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Economy

Profit taking: Trading on NSE sway further down on Tuesday

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NSE: Market indices extend growth by 0.35%

…As Capital market operators task CBN to boost FPI with stable exchange rate***

Trading on the Nigerian equities market nosedive further on Tuesday with a decline of 0.32 per cent and a loss of N44 billion, due to price depreciation on some highly capitalised stocks.

Specifically, the All Share Index decreased by 89.08 points or 0.32 per cent to close at 27,602.77 compared with 27,691.85 achieved on Monday.

Subsequently, the market capitalisation which opened at N13.472 trillion shed N44 billion to close at N13.428 trillion.

The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Seplat Petroleum Development Company (Seplat), Total Nigeria, Dangote Cement, Guaranty Trust Bank and International Breweries.

Analysts at Afrinvest Limited expected the bearish performance to continue as investor sentiment remains weak.

Analysts at APT Securities and Funds Limited said: “We are optimistic that positive sentiment will rally as the market is set for a rebound in anticipation of economic policies.”

Also read:  Sell pressure: NSE All-Share Index dips by 0.39%, costing investors N52bn

Market breadth remained negative with 13 gainers compared with 23 losers.

Seplat for the second consecutive day led the losers’ chart by 9.82 per cent to close at N397.70, per share.

Neimeth International Pharmaceuticals followed with a decline of 9.62 per cent to close at 47k, while NPF Micro Finance Bank lost 9.52 per cent to close at N1.14 per share.

Ecobank Transnational Incorporated (ETI) depreciated by 9.15 per cent to close at N6.95, while Sovereign Trust Insurance and Trans Nationwide Express declined by 9.09 per cent each to close at 20k and 70k, respectively, per share.

Conversely, PZ Cussons recorded the highest price gain of 5.93 per cent to lead the gainers’ chart to close at N6.25.

Courteville Business Solutions came second with a gain of five per cent to close at 21k per share.

Cement Company Northern Nigeria and Chams went up by 3.57 per cent each to close at N14.50 and 29k, respectively, while Wema Bank appreciated by 3.45 per cent to close at 60k per share.

Transcorp topped the activity chart with an exchange of 29.67 million shares valued at N31.70 million.

Guaranty Trust Bank trailed with 25.17 million shares worth N692.25 million, while Access Bank accounted for 19.20 million shares valued at N128.52 million.

MTN Nigeria sold 17.02 million shares worth N2.35 billion, while FBN Holdings traded 15.63 million shares valued at N78.05 million.

In all, total volume traded appreciated by 16.04 per cent with a total of 183.65 million shares worth N4.50 billion traded in 3,558 deals.

This was in contrast with a turnover of 158.27 million shares valued at N2.3 billion exchanged in 3,595 deals on Monday.

Meanwhile, Some capital market operators on Tuesday urged the Central Bank of Nigeria (CBN) to ensure stable exchange rate to boost Foreign Portfolio Investments (FPIs) into the Nigerian capital market.

They made the call in Lagos, while reacting to the persistent decline in total transactions by foreign portfolio investors at the Nigeria Stock Exchange (NSE).

Malam Garba Kurfi, the Managing Director, APT Securities and Funds Limited, said the apex bank needed to ensure stable foreign exchange and friendly economic policies to boost Foreign Direct Investment (FDIs).

Kurfi said foreign investors were more concerned at country’s foreign exchange risks rather than capital gain or price appreciation.

“The Central Bank of Nigeria (CBN) needs to ensure  stability of the exchange rate and  encourage forward contract option for those who want to hedge against exchange risks,’’ he said.

Kurfi noted that it would be difficult to boost FDIs with the price of crude oil going below the 2019 budget benchmark.

He said the country needed strong foreign reserves to attract FDIs, noting that diversification of the nation’s revenue was very paramount.

Mr Sola Oni, a Chartered Stockbroker and Chief Executive Officer, Sofunix Investment and Communications, said Nigeria would be an attractive investment destination for FPI in an enabling environment.

