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Investors lose N6.4bn in bearish trading, await MPC meeting outcome

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  • Shen Neng 1 Owners to Pay USD 30 Mn for GBR Damage

Investors in the stock market, on Monday, lost N6.4 billion from their investment in shares quoted on the Nigerian Stock Exchange, NSE as market operators hinged this week’s market performance on the outcome of Monetary Policy Committee, MPC meeting which is expected to end on Tuesday.

The NSE market capitalisation which represents the total value of equities traded on the NSE dropped marginally by 0.07 per cent to close trading at N9.563 trillion from N9.570 trillion it closed last week Friday, %, while the Year-to-Date return stood at -2.80 per cent.

In the same vein, another stock market gauge, the All Share Index dropped by 0.07 per cent or 18.55 points to close at N27, 839.93 points from 27,858.48 points it closed on Friday.

Market operators attributed the bearish market to profit taking by investors as the market had last week closed in the green on all three trading sessions of the week. Consequently, market capitalization improved by N96.5billion to settle at N9.6 trillion.

Activity level moderated consequent on fewer trading days (only 3) last week as a result of the Eid al-Adha public holidays; hence, average volume and value traded slid 13.9 per cent and 11.1 per cent Week on Week, W-o-W to 203.8million units and N1.8billion respectively.

Meanwhile, transaction volume traded yesterday increased by 43.36 per cent from 228.935 million shares to 328.203 million shares, while the total value of stock traded increased by 37.23 per cent from ¦ 2.109 billion to ¦ 2.895 billion in 3,215 deals.

The Financial Services sector led the activity chart with 302.774 million shares exchanged for ¦ 1.7 billion. Conglomerates came next with 8.302 million shares traded for 0.052 billion, Consumer Goods, Oil And Gas, Industrial Goods sectors followed in that order on the activity chart.

Access Bank Plc, FirstBank Nigeria Holding Plc , United Bank for Africa, UBA Plc, Skye Bank Plc and Zenith Bank Plc were the most active stocks by volume. Conoil Plc , Total, MRS Plc , Transcorp Plc and Skye Bank Plc emerged the highest price gainers on the chart, while 7UP Bottling Company Plc, Fidson Plc , PZ Industries Plc, Avoncrown and African Prudential Plc topped the losers chart.

In its comment on market performance, Afrinvest West Africa said that this week’s performance will be broadly driven by investors’ reactions to the outcome of the MPC meeting slated for 19th and 20th September, 2016.

According to Afrinvest “We believe the MPC is faced with three possible options: Ease monetary policy in response to growth slowdown and widening output gap; maintain status quo whilst reinstating the need to fully implement the currency market reforms to regain credibility and push for fiscal-monetary policy coordination to implement structural reforms; and hike rate further to conform with recently guided inflation-targeting thrust and further attract portfolio capital inflows.

“We opine that the MPC will elect to maintain status quo on all monetary policy rates while studying further developments in the economy. We also do not rule out the possibility of some profit taking by investors in counters that appreciated significantly in the prior week.

In the meantime, the Australian Government has reached an AUD 39.3 million (USD 29.6 million) out of court settlement with the owners of a Chinese coal carrier that ran aground in April 2010 causing direct impact on the Great Barrier Reef.

For more than six years, the China-based shipowner Shenzhen Energy Transport, and its insurer “refused to accept their responsibility” for restitution after the 225-metre long, fully laden Shen Neng 1 ran aground 100 kilometres east of Rockhampton at Douglas Shoal.

“Our ongoing actions to pursue funds to clean-up the pollution sends an unambiguous signal that damage to the Great Barrier Reef World Heritage Area is unacceptable, and that we will use every available means to pursue ship owners who are negligent in causing damage to the Reef,” Australia’s Minister for the Environment and Energy, Josh Frydenberg, said.

The funds, sufficient for the clean-up, will allow the Great Barrier Reef Marine Park Authority to initiate field operations to remove toxic anti-fouling paint and rubble, which will enable the restoration of the natural ecological processes of the reef.

The anti-fouling paint at Douglas Shoal contains a highly toxic component known as tributyltin (TBT), which is now banned from use. The paint also contains copper and zinc.

The authorities estimated that the impacts to marine life on the seafloor could potentially last for many decades if the toxic anti-fouling paint remains in place.

Logistical planning for the clean-up has already begun, however due to the deep nature of Douglas Shoal and its exposure to strong tidal currents, work can only safely take place at certain times of the year. Allowing for seasonal weather, the clean-up operation will begin in mid-2017.

The terms of settlement mean AUD 35 million will be paid to the Commonwealth for the cost of removing polluted rubble while a further AUD 4.3 million will be paid to cover costs incurred by the Australian Government in the immediate aftermath of the grounding.

It was estimated that the grounding caused damages to an area covering 0.4 square kilometres at Douglas Shoal, of which 115,000 square metres “were severely damaged or destroyed,” the Great Barrier Reef Marine Park Authority earlier said, adding that the incident also left toxic anti-fouling paint on the reef and on substantial areas of loose coral rubble created by the grounding.

Vanguard with additional report from World Maritime News

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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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