Stock Exchange makes N3.8 billion record high profit

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…As I&E Forex Window attracts $50.73b in 13 months***

The emergence of the Nigerian Stock Exchange (NSE) as the third best performing stock in the world last year has impacted on its performance for the 2017 financial year, resulting to an operating surplus after tax or Profit After Tax (PAT) of N3.79 billion.

The NSE made this known at the presentation of its results for the year ended December 31, 2017 during the 57th yearly general meeting held in Lagos on Thursday.

Specifically, the exchange’s operating surplus after tax represents a growth 13,712 per cent increase over 2016 modest operating surplus after tax of N27.45 million, indicating the highest operating surpluses recorded in the last five years.

The results showed a total income of N8.30 billion for the Group and N3.82 billion surplus before tax for the year ended 31 December 2017. This represents an 86 per cent increase in gross earnings when compared to the N4.46 billion achieved in 2016. Surplus before tax grew by 5,629 per cent in the same period.

NSE’s All-Share Index grew by 42.3 per cent to emerge as the third best performing stock market in the world, which was characterised by a solid financial performance, growth in market activities and renewed interest in the Nigerian capital market.

The Exchange Group comprises four subsidiary companies- Naira Properties Limited, Coral Properties Plc, NSE Consult Limited and NSE Nominees Limited.

The Exchange also has interests in NG Clearing Limited and Central Securities Clearing System (CSCS) Plc as joint venture and associate company respectively.

The President of the Exchange, Abimbola Ogunbanjo, said that the year 2017 saw a pick-up in global growth, driven by improvements in global oil prices, sustained growth in investment and trade and stronger consumer confidence.

In the meantime, the Investors’ and Exporters’ (I&E) Forex Window has attracted to the economy in 13 months $50.73 billion, a report by FSDH Research has shown.

Prior to the introduction of the I&E Forex window in April 2017  by the Central Bank of Nigeria (CBN), the market and exchange rates were in turmoil. But, in a dramatic turn of events, the acute shortage of forex, which businesses and individuals grappled with, has improved, with banks and bureaux de change (BDCs) now desperately looking for forex buyers.

The window, which offers investors the opportunity to sell dollars at rates of their choice, provided they find willing buyers, has restored confidence to the forex market and boosted the foreign exchange reserves.

The FSDH Research June 2018 Monthly Economic and Financial Market Outlook, said  the  positive  domestic  and  external  environment  will  further lead  to  external  reserves accretion  in  the  short-term  and  this  development  should provide further stability for the foreign exchange rate.

It said the 30-day moving average external reserves increased by 0.36 per cent up from $47.49 billion at end-April to $47.66 billion at May 28, 2018. The month-on-month growth rate recorded in the external reserves was the lowest level since July  2017.  The pressure on demand  from foreign  investors  was  mainly  responsible for the low growth in the external reserves.

“The total turnover at the Investors’ and Exporters’ FX Window (I&E Window) between April 2017 and May 2018 stood at $50.73 billion. The highest amount was recorded in January 2018. Our analysis between August 2017 and May 2018 shows that Nigeria recorded the lowest foreign exchange inflows through the I&E Window in May 2018,” the report said.

It said the  value  of  the  Naira depreciated  further  at  the  inter-bank  and  parallel  markets  in May 2018, compared with April. The demand pressure at the I&E Window occasioned by foreign  investors’  repatriation  of  their  matured  fixed  income  investments  was  largely responsible for the depreciation in the value of the naira.

“The value of the  naira  depreciated month-on-month at the  inter-bank  market to  N305.95/$ as  at end-May  2018,  a  depreciation  of  0.08 per cent  from  N305.70/ $  at  end-April.  The average exchange rate at the inter-bank market also depreciated by 0.06 per cent to stand at N305.80/$ in May, compared with N305.61/$ in April,” it said.

Besides, the value of the naira also depreciated at the parallel market in May to N363.50/$, a drop of 0.14 per cent, compared with April. The average exchange rate at the parallel market also depreciated by 0.29 per cent to stand at N363.90/$ in May, compared with N362.86/$ in April. FSDH Research expects the value of the naira to remain stable in the short-to-medium term,” it said.

The fixed income market analysis for the month of May 2018 shows a net outflow of about N224 billion, compared with a net outflow of about N749 billion in April. The major outflows in May were the Open Market Operation and Repurchase Bills (REPO) of N1.81 trillion, CBN’s Foreign Exchange Sale of  N413 billion, Primary Nigerian  Treasury  Bills  (NTBs) of  N178 billion  and  the  Bond  auction  of N50 billion.

Guardian NG with additional report from Nation