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Business News

Naira depreciates to N460/$1 at the parallel market, despite improved liquidity

Naira weakened against the dollar this represents about 1.1% depreciation when compared to N455 to a dollar that it sold the previous day. 

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Money mistakes, How much are you worth in naira per hour?, Naira’s true worth, Naira depreciates to N460 to $1 at the parallel market, despite improved liquidity, Naira appreciates at parallel market as it stabilizes at the forex market, Forex, Naira gains against the dollar at I&E window, forex liquidity up by 66% 

The Naira weakened against the dollar as it depreciated to N460 to a dollar at the parallel market, popularly referred to as the black market, on Tuesday, May 19, 2020. This is despite the volatility that persists in the foreign exchange market.

According to information from Aboki fx, this represents about 1.1% depreciation when compared to N455 to a dollar that it sold the previous day.

However, the local currency appears to have performed better against the pounds sterling as it sold for N540 to one pound sterling as against the N545 it traded the previous day.

The depreciation in the parallel market is coming against the backdrop of the surprising injection of about $90 million – $100 million into the foreign exchange market through the Wholesale Secondary Market Interventions by the Central Bank of Nigeria (CBN). This is supposed to help improve liquidity in the market and strengthen the Naira in the short run.

(READ MORE: Naira strengthens against the dollar at I&E window, closes at N386 to $1)

The depreciation in the parallel market is also in contrast to the stability in exchange rate movement at the investors and exporters window as it was still N386.33 to a dollar despite the sharp drop in the daily market turnover to $8.67 million at the window.

The increase in crude oil prices and the inflow of $3.4 billion from IMF, is expected to be a big boost to the foreign exchange market. The country’s external reserves seem to have had some positive movements in recent weeks as it is now well over $35 billion.

In a bid to conserve the scarce foreign exchange, Nairametrics reported that the CBN Governor, Godwin Emefiele, insisted that the apex bank would not sell dollars to companies for the importation of items that could be produced locally.

 

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Business News

Heavy sell-off in Guinness shares leads to N6.9 billion market value loss in a single day

Shares of Guinness Nigeria Plc suffered a 9.89% loss today.

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Guinness Nigeria Plc Reports Full Year F19 Results

Guinness Nigeria Plc suffered a 9.89% loss today following a heavy sell-off in the shares of the brewer. This triggered a market value loss amounting to about N6.9 billion at the close of trading activities on the Nigerian Stock Exchange, as investors scaled-down stakes in the brewer.

Data tracked at the close of the market today revealed that the shares of GUINNESS declined from N31.85 per share at the market open, to N28.70 per share at the close of the market today, to print a loss of 9.89%.

This decline saw the market capitalization of the leading maker of beer and spirits fall from N69.75 billion to N62.86 billion at the close of trading activities today, putting the total market value loss at N6.89 billion.

The shares of Guinness at the close of the market today cleared at N28.70 per share, 9.89% lower than the closing price of N31.85 per share yesterday.

At the current price, Guinness shares are currently trading 20.27% lower than their 52-week high of N36.00 per share. However, the shares of the company have returned about 120.8% gains for investors who bought them at their 52-week low trading price of N13.00 per share last week.

During trading hours on the Exchange today, about 159,380 ordinary shares of Guinness Nigeria Plc worth about N4.57 million, were exchanged in 27 executed deals.

The shares of Nigerian Breweries Plc and Golden Guinea Breweries Plc closed flat at N50.1 per share and N0.81 per share respectively, while the shares of International Breweries Plc shed 0.88% to close low today at N5.65 per share.

What you should know

  • At the close of trading activities today, the NSE All-Share Index and market capitalization appreciated by 0.29% to close higher at 39,128.34 index points and N20.477 trillion respectively.
  • The NSE Consumer Goods Index, an investable benchmark designed to track the performance of the shares of consumer goods companies like Guinness Nigeria Plc, depreciated by -0.35% to close the day lower at 553.26 index points.

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Business News

NAICOM revokes operational licence of UNIC Insurance, appoints Receiver/Liquidator

NAICOM stated that it had appointed Hadiza Baba Gimba as the Receiver/Liquidator to wind up the affairs of the company.

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Recapitalisation: 26 firms get NAICOM's approval

The National Insurance Commission (NAICOM) on Wednesday announced the withdrawal of the operational licence issued to UNIC Insurance Plc.

Although no official reason has been provided for the revocation of the insurance firm’s operating license, NAICOM, however, stated that the decision of the regulator was in the exercise of the powers conferred on it by the enabling laws.

According to a report from the News Agency of Nigeria (NAN), this disclosure is contained in a notice which was issued by the commission in Lagos to the general public and policyholders, where it noted that the revocation of the operational license, RIC 043, is with effect from March 25.

NAICOM, thereafter stated that it had appointed Hadiza Baba Gimba as the Receiver/Liquidator to wind up the affairs of the company.

NAICOM in its statement said, “The general public/policyholders are by this notice required to direct all inquiries and correspondence regarding UNIC Insurance to the receiver/liquidator.

The receiver/liquidator will be dealing with the company’s liabilities in accordance with the provision of Insurance Act 2003.’’

What you should know

  • It can be recalled that NAICOM, for the third time in June 2020, gave insurance firms in the country a one-year extension to meet the recapitalisation obligation that was recently set for them apparently due to the coronavirus pandemic which had disrupted the activities of most insurance companies.
  • Some insurance companies had been going through some bad patches with a good number of them struggling to meet up with their obligations and the recapitalization requirements.
  • The recapitalisation programme requires life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.
  • The regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.

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