News track for the day – First Ideas Limited

News track for the day

SMEs tap Commercial Papers for over N140bn funding

No fewer than eight Small and Medium-sized Enterprises (SMEs) have leveraged the short-term funding opportunities at the commercial papers (CP) market this year in a bid to raise a total of N135 billion.

Trading trumps research in Nigerian pharmaceuticals

Pharmaceutical companies in Nigeria are more interested in trading than investing in research and development of drugs, therapies, and treatments, a BusinessDay analysis has shown.

Oil & gas, annuity, group life top insurers’ premium

Out of the N490.800 billion gross written premium generated in the insurance industry in 2019, oil and gas business contributed the highest with N94.049 billion, followed by annuity (N88.145 billion) and group life (N71.715 billion).

Fuel tankers ignore system meant to fix Apapa gridlock

Fourteen months into the implementation of the electronic call-up system, popularly known as the Eto App, used for managing the movement of heavy-duty trucks into Apapa and Tin-Can Island Ports in Lagos, tankers lifting imported petroleum products from tank farms are still not using the system.

How 150 passengers escaped death on board Airpeace Asaba – Abuja flight

Mother luck on Wednesday smiled on 150 passengers on board an Airpeace plane from Asaba to Abuja as they narrowly escaped death after a heavy storm disrupted the plane from landing at the Abuja airport 

Nigeria needs 10 yrs to fix current housing deficit – PwC economist

To fix the current housing deficit in Africa’s biggest economy, Nigeria will need a minimum of 10 years if it maintains building 700,000 units of houses every year, Andrew Nevin, the chief economist at PwC Nigeria has said.

Local vaccine production now matter of national security – Buhari

President Muhammadu Buhari has said building capacity for in-country production of vaccines and medical supplies has become a matter of urgency and national security, flowing from the impact of the COVID-19 pandemic on health and economy of the nation

Nigeria’s $900 billion dead capital can lift 93m out of poverty – Nevin

Nigeria is so broke yet so rich. If Nigeria leveraged the $900 billion lying fallow in dead capital, it could lift 93 million of its people out of extreme poverty, create jobs and rely less on expensive borrowing, Andrew Nevin, the Chief Economist at PwC has said.

Investors Gain N45.91bn as NGXASI Inches up by 0.18%, Maintains Positive Posture

Equities market closed on a positive note, as NGXASI appreciated by +0.18% to close at 48,223.86 basis points as against +1.25% appreciation recorded previously. Its Year-to-Date (YTD) return currently stands at +12.89%.

Market breadth closed Positive as BERGER led 28 Gainers as against 9 Losers topped by SCOA at the end of today’s session an improved performance when compared with previous outlook.

Market turnover closed negative as volume moved down by 30.00% as against 4.35% downtick recorded in the previous session. CUSTODYINS, OANDO, and FIDELITYBK were the most active to boost market turnover. NB and MTNN topped market value list.

CUSTODYINS leads the list of active stocks that recorded impressive volume spike at the end of today’s session.

Afreximbank Releases Consolidated Financial Results for 2021

African Export-Import Bank (“Afreximbank” or the “Bank”) has released the consolidated financial statements of the Bank and its wholly-owned subsidiaries, altogether referred to as the Afreximbank Group (the “Group”), for the year ended 31 December 2021. The Group results demonstrated strong and resilient growth, with interest income crossing the US$1 billion mark once again.

 Two non-bank subsidiaries, Fund for Export Development in Africa (“FEDA”) and Afreximbank Insurance Management Company (“AfrexInsure”) commenced operations during the 2021 financial year. This resulted in the reporting of consolidated financial statements for the first time. The consolidated financial statements showed a separate performance of the Bank and an aggregate performance of the Bank and the subsidiaries. The contribution of these subsidiaries to Group results was not significant, as they only operated for a few months, towards the end of the 2021 financial year.

Highlights of the results for the Group and Bank are shown below:

Financial Metrics2020 ($ million)Group, 2021 ($ million)Bank, 2021 ($ million)
Gross Income1,0801,1351,135
Net Interest Income575.2703.3703.3
Fee and Commission Income111.3114.8114.8
Operating Expenses126.6197.8186.3
Profit for the Year351.7375.8387.3
Total Assets19,30721,89821,931
Loans and advances16,30218,17618,176
Guarantees and Letters of Credit2,3503,0433,043
 Dec. 2020Group Dec. 2021Bank Dec. 2021
Profitability Return on average assets (ROAA) Return on average equity (ROAE)  2.1% 11.4%  1.8% 10.3%  1.9% 10.6%
Operating Efficiency Net interest margin Cost -to -income ratio  3.3% 18.0%  3.6% 24.1%  3.6% 22.7%
Asset Quality Non-performing loans ratio (NPL) Loan loss coverage ratio  3.18% 119%  3.35% 115%  3.35% 115%
Liquidity and capital adequacy Cash/Total assets Capital Adequacy ratio (Basel II)    23%  14.1% 25%  13.9% 25%

Note: Group was equivalent to Bank data in 2020

Oil Rebounds as Supply Concerns Dominate

Oil prices rebounded on Wednesday as a drop in U.S. oil inventories and concerns over tighter supplies from Russia and Libya drove a recovery from the previous session’s sharp losses. Brent crude futures rose $1.46, or 1.4%, to $108.71 a barrel by 1139 GMT.

 The front-month WTI crude futures contract, which expires on Wednesday, rose $1.50, or 1.5%, to $104.06 while the second-month contract gained $1.52 to $103.57.

The two main benchmarks had fallen by 5.2% in volatile trading on Tuesday after the International Monetary Fund (IMF) cut its forecast global growth forecast by nearly a full percentage point, citing the economic impact of Russia’s war in Ukraine and warning that inflation had become a “clear and present danger” for many countries.

 Weakening growth and mounting inflationary pressure can only mean one thing: the spectre of stagflation is hanging over the global economy,” said P.M analyst Stephen Greenock.

IMF Revised Nigeria’s Economic Growth Forecast Upwards to 3.4%

The International Monetary Fund upgraded its projection for Nigeria’s economic growth in 2022. This was on the premise that the rise in global oil price will improve the growth prospect of Nigeria in 2022. This is a 0.7% increase from its earlier forecasts (2.7%) in January 2022. It was disclosed in its April edition of World Economic Outlook: War Sets Back the Global Recovery. The multilateral agency also forecasted a 3.1% growth rate in 2023 down from 3.4% in 2022.

 IMF’s forecast for Nigeria is lower than the outlook for the SSA region which is expected to grow by 3.8% in 2022. In SSA, food covers a larger share of consumer spending (above 40%). Higher food prices are detrimental to a household’s purchasing power and consumer demand, particularly in low-income households. Unfortunately, this is the reality of most Nigerians with a high level of multi-dimensional poverty (above 55%) and high misery index of about 52%.

 Interestingly, the increase in oil prices has projected a positive outlook for the region particularly oil exporting countries like Nigeria and Angola. The major downside risks to the projection is sub-optimal oil production. Nigeria may fail to benefit from this higher oil prices due to sub-optimal production as a result of oil theft and vandalism. This has implications for foreign exchange earnings and government finances in a time of high-interest rate and excruciating debt service burden. Another risk to the forecast is rising food prices which has serious implications on inflation rate in Nigeria and SSA as a whole…

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First Ideas Limited is an investment and financial advisory company established in 1994 to provide advisory services to high net worth individuals, trust funds, financial institutions and medium sized companies in growth sectors.

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