Newspaper Review - Friday, June 7, 2013
Market sustains rally, index up by 0.4%
The rally in the equities segment of the Nigerian Stock Exchange, which began last week, continued on Tuesday, with major indices closing positive. The market capitalisation of the listed equities gained N53bn or 0.4 per cent from N11.945tn on Monday, to close at N11.998tn. Similarly, the NSE’s All-Share Index was up by 165.34 basis points or 0.4 per cent to close at 37,885.66 points, up from 37,720.32 points recorded the previous day. The NSE-30 Index rose by 0.5 per cent or 9.98 points from 1,778.09 points to close at 1,788.07 points, while the consumer goods index gained 1.04 per cent or 11.06 points to close at 1,073.27 points. The NSE Oil/Gas Index and the Banking Index also appreciated to close at 182.38 points and 423.17 points respectively. A total of 35 stocks recorded price appreciation, while 22 stocks lost. IPWA Plc gained the highest, rising by 10 per cent or nine kobo to close at 99 kobo per share, while Jos International Breweries Plc recorded the highest loss for the day, shedding 10 per cent or 11 kobo to close at 99 kobo.
Minority shareholders seek SEC’s protection
Stakeholders have called on the Securities and Exchange Commission and the Nigerian Stock Exchange to review their laws to better protect minority shareholders. They made the call in reaction to the attempt by GlaxoSmithKline Plc (UK) to increase its stake in GlaxoSmithKline Consumer Nigeria Plc to 80 per cent. The Chairman, GlaxoSmithKline Consumer Nigeria Plc, Chief Olusegun Osunkeye, had disclosed the plan at the company’s Annual General Meeting held in May, 2013. “Following a consideration of the proposal, GlaxoSmithKline Nigeria has reached a definitive agreement in principle with our parent company, GSK Plc, on the terms of a proposal whereby GSK would increase its ownership in the company to 80 per cent,” he was quoted to have said. According to him, under the arrangement, the parent company would acquire about 321 million ordinary shares in the company on a pro-rata basis from existing shareholders at the offer price of N48 per share.
CBN moves to minimise bank customers’ credit risks
The Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi, has inaugurated a steering committee on financial literacy to help financially excluded individuals to know, understand and access financial products and services at affordable costs. The committee, which is headed by Sanusi, is made up of representatives of relevant institutions in both the public and private sectors of the economy. Speaking at the event, the CBN governor said the need to empower individuals to make better spending, savings and investment decisions informed the financial literacy policy. Other objectives are to increase awareness for individuals to have personal financial plans, prioritise their spending as well as help consumers to minimise credit risks in the financial system. Sanusi said the central bank was currently working with the Ministry of Education to develop a curriculum that would help promote the financial literacy policy.
Inflation drops to six-month low at 8.4% —NBS
The National Bureau of Statistics on Tuesday released the Consumer Price Index report for the month of June, saying the country’s inflation rate now stood at 8.4 per cent. The CPI measures the average change over time in prices of goods and services consumed by people in day-to-day living. The 8.4 per cent is the lowest inflation rate to be recorded by the country in the 2013 fiscal period. The CPI in January was 9.0 per cent; it moved to 9.5 per cent in February; while March, April and May recorded 8.6 per cent, 9.1 per cent and 9.0 per cent, respectively. In the report, which was signed by the Statistician-General of the Federation, Dr. Yemi Kale, the bureau said the June inflation rate was 0.6 percentage points lower than the 9.0 per cent rate recorded in May. The bureau said since the beginning of this year, inflation rates had continued to trend lower across all three indices of headline, core and food.
Small business owners set two-point agenda for FG
The Association of Small Business Owners has called on the Federal Government to shift focus from its seven-point agenda to a two-point agenda of power supply and provision of motorable roads. This, according to the body, is important if the country is to achieve its aim of encouraging the development of small businesses in the country. The President, ASBON, Dr. Femi Egbesola, stated this when he led other executive council of the association paid a courtesy visit to The PUNCH Place, head office of Punch Nigeria Limited in Ogun State on Tuesday. He said continuous focus on the seven-point agenda would not be feasible in the short-term as some of the targets of government could not be achievable in the next few years. Egbesola said, “We want to seize this opportunity to appeal to the Federal Government to drop the seven-point agenda and instead focus on a two-point agenda, which we think will go a long way to aid the growth of small businesses in Nigeria. “The two areas of focus by government should be roads and electricity.
