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Business News

Capital Market Performance crucial to economic development – FBNQuest Securities

The Nigerian equities market remained on the downbeat in 2016 due to the recession which impacted economic growth adversely.

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Nigerian capital market

The Nigerian equities market remained on the downbeat in 2016 due to the recession which impacted economic growth adversely. The economy however made some recovery in Q2 2017 following the introduction of the I&E window by the CBN; a move by the Central Bank of Nigeria which encouraged some level of FPI inflows, thereby boosting reserves and economic activities.

Consequently, the market closed up at 42.03% at the end of 2017. By 2018, the market declined by -17.81% as foreign portfolio investors exited the emerging and frontier regions following a hike in US Fed rate, US and China trade wars and uncertainty around Brexit in addition to slow economic growth and increasing debt profile in these regions. Investors, foreign and local have largely remained on the side-lines, still in search of clear cut policies to guide investment decisions.

In analysing the current performance of the Capital Market, it is pertinent to note that investor sentiment is still very weak as none of the above-mentioned factors have changed significantly. Appetite for Nigerian assets has not been fantastic and the equities market has been the worst hit. Even our local institutional investors would rather invest in the fixed income market than the equities market due to share price volatility as it impacts their valuations.

Total capital importation into the Nigerian economy grew 35% y/y to US$8.5bn in Q1 2019. The chunk of this inflows c.84% was channeled towards Foreign Portfolio Investments (FPIs). The breakdown of the inflow from the FPIs portion was split; 83% to money market instruments; equities was 9% and 8% channeled to bonds.

Equity instruments are on a downturn, although there has been an increase in fixed-income investments especially from foreign investors as the above data has shown. With relatively stable and competitive interest rates, more investors would be attracted to fixed income instruments such as Money Market Instruments – Treasury bills, Commercial papers, Eurobonds, Corporate and Sovereign Bonds.

There is also a growing interest in investment options in US Dollars due to a growing local appetite for currency diversification – which has led to firms like FBNQuest Securities creating solutions to allow investors to earn an income in foreign currency.

According to Fiona Ahimie, Managing Director, FBNQuest Securities, the Firm is committed to improving the narrative of the market performance by providing quality research reports and valuable insights on a continuous basis to clients to aid their investment decisions. “We advise investors to allocate a portion of their investible funds to equity solutions, in line with their risk appetite especially at these times when the share prices of many companies are testing new lows, as equity markets are expected to provide higher returns over the long term. As more and more investors apply the concept of asset allocation, we expect to see growth in allocations across our solutions in this asset class.”

The capital market’s performance remains a crucial aspect of the growth of any nation’s economy, especially as a catalyst for growth. It mobilizes long term savings/capital from individuals and institutional investors, for users such as governments and the private sector. Increased Public Private Partnership investments in critical infrastructure and improvement in the implementation of capital budgets, would address some of the infrastructural deficiencies in the economy, as this could reduce the average cost of production and enhance economic growth.

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Empirical studies have shown that sustainable growth in the capital market can be attained through technological development and more friendly business policies which support new and existing businesses.

[READ: Why it makes sense for FBN to recall the 8.25% $300m Subordinated Callable Bond]

She further highlighted that Nigeria is characterised by a growing need for investment management services, which has led to more players offering investment management services to the public and private sectors leading to rising competition.

“As such, being a professional service provider, FBNQuest Securities focuses on building innovative and best in class solutions as well as offering seamless client service to stay ahead of competition. We also work to ensure that the performance of our Funds remain competitive thereby boosting investors’ confidence. We do this by making sure we are disciplined across the investment management value chain, that is, from extensive in-house research, good Risk Management practices; to portfolio management and client services.

“Factors we consider when choosing instruments into portfolios include, but are not limited to; market dynamics and realities, regulations, projected risk and returns and the client’s investment profile. We are also committed to investors’ education as we support various initiatives by the regulators in this regard, including organized workshops and also periodic FBNQuest organized roadshows to both local and offshore investors.

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“In conclusion, it is our belief that with more investor awareness and investor confidence in the integrity of the market, coupled with clear-cut economic policies and demonstration of increased accountability by the Federal Government, the capital market will take its rightful place as a source of infrastructural and economic development in the nation.”

