₦airaland Forum

I guess your friend or the person is mixing up foreign portfolio investors (FPIs) with foreign direct investors (FDI).

The withdrawal of funds by FPIs does not cause job loss, but FDIs.

FPIs are investors who only invested in stocks by going through stockbrokers in the country, while FDIs have physical investments in the country. So, when FDIs pull out their funds, it means they are selling their investments like companies, assets and others for cash. And like you know, if an investor sells his company, it means those working there will surely lose their jobs.

So, FPIs are different from FDIs. I hope my explanation helps.

4601CE:
Okay. Thanks .
Someone said the withdrawal of foreign investors from Nigeria stock exchange will make millions of people lose their jobs .
I said that’s a lie ! But he started to rant with no single explanation to back up his claim .
Please kindly say something about this.

The exit of foreign portfolio investors from our market is majorly because of the political situations in Nigeria as well as the hike of rate by Fed Reserve to 2.25% few days ago.

Now, ask yourself that as an investor, would you want to leave your money in Nigeria with what happened in Osun few days ago? No investor wants to risk losing his money for anything.

So, as foreign investors pull out their funds, they will first have to convert their Naira proceeds to Dollar, resulting into more demand for Dollar and more pressure on Naira, causing the local currency to weaken.

I hope I have answered you.

4601CE:
Dipoilowo . Whose fault is this?

By Dipo Olowookere

The continuous increase in demand for the greenback by foreign portfolio investors (FPIs) weakened the local currency at the foreign exchange (forex) market last week.

It was observed that the Naira did not perform well at the various market segments despite the intervention of the Central Bank of Nigeria (CBN) by providing the sum of $210 million to authorised dealers at the interbank market last Tuesday.

The apex bank had supplied the sum of $100 million to the Wholesale segment, while $55 million were each given to dealers at the Small and Medium Scale Enterprises and the invisibles to cater for BTA, medicals, school fees and others.

But at the close of the week on Friday, the local currency depreciated at the interbank forex market to N361.34 to the Dollar.

Also, the local currency went down by 0.07 percent week-on-week (w-o-w) against the Dollar at the Investors & Exporters Forex Window (I&E FXW) to quote at N363.92/$.

However, the local currency remained unchanged against the Dollar at both the Bureau De Change (BDC) segment and the parallel market at N358/$ and N361/$ respectively.

Meanwhile, according to analysts at Cowry Asset, most dated foreign exchange rate forward contracts at the interbank over-the-counter (OTC) segment rose amid declining external reserves: 1-month, 2-month, 6-month and 1-year contracts lost 0.15 percent, 0.11 percent, 0.08 percent and 1.04 percent to close N367.14/$, N370.44/$, N384.59/$ and N414.47/$ respectively.

Business Post reports that the Africa’s largest economy’s foreign reserves depreciated by 0.99 percent w-o-w to $44.381 billion as at Thursday, September 27, 2018, according to data harvested from the website of the CBN.

https://www.businesspost.ng/2018/09/30/naira-weakens-on-more-demand-for-dollar-declining-reserves/

No, it is mainly the interest rate charged on short-term loans between banks

Nnamz:
So this lending rate, is it like you lending money to your friend or someone and charging them 19%?

T-Bills Market Flat as CBN Relaxes OMO Sales
https://www.businesspost.ng/2018/09/29/t-bills-market-flat-as-cbn-halts-omo-sales/

Fidelity Bank Optimistic of Sterling Performance in H2 2018
https://www.businesspost.ng/2018/09/28/fidelity-bank-optimistic-of-sterling-performance-in-h2-2018/

T-Bills Market Quiet as Overnight Rate Crashes to 6.25%
https://www.businesspost.ng/2018/09/28/t-bills-market-quiet-as-overnight-rate-crashes-to-6-25/

T-Bills Yields to Decline on Anticipated N165b Inflows
https://www.businesspost.ng/2018/09/27/t-bills-yields-to-decline-on-anticipated-n165b-inflows/

CBN Gives Hope to Minority Shareholders of Defunct Skye Bank
https://www.businesspost.ng/2018/09/26/cbn-gives-hope-to-minority-shareholders-of-defunct-skye-bank/

Rising Oil Price: CBN Urges FG to Save to Avert Another Recession
https://www.businesspost.ng/2018/09/26/rising-oil-price-cbn-urges-fg-to-save-to-avert-another-recession/

Nigeria Smiles as Brent Crude Oil Crawls Towards $82 per Barrel
https://www.businesspost.ng/2018/09/26/nigeria-smiles-as-brent-crude-oil-crawls-towards-82-per-barrel/

By Dipo Olowookere

On Tuesday, the Brent crude oil extended its rally as Saudi Arabia and Russia ruled out immediate production increases, after the United States' call for increase in supplies by the top producers.

