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All the major economic news from Nigeria in 5 minutes – 05/6/2017

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Summary of the top business, economic and political news in Nigeria today.

 

  1. Privatised public enterprises are to be listed on the Nigerian Stock Exchange, the Director-General, Bureau of Public Enterprises, Mr. Alex Okoh, has said. The BPE boss said the structure of the reform and privatisation process by the BPE envisaged listing of privatised enterprises as the final outcome. Link
  2. The Lagos State Government has released N1.05bn for the payment of accrued pension rights of retirees under the Contributory Pension Scheme in the state’s public service and local governments. According to a statement obtained on Sunday, the Lagos State Governor, Mr. Akinwunmi Ambode, said employees who had served the state and now retired deserved to be specially recognised, and be in the celebration mood for the Lagos at 50. The statement said the money was released for 241 retirees. Link
  3. The Federal Inland Revenue Service (FIRS) has upgraded its web platform and as such has introduced some 6 new electronic solutions which Nigerians can make use of in the comfort of their homes and offices. According to the Executive Chairman, Tunde Fowler, these e-services will improve the convenience, transparency and round the clock processing and payment of taxes. Link
  4. The Debt Management Office will today open the FGN Savings Bond auction for the month of June 2017, selling both two and three year papers to retail investors, according to its provisional bond issuance calendar. Link
  5. The 3,239 bureaux de change (BDCs) approved by the Central Bank of Nigeria (CBN) got $520 million from the apex bank dollar interventions in the last four weeks. The funds, followed $40,000 per BDC weekly dollar allocations from the CBN, in its commitment to deepen liquidity in the foreign exchange market. Link
  6. The Exporter/Importer Forex Window launched by the Central Bank of Nigeria (CBN) to deepen dollar inflows to the economy has recorded $1 billion deals in the last six weeks, Managing Director, Financial Derivatives Limited, Bismarck Rewane, has said. “So far, approximately $1billion has been traded at this window. The spread between the parallel and interbank markets narrowed to N76.15 (May 30) compared to N83.65 as at April 28,” he said. Link
  7. Following the review of the contract terms on the proposed standard gauge railway projects by the China EXIM Bank, the Federal Government will now spend not less than N300billion extra to settle land compensation, insurance, tax and survey. The project which will commence as soon as the 2017 budget is passed, is a partnership between the Nigerian government and the China EXIM Bank for the building of standard gauge rail projects from Lagos to Kano and Lagos to Calabar. Link
  8. As part of efforts to reduce the rate of unemployment in Lagos state, the United Nations Development Programme (UNDP) and the Lagos State Employment Trust Fund (LSETF) have signed a $4million partnership agreement to equip up to 10,000 Lagosians with relevant skills for employment. Link
  9. The National Agency for Food And Drug Administration and Control (NAFDAC), says European Union (EU) rejected 24 exported food products from Nigeria in 2016 for failing to meet standards. NAFDAC spokesperson, Dr Abubakar Jimoh said that the five major products are groundnut, palm oil, sesame seed and beans that were illegally exported to the EU. He noted that from the information made available to NAFDAC, groundnut was rejected because it contained aflatoxin, which made the quality substandard. “The exported palm oil did not scale through the EU’s test because it also contained a coloring agent that was carcinogenic. “Beans was initially banned for one year, when EU was not satisfied with our exported beans in terms of quality assurance, it extended the ban by another two years, which expires next year. Link
  10. Three former top officials of the Nigerian Ports Authority (NPA) and a former special adviser to President Goodluck Jonathan have been named in a massive foreign bribery scandal that has led to the conviction of a company and some of its top officials in Switzerland. Dredging International Services (Cyprus) Limited was sentenced to a fine of one million Swiss Francs and asked to refund 36 million Swiss Francs illegal profit after it was indicted for allegedly making illicit payments to a former Managing Director of the NPA, Adebayo Sarumi; a former Managing Director of NPA’s Eastern Ports, Felix Ovbude; a former Executive Director of Finance at the NPA, Abba Murtala Mohammed; and Daniel Afam-Obi, a former executive assistant to Sullivan Akachukwu Nwankpo who was ex-President Goodluck Jonathan’s special adviser on technical matters. Link