Nigeria losing 400,000 barrels of oil daily –Okonjo-Iweala
• Reps summon Adoke over OPL 245 deal
The nation’s economy is currently in a precarious position following the admittance of the Federal Government that estimated 400,000 barrels of crude oil are being lost daily to illegal bunkering, vandalism of infrastructure and halt in production. As a result, revenue accruing to the Federation Account is fast dwindling amid fears that the Federal Government may not be able to implement the 2013 budget. The Minister of Finance, Mrs. Ngozi Okonjo-Iweala, who appeared before the House of Representatives Joint Committee on Appropriation/Finance in Abuja on Tuesday in response to a summons, revealed the revenue shortfall. Okonjo-Iweala said, “We are losing revenue; 400,000 barrels of crude oil are lost on a daily basis due to illegal bunkering, vandalism and production shut-in. “I have to clarify that it is not as if the entire 400,000 barrels is stolen, no. What happens is that whenever the pipelines are attacked and oil is taken, there is a total shut down.
Plunging excess crude account highlights flaws in management
The political management of Nigeria’s Excess Crude Account (ECA) has been defined in one word: vulnerable. The account is currently estimated at a little over $5 billion. Despite all the warnings that come from even the World Bank, that Nigeria needs to shore-up the account to guard against external shocks, politicians of all colours have been reckless over the country’s oil wealth. And with crude oil production steadily declining, the odds are stacking heavily against the ‘rainy day account’. Razia Khan, regional head of research, Africa, at Standard Chartered Bank, in a response to BusinessDay questions, said: “Our concern is that the amount of spending that Nigeria has seen continues to increase, leaving Nigeria vulnerable to any shortfall in oil earnings, whether that is due to oil theft, or a long-term price decline due to more structural factors. “There is no substitute for increasing the amount of revenue mobilisation from non-oil sources.
Oil stays near $106 ahead US inventories report
The price of oil stayed near $106 a barrel Tuesday as energy markets waited for the next United States report on crude and fuel inventories for confirmation of recent signs of increased demand, The Associated Press reported on Tuesday. Benchmark crude for August delivery was down 35 cents at $105.97 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gained 37 cents to settle at $106.32 on Monday. Oil is up about 10 per cent so far this month. It has been jolted higher by unexpectedly sharp drops in US crude and gasoline inventories, which suggest stronger demand. The military ouster in early July of Egypt’s president has also added a premium to crude, reflecting the risk of supply disruption from political instability in a country that controls the Suez Canal. Those factors were tempered Monday by a second straight quarter of slowing economic growth in China and slower growth in US retail sales in June. China’s economy expanded 7.5 per cent in the April-June quarter after 7.7 per cent growth in the previous quarter.
Shell shuts 624MW Afam VI power plant
Power generation in the country dropped further on Tuesday following the shutdown of the 624 megawatts capacity Afam VI Power Plant by the Shell Petroleum Development Company Joint Venture. Shell said in a statement that the power plant was shut down due to gas shortage arising from the closure of the Trans Niger Pipeline due to crude oil theft related leaks. The pipeline was shut in June following a fire incident. It was reopened after six days only for SPDC to on July 11 shut the pipeline again due to a leak. The shutdown of the TNP system, comprising the 28-inch and 24-inch streams, resulted in the deferment of 150,000 barrels of oil per day and huge economic losses to the Federal Government. The Corporate Media Relations Manager, SPDC, Mr. Tony Okonedo, said the shutdown had also led to tank tops and non-evacuation of condensate from the Okoloma Gas Plant, which supplies Afam VI Power Plant with feed gas. “SPDC had to shut down the Okoloma Gas Plant today (Tuesday) as it could not continue to produce gas without the evacuation of condensate.
Real banking re-emerging as CBN rules set to crimp earnings
Nigerian banks may have no choice but to engage with the real sector, as a deluge of new Central Bank of Nigeria (CBN) rules and the lower interest rate environment threatens to boost the cost of funds and crimp earnings for the next few years. The CBN has set the minimum savings deposit rate at 30 percent of the Monetary Policy Rate (MPR) of which enforcement is set to begin in the third quarter of 2013. This means that with MPR currently at 12 percent, banks that hitherto relied on cheap deposit mobilisation for which they often paid less than 2 percent per annum, would now have to almost double interest payments for deposits to close to 3.6 percent per annum. “The era of “real banking” appears to be gradually re-emerging, as traditional sources of high income and profitability continue to come under threat from increased competition and tighter regulation,” said Afrinvest Limited, a Lagos based investment bank, in a banking sector report released last week.
Invisible sector accounts for 102.0% y/y increase in forex utilisation
The services sector, also known as the invisible sector, consumed the largest chunk of foreign exchange, up to 102.0 percent in first quarter 2013. Analysts are of the view that importation of items for production of goods suffered, as Nigerians spent huge amounts of forex for services, particularly travelling abroad for health services, education and tourism. The invisible sector includes business services, communications, construction and related engineering services, distribution, education, environmental services, financial services, health related and social services, tourism and travel related services, recreational services and transport services. Samir Gadio, an emerging markets strategist at Standard Bank, London said, “We will need to have a more detailed synopsis of the sub-sectoral forex demand from the invisibles group in Q2:13, but official statistics in Q1:13 already pointed to a 102.0 percent y/y increase in the utilisation of forex by the invisibles category, primarily driven by financial services (+159.2% y/y).
