Stocks investors record N136bn loss in one week

Stocks investors lost N136bn at the end of trading last week on the Nigerian Exchange Limited.

Suffering a dip which saw mixed sentiments was the AllShare Index, which depreciated by 0.48 per cent or 250.69 base points to close at 52,214.62 on Friday.

All other indices finished higher except for NGX Main Board, NGX 30, NGX Banking, NGX AFR Bank Value, NGX MERI Value, NGX Industrial Goods, and NGX Sovereign Bond which depreciated by 0.85 per cent, 0.12 per cent, 0.99 per cent, 1.45 per cent, 1.11 per cent, 3.36 per cent and 4.83 per cent respectively while the NGX ASeM index closed flat.

At the end of last week, the Year-To-Date returns rose to 1.88 per cent from 1.78 per cent recorded on Thursday.

In the last trading week, a total turnover of 3.602bn shares worth N36.451bn in 27,801 deals was traded by investors on the floor of the NGX against a total of 2.973bn shares valued at N22.828bn that exchanged hands the previous week in 23,765 deals.

The Financial Services Industry (measured by volume) led the activity chart with 3.150bn shares valued at N27.484 bn traded in 14,987 deals; contributing 87.47 per cent and 75.40 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 99.394m shares worth N219.455m in 901 deals. The third place was the Consumer Goods Industry, with a turnover of 87.434m shares worth N1.628bn in 3,768 deals.

Forty eight equities appreciated lower than 51 equities in the previous week. 30 equities depreciated in price, higher than 26 in the previous week, while 78 equities remained unchanged, lower than 79 recorded in the previous week.

Leading the gainers’ table was the Computer Warehouse Group whose shares appreciated by 56.82 per cent to close at N2.07, and Ardova Plc gained 37.50 per cent to close at N26.40. Transnational Corporation Plc recorded a 33.51 per cent gain to close at N2.59, Multiverse Mining and Exploration Plc gained 32.90 per cent to close at N4.12 and Sovereign Trust Insurance Plc gained 27.27 per cent to close at N0.42.

Atop the losers’ chart was C &I Leasing, which dipped by 19.60 per cent to close at N3.20, Access Holdings Plc lost 12 per cent to close at N9.90, Royal Exchange Plc lost 11.48 per cent to close at N0.54, Sunu Assurances Nigeria Plc suffered a 9.26 per cent loss to close at N0.49 and Bua Cement lost 8.02 per cent to close at N90.

Analysts at SCM Capital projected that the mixed sentiments that the market had been experiencing may persist, even as bargain hunting took place as investors took positions in fundamentally sound stocks with fantastic first-quarter earnings.

In his presentation at the Lagos Business School Breakfast meeting (May edition), the Managing Director/Chief Executive Officer, Financial Derivatives Company Ltd, Bismarck Rewane, warned that the impact of the cashless policy of the Central Bank of Nigeria would remain a threat to consumers’ purchasing power and would likely weigh on the second quarter performance of corporates.

“However, it will be offset by improved digital services and increased availability of cash,” he said.

From Abubakar Yunusa ABUJA

Stransact (Chartered Accountants), the correspondent firm of RSM, a global accounting and auditing firm in the world, has recommended tax related reforms for the government to improve and sustain the economy.

During a media briefing, the firm’s partners set agenda on tax reforms for the incoming administration, ahead of May 29 inauguration of President-elect of Nigeria, Bola Tinubu.

Stransact Partners noted that the middle class in Nigeria was fast disappearing due to the collapse and relocation of companies that would have employed skilled and educated workforce.

According to the partners, Nigeria had one of the highest multiplicities of tax in the world. With inflation rate rising to 22.04 per cent in March, the multiple taxes imposed on businesses and individuals had become a heavy burden on Nigerians and had become impediments to the ease of doing business.

They advised the government to widen the tax net by bringing in more people from the informal sector into the tax bracket, rather than increasing tax rates or introducing new forms of taxes.

“To ease pressure on genuine businesses bringing investments into the country and ensure compliance, government must be fair and concise in regulation, allowing market forces to freely set the terms for a healthy competition in the economy,” General Partner at Stransact, Eben Joels, said.

Joels also noted that the multiple currency rates policy was giving influential people undue advantage to make excess profit while stifling the growth of genuine businesses.

“For instance, a politician can use his influence to get dollars at the official rate of N460 and sell at the black-market rate of around N750, taking advantage of the arbitrage difference,whereas a fully compliant business person may find it challenging to recoup their investments because they are required to purchase dollars at the open market rate, which is not stable enough to ensure consistent profits”

Partner, Tax Services, Victor Athe, called for the ‘formalisation’ of the informal sector of the Nigerian economy, where a large portion of transactions were done outside the banking system.

“Introducing facilities and regulations that will formalise the unregulated sectors of the economy will widen the tax net and increase the tax revenue available for government,” Athe said.

The partners canvassed for the deployment of homegrown innovations, technologies and tailored solutions to Nigeria’s tax problems.

One example of such indigenous innovations, the partners noted, was the TaxPro-Max introduced by the Federal Inland Revenue Services, which enabled seamless registration, filing, payment of taxes and automatic credit of withholding tax.

From Abubakar Yunus, Abuja

The International Air Transport Association has released a statement clarifying that it is not responsible for the exchange rate applied to international flight tickets in Nigeria.

This comes after reports suggested that IATA was behind the current hike in exchange rates.

The IATA stated that “The exchange rate applied to international flight tickets sold in Nigeria are not determined by IATA, and it is incorrect to describe them as the “IATA exchange rate.”