“FPIs do country risk analysis before they invest their hot money anywhere.

“They are also ready to move out their investment at the click of a button.

“They want an environment where there is stability in all spheres of human endeavours,’’ Oni said.

He noted that foreign investors needed macroeconomic, political, religious and social stability to invest in any country.

The total transactions by FPIs in the nation’s bourse dropped by 36.53 per cent in seven months, with foreign portfolio outflows outpacing inflows.

Foreign and domestic portfolio transactions in the past seven months obtained from the exchange showed that total foreign transactions dropped to N530.57 billion by July as against N835. 89 billion achieved in the corresponding period of 2018.

Also, foreign inflows decreased by 39.24 per cent to N24.3.35 billion by July against a drop to N157. 13 billion posted in the comparative period of 2018.

Similarly, foreign outflows dropped to N287. 22 billion compared with N435. 41 billion recorded in 2018.

 

 

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Economy

FG Threatens To Open Borders for Cement Importation Over Price Hike

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Palpable fear has gripped cement manufacturers following the Federal Government’s threat to throw open the nation’s borders for cement importation if the product manufacturers fail to bring down the cost.

The Minister of Housing and Urban Development, Mr Ahmed Dangiwa issued the threat on Tuesday in Abuja at a meeting with Cement and Building Materials Manufacturers.

The meeting was summoned to address the astronomical increase in the cost of cement nationwide.

The minister expressed concerns that in the past couple of months, the country had witnessed a recurring alarming increase in the prices of cement and other building materials.

“Clearly, this is a crisis for housing delivery. An increase in essential building materials means an increase in the prices of houses.

“We are not the only country facing this challenges, many countries are facing the same type of challenges that we’re facing, some even worse than that.

“But, as patriotic citizens, we have to rally round the country when there is crisis, to ensure that we do our best to save the situation,” he said.

The minister added: “Honestly speaking, we have to sit down and look at this critically and know how you should go back and think of it.

“The government stopped importation of cement in other to empower you to produce more and sell cheaper

Bags of cement

“Otherwise the government can open the borders for mass importation of cement, the price will crash, but you will have no business to do”.

Dangiwa said the reasons given by cement manufacturers for the price increase – high cost of gas and manufacturing equipment – were not enough for such astronomical pricing.

He expressed his displeasure at the position of  Cement Manufacturer Association of Nigeria (CEMAN) that the association “does not interfer with the pricing of cement”.

He said the association should not just fold  its arms when things were going wrong.

“One person cannot be selling at N3500 per bag and another selling at N7000 per bag and you cannot call them to order.

“The association is expected to monitor price control, otherwise the association has no need to exist,” he said.

Earlier, Mr Salako James, Executive Secretary, CEMAN, said the housing policy of the administration of President Bola  Tinubu was laudable and every responsible Nigerian has to key into it.

He, however, identified some areas of concern and appealed to the government to look into them to tackle the issue of cement pricing.

Salako identified the challenges of gas supply to heavy users like the cement industry and urged the government to create a window whereby gas will be bought with Naira instead of dollar.

He also complained about the distribution channel, stressing tha there was a great difference between the price from the manufacturers and the market price.

He, therefore called for government intervention to help stabilise the situation and bring sanity to the economy.

At the end of the meeting, the minister directed that a committee should be constituted to review the situation and come out with implementable resolutions that would benefit the common Nigerian.

The three major cement producers, Dangote Plc, BUA Plc, and Lafarge Plc were represented as well as other industry stakeholders.

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Economy

Cement Price Can Be Lower Than FG, Manufacturers’ Projection — Association 

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…Warns that high price could lead to corner-cutting and building collapse

The National Association of Block Moulders of Nigeria (NABMON) says the agreement between the Federal Government and three major cement manufacturers that a 50kg bag of cement, for now, is not supposed to sell for more than N7,000 to N8,000 is faulty.

