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Nigeria received $5.82 billion capital inflows in Q2 2019, down by -31.41%

Nigeria received $5.82 billion capital inflows in Q2 2019, down by -31.41%

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capital importation, Nigeria spends N1.9 trillion on goods from China in H1, up by 88% , Capital importation jacks by 5.7% (YoY) as banks attract $4.74 billion , Capital flows to Nigeria down for the second consecutive quarter by 7.8% q/q 

Nigeria received $5.82 billion capital inflows in the second quarter (Q2) of 2019, compared to $8.48 billion in the first quarter (Q1). This is revealed in the latest capital importation data released by the National Bureau of Statistics (NBS).

According to the NBS report, the $5.82 billion capital importation in the first quarter represents a -31.41% contraction from the total amount ($8.48 billion) received within the last quarter.

Also, Capital inflows at $5.82bn in Q2 2019 compared to $5.51 billion in Q2 2018 represents a year on year growth of 5.56%.

The Details: Basically, Nigeria’s capital importation is categorized into three investment types, and these include Portfolio Investment, Foreign Direct Investment (FDI) and Other Investment.

The Portfolio Investment in Nigeria is made up of three items which include Equity, Bonds and Money Market instruments. During the period under review, the largest amount of capital importation by type was received through portfolio investment, which accounted for 73.76% ($4.29 billion) of total capital importation.

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  • Money Market instruments accounted for 81% of total portfolio investments, and this amounted to $3.47 billion.
  • Equity ranked second with $496.8 million or 12% of the portfolio investment.
  • Lastly, Bonds received the lowest portfolio investment with $316.28 million or 7% of total capital.

Other Investment is broken down into four categories which include Trade credits, Loans, Currency deposits and Other claims. In the second quarter of 2019, other investments recorded the second biggest capital importation, accounting for 22.41%  or $1.30 billion of total capital importation.

  • Loans investment was estimated at $413.37 million and Other claims within the quarter stood at $413.37.
  • While currency deposit did not receive any investment, trade credit got a meager $110,000.

Foreign Direct Investment (FDI) investments in Nigeria accounted for the least of total capital importation with $222.89 million or 3.83% of total capital imported in Q2 2019.

  • Equity FDI inflow in the second quarter was estimated at $222.89 million, a decline from the value recorded in Q1 2019. However, FDI only received 100% equity capital importation.

A further breakdown in the report further shows that by sector, capital importation in banking dominated Q2 2019 with $1.89 billion of the total capital importation.

A closer look shows that the United Kingdom emerged as the top source of capital investment in Nigeria in Q2 2019 with $3.13 billion. This accounted for 53.85% of the total capital inflow in Q2 2019.

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Key takeaways

  • Following the drop in capital inflows into Nigeria in Q2 2019, this suggests investors’ confidence in the economy dampened during the period.
  • This also reflected in the Gross Domestic Product (GDP) of the country that slowed to 1.94% in Q2 2019.
  • While momentum improved in the economy in Q1 with 2.10% GDP growth, major sectors’ contracted and this may partly be due to the uncertainty the surrounded the political atmosphere in the country.
  • Recall, the second quarter of 2019 (April and June) was characterized by the lack of ministers to drive policies to spur growth in different sectors, and this must have affected investors’ sentiments to invest in the country.

[READ FURTHER: Nigeria’s GDP slows to 1.94% in Q2 2019, as non-oil sector contracts]

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Companies

Multiverse forecasts N39.5 million profit in Q1 2021

The management of Multiverse Plc has projected a revenue of N76 million and a profit of N39.5 million in Q1 2021.

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Multiverse Mining and Exploration Plc has projected that in the first quarter of 2021, the mining and exploration company will generate N76 million in revenue, and post a profit of N39.5 million.

These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Corporate Secretaries of the company.