Jetlink, partners India’s tech firm, Integra to promote financial inclusion in Nigeria
Jetlink Limited, Nigeria’s leading technology solutions provider has announced its tie-up with Integra Micro Systems (Integra), India’s leading provider of innovative and hi-tech products to promote Financial Inclusion in Nigeria. With over 46 percent of Nigeria’s population excluded from access to financial services, believed to be one of the highest in sub-Saharan Africa, the strategic partnership is expected to help bring innovative solutions to bridge this gap to the Nigerian financial services industry. Under the partnership, Jetlink will promote financial inclusion solutions from Integra in Nigeria to service both the disconnected rural masses, while also enhancing the banking experience of the urban, connected customers. Mahesh Kumar Jain, CEO, Integra said in a statement “Integra is excited about the opportunities to serve customers at the bottom of the pyramid and this partnership will help us bring well tested financial inclusion solutions to the Nigerian markets. With leading edge technologies and services engineered at Integra, we are confident of providing customized solutions to the inclusion initiatives in Nigeria.”
Mainstreet Bank Lauds FG, commits N10bn to agric development
The Executive Director, Corporate and Investment banking, Mainstreet Bank Limited, Roger Woodbridge, has commended the Federal Government (FG) for coming up with the Growth Enhancement Scheme (GES); which is designed specifically to provide affordable agricultural inputs like fertilizers and hybrid seeds to farmers in order to increase their yields per hectare and make it comparable to world standards. Speaking to newsmen after a stakeholders meeting held in Abuja recently, Woodbridge acknowledged that the GES scheme has enabled the private sector to play an integral role in growing the nation’s food production. Citing Mainstreet’s experience in funding fertilizer distribution to Agro-dealers and smallholder farmers, he stressed that the Public Private Partnership (PPP) provides effective framework for private sector engagement in overall agricultural development.
Cashless Nigeria: CBN partners E-PPAN for grassroots mobilisation
The Central Bank of Nigeria (CBN), has reached an agreement with the E-Payment Providers Association of Nigeria (E-PPAN) to be their major partners in carrying out massive mobilisation and sensitisation of the grass roots as the cashless initiative moves to Abia, Anambra, Kano, Ogun, Rivers and the Federal Capital Territory (FCT). The mobilisation will include series of interactive sessions with non-organized markets, trade associations, Market leaders and other stakeholders. According to the Executive Secretary of the association, Onajite Regha, if the greater percentage of Nigeria’s population embraces the alternative forms of payment, the move to transform payment life style could be far-reaching, “ultimately bringing more of the money in circulation into the banking sector, lowering bank costs and improving the transmission of monetary policy.”
Skye Bank donates N600m ICT centre to OAU
Skye Bank Plc has donated a N600m state-of-the-art Information and Communication Technology centre to the Obafemi Awolowo University, Ile-Ife, Osun State. The Group Managing Director and Chief Executive Officer of the bank, Mr. Kehinde Durosinmi-Etti, handed over the centre to the Vice Chancellor, OAU, Prof. Bamitale Omole, on Tuesday. Built on the campus of the university, the 700-seater centre, according to Durosinmi-Etti, will expand the frontiers of education and aid learning. He said N150m was spent on the construction of the centre, while N450m was used for procurement and installation of equipment. Omole said the centre would be utilised to harness modern technology for effective and efficient learning, and research. “The problem of large classes will soon be a thing of the past as lecturers and students can interact real-time online,” Omole said.
RMRDC commissions ginger processing equipment at Mbaitoli
The Raw Materials Research and Development Council (RMRDC) has commissioned a ginger splitting and drying equipment, which it donated to Mbaitoli Ginger Growers Association (MGGA), the first ginger-growing cluster in the Southeast geo-political zone of the country. The equipment fully installed and tested, were locally fabricated by the National Root Crops Research Institute (NRCRI) Umudike, Abia State and Farm Industries Limited, an Owerri based firm, to help the cluster add value to their produce. The equipment has the capacity to split one ton of ginger per hour and dry two tons of ginger per hour. Peter Onwualu, director-general/chief executive officer, RMRDC, in his speech at the commissioning of the equipment, held Thursday, at the Mbaitoli Local Government Area headquarters, Nwaorieubi, Imo State, affirmed that the equipment, would help in job creation and reduce youth restiveness in the area.
