Banking & Finance Economy

NSE market indicators open trading with N23bn loss

NSE: Indices record 0.16% in last trading day of September
Written by Maritime First

…As CBN clarifies cashless policy transaction charges***

The Nigerian equities market commenced trading for the week on Monday on a negative sentiment with indices dropping by 0.17 per cent and investors and investors losing N23 billion.

Specifically, the All-Share Index lost 48.41 points, indicating a decrease of 0.17 per cent to close at 27,650.28 points, while market capitalisation lost N23 billion to close at N13.460 trillion against N13.483 trillion achieved on Friday.

The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Presco, UAC of Nigeria (UACN), Nigerian Breweries, Vitafoam Nigeria and Dangote Cement.

Analysts at Afrinvest Limited said: “We maintain our bearish stance for the market, although the current low prices of stocks pose opportunities for bargain hunting.”

Also, analysts in United Capital Plc in their report for this week expected the decision of the Monetary Policy Committee (MPC) to affect investors sentiment towards the equity market, in conjunction with the happenings in the global space.

Market breadth closed negative, with 18 gainers against 24 losers.

An analysis of the price movement table shows that Presco led the losers’ chart with a loss of 9.93 per cent to close at N40.35 per share.

UACN Property Development Company followed with a decline of 9.86 per cent to close at N1.28, while Vitafoam dipped 9.79 to close at N3.87 per share.

NPF Microfinance Bank lost 9.60 per cent to close at N1.13, while UACN shed 9.49 per cent to close at N7.15 per share.

Conversely, NCR Nigeria and Trans-Nationwide Express recorded the highest price gain of 10 per cent each, to close at N4.95 and 77 per share, respectively.

Eterna followed with a gain 9.09 per cent to close at N3 per share.

Cutix improved by 8.97 per cent to close at N1.70, while Cornerstone Insurance appreciated by 7.69 per cent to close at 42k per share.

Also, the volume of shares transacted dropped by 38.30 per cent with an exchange of 109.56 million shares valued at N888.17 million in 3,382 deals.

This was in contrast with a turnover of 177.57 million shares worth N5.92 billion achieved in 3,484 deals on Friday.

FBN Holdings was the toast of investors, accounting for 20.29 million shares valued at N114.29 million.

Transcorp came second with 9.83 million shares worth N10.33 million, while Access Bank accounted for 9.69 million shares valued at N70.26 million.

UACN sold 5.81 million shares worth N43.12 million, while Wapic Insurance transacted 4.64 million shares valued at N1.6 million.

Also read:  NSE market capitalisation increases by N25bn

In the meantime, the Central Bank of Nigeria (CBN) says the transaction charges on deposit and withdrawal in furtherance of implementation of its cashless policy is on the amount in excess of the set limits.

The Director, Corporate Communication Department, Mr Isaac Okorafor, made the clarification in Abuja on Monday, explaining that transactions would attract three per cent processing fees for withdrawal and two per cent processing fees for lodgement of amounts above N500,000 for individual accounts.

Recall that CBN on Sept 17 issued a circular to deposit banks to commence the implementation of the cashless policy in six pilot states across the country.

Similarly, corporate accounts would attract five per cent processing fees for withdrawal and three per cent processing fees for lodgement of amounts above N3 million

The apex bank directed that implementation should commence from Sept. 18 in Lagos, Ogun, Kano, Abia, Anambra, and Rivers States, as well as the Federal Capital Territory (FCT).

It, however, stated that the nationwide implementation of the cashless policy would take effect from March 31, 2020.

Okorafor explained that contrary to the misconception on the implementation of the policy, the charges would only be on the excess of N500,000 deposited or withdrawn for individual and N3 million for corporate body

According to him, if an individual deposited N510,000 the two per cent charge would be on the N10,000 excess which is N200 only.

He said the same applied to a withdrawal of same amount, adding that the three per cent charge would be on excess of the set limits.

He said that the same thing also applies to the corporate body also which five per cent on withdrawal and three per cent on lodgement of amounts above N3 million.

Many Nigerians have described it as additional burden on banks’ customers who were already laden with other charges by the banks.

CBN Governor Godwin Emefiele had also said, after the Monetary Policy Committee meeting on Friday in Abuja that the policy was inaugurated in the country in 2012 and implementation began in 2014.

“The policy says if you deposit money in the bank above a particular threshold which for individual is N500,000 and N3 million for corporate bodies, then you will be charged, same for withdrawal.

He stated that the policy was not designed to de-franchise hard working Nigerians as perceived by some categories of people.

According to him, a data conducted, revealed that close to 95 per cent of cash deposited and withdrawn fall below this threshold.

Emefiele said Nigerians had already embraced electronic channels and online transaction in market places.

He added that Micro, Small and Medium Enterprises now had various options and channels available to collect a legitimate payment for goods and services, like POS, banks transfer using ATM, USD code among others.

He said that the cashless policy increases transparency in financial dealings and reduce crimes such as ransom payment and extortion among others.

The governor said the bank had the mandate under the CBN Act 2007 as amended to promote a sound and stable financial system through credible efficient payment system.

 

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