Investors Lose N33.42bn as NGXASI Declines by 0.13%; Overnight Rate Expands to 11.00%; BDC Depreciates to 737
- EQUITIES MARKET
1.1 NGX – Listed Equities
Nigerian Equities Market closed negative as the key market indicator declined by 61.35 bps amid positive market breadth
The NGX All-Share Index declined by 0.13% to close at 48,365.14 basis points as against a 0.12% gain recorded previously to close at 48,426.49 basis points at the end of the last trading session. In Naira terms, the NGX Market CAP records a N33.42bn loss.
YTD, the NGXASI Stands at +13.22%
The total volume traded advanced by 1.33% to close at 148.16m, valued at N2.98bn and traded in 3,391 deals. ETI was the most traded stock by volume with 26.36m units traded while MTNN was also the most traded stock by value which is put at N1.19bn
Sectoral performance was broadly negative as five (5) NGX sector index closed northward, ten (10) closed southward and three (3) closed flat. The NGX-IND index advanced by 1.11% to top the gainer’s chart while the NGX PREMIUM index declined by 0.90% to top the losers’ chart.
The Dangote index closed flat at 136.89 basis points while the Elumelu index advanced by 0.47% to close at 111.45 basis points.
At the close of trading, the market recorded 15 gainers to 10 losers and 76 unchanged. CHAMS topped the list of gainers while CAPHOTEL topped the list of losers.
Thus, market breadth closed negative as the Market Breadth Index (MBI) is put at 0.07x.
Volume and Value Contribution
ETI led the volume’s chart with 17.79% contribution and closely followed by FBNH and TRANSCORP
MTNN tops the value’s chart with 39.94% contribution and followed by GUINNESS and ETI
1.2 NASD OTC Exchange– Unlisted Equities
The NASD market index advanced by 0.95% to close at 718.95 basis points as against the flat position recorded previously to close at 712.16 basis points
The total volume traded advanced by 128.02% to close at 128,533 units valued at N3.8m and traded in 11 deal(s).
At the close of trading, NASD OTC market recorded one (1) gainer(s) to one (1) loser(s)
1.3 Global Indices
On the global scene, the Hong Kong Hang Seng Index leads the top five gainers with 3.38% gain while the East Isreal TA-100 Index tops the top five losers with 1.14% loss as of 4pm Nigerian Time
1.4 African Indices
Similarly, on the African scene, the Egypt EGX 70 EWI Index tops the top four gainers with 0.89% gain while the Namibia NSX Namibia Index tops the top five losers with 1.68% loss as of 4pm Nigerian Time
- BONDS AND FIXED INCOME MARKETS
2.1 Debt Market Size
The FMDQ Debt Market Size was not available as at the time this report was completed.
2.2 Overnight and Open Repo (OPR)
The Overnight lending rate expanded by 0.62% to close at 11.00% while the Open Repo (OPR) rate also expanded by 0.88% to close at 10.88%
- COMMODITIES MARKET
3.1 AFEX Indices
The AFEX ACI closed flat at 456.93 while the AFEX AEI closed flat at 224.44 basis points
3.2 AFEX Commodity Prices
Maize advanced by 3.01% to top the gainers’ chart while Cocoa declined by 2.61% to top the losers’ chart.