  11. Zenith Bank Plc has issued a five-year senior unsecured benchmark Eurobond of $500 million on the Irish Stock Exchange, which has broken new grounds with an oversubscription of more than 400%. A statement by the bank’s management at the weekend said the issue was in addition to its existing $500 million Eurobond, which matures in April 2019.  Link
  12. AutoGenius, one of Nigeria’s first digital insurance platforms, has unveiled an insurance policy tagged ‘Taxify Cover’ designed to increase driver and rider safety as well as improve the confidence of their user base. General Manager, Non-Life Business, AIICO, Adewale Kadiri, said the policy is a special Comprehensive Motor Insurance product customised to provide all the benefits of a comprehensive motor insurance with extended passengers’ liability, loss of personal effects and personal accident covers with a single premium. Link
  13. Jaiz Bank has emerged the worst performing stock in percentage terms on the Nigerian Stock Exchange for the month of May. The data obtained from the exchange for the month of May indicated that the stock dropped by 17.39 percent, to close at 95k per share, as against the opening price of N1.15. Link
  14. The NLPC Pension Fund Administrator Limited’s gross earnings rose by 6.1 per cent from N2.29bn in 2015 to N2.43bn in 2016. The Chairman of the company, Mr. Olabode Emanuel, disclosed this during the firm’s 12th annual general meeting in Lagos. Link
  15. The Nigeria Union of Petroleum and Natural Gas Workers has vowed to shut down the oil sector if the Federal Government fails to rescind its decision on the sale of the Port Harcourt Refining and Petrochemical Company to Oando Plc. The union alleged that the government had ignored the recent resolution by the Senate, which urged that the sale of the refinery should be suspended. Link
  16. Following the successful acquisition of 60 per cent equity stake of Mobil Oil Nigeria Plc by Nipco Investment Limited (NIL) from ExxonMobil Oil Corporation, the company has applied to regulators to acquire additional shares from minority shareholders. The application for the takeover bid opened on May 30 and it is expected to close on June 29, 2017. “This offer period represents the opportunity for qualifying minority shareholders of Mobil Oil Nigeria Plc, who tender their shares to earn cash consideration of N417.12 per ordinary share tendered at a satisfactory premium in comparison with the current market price of N290, which the shares are being traded on the floor of the NSE last Friday,” the company said. Link
  17. The federal government realised a whopping $2billion as revenue from the Onne Oil and Gas Free Zone (OGFZ), in the last six years.  Managing Director of Oil and Gas Free Zones Authority (OGFZA), Mr. Umana Okon Umana, disclosed this at the first session of the Nigeria Business Roundtable held in Lagos at the weekend. Link
  18. The group of 13 banks being owed by Etisalat Nigeria has roundly rejected an offer of five per cent equity in the telecommunications firm in lieu of the more than one $1billion trade credit extended in 2013. Link
  19. The  board of directors of Premier Paints Plc has announced the appointment of Dr Mufutau Adeoye Yusuf has as the new Managing Director/CEO  of the company. Link
  20. Granting unknown persons and organisations access to a subscriber’s telephone line by MTN for the purpose of sending unsolicited messages to the line is a violation of the subscriber’s right to privacy, the Abuja Division of the Court of Appeal has ruled. Link
  21. Senate President Bukola Saraki has said the Senate is concerned about the high interest rates on loans, stating that lawmakers will this week discuss the issue with the Central Bank of Nigeria and the Deposit Money Banks. He stated that in an economy where workers were being retrenched and people were losing investments, it was immoral for certain sectors to be making astronomical profits. Link
  22. As the nation eagerly awaits the take-off of the 2017 budget, more than half way into the fiscal year, the Presidency and the leadership of the National Assembly made last minute attempts, last night, to salvage the document by sorting out areas of disagreement.  According to impeccable sources, the presidency, which prepared the budget, is riled that the leadership of the National Assembly unilaterally introduced more than 400 ‘strange projects’ into the budget before belatedly passing it last month. Link
  23. The Nigerian National Petroleum Corporation, the Department of Petroleum Resources, International Oil Companies and over 40 other firms are expected to appear on Monday (today) as the House of Representatives opens its public hearing on the alleged theft of $17bn crude oil and gas resources from the country. Link

