…Ghana loses $190m grant over canceled power contract***

The Nigerian Stock Exchange (NSE) on Wednesday, recorded second gain in October with the market capitalisation increasing by N15 billion.

Specifically, the market capitalisation which opened at N12.835 trillion, inched N15 billion or 0.12 per cent to close at N12.850 trillion.

Also, the All Share Index (ASI) rose by 32.11 points or 0.12 per cent to close at 26,397.94 compared with 26,397.94 achieved on Tuesday.

The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; Dangote Cement, United Bank for Africa, FBN Holdings, UACN Property Development Company and Omoluabi Mortgage Bank.

Analysts at Afrinvest Limited stated that “Notwithstanding yesterday’s positive performance, we maintain our bearish outlook on the market, although we expect third quarter earnings to guide investors’ sentiment.”

In spite of the growth in market indices, market breadth closed negative as eight stocks posted gains, while 11 stocks posted declines.

Omoluabi Mortgage Bank recorded the highest price gain of 10 per cent, to close at 55k per share.

UACN Property followed with a gain nine per cent to close at N1.09, while AG Leventis appreciated by 7.69 per cent to close at 28k per share.

UBA went up by 2.63 per cent to close at N5.85, while FBN Holdings appreciated by 1.89 per cent to close at N5.40 per share.

Conversely, Union Diagnostic and Clinical Services led the losers’ chart by 8.33 per cent, to close at 22k per share.

Lasaco Assurance followed with a decline of 7.14 per cent to close at 26k, while Jaiz Bank dipped 6.25 per cent to close at 45k per share.

Access Bank lost 3.40 per cent to close at N7.10, while Lafarge Africa shed 2.97 per cent to close at N14.70 per share.

The total volume traded declined by 58.08 per cent with an exchange of 290.94 million shares worth N2.78 billion traded in 2,668 deals.

This was in contrast with a total of 694.02 million shares valued at N7.83 billion transacted in 2,780 deals on Tuesday.

Omoluabi Mortgage Bank maintained leadership with a turnover of 122.5 million shares valued at N67.38 million.

UACN Property followed with 30.30 million shares worth N31.82 million, while Zenith Bank traded 26.81 million shares valued at N460.86 million.

Guaranty Trust Bank sold 18.06 million shares worth N475.05 million, while FBN Holdings transacted 17.56 million shares worth N94.17 million.

Also read:  Investors lose N12bn, though Zenith Bank lifts trading with 357.23m shares

Ghana however, loses $190 million, following U.S. cancelation of $190 million grants, under the “Power Africa” initiative, in response to the Ghanaian government’s termination of a contract with a private utility provider, says the U.S. embassy.

The Millenium Challenge Corporation (MCC), a U.S. government foreign assistance agency, agreed in 2014 to provide 498 million dollars in funding to Ghana’s power sector to help stimulate further private investment.

The initiative, launched in 2013 by then president Barack Obama and aiming to bring electricity to tens of millions of households in Africa, was the largest by the U.S. under Power Africa.

One reform under the agreement involved handing over operations at state-run Electricity Company of Ghana (ECG) in March to Ghana Power Distribution Services (PDS), a consortium led by Philippine electricity company Meralco (MER.PS).

But Ghana’s finance minister informed U.S. officials on Saturday that the government was cancelling the 20-year concession it had signed with PDS, saying payment guarantees provided were not satisfactory.

In a statement on Tuesday, the U.S. embassy said the decision to terminate the contract was unjustified and that the MCC was, therefore, cancelling 190 million dollars in grants.

The remaining 308 million dollars will still be disbursed.

“The U.S. underscores the importance of contract sanctity as essential to a conducive investment climate and a pre-condition for inclusive economic growth,” it said.

Ghana’s Information Minister Kojo Nkrumah on Wednesday said that the U.S. announcement did not represent “a crisis of confidence” between the two governments.

“It has been a difference in opinion which we have mutually agreed to respect,” he said.

Meralco did not immediately respond to a request for comment.