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NSE stocks will continue to fall unless naira is devalued – Investors

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  • As Residency card now becomes condition for WAEC, NECO in Ondo —Govt

Money managers including Aberdeen Asset Management Plc and Duet Asset Management Limited say the only way to revive investor demand of Nigeria stock is to let the currency depreciate. Nigeria Stock Exchange’s All Share Index fell 0.4 per cent to 22,456.32 by the close of trading on Tuesday, while the MSCI Emerging Markets Index rose 1.6 per cent, the most since Nov. 19.

Nigeria’s gauge has dropped 19 per cent this year, the second-most among 93 primary indexes tracked by Bloomberg after Saudi Arabia’s and making the country’s equities the cheapest in sub-Saharan Africa. For money to flow back in, authorities need to let the currency depreciate by about 20 per cent and end the foreign-exchange trading restrictions, according to Duet’s Ayodele Salami.

The index pared losses on Wednesday, climbing 3.9 per cent by 2:06 p.m. in Lagos to head for its best gain since April. Still, the currency controls will continue to weigh on prices, Salami said.

“The Nigerian equity market is ridiculously cheap,” said Salami, who oversees about $500 million of African equities as chief investment officer of the London-based money manager. “But you’d look pretty stupid to buy it and then take a 20 or 25 per cent writedown just because of devaluation. A lot of people will wait on the sidelines.”

The bourse is at its lowest level since July 2012 and trades at 6.9 times forward earnings, compared with 10.1 times for the MSCI Emerging Markets Index and 8.6 times for the Frontier Markets Index.

The risks are still too great for foreigners as long as Central Bank Governor Godwin Emefiele, who has the backing of President Muhammadu Buhari, fixes the naira at 197 to 199 per dollar. Many see devaluation as inevitable following Brent crude’s slide to a 12-year low of below $30 a barrel.

The currency restrictions have caused a shortage of dollars in a country that imports almost all manufactured goods, hurting businesses and sending the black market rate soaring to a record N305. Forwards prices suggest the interbank rate will weaken 20 per cent to 248.5 in three months.

“When oil was at $50-$60, there was definitely money waiting to come in when they devalue,” Dominic Bokor-Ingram, a money manager at Charlemagne Capital Limited with $1.9 billion of equities under management, said in an interview in London early this week. “Today, I’m not so sure anyone would be interested.

If they devalue to 230-240, people will say that’s not enough because of where the parallel market is and because of what’s happened to oil.”

Nigeria’s bonds have also been punished, with yields on local government securities rising to 12 per cent, higher than those of all developing countries tracked by Bloomberg except Brazil, Kenya and Egypt. Like their equity counterparts, global bond investors say those levels aren’t attractive enough.

“If you get, say, a 20 per cent devaluation you will get some investors coming back,” Kevin Daly, a money manager at Aberdeen Asset Management Plc, which sold all its naira debt last year, said by phone from London. “If it is less than that, I don’t think you will get huge amount of inflows.”

In the meantime, the Ondo State government has made the presentation of  parent’s Residency Card, popularly known as ‘Kaadi Igbeayo’ a condition  for registration and participation of students in both internal and external examinations.

This was as it said such were entrance examination into public and unity secondary schools, junior secondary school certificate examination, as well as NECO and WAEC examinations in the state.

The state’s Commissioner for Information, Kayode Akinmade, announced this in Akure, the state capital,  on Sunday, while speaking with newsmen.

He said government took the decision to ensure the fulfilment of its desire to have a workable data of residents  in the state to enable planning, adequate and even distribution of its services to the people.

According to him, principals of schools in the state had been briefed of  the decision of government regarding the development.

The  state’s Commissioner for Education, Mr Jide Adejuyigbe, had in a meeting with all principals of the 304 public secondary schools in the  state, conveyed government’s decision and demanded strict compliance, at the meeting, which held at St James Caring Heart Mega Primary School, Akure, last Thursday,  among other issues.

Adejuyigbe  expressed his displeasure that up till now, some schools have not complied with the state government’s directive that students should present the photocopies of their parents or guardians’ residency cards for documentation and submission to the Ministry of Education.

The commissioner, therefore, directed that compliance with the directive would henceforth be the condition for registration and participation of students in both internal and external examinations.

Also speaking at the meeting, chairman of the state Teaching Service Commission, Professor Francis Igbasan, explained the rationale behind the recent posting of teachers to schools, saying it was to improve the standard of education, enhance efficiency and higher productivity of the teachers.

He said in a bid to comply with the 21st century method of record keeping, the commission had commenced collection of data from all the teachers in the state, in order to have a computerised database for its workforce, thereby calling on principals to properly inform their teachers and prepare them for the success of the exercise.

Upshot with additional report from Tribune

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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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