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Banking stocks tumble as investors lose N684b in 10hrs

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Nigerian equities yesterday came under intense pressure, piling up a net loss of about N684 billion within the 10-hour trading sessions in the past two days.

Against the background of N425 billion on Tuesday, aggregate market value of all quoted shares dropped by N259 billion. The two-day loss surpassed the total net gain of N613 billion recorded in the previous week.

With nearly five losers to every gainer, aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE), which had opened this week at N9.926 trillion, dropped to N9.501 trillion on Tuesday and trended further downward to N9.242 trillion.

The All Share Index (ASI), the benchmark index for the Nigerian stock market, which had depreciated by 4.29 per cent on Tuesday, dropped further by 2.72 per cent, pushing the average year-to-date return deep into negative at 6.05 per cent.

The ASI dropped from its opening index of 28,902.25 points for the week to 27,663.16 points and 26,910.23 points on Tuesday and yesterday.

Banking stocks headlined the depreciation as investors grapple with uncertainties in the guided flexible foreign exchange policy announced by the Central Bank of Nigeria (CBN) last week amidst profit-taking transactions and month-end portfolio rebalancing. The apex bank announced the adoption of a flexible foreign exchange policy. However, the detailed guidelines on the implementation of the flexible exchange rate have not been released.

Average loss in the banking sector more than doubled the overall average loss in the entire market as most banking stocks tumbled under open sale orders, unrestricted sell orders, which sought to close the deals at any available price. The NSE Banking Index, which tracks the banking sector, dropped by 6.9 per cent, after the two most capitalised banking stocks-Guaranty Trust Bank and Zenith Bank – lost 9.6 per cent and 9.2 per cent respectively.

“We expect the current bearish trend in the market to continue as investors take profit following the impressive gains recorded in the previous week. However, we do not rule out the prospect of a change in tide, should the apex bank announce the expected modalities for a more flexible foreign exchange rate regime as indicated last week,” Afrinvest Securities stated in a post-trading review.

Seven banking stocks ranked among the top 10 losers, in percentage terms, with losses ranging around the 10 per cent maximum daily allowable percentage price change. Stanbic IBTC led the losers with 9.70 per cent. United Bank for Africa declined by 9.47 per cent. FCMB Group dropped by 9.36 per cent. Skye Bank depreciated by 8.40 per cent while Access Bank dropped by 6.88 per cent.

Total turnover stood at 352.29 million shares valued at N3.85 billion in 5,024 deals. Zenith Bank was the most active stock with a turnover of 56.73 million shares valued at N770.38 million. Guaranty Trust Bank followed with a turnover of 39.46 million shares worth N696.6 million while Transnational Corporation of Nigeria recorded a turnover of 30.47 million shares valued at N37.24 million.

Further sectoral analysis showed widespread selling sentiments. The NSE Consumer Goods Index dropped by 2.9 per cent. The NSE Industrial Goods Index declined by 1.5 per cent. The NSE Oil and Gas Index slipped by 1.3 per cent while the NSE Insurance Index dipped by 0.8 per cent.

The Federal Government is to inject N6.5 billion into the capital market, Chairman, Senate Committee on Capital Market, Senator Isiaka Adeleke, has said.

The news is coming even as senators and members of the House of Representatives yesterdaybegan the process of shoring up the dwindling fortunes of the capital market.

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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