no longer import petrol at a controlled price of N145 per litre. But it was gathered in Abuja on Wednesday that the marketers reversed their stance at the meeting of the ad hoc committee set up by the Presidency to get the oil marketers to restart the importation of refined petroleum products. Sources at the meeting FINANCIAL WATCH
told our correspondent that a communique on the resolutions reached at the meeting would be made public soon, but noted that the marketers also appealed to the Federal Government to grant them tax holidays and other incentives that would help cut their costs when they resumed fuel importation. It was learnt that four sub-committees were constituted at the meeting, which was chaired by the Minister of State for Petroleum Resources, Ibe Kachikwu, at the ministry’s headquarters in Abuja. “Four subcommittees were inaugurated by the minister and we agreed on a price that is good
for Nigerians, which of course, is the current price. All these and more will be in the communique that will be released soon,” a source who spoke to our correspondent in confidence, said. Another source stated that the committees included those on logistics and business conduct, adding that the agreements reached at the meeting would be relayed to the Presidency before the communique would be made public. It was also learnt that heads of some parastatals under the Federal Ministry of Petroleum Resources were members of some of the committees. Meanwhile, the Senate has denied an alleged claim by the Chief of Staff to the President, Abba Kyari, that the National January 4, 2018
Assembly is responsible for the delay in the payment of the debt owed oil marketers by the Federal Government. The lawmakers denied any pending request to approve a loan for the payment of the debt by the Presidency. The upper chamber of the National Assembly stated this on Wednesday in a statement issued by the Chairman, Senate Committee on Media and Public Affairs, Senator Aliyu Sabi-Abdullahi. The statement read in part, “The attention of the Senate has been drawn to a claim said to have been made by the Chief of Staff to the President, Mallam Abba Kyari, during a meeting with stakeholders in the oil industry on the perennial fuel scarcity in the
country to the effect that the payment of debts owed oil marketers was being delayed because the National Assembly has not approved request presented to the legislature for a loan meant for that purpose. “The Senate will want members of the public to know that no such request has been made to it specifically requesting for a loan meant for payment to oil marketers. The Senate is aware that subsidy on petrol had been cancelled by this administration, so we wonder which payment we are talking about now. “Senators have been inundated with calls from oil marketers who were present at the meeting with the Chief of Staff to the President on the issue and thus, we call on Mallam Kyari to either prove his claim or retract it.” Page 5
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NNPC orders assessment of Escarvo-Lagos gas pipeline fire
DPR seals 80 petrol stations in Delta
By Ezekiel Enejeta By Haruna Magaji The Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Dr. Maikanti Baru, has ordered an immediate assessment of the damage caused by a fire on the Escarvos to Lagos Pipeline (ELP), a natural gas pipeline which supplies gas from Escravos region of the Niger Delta area to Lagos. The pipeline also National grid: TCN, GENCOS to restore operation By Ezekiel Enejeta A statement from the management of the ministry indicated that the Nigerian Gas Processing and Transportation Company Ltd (NGPTC) had reported a fire on its Escravos Lagos Pipeline system near Okada, Edo on Jan. 2. The incident, according to the statement, requires a shutdown of the pipeline supplying gas to Egbin 1,320MW; Olorunsogo NIPP 676MW, Olorunsogo 338MW, Omotosho NIPP 450MW, Omotosho 338 MW and Paras 60MW power stations. It said the sudden loss of generation due to interruption in gas supply from the stations caused the national transmission grid to trip off around 8:20 a.m. on Jan. 2. It said that the trip off was regrettable, given the sustained period of increasing production and distribution of power since September 2017 to date. The statement added that once the national grid is restored, output from the hydroelectric power stations and all other unaffected gas fired thermal power stations will be increased. This, it said, would minimise the impact of loss of generation from the affected power stations. It urged members of the public to bear with it as precise steps were being taken to restore operation at the grid. FINANCIAL WATCH
supplies gas to power plants in the South West, in addition to feeding the West Africa Gas Pipeline System. NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu disclosed this in a statement on Wednesday. The incineration of the ELP, which was built in 1989, was suspected to have been caused by a bushfire January 2, 2018 at Abakila, in Ondo State.