Key highlights of the earnings forecast for Q1 2021

  • Total revenue is projected at N76 million.
  • Turnover from agency sale is projected at N1 million.
  • Agency cost is s projected at N850 thousand.
  • Total expenses are projected at N7.8 million.
  • Operating Profit is projected at N67.3 million.
  • EBIT (Earnings Before Interest and Taxation) is projected at N67.3 million.
  • Interest Expense is projected at N27.8 million.
  • Profit after tax is projected at N39.5 million.

Key assumptions made to support the earnings forecast and projection of the company

The earnings forecast was made on the ground that there won’t be any significant change in the economic policies of the Federal Government, while the monetary policies of the CBN would not be altered significantly.

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The company also maintained that there would not be any industrial unrest that would affect its production and sales volume, while the profit of the company would not be pressured by rising costs of inputs, as prices of materials used in production shall be stable in the period under review.

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Companies

GCR affirms Dangote Cement issuer ratings of AA+(NG) and A1+(NG)

Global Credit Ratings has affirmed Dangote Cement issuer ratings of AA+(NG) and A1+(NG).

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Dangote Cement Plc has announced that Global Credit Ratings has affirmed the cement manufacturer a long-term and short-term national scale issuer ratings of AA+ (NG) and A1+(NG) respectively.

According to the press release issued by the company, the rating which maintains a stable outlook on Dangote Cement would expire by November 2021.

In line with this, GCR reviewed existing bonds of the company and assigned the N100bn Series 1 Fixed Rate Bond of Dangote Cement a rating of AA+.

Why this matters

  • The ratings reflect Dangote Cement Plc’s status as Africa’s leading integrated cement manufacturer with a group-wide installed capacity of 45.6 million metric tonnes per annum across ten countries.
  • The stable outlook which was maintained by GCR reflects the extensive distribution network, significant scale economies and position as the largest corporations on the Nigerian Stock Exchange, with sound access to capital.
  • It is important to note that a rebound is expected within 18-24 months, on the back of strong base domestic demand.

What they are saying

Michel Puchercos, Chief Executive Officer, said:

  • Dangote Cement has shown great resilience in 2020 despite the COVID-19 pandemic and a challenging environment. The Group continues to report strong cash generation while maintaining strong financial discipline. As Africa’s leading cement producer, we are committed to maximizing shareholder value creation.”

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Coronavirus

Governor Sanwo-Olu says 24,000 students yet to resume in public schools

24,000 students in public schools are yet to return back after the reopening of schools, according to Governor Sanwo-Olu.

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The Lagos State Governor, Babajide Sanwo-Olu, has revealed that about 24,000 students in public schools are yet to come back after the reopening of schools following last year’s lockdown necessitated by the first wave of Covid-19 across the country.

This is as the governor said that resumption of school activities Monday, January 20, 2021, was a difficult decision to make in light of the second wave of Covid-19.

This disclosure was made by the governor while peaking during a press conference on Covid-19 update at the Lagos House, Ikeja on Tuesday.

Sanwo-Olu assured that it was the best decision for the children’s safety and long-term development, especially the most vulnerable ones.

What the Lagos State Governor is saying

Sanwo-Olu in his statement said, “Last year after the first lockdown and kids have to come back to school, we are still looking for about 24,000 of them that have not come back to school. So, there is a challenge if you keep them out for that long and their parents or guardians now turn them to other things instead of ensuring that they have time to come back for learning even if it is twice or thrice a week.

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“At least they have been registered since the beginning of a session and they can be monitored. If not, they will just be roaming the streets and become endangered. We have seen incidents of child abuse and all unprintable things that are being done to these children. So, we believe to a large extent that schools sometimes happen to be the safe haven for them. We have done the roster in which we ensure they keep social distance and we are monitoring,” he said.

What you should know

  • It can be recalled that public and private schools below the tertiary level in Lagos State, On Monday, January 18, 2021, reopened for academic activities despite opposition from some stakeholders due to the second wave of coronavirus pandemic in the state.
  • Following the surge in the number of infections in the state, which is the epicentre of the disease in the country, there were complaints about the state of preparedness of the schools, especially the public ones, in adhering to the strict Covid-19 protocols and guidelines.

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