The commodity traded late on Tuesday at $81.80 per barrel at the global market after 17 cents or 0.21 percent, data obtained by Business Post showed.

The price of the Brent is projected to continue to rise at the market as the sanctions imposed by the US on Iranian crude exports take effect from November 4, 2018.

With the Nigerian government pegging its oil benchmark at $51 per barrel in the 2018 budget, the continue hike in the commodity is a welcome development.

Yesterday, the Central Bank of Nigeria (CBN) advised government to take advantage of the rising oil prices to save for the raining days.

It warned that if care was not taken, the country’s economy may witness another recession, which it fell into in 2016 and exited a year later.

Since going out of recession in the second quarter of last year, Nigeria’s economy, the largest in Africa, has struggled.

In the second quarter of this year, the Gross Domestic Product (GDP) slowed to 1.50 percent from 1.95 percent, giving analysts something to worry about. The contraction was caused by drop in the price of crude oil during the period under review.

At the international market, crude oil prices are expected to stay under pressure on the back of a deadlock on supply between the top producers and the world's largest economy, the United States.

President Donald Trump had asked members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia increase their supplies to make up for the expected fall in Iranian exports, but they are adamant.

"Brent oil prices are set to rise further from current levels on supply disruption after Iran sanctions and a broader range of $80 to $90 per barrel looks achievable in the last quarter of this year," said Abhishek Bansal, founder and chairman of ABans Group of Companies.

The OPEC has 15 member countries including Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, the UAE and Nigeria. At the start of 2017, OPEC members and Russia, a non-OPEC supplier, together agreed to curtail output in an oversupplied market.

According to CARE Ratings, after the sanctions on Iran exports come into effect, oil prices “are likely to go even higher given an expected drop in supply from major producers Iran and Venezuela and political and price escalation prevailing in the markets.”

“Now, as the deadline of sanctions on Iran is nearing and as the OPEC and non OPEC countries have consistently shown their reluctance over increasing production, the latest phase of bull rally has become more and more impulsive,” said Gaurav Katariya, research head (commodity), Arihant Capital Markets. “$82 may be a short lived resistance as the rally is very impulsive and any correction of, say, 3 to 4 percent, from here will only bring in strong buying.”

https://www.businesspost.ng/2018/09/26/nigeria-smiles-as-brent-crude-oil-crawls-towards-82-per-barrel/

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Tuesday warned of a looming fall into another recession if efforts are not being made to boost the economy.

This warning was given at the end of the two-day Monetary Policy Committee (MPC) meeting held in Abuja.

Addressing reporters yesterday, CBN Governor, Mr Godwin Emefiele, noted that during the meeting, the committee identified rising inflation and pressure on external reserves created by capital flow reversal as the current challenges to growth.

According to him, inflationary pressures have started rebuilding and capital flow reversals have intensified as shown by the bearish trend in the equities market even though the exchange rate remains very stable.

Mr Emefiele told newsmen that at the July meeting of the MPC, members had lauded the modest stability achieved in key indicators, including inflation, exchange rate and external reserves, buoyed by a robust level of external reserves with inflation trending downwards for the 18th consecutive month.

However, he emphasised that the gains recorded as at the last time the committee met before yesterday appear to be under threat of reversal, following new data which provides evidence of weakening fundamentals.

He said available data from the National Bureau of Statistics (NBS) showed that real GDP growth declined by 45 basis points as the economy grew by 1.50 percent in the second quarter of 2018, down from 1.95 percent in the preceding quarter, but higher than 0.72 percent in the corresponding quarter of 2017.

“The committee was concerned that the exit from recession may be under threat as the economy slowed to 1.95 and 1.50 percent in Q1 and Q2 2018, respectively,” Mr Emefiele said during the briefing.

He said the committee attributed the slowdown in economy to drop in the oil sector, with strong linkages to employment and growth in other key sectors of the economy.

According to him, in order to avoid another recession, federal government must take advantage of the current rising oil prices to rebuild fiscal buffers, strengthen government finances in the medium term and reverse the current trend of decline in output growth.

“The MPC also called on the fiscal authorities to intensify the implementation of the Economic Recovery and Growth Plan (ERGP) to stimulate economic activity, bridge the output gap and create employment,” he said.