The National President, Mr Adesegun Banjoko, said this on Tuesday in Lagos.

Recall that the parties, at a meeting on Monday, said that the ideal price of  a 50kg bag of cement for now should be between ₦7,000.00 and ₦8,000.00 depending on location.

They agreed that the current higher prices of cement in parts of the country were abnormal.

The main manufacturers of cement in the country are Dangote Plc, BUA Plc and Lafarge Plc.

According to Banjoko, there is no reason for the price of cement to be sold even at the projected prices, since limestone, which is a key ingredient, is readily available in Nigeria.

He expressed fears that the high price would lead to corner-cutting and building collapse.

The NABMON president expressed the belief that the government and manufacturers could do better and offer lower prices.

Bags of cements

He suggested a reduction or elimination of customs duties on other imported materials used in cement production, adding that this would incentivise manufacturers to lower their prices.

He, therefore, proposed a target price of ₦3,500 to ₦5,000 per bag.

Banjoko said, “There are three issues that make me disagree with the government and the main manufacturers.

“First, limestone is sourced in Nigeria; agreed they have some few other materials they bring in from abroad.

“But if the government is really concerned about life and property lost to building collapse, they should either remove custom duties on such items or reduce them by half to encourage the manufacturers to come down to between N3, 500 and N5, 000.”

He also advised the government to temporarily halt road construction projects that use cement.

Banjoko said that this would free up available cement for vital projects and potentially reduce demand, leading to lower prices.

The NABMON president warned that the high price of cement had added to the existing tensions in the country.

He urged the government to act cautiously with essential commodities like cement, emphasising its impact on public well-being.

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Economy

NGX: Bullish Sentiment Persists, Investors Gain N329bn

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Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

…Unilever Nigeria Plc, Julius Berger lead Losers’ table 

Bullish sentiment persisted on Thursday at the Nigerian Exchange Ltd. (NGX) equity market, as the market indices rose by 0.58 percent.

Specifically, investors gained N329 billion or 0.58 percent, as the market capitalisation closed at N56.961 trillion, as against N56.632 trillion recorded on Wednesday.

The All-Share Index also appreciated by 0.58 percent or 601.72 points to settle at 104,100, compared to 103,498.28 posted in the previous session.

As a result, the Year-To-Date (YTD) return rose to 39.22 percent.

Continuous buy interests in the shares of BUA Cement, BUAFoods, and Geregu kept the market in the positive terrain.

A total of 284.49 million shares valued at N6.91 billion were exchanged in 8,168 deals, as against 426.86 million shares valued at N12.11 billion exchanged in 8,654 deals.

However, analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 42.89 percent.

Guaranty Trust Holding Company(GTCO) led the activity table in volume and value with the trade of 56.61 million shares worth N2.22 billion.

Transcorp followed with 33.17 million shares valued at N418.31 million, while United Bank of Africa(UBA) traded 18.38 million shares worth N442.96 million.

Also, Mutual Benefits Assurance sold 16.76 shares valued at N11.48 million and AXA Mansard traded 12.51 million shares worth N75.57 million.

On the gainers’ table, University Press Ltd.(UPL) led in percentage terms of 9.96 percent to close at N2.87, followed by Juli Plc by 9.84 percent to close at N1.34 per share.

Mutual Benefits gained 9.38 percent to close at 70k, Daar Communications rose by 8.82 percent to close at 74k, while Honeywell Flour garnered 7.50 percent to close at N4.30 per share.

Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

Conversely, Unilever Nigeria Plc led the losers’ table by 9.80 percent to close at N16.10, Julius Berger lost 9.64 percent to close at N50.60, while Morison Industries Plc shed 9.60 percent to close at N2.23 per share.

May & Baker Nigeria Plc depreciated by 6.52 percent to close at N6.45 and National Salt Company of Nigeria (NASCON) dropped 5.37 percent to close at N59.04 per share.

Market breadth closed negative with 26 declining stocks outnumbering 23 advancing ones.

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