NNPC firemen were drafted to the scene and were able to contain the fire from the leak point of the pipeline incident. However, the fire could not be extinguished due to the high pressure of the line. To put off the fire, the line would require being isolated and depressurized, which might lead to a complete shutdown of the pipeline segment for repair works to be carried out.
The exercise will affect gas supply to customers in Ondo, Ogun and Lagos State with a subsequent shutdown of the following power plants with a combined generating capacity of 1,143MW: Egbin, Lagos, Olorunshogo, PEL Olorunshogo, Ogun, Paras Power Plant, Ogun and Omotosho plant, Ondo State.
SEC vows to transfer unregularised shareholdings to development fund a view to encouraging many more investors to consolidate their multiple The Securities and Exchange Commission subscriptions into one account. (SEC), yesterday, “Investors that bought vowed to transfer to shares of the same the Capital Market company during public Development Fund, CMDF, all shares not offers, using different names, are allowed till consolidated into one March 31st this year to account by investors continue to approach who subscribed for their stockbrokers or them using multiple Registrars to regularize identities. Abdul Zubair, SEC’s their shareholdings, in line with SEC Rules on Acting DirectorGeneral, disclosed this customer identification. Thereafter, all shares not in Abuja, at a press regularized shall be briefing on the ongoing Capital Market transferred, on trust, to the Capital Market initiatives by the Development Fund,” Commission. Zubair warned According to him, The Acting SEC DG, SEC will effect the who also announced a transfer to CMDF on new deadline for investor31st March 2018, enrolment into the ewhich marks the dividend initiative of the expiration of a fresh Commission, said the extension for the move was to ensure more Commission’s investors key into the eforbearance of dividend payment multiple accounts by platform.. investors. Recall that SEC had in He said the new June last year announced date was picked with By Saamson Gabriel
January 4, 2018
December 31st, 2017, as deadline for issuance of physical dividend warrants to shareholders by quoted companies to tackle unclaimed dividends and mitigate the risks associated with paper warrants. While noting that only 2.1 million investors have registered, Zubair said that the e-Dividend enrolment would no longer be free as the Commission has decided to stop underwriting the processing fee for investors. Zubair enjoined such investor to approach their Banks or Registrars to seamlessly mandate their Bank Accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 will not be demanded from them at he point of registration.
More than 80 petrol filling stations have been shut in Delta state for selling above official price and hoarding. The stations were sealed by Department of Petroleum Resources (DPR), Warri Zonal Office, since fuel scarcity begun in December, 2017. Mr Antai Asuquo, the Warri Zonal Operations Controller, said on Wednesday in Warri that the filling stations were sealed in Warri, Ughelli, Sapele, Isoko and Asaba. Asuquo, who led a group of surveillance team to Asaba, said that aside from selling above the government approved price of N145 per litre and operators always absconded on sighting DPR officials. “DPR has sealed over 80 filling stations since the fuel scarcity began last month. “Those we sealed are because they refused to dispense at the government approved price of N145 per litre and those that abandoned their retail outlets on sighting our personnel. “Today, we have been to many filling stations in Asaba; one actually abandoned his station and we sealed the facilities because they have an equivalent product of 30,000 litres. “We will revisit the station to ensure that appropriate sanction is melted out on the owner. “We also saw stations selling above the approved pump price; we compelled them to sell at the regulated pump price,” he said. Asuquo advised petroleum marketers not to purchase fuel if they knew that they could not sell at the regulated price of N145 per litre. “It is our intention to keep monitoring the products and price; we will also ensure that the products are not sold to the third party. Page 6