The CBN chief further disclosed that the committee noted that disruptions to the food supply chain in major food producing states due to the combined effects of poor infrastructure, flooding and the on-going security challenges resulted in a rise in food prices, contributing to the uptick in headline inflation.

However, he said the committee expressed optimism that as harvests progress in the coming months, pressure on food prices would gradually recede, while growth enhancing measures would over the medium term have some moderating impact on food prices.

He said the MPC was of the view that even though growth remained weak, the effective implementation of the 2018 capital budget and policies that would encourage credit delivery to the real sector of the economy would boost aggregate demand, stimulate economic activity and reduce unemployment in the country.

Business Post recalled that in the second quarter of 2016, Nigeria slipped into recession and only exited in the second quarter of 2017.

Some weeks ago, the Statistician General of the federation, Mr Yemi Kale, disclosed that the Nigerian economy was presently in a recovery stage.

https://www.businesspost.ng/2018/09/26/rising-oil-price-cbn-urges-fg-to-save-to-avert-another-recession/

Selloffs at T-Bills Market as Lending Rate Jump to 19.42%
https://www.businesspost.ng/2018/09/25/selloffs-at-t-bills-market-as-lending-rate-jump-to-19-42/

Who listened to Emefiele's post-MPC meeting address this afternoon?

Wall Street Opens Higher on Rising Treasury Yields
https://www.businesspost.ng/2018/09/25/wall-street-opens-higher-on-rising-treasury-yields/

BREAKING: MPC Retains Interest Rate at 14%
https://www.businesspost.ng/2018/09/25/breaking-mpc-retains-interest-rate-at-14/

T-Bills Market Trades Flat as Yields Slightly Rise to 13.11%
https://www.businesspost.ng/2018/09/25/t-bills-market-trades-flat-as-yields-slightly-rise-to-13-11/

FG Orders Immediate Release of N22.68b to Ex-Nigeria Airways Workers
https://www.businesspost.ng/2018/09/24/fg-orders-immediate-release-of-n22-68b-to-ex-nigeria-airways-workers/

CBN's Frequent Intervention Weigh on Reserves, Drop to $44.8b
https://www.businesspost.ng/2018/09/24/cbns-frequent-intervention-weigh-on-reserves-drop-to-44-8b/

Only 30% of Insurance Firms in Nigeria are Valued Above N5b
https://www.businesspost.ng/2018/09/24/only-30-of-insurance-firms-in-nigeria-are-valued-above-n5b/

Like I pointed out earlier, that is the essence of the submitting financial statements to regulator for checks before approval. At that stage, the CBN, for banks, should have detected 'errors' and possibly sanction the bank executives for such 'figure dressing' to serve as deterrent.

Regulators are supposed to act as if all investors are novice and because of this, protect them. That is how a responsible regulator should act.

Willie2015:
- SEC, CBN etc will not determine which shares you will buy, but they have a responsibility in ensuring the integrity of data submitted by companies which shareholders based their investment decision.
- They have failed us in this core function.
- You simply wonder how CBN and other regulators could not detect Skye Bank has two financial books and outrageous N280bn in suspense accounts to hide various losses and infractions. Most coys are guilty of this practice.
- We have to accept that there is a high level of romance BTW regulators and top management of coys. BGL case & brokerage scandal in Partnership Investment Securities are just examples of numerous cases.http://judefejokwu..com/2017/02/another-brokerage-scandal-rocks-nigeria.html

Now, what is now the need for the submission of financial statements to industry regulators? Is it not to ensure they are clean before being approved and released to investing public?

Asides that, when issues like the Skye Bank happens, those who wrecked havoc on failed firms are supposed to be punished, but does that happen here?

The implication is that more people will continue to steal from shareholders with the believe that nothing will happen to them and at the end, the it is the minority shareholders that bear the brunt.

Regulators need to wake to block these holes. Govt is supposed to protect its citizens from unnecessary losses.

wanaj0:
What do you expect the regulators to do?

CB regulate the banks and made a promise that depositors will NOT lose their money. CBN did not promise the shareholders anything.

NSE is a market where you come and sell. CAVEAT Emptor applies.

SEC fines companies that did not make returns on time.

People that bought SKYE on Friday knew that

1) SKYE was sick
2) SKYE has not released result for many quarters

The shareholders of SKYE attends the AGM and shower praise on the board and management.

The shareholders have members represented on the audit committee so they have 'insight' into the accounts.

The shareholders are aware that they can lose money in their investment.

