How Nigeria is paying for Russia-Ukraine war
As Russia’s war in Ukraine passes the 100-day mark on Friday (today), its ripple effects are reverberating across sectors of Africa’s biggest economy, inflicting more pain on Nigerians. Russia’s large-scale invasion of Ukraine, which began on February 24, 2022, has has pushed the prices of crude oil, natural gas, aluminium, nickel, wheat, and other commodities to record highs.This development has taken a toll on many economies, including Nigeria’s, and worsening the economic woes facing Nigerians.
The distance between Nigeria and Ukraine is an estimated 8,287 kilometres but the conflict has led to higher petrol subsidy bill and a surge in the prices of diesel, aviation fuel, cooking gas and some food items.Russia is the world’s second-largest producer of natural gas, largest exporter of wheat and one of the world’s largest oil-producing nations.
Diesel, aviation fuel users feel the pinch
The sudden increase in the prices of diesel, aviation fuel and other commodities has left many Nigerians and businesses reeling. Oil prices have surged some 50 percent since the beginning of the year, with Russia’s invasion of Ukraine and resulting Western sanctions roiling global energy markets.
On Tuesday, a Reuters poll of analysts showed a consensus for Brent prices to average just over $107 per barrel in the second quarter of this year, with some experts eyeing $130 per barrel in the aftermath of the EU’s partial ban on Russian imports.
With the above development, the International Monetary Fund has warned Nigeria could pay out as much as N6 trillion in oil subsidies in 2022 if oil prices continue to rise and urgent actions are not taken to reverse the trend
Vegetable oil price surge hits Nigerians
Many Nigerian homes are struggling to buy vegetable oil as the prices of different litres of the commodity have risen by 14 percent since the Russian-Ukraine war started. The war that has disrupted the global supply chain is largely responsible for the surge b in vegetable oil prices in Nigeria, and this accounts for almost half of the increase recorded in the year as Africa’s most populous country still imports a large portion of its vegetable oil needs.
Vegetable fats and oils accounted for 1.26 percent of Nigeria’s total imports in 2021 – the figure also included animal fats, according to the data from the National Bureau of Statistics (NBS).
Higher returns seen for pensions on PFAs, PEs’ co-investment
Pension contributors and retirees stand to get higher returns in coming years when Pension Fund Administrators (PFAs) and managers of the funds start to co-invest with private equity firms (PEs), operators have said.
Gas and FX shortage cripple Nigeria’s power generation
Leading power generation companies in Nigeria GenCos say their operations have been crippled by persistent shortage of gas and foreign exchange which they need for routine maintenance of their turbines or to bring in new equipment. BusinessDay learnt that the OKOLOMA gas plant operated by the NNPC gas gas subsidiary has been shut down since March this year, taking out atleast 1000MW of power generation at atime of surging diesel price.
CBN asks banks to accept indemnity for ‘highly secured’ online transfers
Nigerian banks are to accept indemnity for highly secured funds above N1 million for individuals and N10 million for corporates, the Central Bank of Nigeria (CBN) said in a circular. Indemnity refers to a contractual agreement between two parties, where one party agrees to pay for potential losses or damages caused
The circular on ‘review of operations of Nigeria Inter-Bank Settlement System instant payments system and other electronic payment options with similar features’ was signed by Musa Jimoh, director, payment system management department at CBN.
Investors Gain N49.85bn as NGXASI Inches up by +0.18%; Debt Market Size Grows by 0.04% to N27.71trn; IEFX Rate Depreciates to N419.7
1. EQUITIES MARKET
1.1 NGX – Listed Equities
Nigerian Equities Market halted losing streak as market sentiment turned green at the close of trading today.
The NGX All-Share index inched up by +0.18% to close at 52,908.24 basis points as against -0.30% loss recorded at the end of the previous trading session. In Naira terms, the NGX Market CAP records N49.85bn gain
YTD, the NGXASI Stands at +23.86%
The total volume traded advanced by +3.11% to close at 282.97m, valued at N3.37bn and traded in 4,245 deals. UACN was the most traded stock by volume with 73.89m units traded, while UACN was also the most traded stock by value which is put at N812.89m.
Sectoral performance was broadly positive as thirteen (13) NGX sector indices closed northward, two (2) closed southward while three (3) closed flat. The NGX Insurance Index inched up by +1.41% while the NGX LII Index dipped by -0.09% to top all sector indices otherwise.
Gote index closed red with -0.30% loss recorded to close at 144.30 basis points while Toni index also closed red with -0.15% loss recorded to close 116.38 basis points.