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Nigeria’s Bonny Light crude oil hits $67.10 a barrel By Haruna Magaji The price of Nigeria’s Bonny Light crude oil reached $67.10 per barrel to emerge the highest priced product among members of Organisation of the Petroleum Exporting Countries (OPEC).Apart from Bonny Light crudes, other Nigeria’s oil grades such as Brass River and Qua Iboe Cont’d from page 1 Limited and 22 others, Justice Ibrahim Saulawa and four other justices of the Court of Appeal, Lagos Judicial Division, held that the Stamp Duty Act, 2004 did not impose a duty on the DMBs to deduct N50 on bank deposits. According to the court, electronic transactions are not covered by the Stamp Duty Act. The ruling has not stopped the banks from deducting the stamp duty on deposits of N1,000 and above. It was based on the ruling of the court that the Nigerian Postal Service drafted the new bill to capture in black and white that bank deposits are to be subjected to stamp duty deduction. The new bill seeks not only to remove some ambiguities contained in the original Act, but also to legitimise what has been collected as stamp duty by the DMBs since January 2016. It also seeks to legitimise the recent inclusion of savings accounts as eligible for imposition of stamp duty as the CBN had in its memo on the matter excluded savings accounts for stamp duty collection. Our correspondent learnt that the only accounts that were exempted in the new bill were children education accounts. FINANCIAL WATCH
also appreciated in value to sell at $65.32 and $61.22 per barrel respectively yesterday at the international market. United Arab Emirate’s Murban; Algeria’s Saharan Blend and Qatar Marine also recorded impressive performance to settle at $66.83, $67.05 and $66.83 per barrel respectively.The Bonny Light is in high demand specifically by American and European refineries. It is therefore a major source of income for the oil-rich nation. The very low sulfur content of Bonny Light crude makes it a highly desired grade for its low corrosiveness to refinery infrastructure and the lower environment impact of its byproducts in refinery effluent. At a broader level, at the New York Mercantile Exchange, United State West Texas Intermediate (WTI), crude futures traded at $60.45 a barrel during the trading hours of yesterday, recording its highest since June 2015. Brent crude futures recorded a one per cent decrease in price at $66.81 a barrel yesterday, after hitting $67.29 a barrel few days ago.West Texas Intermediate (WTI) and Brent, two major crude oil benchmarks, account for 70 per cent of the weighting in the Standard and Poor’s (S&P) Goldman Sachs Commodity Index (GSCI) energy index.
As a result, the energy index tends to follow major price movements in the crude oil market. The weights associated with individual commodities within the S&P GSCI index are updated every year in response to changes in global commodity production quantities and futures contract trading volumes. Although still lower than in 2011 through 2014, crude oil prices rose for the second straight year after a crude oil production-cut agreement was executed among the OPEC)and some nonOPEC countries, which partially constrained global crude oil production. The agreement came into effect in January 2017 and will continue through the end of 2018. In addition to supply-side factors, strong economic growth in both developed and emerging markets has led to higher oil demand.
OPEC Secretary General, Mohammad Sanusi Barkindo, during the association’s yearly general assembly, attributed the improvement in prices of crude oil to the declaration of cooperation by OPEC and non-OPEC members.
