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MTN Nigeria makes a return to the watchlist

@mtnng and @oando_plc are one of several firms to watch out for on the @nsenigeria this week

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Stock to watch this week, Airtel Africa

Stocks to watch comprises the best and worst performing stocks of the previous week, companies that had corporate actions after Friday’s closing bell, and those expected to hold this week.

Stocks to watch is not a Buy/Sell/Hold recommendation.

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Ikeja Hotels et al

Ikeja Hotels and all other firms holding Annual General Meetings or Court Ordered Meetings this week have a joint spot this week.

They include Lafarge Africa, Presco Plc, CCNN, Studio Press Nigeria, Sovereign Trust Insurance, and NPF Microfinance Bank Plc.

Others are Nigerian Aviation Handling Company Plc, and John Holt Plc.

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MTN Nigeria and CAP Plc

MTN Nigeria and CAP Plc have a joint spot this week, as they will hold board meetings on the 24th of July, 2019. The firms could release their results shortly after.

LASACO Assurance et al

LASACO Assurance Plc, Royal Exchange Plc, Regency Alliance Plc, and AXA Mansard Insurance Plc have a joint spot this week, as they will be holding board meetings between the 24th and 25th of July respectively.

Access Bank et al

Access Bank Plc, Nestle Nigeria Plc, UPDC Plc, Dangote Cement Plc, and The Initiates Plc will hold board meetings on the 26th of July 2019.

Except Access Bank, the other firms could release their results shortly after.

Oando Plc

Oando Plc has a spot this week, as further hearing on the suit between the Securities and Exchange Commission (SEC), and the company’s Group CEO, Wale Tinubu, and Deputy Group CEO, Mofe Boyo, continues this week.

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Omatek and Deap Plc

The two firms jointly occupy the last spot in this week’s watchlist, by virtue of notices sent after Friday’s closing bell. The two firms have been in limbo for a while: Omatek, due to the death of its Founder/Managing Director Florence Seriki, and Deap Capital, due to a suspension placed by the Securities and Exchange Commission (SEC).

Patricia

A backlog of results could be released this week.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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FEATURED

Naira falls at the black market despite growing Nigerian foreign exchange reserves

According to the latest data obtained from the Central Bank of Nigeria (CBN), Nigeria’s foreign exchange reserves now stand at $36.57 billion.

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The naira depreciated on Friday at the parallel segment of the foreign exchange market against the United States dollar. It sold at N450 to $1, compared to N447 against the dollar, which was recorded on Thursday as some importers rushed to meet their foreign exchange payment obligations before the close of the week. 

In addition, it should be noted that just recently, Nigeria’s central bank had paused the selling of U.S dollars to foreign investors and manufacturers seeking to retrieve their funds at the height of the oil crisis. This was done in a bid to protect the value of the naira, according to reports credited to Bloomberg news. 

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READ ALSO: CBN reacts to videos, pictures of new N2,000 and N5,000 in circulation

“Remedial policy action was taken by the central bank and increased government borrowing will help contain liquidity pressures,” said Mahmoud Harb, a director at Fitch Ratings.  

Meanwhile, according to the latest data obtained from the Central Bank of Nigeria (CBN), Nigeria’s foreign exchange reserves now stand at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020. This shows a gain of $3.15 billion dollars in 36 days. 

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READ ALSO: Forex turnover drops by 28.3% as naira depreciates against the dollar at I&E window

The macro fundamentals surrounding Nigeria’s major export, including the recent surge in crude oil prices to about $41, seem to have helped Nigeria’s foreign reserve to rise at such a steady pace. 

However, according to data recently obtained from Bloomberg news, twelve-month naira forwards traded at N454.50 per dollar at 11.43 a.m. on Wednesday, down from a high N522.56 to the dollar on April 20. This shows that currency traders are bullish on the naira at the mid-term macro level. 

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Coronavirus

COVID-19 Update in Nigeria

On the 5th of June 2020, 328 new confirmed cases and 10 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 11,844.

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COVID-19: FCMB reschedule operations

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 11,844 confirmed cases.

On the 5th of June 2020, 328 new confirmed cases and 10 deaths were recorded in Nigeria.