 

Mudeerat Olawunmi is a graduate of Business Administration with over 5 years experience in online data gathering and analysis. Wunmi is a data analysts at Nairametrics and helps ensure that our readers get some of the most important macro and micro economic data required to help make investing decisions.

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Markets

Tesla gains as the Dow plunges; investors shun inflation concerns  

The S&P 500 increased by (+0.33%) as the Dow made a loss of (-0.20%).

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NASDAQ

Investors bet that a higher-than-anticipated increase in inflation would not be enough to slow economic stimulus policies, as equities hit new highs and bond yields dropped. Consumer prices grew faster than expected last month, but investors speculated that the pace was not quick enough to justify any Federal Reserve policy reform. Bank stocks were hurt by the decline in yields. Nasdaq took a hit of (-1.05%) during the session.

The S&P 500 increased by (+0.33%) also. The Dow made a loss of (-0.20%).

Tesla delivered 184,800 new cars in the three months ending in March, up more than 100% from the same span last year and well ahead of Wall Street expectations of about 177,000 vehicles. Hence, Tesla shares soared on Monday after Canaccord Genuity upgraded the clean-tech carmaker’s ranking as it steps toward an “Apple-esque ecosystem” of energy goods.

  • On Thursday, the US will release details on initial jobless claims, factory productivity, and retail sales.
  • The government’s sale of 30-year bonds was met with high interest, extending Treasuries’ profits.
  • Bitcoin hit an all-time high as the cryptocurrency market turned positive ahead of Coinbase Global Inc.’s IPO.
  • GameStop and AMC, which fell 11% and 8.5% on Monday, respectively, failed to recoup losses on Tuesday, with Morgan Stanley predicting heightened uncertainty in the market’s speculative pockets in the months ahead.

Top gainers  

  1. Tesla up 8.60% to close at $762.32.
  2. Danaher up 3.41% to close at $243.84.
  3. NVIDIA up 3.09% to close at $627.18.
  4. Newmont Goldcorp up 2.71% to close at $62.25
  5. Diamondback up 2.54% to close at $75.76.

Top losers

  1. Alliance Data System down 5.35% to close at $105.72
  2. Franklin Resource down 5.25% to close at $27.75
  3. PVH down 4.25% to close at $108.29
  4. Synchrony Financial down 3.92% to close at $41.46.
  5. Micron down 3.60% to close at $92.15

Outlook

  • The first-quarter earnings of banks and financial companies such as JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, and Goldman Sachs Group Inc are expected to have an impact on the market performance.
  • Consumer prices increased a higher-than-expected 2.6% in March, according to data released on Tuesday by the US Bureau of Labor Statistics, with fuel prices spiking 9.1% accounting for nearly half of the index’s price rise.
  • Nairametrics, however, advises cautious buying in this era of growing uncertainties.

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Business

Burger King to open first outlet by Q4 2021- Franchisee

Burger King is expected to employ about 6,000 people (direct and indirect) in Nigeria between 2021 and 2026.

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Burger King

Burger King, an American multinational hamburger fast food chain, is expected to start its operations in Nigeria by the fourth quarter (Q4) of 2021.

The company is also expected to employ about 6,000 people (direct and indirect) in the country between 2021 and 2026, other things being equal.

These were disclosed by Antoine Zammarieh, the Franchisee of Burger King in Nigeria and Managing Director, Allied Food & Confectionary Services Limited, in an interview with Nairametrics on Tuesday.

He said, “Burger King will start operations by Autumn, i.e between September and November 2021. We have set up the Quality Control unit and have met some of our local suppliers to seal the deal. Also, we have sent some of the ingredients to America to test quality.

As a company, we are delighted to enter this new market being the largest country in Africa and are looking forward to serving our future guests with our world-famous Burger King meals.

Most importantly, our goal is to positively contribute to the economy by creating more jobs and employment opportunities. In five years, we hope to directly or indirectly employ between 5,000 and 6,000 people in Nigeria.”

Zammarieh added that the hamburger maker, in a show of interest in the Nigerian market, had signed a development agreement for the Nigerian market.

He explained that the development agreement of the chain in Nigeria, which was recently signed, would give more confidence to the Nigerian market and consumers in general, especially during these hard times.

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What you should know

Nairametrics had reported, three weeks back, when Zammarieh said, “I always believed in Nigeria and in its people. I am confident this venture will go a long way and prove successful for Burger King, Nigeria, and our company.”

“I believe this will be a tremendous step towards giving more confidence to the Nigerian market and consumers in general.”

What to expect

The first outlet of the hamburger chain in Nigeria is expected to be launched in Lagos.

The Florida-based restaurant chain is set to join the likes of Dominos Pizza, Krispy Kreme, KFC, and Chicken Republic (pieXpress) in a stiff competition for market share and dominance in a saturated market, with hundreds of other traditional restaurant chains.

Burger King is expected to dig deep into its quiver of strategies to ensure an impressive performance and success in its first year of operation, as other players have been having it tough following their respective launches into the Nigerian market.

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The COVID-19 pandemic however has affected the fast-food industry severely, as the disruption to the industry’s supply chain, especially the on-trade channel, which accounts for a significant percentage of restaurant sales, triggered declines in their profits in 2020.

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