Together. “The decisions we made were historic and mark the first time in the history of the industry that 24 OPEC and non-OPEC producers have joined forces to help contribute to improving oil market stability. I am happy to say that we can now firmly put to rest any Barkindo stated: suggestions that this “Together with our non- process we have started OPEC partners, we have and the Declaration of co-authored a new Cooperation could not chapter in the history of be successful.” this industry, one that is “The decisions we about cooperation, made were historic and stability and mark the first time in sustainability. Our work the history of the together over the past industry that 24 OPEC year has forged new and non-OPEC relationships between producers have joined OPEC and non-OPEC forces to help contribute countries, which never to improving oil market existed in the past. This stability. I am happy to has led to new say that we can now friendships, new firmly put to rest any opportunities and laid suggestions that this the groundwork for process we have started ongoing future and the Declaration of cooperation. We can be Cooperation could not very proud of what we be successful.” have achieved working
FRSC Promotes 1, 925 Personnel, Urges for Re-dedication to Duty By Haruna Magaji
approved promotion of the Zonal Commanding Officer of the Corps in The Corps Marshal, Charge of Zone RS3HQ, Federal Road Safety Abubakar Ringim to the Corps, (FRSC) , Dr Superintendant Route Boboye Oyeyemi has approved the promotion of Commanders, 93 Route Commanders, and 137 685 Marshal Inspectors Deputy Route and 942 Road Marshal Assistants, urging them to Commanders. According to Kazeem, re-dedicate themselves to the personnel promoted to duty. Marshal Inspectors The Corps Public Education Officer, Mr Bisi include: 57 Deputy Kazeem, disclosed this in Marshal Inspectors, 71 Assistant Marshal a statement on Saturday Inspectors, 54 Principal in Abuja. Marshal Inspectors, 234 Kazeem said the Senior Marshal Secretary to the Inspectors, 207 Marshal Government of the Inspectors I, and 62 rank Federation, Mr Boss of the Deputy Corps Mustapha had also January 4, 2018
Marshal (DCM). Mustapha equally approved the promotion of 298 officers of the corps, bringing the total number of the newly promoted officers to 1, 925. The officers promoted included: 33 Chief Route Commanders, 34 Marshal Inspectors II. He said the Marshal Assistants promoted include: 45 Deputy Chief Road Marshal Assistants, 81 Senior Road Marshal Assistants, 146 Road Marshal Assistants I, and 670 Road Marshal Assistants II. Oyeyemi also commended
the performance of the Newly promoted officers and Marshals of the Corps, and urged them to put in their best in the discharge of their duties as they assume higher responsibility in their career. The Corps marshal urged them to be of good character as well as work hard to achieve the mandate of the Corps which was aimed at combating road accidents by 15 per cent and fatality by 25 per cent yearly. Page 7
FINANCIAL WATCH
www.financialwatchngr.com
JANUARY 4, 2018
NEWS
NSE trading closes on negative trend, index down
Cont’d from page 1
By Haruna Magaji
of emerging sectors of the Nigerian economy. A summary of the Rights Issue is outlined as: 4,313 Acceptance Forms for 14,602,842,222 units of the Rights received were found to be valid under the termsof the Rights and were processed accordingly. The Rights Issue was therefore 120.3% subscribed. The bank, however did not allot additional shares. 4,246 shareholders accepted their Rights in full totaling 10,918,247,917 ordinary shares. 32 shareholders with a provisional allotment of 31,639,722 ordinary shares partially accepted their rights for 31,264,665 ordinary shares. Thus, the balance of 375,057 ordinary shares were renounced. 35 shareholders purchased Rights for 290,378,677 ordinary shares traded on the floor of the Nigerian Stock Exchange. Of the 4,246 shareholders who took up their rights in full, 2,244 shareholders also applied for additional3,362,950, 963 ordinary shares and were partially allotted from the renounced rights at
Trading on the Nigerian Stock Exchange (NSE) on Wednesday recorded low gain, with the AllShare Index dropping by 0.21 per cent. The News Agency of Nigeria (NAN) reports that the index closed lower at 38,187.28 compared to 38,264.75 achieved on Tuesday, indicating a loss of 77.47 points or 0.21 per cent. In the same vein, the market capitalisation which opened at N13.617 trillion shed N28 billion or 0.21 per cent to close at N13.589 trillion. An analysis of the price movement table showed that Mobil Oil topped the losers’ chart for the day, dropping by N17.80 to close at N176.80 per share. Dangote Cement trailed with a loss of N7 to close at N223, while Presco was down by N2 to close at N66.50 per
share. Cadbury depreciated by 65k to close at N14.95, while Unilever declined by 35k to close at N39.86 per share. On the other hand, Lafarge Africa recorded the highest price gain to lead the gainers’ table, increasing by N2.21 to close at N47.10 per share. Dangote Sugar Refinery followed with a gain of N1.51 to close at N21.87, while Dangote Flour grew by 60k to close at N12.75
per share. NASCON added 58k to close at N19.80, while Ecobank Transnational increased by 47k to close at N16.74 per share.