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To date, 11844 cases have been confirmed, 3696 cases have been discharged and 333 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 73,064 tests.

COVID-19 Case Updates- 5th June 2020

  • Total Number of Cases – 11,844
  • Total Number Discharged – 3,696
  • Total Deaths – 333
  • Total Tests Carried out – 73,064

The 328 new cases were reported from 14 states- Lagos (121), FCT (70), Bauchi (25), Rivers (18), Oyo (16), Kaduna (15), Gombe (14), Edo (13), Ogun (13), Jigawa (8), Enugu (6), Kano (5), Osun (2), Ondo (2).

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

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The latest numbers bring Lagos state total confirmed cases to 5663, followed by Kano (985), Abuja at 862, Katsina (385), Edo (364), Kaduna (335), Oyo (334), Ogun (329), Borno (322), Rivers (308), Jigawa (282),  Bauchi (281),  Gombe (184), Kwara (127).

Delta State has recorded 116  cases, Sokoto (115), Plateau (113), Nasarawa (90), Ebonyi (80), Zamfara (76),  Yobe (52), Osun (49), Imo (47), Akwa Ibom (45), Adamawa (42), Niger (41), Ondo (38),  Kebbi  (33), Bayelsa and Enugu (30), Ekiti (25), Taraba (18), Abia (15), Benue (13), Anambra (12), while Kogi state has recorded only 3 cases.

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

 

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

Patricia
DateConfirmed caseNew casesTotal deathsNew deathsTotal recoveryActive casesCritical cases
June 5, 20201184432833310369678157
June 4, 2020115163503238353576467
June 3, 2020111663483151332975227
June 2, 20201081924131415323972667
June 1, 20201057841629912312271579
May 31, 20201016230728714300768687
May 30, 2020985555327312285667267
May 29, 202093023872612269763447
May 28, 202089151822595259260647
May 27, 202087333892545250159787
May 26, 2020834427624916238557107
May 25, 202080682292337231155247
May 24, 202078393132265226353607
May 23, 202075262652210217451317
May 22, 2020726124522110200750337
May 21, 2020701633921111190748987
May 20, 202066772842008184046377
May 19, 202064012261921173444757
May 18, 202061752161919164443407
May 17, 202059593881826159441837
May 16, 202056211761765147239737
May 15, 202054452881713132039544
May 14, 202051621931683118038154
May 13, 202049711841646107037374
May 12, 20204787146158695936704
May 11, 202046412421521090235894
May 10, 202043992481421777834794
May 9, 202041512391271174532784
May 8, 202039123861181067931154
May 7, 20203526381108460128184
May 6, 20203145195104553425071
May 5, 2020295014899548123704
May 4, 2020280224594641722912
May 3, 2020255817088240020702
May 2, 20202388220861735119522
May 1, 20202170238691035117512
April 30, 2020193220459731715562
April 29, 2020172819652730713692
April 28, 2020153219545425512322
April 27, 20201337644102559942
April 26, 20201273914152399942
April 25, 20201182873632229252
April 24, 202010951143312088552
April 23, 20209811083231977532
April 22, 2020873912931976482
April 21, 20207821172631975602
April 20, 2020665382311884662
April 19, 2020627862221704362
April 18, 2020541482021663562
April 17, 2020493511841593172
April 16, 2020442351311522772
April 15, 2020407341211282672
April 14, 202037330111992632
April 13, 202034320100912422
April 12, 20203235100852282
April 11, 202031813103702382
April 10, 20203051770582402
April 9, 20202881471512302
April 8, 20202742260442262
April 7, 20202541661442042
April 6, 2020238650351982
April 5, 20202321851331942
April 4, 2020214540251850
April 3, 20202092542251800
April 2, 20201841020201620
April 1, 2020174352091630
March 31, 202013982091280
March 30, 2020131202181210
March 29, 2020111221031070
March 28, 20208919103850
March 27, 2020705103660
March 26, 20206514102620
March 25, 2020517102480
March 24, 2020444102410
March 23, 20204010112370
March 22, 2020308002280
March 21, 20202210001210
March 20, 2020124001110
March 19, 20208000170
March 18, 20208500170
March 17, 20203100030
March 16, 20202000020
March 15, 20202000020
March 14, 20202000020
March 13, 20202000020
March 12, 20202000020
March 11, 20202000020
March 10, 20202000020
March 9, 20202100020
March 8, 20201000010
March 7, 20201000010
March 6, 20201000010
March 5, 20201000010
March 4, 20201000010
March 3, 20201000010
March 2, 20201000010
March 1, 20201000010
February 29, 20201000010
February 28, 20201100010

