Category Archives: MARKETS

The Nigerian stock market down 0.19%

The Nigerian stock market down 0.19%

The Nigerian stock market closed south Thursday with the All-Share Index losing 0.19 percent. The Index lost 49.02 points or 0.19 percent to close at 25,282.75 points compared with 25,331.77 points recorded the preceding trading day.

Also, the market capitalisation, which opened at N8.765 trillion, dipped N16 billion to close at N8.749 trillion. The markets Year-to-Date (YtD) returns stood yesterday at -5.90 percent.

Top on the list of losers today are Okomu Oil Palm Plc, UAC of Nigeria Plc, GTBank Plc, and NEM Insurance Plc

Okomu Oil Palm Plc lost N2.49, from N49.88 to N47.39; UAC of Nigeria Plc lost 68kobo, from N14.6 to N13.92.

GTBank Plc lost 23kobo, from N24.83 to N24.6. NEM Insurance Plc lost 2kobo, from N 0.82 to N0.8. On the gainers table, Transnational Corporation of Nigeria Plc gained most by 1kobo, after rising from N0.89 to N0.9. It was followed by Diamond Bank Plc which added 1kobo, from N0.85 to N0.86.

Actively traded stocks on the local bourse included GTBank Plc, FBN Holdings Plc, Diamond Bank Plc, Transcorp Plc, and Fidelity Bank Plc. Stock traders exchanged 6.080 million units of GTBank Plc valued at N149.576 million; and 5.442 million units of FBN Holdings Plc valued at N19.994 million. Also exchanged were 3.510 million units of Diamond Bank Plc stocks valued at N2.94 million; Transcorp’s 2.601 million units worth N2.382 million and Fidelity Bank Plc’s 600,000 units valued at N490,000.

In all, the volume of shares traded closed lower as investors bought and sold 147.88 million shares valued at N 836.84 million exchanged in 2,578 deals.

NDIC to re-arrest absconded directors of failed banks, MFBs

NDIC to re-arrest absconded directors of failed banks, MFBs

The Nigeria Deposit Insurance Corporation (NDIC) through the Task Force on the Implementation of the Failed Banks Act is planning to re-arrest for prosecution, directors and officers of licensed banks and microfinance banks who had committed banking malpractices and had absconded.

The move will affect 15 former directors of Microfinance Banks, and two former directors of deposit money banks. The Task Force reviewed about 16 criminal cases being prosecuted under the Failed Banks Act in which prosecution had been stalled as a result of the fact that the accused persons in those cases had jumped bail and had absconded from the country in the heat of their investigation and prosecution. The sureties that took them on bail had also disappeared.

Analysts have raised concern that the cases involving directors of failed banks have been left unattended for too long and might be difficult to get the parties involved.

Johnson Chukwu, managing director and CEO, Cowry Asset Management limited said if there is criminal cases against the former directors, that should form the basis for prosecuting them.

“Where criminal case is established, I would ordinarily support the prosecution but this has been too long. I think the government should focus on new cases than attending to old issues”, Chukwu told BusinessDay by phone.

In a statement signed by Taribo B. A. Director of Legal Department, NDIC Chairman Of The Task Force On Implementation of Failed Banks Act, the Task Force noted that some of those accused persons had sneaked back into the country in the hope that their prosecutions might have been terminated. It is against this backdrop that the Task Force gave the notice that such accused persons would be re-arrested and prosecuted to serve as a warning to other bank offenders, adding that the Task Force would leave no stone unturned to ensure that erring bank offenders were brought to book.

The Task Force had at its 38th meeting held on March 13, 2017 reviewed some pending investigations by the Police Financial Malpractices investigation Unit (FMIU) under the Failed Banks Act comprising 17 cases involving 10 closed Microfinance Banks (MFBs) in which 15 former Directors of the MFBs were involved.

It also reviewed two cases of closed Deposit Money Banks (DMBs) involving their former Directors. One of the closed DMBs cases currently under prosecution was FRN vs. Prince Adekunle Adeyeba and Ors where the accused persons being erstwhile directors of the closed Gulf Bank of Nigeria Plc. were facing trial over banking malpractices involving N15.1 billion of depositors funds in that closed bank.