Skye Bank was the most active stock during the day, exchanging 190.02 million shares valued at N101.73 million. Transnational Corporation of Nigeria followed with an In spite of the drop in account of 93.42 million market indices, the volume shares worth N144.62 of shares traded closed million, while Diamond upbeat by 137.21 per cent Bank traded 79.38 million with a turnover of 589.58 shares valued at N136.32 million shares valued at million. N2.12 billion in 4,366 deals. FCMB Group sold 61.15 This was in contrast with a million shares worth total of 248.55 million N105.49 million, while shares worth N1.78 billion Fidelity Bank sold 21.65 traded in 3,035 deals on million shares valued at Tuesday. N60.55 million.
$550m new Satellites : FG gets full funding Cont’d from page 1 would pay the remaining 15 per cent as counterpart funding for the projects. He, however, stated that as Nigeria could not be able to meet her obligation in paying the counterpart funding, the agreement was renegotiated with the China EXIM bank and the manufacture of the satellites, the China Great Walls. ”I’m in the Presidency to see Mr. President and to brief him on three major issues. “One, NICOMSAT, which is one of our agencies where we hope to procure two new satellites from China. “Initially the agreement was that they will provide the cost of the two satellite 550 million dollars minus 15 per cent which is the counterpart funding. ” Because we could not afford this 15 percent, we have renegotiated with the China EXIM Bank and the China FINANCIAL WATCH
Great Walls who are the manufacturers and they have happily agreed to pay the entire $550 million to procure two new satellites,’’ he said. The minister stated that the new satellites would ensure that the Nigerian satellite company (NICOMSAT) would conquer the entire African continent in regard to the provision of satellite communication services. He said that the Chinese had appreciated the potential market that existed in the satellite business in Nigeria and the African continent. “”This is a very big business opportunity and I am sure that the Chinese appreciate the potential market which is so vast and that is why they have agreed that even without our ability to contribute 15 per cent they are prepared to pay the entire sum of $550 million for the procurement of the two new satellites for Nigeria,’’ he added. Shittu revealed that the production of the satellites would commence
immediately the final agreements were signed. He said: “”It takes two years to produce because it is when we sign the papers they will start production. “We hope that before the end of this month we will sign the papers and then they will commence the production. It is the completion of the production that the two satellites will be launched.’’ He added that Nigeria had nothing to lose because the country would not put anything into the project in terms of financial resources. “The president was excited and was not surprised because the Chinese are not just going to market our satellite to the entire African continent but also perhaps by legislation insists that all Nigerian entities must patronize the Nigerian satellite company rather than going to Israel, UK, US for satellite services. ”Now we can say by our local content policy we must patronize Nigeria,’’ he said ”The major issue is not about employment but by providing satellite services January 4, 2018
to all companies which require it. ”Currently most Nigerian companies and even Nigerian government establishments patronize foreign satellite companies. So the first thing is that we want to make profit, we want to capture the local market and we also want to capture the African market,’’ he added. The Minister also said he informed the President that he had been appointed as national chairman of the board of trustees of Muhammadu Buhari/Osinbajo Dynamic Support Group. Shittu, who described President Buhari as ““Saviour’’ of Nigerians, said the South West Zonal office of the campaign organisation of BuhariOsinbajo would be inaugurated on Jan. 20. ““Every day since he came into office all his activities are geared towards letting Nigeria know that they have a saviour, a rescuer, somebody who is committed to providing relief for Nigerians in all respects.
