…As Minister says 2019 Finance Bill, is aimed at promoting fiscal equity, tax reforms***
The Nigerian Stock Exchange (NSE) opened trading on Monday with a loss of 0.60 per cent, with the All Share Index shedding 160.59 and investors losing a whopping N188 billion.
The market capitalisation which opened at N13.071 trillion shed lost N188 billion to close at N12.883 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Okomu Oil, Access Bank, Ecobank Transnational Incorporated (ETI), United Bank for Africa (UBA) and Caverton Offshore Support Group.
Commenting on the market performance, analysts at United Capital said “this week, we expect investors to continue to lock in gains in stocks with strong fundamentals, as the system remains awash with liquidity.”
Also, analysts at Imperial Asset Managers expect “more liquidity inflows into the equity market as investors continue to search for alternative asset to deploy idle fund”.
They said that traders were expected to take marginal profit witnessed last week, noting that buying interest remained strong in most listed equities irrespective of the NSE-ASI loss.
However, market breadth closed positive, with 16 gainers in contrast with14 losers.
Wema Bank led the losers’ chart in percentage terms with a loss of 7.89 per cent, to close at 70k per share.
FCMB Group came second with a decline of 7.50 per cent to close at N1.85, while Caverton Offshore lost 7.41 per cent to close at N2.50 per share.
Access Bank and ETI lost 6.67 per cent each, to close at N9.80 and N7.00, respectively, while Okomu Oil shed 5.57 per cent to close at N50 per share.
Conversely, Neimeth recorded the highest price gain in percentage terms with a gain of 10 per cent to close at 44k per share.
Jaiz Bank followed with a gain of 9.86 per cent to close at 78k, while Ikeja Hotel increased by 9.47 per cent to close at N1.04 per share.
Custodian Investment inched 9.09 per cent to close at N6, while Courteville appreciated by 8.70 per cent to close at 25k per share.
Also, the volume of shares traded closed lower as investors bought and sold 307.96 million shares worth N2.54 billion in 4,609 deals.
This was in contrast with a turnover of 469.99 million shares valued at N5.59 billion transacted in 5,594 deals on Friday.
Transactions in the shares of UACN topped the activity chart with 102.55 million shares valued at N636.15 million.
Zenith Bank followed with 29.44 million shares worth N555.84 million, while UBA traded 20.81 million shares worth N147.44 million.
Access Bank sold 20.24 million shares valued at N195.62 million, while FBN Holdings transacted 14.67 million shares worth N96.65 million.
Meanwhile, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed on Monday highlighted that the Finance Bill, 2019 is aimed at promoting fiscal equity, international tax reforms, raising tax revenues and ease of doing business reforms.
The Finance Bill was submitted by President Muhammadu Buhari to the joint session of the National Assembly on Oct. 14.
Mrs Ahmed stated this at a meeting with Chairman and members of Senate Committee on Finance in Abuja, adding that coming up with such bills whenever budgets were passed had been the best practice.
“Every year when you do your annual budgeting process, you look at the fiscal laws and see what requires amendment.
“What we have here is a situation that for years we don’t amend our laws and we have made some but have left the ones that are difficult,” she said.
The minister said that the bill which was slated for a public hearing on Tuesday, 19, aimed at introducing tax reforms which would help government achieve its revenue projections for the 2020 Budget (N8.15 trillion).
She said that other proposals included an increase in the Value Added Tax (VAT) rate, moderation of inefficient and ineffective tax incentives and closing loopholes in the existing tax laws that allowed tax avoidance resulting in tax revenue leakages.
“The bill also proposes essential palliatives to support Micro- Small and Medium Enterprises (MSMEs) and mitigate the impact of the VAT rate increase on the the most vulnerable businesses, communities and citizens in the country.”
She said that some of the measures included expanding the list of VAT-exempt items such as basic food items, educational materials and medical supplies.
“Introducing a VAT registration threshold of MSMEs with a turnover of less than N25 million per annum and reducing the Corporate Tax rate for these MSMEs from 30 per cent to 20 per cent.”
Chairman of the Committee, Sen. Solomon Adeola, assured the minister that the Senate would ensure that the public was educated to see reasons why the bill should “see the light of day.”
Sen.Kashim Shettima (APC- Borno Central) said that it was a very revolutionary bill that would reposition the economy.
He urged the ministry to come up with a very broad platform of addressing the issue of digital taxation.
On insurance companies, Shettima decried that the companies had become economic albatross adding that Nigeria at the moment had very few of such companies.
“Most of them are in a comatose condition. So giving them respite is not the solution.
“They need proper monitoring and evaluation,” he said.
He said that the country’s VAT was one of the lowest globally and that citizens were unaware of where the components of the VAT went to.
“The public is unaware of what percentage is going to the State, Local and the Federal Government.”