FCMB Jumia.com partner to drive growth in e-commerce sector
First City Monument Bank (FCMB) has announced its partnership with Jumia.com, Nigeria’s foremost online Retailer, as well as other e-commerce organizations to drive growth in the online retail sector. To this end, the bank has put in place platforms that will enable customers to make their purchase online and enjoy secured payment system. Rolayo Akhigbe, head of transaction banking, FCMB, told journalist at the Jumia 1st anniversary e-commerce conference and fashion cocktail in Lagos that the bank’s payment engines are fully tasted and certified to global standard. “FCMB sees ecommerce as a growing area. We see a huge opportunity for growth in the e-commerce space and that is why we are partnering with Jumia.com as well as other e-commerce organization to help them in growing their business, putting a platform in place that is going to support the payment engine because it is one thing for the Client to go online and see what they want to buy but they also want to make sure that whatever payment they are making online is secure.
Custodian partners with Sickle Cell Foundation Nigeria
Custodian and Allied Insurance Plc, a registered member of the Nigerian Insurance Association (NIA), has partnered with the Sickle Cell Foundation Nigeria as co-sponsors of the 2013 Sickle Cell Anemia Walkathon. The event which took place on Saturday 13 July was organised by The International Finance Corporation (IFC) Nigeria. The 7 kilometer walk in Lagos Island was aimed at raising awareness and increasing public knowledge about sickle cell anemia; both in terms of general alertness and recent advancements in management of the ailment, as well as raising funding to support increased research and providing some support to institutions caring for people affected by sickle cell anemia. The Head of Directorate, Administration & Corporate Affairs of Custodian and Allied Insurance Plc, Mrs. Olubunmi Aderemi, said “The motivation for us was that at Custodian, we like to associate with worthy courses affecting our environment and people around us.
Investment in ICT, panacea for unemployment – Ondo commissioner
Ondo State Commissioner for Budget and Economic Planning, Mr. Akin Adaramola, on Tuesday said the alarming rate of unemployment in the country would worsen in the nearest future unless government provided infrastructure that would support Information and Communication Technology development and electricity generation. Adaramola stated this at the opening of a 10-day training programme organised by the state government in partnership with the National Information Technology Development Agency for engineers and ICT graduates in the state civil service. The commissioner said ICT was pivotal to the development of any nation and that any development model without concrete plan for ICT contribution would fail. “Many advanced economies of the world, in the past, developed from an agricultural economy in which land was the key resource, then to an industrial economy in which natural resources was, and now, to a knowledge-based economy characterised by ICT in which knowledge is the key resource,” he said.
FG inaugurates broadband council
The Federal Government on Tuesday inaugurated the Broadband Implementation Council chaired by the Minister of Communications Technology, Mrs. Omobola Johnson, with a target to achieve 80 per cent mobile broadband penetration for the country by 2017. Speaking during the inauguration of the council in Abuja, Johnson said it represented an important milestone in the implementation of the National Broadband Plan recently approved by President Goodluck Jonathan. She said, “The role of the council is to ensure that we not only have a well-articulated plan, but also a well executed plan. “The terms of reference include providing periodic progress report on the evaluation of the plan; facilitating the coordination and collaboration of the various stakeholders during plan implementation; ensuring that relevant agencies and institutions are actively engaged; and monitoring the progress of the plan and highlighting adjustment areas, if any.
Economic opportunities abound in C’River – Imoke
Cross River State Governor Liyel Imoke has called on youths to contribute to the development of the state by taking advantage of economic opportunities in the state. Imoke made the call during 2013 Career/Founder’s Day organised by The Bridge Leadership Foundation, according to a statement on Sunday. He said, “The unemployed graduates among you should take advantage of the Micro-finance Entrepreneurial Development Agency and grow their businesses. Coming from a poor background is no longer an excuse for a youth to fail in life. The possibilities abound in the state for them to key in to create wealth and jobs. “There has been a tremendous entry of foreign investments into the state based on the conducive economic climate created. These investments will provide about 40,000 direct jobs and about 74,000 indirect jobs, which means that youths need to equip themselves with the prerequisite practical skills, which will be provided.”
Court sides with Yahoo in data collection case
Yahoo has won a court fight that could help the public learn more about the government’s efforts to obtain data from Internet users, The Associated Press reported on Tuesday. The United States Foreign Intelligence Surveillance Court, which reviews government requests to spy on individuals, ruled Monday that information should be made public about a 2008 case that ordered Yahoo Inc. to turn over Client data. The order requires the government to review which portions of the opinion, briefs and arguments can be declassified and report back to the court by July 29. The government sought the information from Yahoo under the National Security Agency’s PRISM data-gathering programme. Details of the secret program were disclosed by former NSA contractor Edward Snowden, who has fled the US. The programme came to light in early June after The Washington Post and Guardian newspapers published documents provided by Snowden. It allows the NSA to reach into the data streams of US companies such as Yahoo, Facebook Inc., Microsoft Corp., Google Inc. and others, and grab emails, video chats, pictures and more.
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