a pro rata rate of 26.6%. A total of 893,380,679 ordinary shares were fully renounced bringing the total number of shares renounced to 893,755,736 ordinary shares. A total of 2,469,195,227 additional ordinary shares requested were unsuccessful as the Issue was oversubscribed. The above stated basis of allotment, as well as this announcement has been cleared by the Securities & Exchange Commission. Page 8
FINANCIAL WATCH
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JANUARY 4, 2018
NEWS
Fuel scarcity: Senate to grill Kachikwu, Baru, DPR today By Haruna Magaji
The Chairman of the committee, Senator The Senate will Kabiru Marafa, had on today (Thursday) Friday raised questions on question the Minister the alleged payment of of State for N26 per litre to subsidise Petroleum Resources, the pump price of petrol, Dr. Ibe Kachikwu; which the NNPC put its and the Group landing cost at N171 but Managing Director, sells at N145. Nigerian National He had asked how the Petroleum Federal Government, Corporation, Mr. through the NNPC, was Maikanti Baru, over maintaining a pump price the current crisis in of N145 per litre when the the supply chain of landing cost of the Premium Motor commodity was now N171. Spirit, also known as Marafa and Chairman of petrol. the Committee on Media Also to appear and Public Affairs, before the Senate Senator Aliyu SabiCommittee on Abdullahi, who jointly Petroleum addressed journalists on (Downstream) are the matter in Abuja on regulatory bodies, Friday, stated that the marketers and other Senate was set to move stakeholders in the against anybody or petroleum sector. organisation found to have The investigative caused the crisis. hearing, which will According to Mafara, hold in Room 231 at those to be grilled include the Senate wing of the Depot and Petroleum the National Products Marketers Assembly Complex, Association, Major is expected to be aired live by the Nigerian Television Authority. President of the Senate, Bukola Saraki, had last Thursday directed the committee to cut short its recess and immediately convene a meeting with stakeholders in the petroleum sector over the current scarcity of petrol.
Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, and the Department of Petroleum Resources. Marafa had said, “While this problem is raging, we hear of accusations and counteraccusations from the NNPC, IPMAN, DAPMAN and MOMAN, with letters flying all over the place over hoarding and sabotage. “ Part of what we are going to ask is, we were told that there is subsidy. If there is subsidy, who approved the subsidy? We are the only ones who can appropriate money (for the government), nobody else. That is why the Senate spoke resoundingly before going on recess when they talked about taking $1bn (from the Excess Crude Account) to fight insurgency. Nobody can take any money without the approval of the
Senate. If you do that, you are breaching the provisions of the Constitution.” He added, “So, if you are going to provide for subsidy, you have to come to the parliament. We need to know and that is part of what we are going to ask. “Now, if they say there is subsidy when the price (of petrol) rose to N145, the common belief by all Nigerians was that subsidy was gone and gone for good. Now, they are telling us that the landing cost of petrol is N171. If it is N171, who approved the subsidy or payment of the remaining balance? Where is it buried? Who appropriated it? What are we going to do in the next few days, months and years to come? We need to address these issues squarely because a lot of Nigerians are misinformed about this subsidy issue. “Between 2006 and the figures we have for 2016, the NNPC alone got N5.1tn for subsidy, while the marketers collected over
N4tn. Put them together, we are talking of over N10tn spent on subsidy. I am asking, what is the impact of these monies that are being paid on our behalf to subsidise petroleum products? Why are we afraid? If we take the N10tn to the road sector or railway, power, agriculture, what are we going to expect? The Warri Zonal Operation Controller, DPR, Mr. Antai Asuquo, who stated this on Wednesday after a state-wide monitoring exercise, said majority of the affected stations were shut for selling petrol above the N145 Federal Government approved pump price. Asuquo stated that other stations were sealed off for hoarding, diversion and absconding upon sighting officials of the DPR.