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Energy

Nigeria breaks transmission record again, hitting 5,801.60 MW

The TCN has broken its own transmission record three times in the space of a week.

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FG set to create at least 5 million jobs for youths in the power sector – Minister of Power , Consortium of Western investors to inject upwards of $5 billion in Nigeria's renewable energy sector, Power: Nigeria's deal with Siemens - the birth of a new era?

The Transmission Company of Nigeria announced another record, as grid transmission hits a peak of  5801.60 MW.

This was disclosed by the Minister of Power, Engineer Sale Mamman in a statement on Tuesday evening.

“Back-to-Back Peak Transmission, Yesterday, 1st of March at 9:30 pm, we hit a new HIGH,” he said.

He added that 5801.60 MW transmitted at a frequency of 50.09 hz.

“Next Level heights for the Power Sector. Kudos to all at the TCN & MoP striving towards stable energy for Nigerians,” he added.

In case you missed it 

  • Nairametrics reported yesterday that the Transmission Company of Nigeria (TCN) announced that it hit another record milestone on transmission, as it recorded a national peak of 5,615.40MW.
  • On March 1st that the TCN announced it has broken its transmission record once again, after hitting a record of 5,584.40 MW.

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Coronavirus

COVID-19 Update in Nigeria

On the 2nd of March 2021, 479 new confirmed cases and 8 deaths were recorded in Nigeria

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Covid 19 update symptops

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 156,496 confirmed cases.

On the 2nd of March 2021, 479 new confirmed cases and 8 deaths were recorded in Nigeria.

To date, 156,496 cases have been confirmed, 134,551 cases have been discharged and 1,923 deaths have been recorded in 36 states and the Federal Capital Territory.

A total of 1.54 million tests have been carried out as of March 2nd, 2021 compared to 1.49 million tests a day earlier.

COVID-19 Case Updates- 2nd March 2021,

  • Total Number of Cases – 156,496
  • Total Number Discharged – 135,136
  • Total Deaths – 1,923
  • Total Tests Carried out – 1,544,008

According to the NCDC, the 479 new cases are reported from 22 states- Lagos (153), Enugu (75), Rivers (50), FCT (40), Kaduna (18), Ebonyi (17), Plateau (17), Edo (17), Borno (16), Oyo (12) Kano (11), Abia (10), Cross River (10), Taraba (9), Nasarawa (7), Bauchi (4), Bayelsa (3), Delta (3), Ekiti (2), Niger (2), Ogun (2) and Akwa Ibom (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 56,001, followed by Abuja (19,274), Plateau (8,911), Kaduna (8,531),  Oyo (6,746), Rivers (6,544), Edo (4,607), Ogun (4,398), Kano (3,764), Ondo (2,983), Kwara (2,931), Delta (2,576), Osun (2,433), Nasarawa (2,234), Enugu (2,078), Gombe (2,051), Katsina (2,030), Ebonyi (1,881), Anambra (1,726), and Abia (1,530).

Akwa Ibom has recorded 1,519 cases, Imo (1,497), Borno (1,292), Bauchi (1,232), Benue (1,188), Niger (917), Taraba (813), Ekiti (804), Bayelsa (772), Sokoto (769), Adamawa (762), Jigawa (496), Kebbi (377), Cross River (334), Yobe (268), Zamfara (219), while Kogi state has recorded 5 cases only.

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

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, Nigeria’s 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.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

Governor Babajide Sanwo-Olu of Lagos State announced the closed down of the Eti-Osa Isolation Centre, with effect from Friday, 31st July 2020. He also mentioned that the Agidingbi Isolation Centre would also be closed and the patients relocated to a large capacity centre.

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Due to the increased number of covid-19 cases in Nigeria, the Nigerian government ordered the reopening of Isolation and treatment centres in the country on Thursday, 10th December 2020.

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On 26th January 2021, the Federal Government announced the extension of the guidelines of phase 3 of the eased lockdown by one month following the rising cases of the coronavirus disease in the country and the expiration of phase 3 of the eased lockdown.

On 28th February 2021, the federal government confirmed that the first tranche of Covid-19 vaccines will arrive in Nigeria on Tuesday, March 2nd, 2021.

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

 

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