Actually it is the shareholders that need to be more responsive and active. They should stop going to AGM just to get AGM gifts. They need to hold the their directors accountable.

BUT if you are a 'trader', it is just a trade that went BAD.

If there is any lesson, I think people need to come up with their criteria for buying a stock.

Why I will join others to blame the CBN, NSE and SEC is because as regulators, they are supposed to make sure the companies are fair in their dealings. They are not called regulators to only collect fines and others, but for checks and balances to boost investors' confidence.

pluto09:
It is really surprising to me how people will blame NSE,CBN and everyone else for their misfortune in the stock market and see nothing wrong in investors buying shares of dead companies.

Don't even mention CBN, SEC and NSE. These agencies are mere figure-heads.

As at the time, last Friday, the CBN announced Polaris Bank as the new owner of Skye Bank, their website was yet to be created. The site was created by 8:16pm, which the company is yet to be duly registered.

This goes to show you that we are not serious in the country. Same way Nigeria Air faded away.

Godlylifeoneart:
FYI, good corporate governance does not exist in Nigeria. What exist is selfish interest. How on earth could Lame NSE the political susceptible CBN and THE HANDICAP SEC woke up one day and announced the burial of sky bank with no prior announcement of its obituary?
A good investor with a good lawyer will make fortune from this useless regulatory agencies that only serve the interest of the oligarchy.
All the high volume of sky traded on NSE in the last one month was dumped by the Oligarchs n Nigeria aristocrats. Now the minority shareholders suffer the consequence. Some pension funds are lost 4ever,JIJO are trapped

Good morning all, for those who said I don’t contribute here aside posting news links, you are right and I apologise for that. From now on, I will try to be active here, contributing to discussions.
Do have a fruitful trading week and please, take it easy on banking stocks at the market this week.

Analysts Predict Fall in Banking Stocks as Skye Bank Exits NSE
https://www.businesspost.ng/2018/09/24/analysts-predict-fall-in-banking-stocks-as-skye-bank-exits-nse/

CBN Yet to Register Polaris Bank, New Owner of Skye Bank
https://www.businesspost.ng/2018/09/24/cbn-yet-to-register-polaris-bank-new-owner-of-skye-bank/

By Dipo Olowookere

Mr Kunle Rasheed, head of the media team of Fuji maestro, K1 De Ultimate, has lambasted another Fuji icon, Mr Abass Obesere, over his outburst on K1.

Few days ago, Obesere had attacked Ogun State-born K1 De Ultimate for allegedly insulting the Lagos State Governor, Mr Akinwunmi Ambode, at a public function during an informal chat with his friends.

Reacting, Mr Rasheed, who took Obesere to the cleaners, described the musician as an opportunist who wants to latch onto K1's fame to get noticed by all means.

He advised the Omo Rapala crooner to rather concentrate on his “vastly diminished music career” instead of using K1 in his political Yahoo game.

“Ordinarily, we would not bother ourselves with the usual ranting of Fuji act, Abass Omo Rapala Obesere because K1 will never entertain such idea. But as a concerned party, we need to set the records straight hence this timely advice to Obesere.

”We can glean that Obesere positioned in his epistle to disparage the person of Alhaji Wasiu Ayinde Marshal, a.k.a. K1 De Ultimate, for no just cause.

“We have been watching the entertainment scene for a while and have come to the conclusion that Obesere is an opportunist who waits for K1 to either err or take an action for his voice to be heard.

“One good thing which life has taught is that the truest mark of being born with great qualities is being born without envy.

“This has prompted our belief that Obesere’s issue with K1 borders on envy and nothing else.

“Obesere should know that K1 remains a prominent APC party member in the state and as such is a bonafide stakeholder in the affairs of his party.

“Instead of Obesere dabbling into a matter that doesn’t concern him, he should as a matter of urgency concentrate more on re-jigging his dwindling musical career. K1 has done well both as a musician and a politician,” the musician’s aide said.

Mr Rasheed further said, “The Czar of Fuji music has done so many hits after hits and has always remained relevant in the Nigerian music scene. Of late, Obesere’s voice and face becomes only visible when the issue of K1 issue arises. Why is this If not envy?

“While the same K1 was busy campaigning for Governor Akin Ambode in 2015, Obesere did a song that Eyin magbale, awa ma gbadun (meaning APC members should continue sweeping, his own people (PDP) will continue to enjoy).

“Now that PDP failed in both the state and at the federal level, Obesere now solicits patronage from the same party he had derided in the past.