After a brief relief, queues of desperate motorists and other users of petrol returned to filling stations in Lagos and parts of Ogun State on Wednesday. Efforts to reach the officials of MOMAN and the DAPPMA on the telephone were not successful. “The NNPC has been giving us product and we have been distributing it; all what we are hoping for is that they should continue at the rate they are giving us,” he had stated.
FG rakes in N7.3bn from savings bond By Cynthia Adigwe The Federal Government raised a total of N7.3bn from the FGN Savings Bond in 2017, the Debt Management Office data showed on Tuesday. The savings bond programme , which was introduced in March 2017 to boost domestic investors’ participation in the bond market, has been for 10 months now. The Federal Government was planning to use proceeds of the savings bond to finance the 2017 FINANCIAL WATCH
budget deficit but investor appetite for the bond diminished in the fourth quarter. The December allotment figures showed that N246.41m was raised, the lowest figure for the year. According to the DMO data, the coupon rate allocated were 11.738 per cent for FGNSB DEC 2019, a two-year bond and 12.738 per cent for FGNSB DEC 2020, a three-year bond. For November allotment, the figures shows that N256m has been raised through the 12.091 per cent (FGNSB
NOV 2019) two-year bond and 13.091 per cent (FGNSB NOV 2020) threeyear bond. Subscription in November was the second lowest as investors’ appetite started dropping. Before November and December, the average coupon rate on the FGN saving bond was pegged at an average of 12 per cent and 13 per cent for the twoyear and three -year bond. In October, the saving bond allotment dropped by 5.6 per cent to N389.19m from N412.7m following the slowdown in coupon rates. The coupon rate assigned December 29, 2017 30, January 4, 2018
to the FGNSB OCT 2019 and FGNSB OCT 2020 in October was at 12.059 per cent and 13.059 per cent, respectively, while in September, the coupon rate was at 13.817 per cent (FGNSB SEP 2019) and 14.817 per cent (FGNSB SEP 2020)respectively. Before the last quarter of 2017, there was increased participation at the debt market in the first quarter as demand for T- Bills, FGN Bonds and the Savings bond increased relative to supply Specifically, in March the debt office had raised
N2.068bn from the 13.01 per cent two year debt with 2,575 total number of successful subscriptions. The DMO data showed that the initial auction of the FGN Savings Bond had the largest participation in the first quarter and started dropping in the second and third quarters. At the end of first quarter, in April, the DMO raised N1,288.02bn that comprises of N419.33m and N868.69m for a 12.794 per cent and 13.794 per cent, twoyear and three-year savings bond, respectively. Page 8 9
FINANCIAL WATCH
www.financialwatchngr.com
JANUARY 4, 2018
NEWS
Nigeria’s first dry port comes on stream today
and air to a sea port, and will operate as a Succour may have come centre for transthe way of importers and shipment of sea cargo to inland destinations. exporters in the North The Director, Special Western part of the Duties, Nigerian country, as President Muhammadu Buhari is Shippers Council (NSC), Ignatius Nweke, who set to commission confirmed this to The Nigeria’s first Inland Guardian yesterday, Dry Port in Kaduna, said the port, built by today. the Kaduna Inland Dry The dry port is an Port Limited, is among inland intermodal the seven dry ports terminal directly being promoted by the connected by road, rail
By Cynthia Adigwe
Council. According to him, the port has the capacity to handle 29,000 tonnes of cargoes yearly in the first phase of operation, and likely to double when fully completed. “It is also estimated to generate no fewer than 5,000 direct employments at the commencement of operations. The Kaduna Dry Port, which is the first of its kind in
in Lagos ports, andprovide relief for the busy Apapa road.He said the port when inaugurated would provide an easy process for the exportation of farm produce from Kaduna and neighbouring states as well as landlocked countries. Nweke noted that Kaduna State is the largest producer of ginger in Nigeria, adding that the market for Kaduna ginger would improve tremendously once the dry port commenced full operations on Thursday. He recalled that other locations of Inland Dry Nigeria, would receive Ports had been approved, cargo from Apapa Port and already concessioned in Lagos, through the to private sector operators railway or by road and by the ICDs also export goods Implementation through the same Committee of the Federal channel,” he said. Ministry of Nweke explained Transportation.“These are that the idea to Isiala Ngwa (Abia State); establish the Inland Erunmu, Ibadan (Oyo Container State); Heipang (Plateau Depots(ICDs), in the State); Zawachiki (Kano hinterland was State); Funtua (Katsina informed by the need to State); and Maiduguri reduce the congestion (Borno State),” he said.