The Failed Banks [Recovery of Debts] and Financial Malpractices in Banks Act 1994 [Failed Banks Act] was promulgated to recover debts owed to Failed Banks which had remained outstanding as at the date the banks were closed or declared failed and to prosecute directors and officers of licensed banks who had committed banking malpractices.

In July 1995, the Inspector General of Police established a special Police Unit called the Failed Banks Inquiry to assist the Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria implement the criminal aspects of the Failed Banks Act through investigation of criminal complaints referred to the Unit by the Regulatory Authorities.

Yuan Calm at Risk of Ending as China Share Drop Darkens Mood – BLOOMBERG

  • Equity investors may turn to overseas assets, BBVA says
  • Other yuan risks include dollar, easing of capital controls

A selloff in Chinese stocks is threatening to end the yuan’s calmest period since its devaluation 20 months ago.

Further equity declines could have a contagion effect on the currency, pushing it out of the narrow range that it has stayed in for almost three months, according to Banco Bilbao Vizcaya Argentaria SA and Australia & New Zealand Banking Group Ltd. This is in addition to a slew of other risks, including potential easing of capital controls, as well as U.S. interest-rate increases and geopolitical tensions that could spur renewed strength in the dollar.

“When investors figure they don’t want to play with the A-shares, they will use the money to buy the dollar or find a way to purchase overseas assets,” said Xia Le, Hong Kong-based economist at BBVA, the yuan’s  as ranked by Bloomberg. “The stability in the yuan will be short-lived. The central bank, an opportunist in managing the exchange rate, will also depreciate the yuan when it sees the right chance, and the next one will likely come in May, when the dollar rises on bets for further U.S. hikes.”

The yuan, which has traded in a 1.1 percent range since February due to tightened capital controls and a weakening greenback, hasn’t budged more than 0.2 percent in the past week. This is in sharp contrast to the stock market, with the Shanghai benchmark tumbling 3.2 percent in the four sessions through Wednesday amid talk of increased scrutiny. Liu Shiyu, the country’s top securities regulator, said over the weekend that the nation’s bourses should punish market irregularities “without mercy.”

Chinese policy makers have kept the yuan stable so far this year because they want to steady sentiment, and they will resume depreciation once the market is relatively confident, said BBVA’s Xia. The yuan will weaken and break out of its recent trading range if the equity declines continue, said Khoon Goh, Singapore-based head of Asia research at ANZ. Goh expects the yuan to end this year at 7.1 per dollar, from 6.8800 on Thursday.

The yuan has advanced 0.9 percent so far this year — swinging from a 6.5 percent tumble in 2016 — as outflows eased amid capital controls, the economy  its first back-to-back acceleration in seven years and the Bloomberg Dollar Spot Index posted its biggest quarterly loss in a year. Policy makers are also getting a hand from U.S. President Donald Trump, who refrained from branding China a currency manipulator in a foreign-exchange report this month.

The A-share market, on the other hand, has tumbled. Liu Shiyu, who took over the helm of the China Securities Regulatory Commission last February after the equity market fell apart, has been quick to put down any signs of speculative activity. Last year he labeled as “robbers” insurers conducting leveraged buybacks. The insurance regulator took a series to steps to curb short-term speculation, while China’s anti-graft agency announced this month that it is probing the top insurance official for disciplinary violations.

Among the other dangers to the yuan are a potential easing of cross-border capital restrictions.

“China may start to ease capital controls in the second half of this year, and then outflow pressures could resurface, keeping the yuan rally in check,” said Ken Cheung, a Hong Kong-based currency strategist at Mizuho Bank Ltd. “Also, the Federal Reserve may turn hawkish and  its balance sheet, which will support the dollar.”

Cheung forecasts the yuan to weaken 3.1 percent to 7.1 per dollar by the year-end, in line with the median estimate of 7.08 in a Bloomberg survey.

“The resumption in the yuan’s drop will be triggered by a recovery in the dollar, which will happen later this year,” said ANZ’s Goh. “Other risks include the North Korea tension, the French election this weekend and German polls later in the year.”