“We have observed that Obesere is like a sinking man who will desperately hang on anything to go down with him. We have also observed that the hatred he harbours for K1 has not ceased despite K1 offering olive branches to him several times.

“We advise Alhaji Abass Obesere to heed the words of the great writer PK Thomajan, that says grudges get heavier, the longer they are carried and we implore him to shed himself of this unnecessary envy and let K1 be.”

https://www.businesspost.ng/2018/09/24/ambode-face-your-dead-music-career-k1-tells-obesere/

Cost of Funds to Rise as N164.6b Treasury Bills Mature
https://www.businesspost.ng/2018/09/24/cost-of-funds-to-rise-as-n164-6b-treasury-bills-mature/

In my view, Skye Bank woes entered gear 5 in 2015, when Tunde Ayeni donated N2 billion for Jonathan's second term ambition.

After APC won the poll, it was natural to go after his business. It was no surprise that a year after, the CBN took over the bank.

Jim Ovia, Tony Elumelu and Herbert Wigwe have to be very careful with the way they romance Ambode of Lagos State.

I must give it to Dangote. He knows how to mix politics with business. In Nigeria, politicians love to crush the enemy anyway, anyhow. Ajimobi and Ayefele comes to mind. One has to be very careful with them.

Some people don call us privately say we 'pushed' them to buy, sell or hold stocks recommended in our articles. That's aside.

Angel Michael sef dey one corner dey wonder how he wan tey handle the matter.

mendes911:
I beg to disagree. Recommending stocks has never been an issue. The big issue results when you recommend a stock claiming insider info, grapevine info, etc when that person actually has no information other than the company's spreadsheet and speculation. That one is 100 times worse than MH!

A person claiming insider knowledge might get away with it once or twice, after all a dead clock is always right twice a day, but that doesn't mean that he has any insider information.

Make I still dey my corner dey observe una shaaa. Na Angel Michael go take koboko finish some people soon.

I needed to emphasize that before she think say na Nestle S.A I wan give her.

Olohunjedalo:
Is there Nestle Ghana shares?

The truth is recommending stocks here is becoming an issue. The reason I stopped posting the weekly stock recommendations here.

Also, last week or so, I posted a story on shareholders' worry on the financial health of Skye Bank. It was a way of warning people about the stock too.

Like I pointed out yesterday, Coolcash1, on Sept 8, dropped a hint on a possible fall of Skye Bank, which I grabbed and did some checks on. When I confirmed the signal, I acted fast.

Well, I humbly apologize for that sha.

Mcy56:
Send the units first make I help you appease them before you go know your offense.
Dont mind me. Na because you get hint you no tell us..... but nevermind, just joking cos there are more than enough comments against skye here, but na that profit dey enter person's eyes.

Biko, na wetin Dipo do wey make you no trust am again? Abeg, I wan know so as to know whether to appease the gods with 2000 units of Nestle Nigeria shares.

Mcy56:
Lol. It is well. Im just pulling your legs.
Forget that Dipo, I no trust him again.
Notwithstanding however, never say never in NSE. Since banks have joined politics with their operations, we should expect more of the scenario. It's a pity.
Sir Chibuking81 was right in some of his comments above. Its politics playing itself out.
Imagine 19 aspirants jostling for governorship seat in Borno under APC alone, PDP getting ready to give them a good fight as well. Don't you see that wahala dey? They will do all within their power to discredit the other party not minding whose ox is gored. It is well o.

BREAKING: INEC Declares Osun Guber Election Inconclusive
https://www.businesspost.ng/2018/09/23/breaking-inec-declares-osun-guber-election-inconclusive/

Honeywell Laments Impact of Apapa Gridlock on Operations
https://www.businesspost.ng/2018/09/23/honeywell-laments-impact-of-apapa-gridlock-on-operations/

Ecobank Plans Aggressive Expansion in Nigeria
https://www.businesspost.ng/2018/09/22/ecobank-plans-aggressive-expansion-in-nigeria/

I believe the appointment of bank CEOs and CBN Governor should be stopped. Some times, it kills neutrality. For instance, it might be difficult for a Godwin Emefiele to see the downfall of Zenith Bank or a Sanusi see the downfall of First Bank. They will naturally want to protect these firms and those close to them.

If you see the way bank directors lavish money, you will be scared. At the end of the day, minority shareholders bear the brunt.

For those who are wise, they should be careful of Diamond Bank and Unity Bank. A word is enough for the........

DOLLARTEX:
that guy has serious case to answer.it is just sad that after the mess these CEO creates,they just moved on as if nothing happened!