CBN, NeFF project tougher year for e-payment fraudsters By Ezekiel Enejeta
operation, embarked on several industry The Chairman, Nigeria defining initiatives Electronic Fraud backed by three major Forum (NeFF), ‘Dipo circulars that have Fatokun, has predicted emanated from a tough year for previous deliberations electronic payment of the forum. (epayment) Such initiatives fraudsters. include implementing a Fatokun, who doubles two-factor as the Central Bank of authentication for Nigeria (CBN) Deputy internal banking Governor, Payment processes, instituting System Department, regulation for card said the forum would present fraud in a nonensure that activities of Europay, MasterCard e-fraudsters are and Visa (EMV) stopped before they environment, and happen. creation of fraud desks Speaking at NeFF’s for effective e-fraud end of year party held control. in Lagos, he said “In order to raise the NeFF’s efforts in 2018 bar of our collaboration will be aimed at further effort, the NeFF also securing banking led the industry on a channels, raising scheduled visit to the awareness on fraud Nigerian Computer controls and deepening Emergency Response collaboration and Team (ngCERT) facility partnership with both coordinated by the law-enforcement and Office of the National telecommunication Security Adviser to the stakeholders within President, where the and outside the country industry was enjoined The Forum,he further to utilise the facility in explained, had in the bolstering its fraud FINANCIAL WATCH
prevention efforts in a more proactive, effective and efficient way,” he said. “We have thus far restricted the activities of electronic fraudsters in Nigeria, cutting back on losses suffered for a third straight year. In the coming year, we will ensure that not only fewer losses occur but the inclination to attempt will also wane,” he added. Fatokun, had earlier said the NeFF will be partnering with the Nigeria Communications Commission (NCC) to check e-fraud in the country. Fatokun revealed that NeFF also organised a stakeholders workshop on Cybercrime collaborating with Technology Advisors (ICT Lawyers/Consultants) with theme: “Tackling Enforcement Challenges Under The Cybercrime Act” to ensure success of the partnership. He said Subscriber Identification Module January 4, 2018
(SIM) swaps and recycled SIMs have posed a new challenge in Nigeria’s space, with subscribers constantly being inundated with messages and calls aimed at phishing personal banking information from the unsuspecting public. “It has become important to partner with the telcos which can assist us in probably ending this dimension of fraud. Users of financial products need to keep payment safety buttons on top of their mind at all times. We hope that our members will show the much needed cooperation when the time comes for us to jointly engage the public and push our message to the forefront of payment conversations alongside convenience and speed,”he said. The workshop, he said, attracted
stakeholders as defined by the Act from the Presidency, banks, telecommunication companies and the Nigerian Stock Exchange with the Governor of the Central Bank of Nigeria, Godwin Emefiele who was represented by a Deputy Governor of the apex bank. “The workshop was able to issue a 10 point communiqué which was delivered to the representative of the Hon. Minister of Justice and Attorney General of the Federation for further action. I want to assure you that with your cooperation, we will not relent in realizing the points that have been birthed from this process in order to create a safer operating environment in our payments system,” he said. Also speaking at the event, CBN Deputy Governor, Operations, Adebayo Adekola, said the Nigeria payment system and banking security have improved since the NeFF creation six years ago. Page 10