At the close of trading, market recorded 21 gainers to 16 losers and 68 unchanged. NEM topped the list of gainers WAPIC topped the list of losers. Thus, market breadth closed positive
Volume and Value Contribution
UACN led the volume chart with 41.25% contribution and closely followed by FBNH and TRANSCORP.
UACN led the value chart with 15.97% contribution and closely followed by FBNH and MTNN.
NGX Corporate News
Guaranty Trust Holding Company Plc has notified of the receipt of the final approval of the Central Bank of Nigeria (the CBN) for its wholly owned Payment Subsidiary, HabariPay Limited (“the Company”).
Commenting on the new subsidiary, Mr. Segun Agbaje, Group Chief Executive Officer of GTCO Pic, said: “Payments are central to the development of financial services globally and represent a key growth area for the Group. GTCO Pic has been at the forefront of delivering cutting-edge innovative solutions with its banking franchise and would leverage this capacity to transform the evolving payment space. With HabariPay, we have successfully created another pathway towards enhancing the service experience for our customers and creating more value for our stakeholders.”
He stated further that, “Our vision is an Africa where every payment is digital, and we hope to achieve this by increasingly leveraging technology to improve access to financial services for individuals and empower businesses across Africa with the right digital tools to thrive.”
The new subsidiary will serve to expand GTCO Pic’s range of services to largely underserved markets in support of the CBN’s financial inclusion drive and contribute to the resilience of the global payment ecosystem.
1.2 NASD OTC Exchange – Unlisted Equities
The NASD market index dipped by -1.28% to close at 752.59 basis points as against -0.47% loss recorded previously.
The total volume traded declined by -47.22% to close at 140,936, units valued at N12.19m and traded in 16 deals.
At the close of trading, NASD OTC market recorded 0 gainer(s) to 1 loser(s)
Volume and Value Contribution
SDFCWAMCO led the volume chart with 56.84% contribution
SDFCWAMCO led the value chart with 58.54% contribution
1.3 Global Indices
On the global scene, the Japanese Index leads the top five gainers with 1.27% gain while the Russian Index tops the top five losers with -1.63% loss as of 4pm Nigerian Time
1.4 African Indices
Similarly on the African scene, the Casablanca Index tops the top five gainers with 0.60% gain while the BRVM-C Index tops the top five losers with -0.62% loss as of 4pm Nigerian Time
2. BONDS AND FIXED INCOME MARKETS
2.1 Debt Market Size
The FMDQ Debt Market Size advanced by 0.04% to close at N27.72trn from previous figure of N27.71trn
2.2 Overnight and Open Repo (OPR)
The overnight lending rate advanced by 0.83% to close at 7.00% while the Open Repo (OPR) rate also advanced by 0.67% to close at 6.67%
3. COMMODITIES MARKET
3.1 AFEX Indices
The ACI grew by +3.56% to close at 475.78 basis points as against previous figure of 459.42 while the AEI closed flat at 197.95 basis points.
3.2 AFEX Commodity Prices
Sorghum and Paddy Rice both declined by 9.39% and 9.16% respectively while other commodities closed flat.
3.3 Global Commodity Prices
Gold recorded 1.07% loss while Silver also declined by 2.14% as of 12:16 NY time
In the energy market, Brent advanced by 1.46% while WTI also advanced by 1.40% as of 11:14AM Central Daylight Time (CDT)
4. CURRENCY/ FX MARKET
The naira depreciated at the I&E FX Window by 0.06% to close atN419.75/USD while the NAFEX rate appreciated by 0.16% to close at N418.45.
Source: FMDQ, BDC
2.56% of UACN’s Outstanding Shares Traded on NGX on 030622
At the close of trading on Friday June 03, 2022, a total volume of 73.89m units of shares of UACN Plc valued at N812.89m were traded.
This represents 26.11% of the total market volumes of 282.96m while the value of UACN shares traded represents 24.11% of the total market value traded which was put at N3.37bn.
Furthermore, the volume traded represents 2.56% of UACN’s total shares outstanding put at 2.88bn shares while the value of the shares traded also represents 2.56% of UACN market capitalization of N31.69bn as of June 03, 2022.
A comparison of UACN’s volume traded with the previous day traded volume revealed that it increased by +6277% from 1.16m to 73.89m units traded.
The share price of UACN moved down by a tick size of 4.35% to close at N11.00k at the close of trading.
Year-to-date, UACN shares have moved up by +16.84% as against +23.86% YTD return recorded by the NGXASI, under performing the broad market index by -7.02%.
The huge volume traded today may be a related party transaction as previous director’s dealings disclosure filed with the NGX suggested.