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Stocks cheap on foreign investors’ exit – Onyema



Foreign investors fleeing Nigeria as oil prices plunge are leaving stocks undervalued in Africa’s biggest economy, the bourse’s chief executive officer, Mr. Oscar Onyema has said.

The benchmark index’s 18 per cent decline this year isn’t justified by economic changes and as a result Nigerian equities are “effectively on sale,” Oscar Onyema said in an interview with Bloomberg in Diani, Kenya.
“The fundamentals demand higher valuations.”

Nigerian stocks dropped as crude slid into a bear market and the central bank eroded reserves to support the currency, which fell to a record low this month.
Nigeria is Africa’s biggest oil producer, and its $520 billion economy is forecast to grow 6.5 per cent this year and next, according to a Bloomberg survey of economists.
“The local institutional investors are net buyers at the moment,” Onyema said, adding that “they are buying and their way of looking at it is that the prices we’re seeing today are not justified by the fundamentals.”
The Nigeria Stock Exchange (NSE) All Share Index closed at 34,111.85 basis points yesterday, while the NSE market capitalisation closed at N11.263 trillion. In addition, as 19 shares increased, six fell and 170 were unchanged.
PZ Cussons Nigeria Plc, a soap maker, was the bigger gainer, climbing 4.9 percent.

Foreigners will probably remain wary of the Nigerian market until presidential elections in February, Onyema said.

There is pent-up demand for stocks, though investors won’t commit funds until they have clarity on policy and security under the new administration, he said.
An Islamist insurgency in northern Nigeria and a campaign for the presidency pitting candidates from the mainly Muslim north against an incumbent from the largely Christian south point to “a very perilous contest whose results may also be disputed,” the Brussels-based International Crisis Group said in a report last week.

“We’re in a political cycle right now and foreign investors want to see what the outcome is,” Onyema added.

“They want to get certainty about the security situation and they also want to see the package of measures that the fiscal and monetary authorities will take in addressing the shocks that we’ve seen.”
The naira had weakened to a record low of N178 to a dollar this month because of the collapse in the price of oil, which accounts for more than two-thirds of government revenue.

The Central Bank of Nigeria (CBN) yesterday devalued the naira by moving the midpoint from N155 to a dollar to N168 to a dollar. It also widened the band around the midpoint by 200 basis point from + or – 3 per cent to + or -5 per cent. Similarly, it increased the monetary policy rate (MPR) from 12 per cent to 13 per cent and also raised private sector cash reserve ratio (CRR) from 15 per cent to 20 per cent.
“When you look at OPEC countries, they’re all feeling the sweat, but Nigeria tends to be more pronounced, because of some of the perceived weaknesses in our buffers such as the level of foreign reserves and the ability of the central bank to defend the currency,” Onyema said.

“I have confidence in the central bank’s ability to provide a currency that has stability.”

Onyema said the NSE is seeking to boost listings and talking to so-called marginal oil field operators eager to match the success of Seplat Petroleum Development Company’s initial public offering in April, Nigeria’s first since 2008.

“The marginal field operators have a real opportunity to participate in our market, especially given the success that Seplat has shown,” Onyema said.
Marginal field operators in Nigeria include Bayelsa Oil Company, Platform Petroleum Limited and Sahara Energy Field Limited.—-ThisDay

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



…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



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

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Wind Farm Vessel Collision Leaves 15 Injured



…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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