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Companies

CBN debits banks another N459.7 billion for failure to meet CRR target

Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures.

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CBN

The Central Bank of Nigeria (CBN) has debited twenty-six banks, including merchant banks, to the tune of N459.7 billion for failure to meet their CRR (Cash Reserve Ratio) obligations. The fresh debit, which Nairametrics reliably gathered occurred yesterday, has left many stakeholders in the banking sector very upset.

The details: Among the banks that were most affected are United Bank for Africa Plc (N82.3 billion), First Bank of Nigeria Ltd (N59.3), Zenith Bank Plc (N50 billion), First City Monument Bank (FCMB) Limited (N45 billion), and Guaranty Trust Bank Plc (N40 billion). The rest of the affected banks can be seen in the table below.

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Note that the latest CRR debits are coming barely one month after a lot of banks were collectively debited to the tune of N1.4 trillion for the same reason in April. Between then and now, a lot of other minor CRR debits have occurred. Nairametrics understands that the apex bank now debits banks on a weekly basis.

Some backstory: During the CBN’s Monetary Policy Committee (MPC) meeting that was held last month, committee members voted to retain CRR rate at 27.5%. The rate was increased in January this year from 5% to its current level after the apex bank cited inflationary pressure concerns. What this means, therefore, is that Nigerian banks are required to keep 27.5% of their deposits as CRR with the Central Bank of Nigeria.

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But banks are silently upset: Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures. While reacting to the latest development, a banker who refused to be identified, said:

“What we’ve seen in recent times is that the CBN just indiscriminately debits banks, usually towards the stale-end of every week. They will look at your bank account and if your liquidity is plenty, they will debit you.

Deal book 300 x 250

“You know the central bank also does what we call retail FX intervention, that is when they sell FX to corporates. Now, because they don’t want banks coming with huge demands, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands. That has really been the driver.

READ ALSO: Central banks digital currencies pose a threat against the U.S dollar

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“We understand that the central bank had set up a special CRR team that is supposed to monitor banks’ CRR once a month. But now, the team monitors banks’ CRR on a weekly basis. This is why the central bank is effectively debiting banks on a weekly basis. Some weeks ago, they debited some banks about N1.4 trillion. That was one of many. Between that time and now, there have been more debits that have happened. But the debits that are huge/significant are what is troubling the banks. There was a N300 billion that happened about two weeks ago. and then yesterday that was this N459.7 billion that was also debited.

Patricia

“These are huge amounts that are leaving the banking sector. It’s a squeeze on the banks. A bank like First Bank, for instance, has about N1.4 trillion in CRR with the Central Bank. And there is Zenith Bank with equally as much as N1.5 trillion. These are monies that banks can potentially put in loans at 52% at 30%, or even put in money market instruments at maybe 10%. So, for a shareholder of these banks, this CRR debits are impairing the banks’ ability to increase their earnings because now are not able to use the funds that are legitimately theirs to create money for their shareholders. And the question is that under what framework is the Central Bank choosing to take people’s money?”

Heterodox Policies: The CBN has deployed several policies in the past two years that defy conventional solutions wisdom all in a bit to contain the devaluation of the naira and support fiscal measures that are yet to be complimentary.

This is why some analysts suggest this CRE policy is another one of those policies. An analyst with knowledge of this matter inform Nairametrics that it appears the CBN no longer relies on the 22.5% CRR charge but rather arbitrarily debit bank accounts.

Understanding CRR: The cash reserve requirement is the minimum amount banks are expected to retain with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased from 5% to 27.5%  by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.

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