3.3 Global Commodity Prices
Gold recorded 0.27% gain while Silver advanced by 1.94% as of 09: 59 NY time
In the energy market, Brent advanced by 0.93% and WTI also advanced by 1.94% as of 10: 00 AM Central Daylight Time (CDT)
- CURRENCY/ FX M7ARKET
The naira at the I&E FX Window appreciated by 0.02% to close at N445.80/USD while the NAFEX rate also depreciated by 0.07% to close at N444.50/USD
FG: Second Niger Bridge Will Open to Traffic Dec 15
– The federal government says the Second Niger Bridge will open to traffic on December 15. Jimoh Olawale, federal controller of works in Delta, made this known in an interview with NAN on Wednesday. Source TheCable Read More
World Bank: Low-Income Countries’ Debt Doubled in Last Decade — Up By $9trn In 2021
– The World Bank says the external debt stock of low-income and middle-income countries doubled over the past decade to $9 trillion at the end of 2021. Source TheCable Read More
Fuel Scarcity: Expect Flight Delays, Air Peace Alerts Passengers
– The management of Air Peace has announced possible flight delays as a result of scarcity of aviation fuel popularly known as Jet A1. The airline disclosed this in a statement via its official Instagram handle obtained by our correspondent. Source Punch Read More
Nigerian Telecom Regulator ‘NCC’ Plans to Roll Out Additional 5G Spectrum License in 2023
– According to industry reports, the Nigerian Communication Commission (NCC) has concluded plans to roll out two additional 3.5GHz spectrum licenses for the Fifth Generation (5G) licenses in 2023. Source Broadcast Media Africa Read More
Stakeholders Task MVNO’s License Operators on Rural Connectivity
– Industry stakeholders have tasked licensed Mobile Virtual Network Operators on the need to expand connectivity to rural, un-served, and underserved areas of the country, to enable all Nigerians have access to connectivity. Source ThisDay Read More
Airtel Emerges Sole Bidder for Second 3.5GHz Spectrum Auction in Nigeria
– The Nigerian Communications Commission (NCC) has announced that by the close of business on Monday, December 5, 2022, only two companies expressed interest in the auction of the 3.5GHz Spectrum band. Source TechEconomy Read More
FGN Sukuk Series V – Greenwich Merchant Bank Supports the Federal Government to Raise N130bn for Infrastructure Projects
– Greenwich Merchant Bank Limited, a mandated Issuing House to the FGN 15.64% N100 Billion Sukuk V Issuance, along with other Issuing Houses, has successfully closed the offer with a subscription level of over N165 Billion. Source Greenwich Merchant Bank Read More
CBN’s Cash Withdrawal Limits Will Have Tax Implications for Individuals, MSMEs ― Tax Expert
– A tax expert and the Africa Tax Leader at PwC, Mr. Taiwo Oyedele, has said that the cash withdrawal limit announced by the Central Bank of Nigeria (CBN) on Tuesday will have tax implications for individuals as well as small and medium-size businesses. Source Tribune Read More
NGX Urges Chams to Extend Market Engagement, Welcomes New GMD
Nigerian Exchange Limited has encouraged the board and management of Chams Holdings Plc to extend its market engagement as its new Group Managing Director, Mrs. Mayowa Olaniyan takes over.
At the Closing Gong ceremony of Chams Holdings Plc held at the Exchange, the Divisional Head, Capital Markets, NGX, Mr Jude Chiemeka congratulated the company for the appointment of its first female GMD, Olaniyan saying it was a welcome development and emphasized the company’s commitment to inclusivity.
Speaking on the company’s restructuring into a holdco, Chiemeka said, “In this new era of the company’s existence, it will be great to further engage the market. One of the ways we at the Exchange encourage listed companies is to take advantage of the Facts Behind the Figures Platform which was set up by NGX to help listed companies inform the capital market community of their performance, strategy which helps investors and other stakeholders understand the firm”.
The new GMD, Chams Holdings, Olaniyan appreciated NGX management for hosting the company at the Exchange. She noted that the company’s board was committed to maximising shareholder value amidst its restructuring and repositioning in the technology space. “We are investing in expanding our footprint especially in the Fintech space. We have received approval from the Central Bank for mobile money license. One of our goals now is to align the price in the market to the value of the company and on that note, we will work more with the broker community and take advantage of the Facts Behind the Figures Presentation platform of NGX.”
Afreximbank Doubles Funding Facility for Creative and Cultural Industries to US$1bn
The Creative Africa Nexus Weekend (CANEX WKND) brought together the largest gathering for the cultural and creative industries in Africa and the Diaspora in Abidjan, Côte d’Ivoire, from 25th to 27th November 2022. Speaking at the opening of the three-day event on Friday evening, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank), announced a funding package of US$1 billion dedicated towards supporting Africa’s creative industries under the auspices of the CANEX programme.
In 2020, Afreximbank introduced a dedicated US$500 million facility to support Africa’s creative and cultural industry as part of its wider CANEX programme. The Bank has been able to support the industry significantly through this facility which is now nearly fully utilised. Afreximbank President Prof. Benedict Oramah indicated that the doubling of the size of the facility to US$1 billion, for implementation over the next 3 years to 2025, will maintain and sustain the momentum and impact initiated by the original facility.
Fitch Downgrades Ghana’s Long Term Local Currency Issuers Default Rating to ‘C’
Fitch Ratings has downgraded Ghana’s Long-Term Local-Currency (LTLC) Issuer Default Rating (IDR) to ‘C’ from ‘CC’. The issue ratings on local-currency bonds issued domestically have also been downgraded to ‘C’ from ‘CC’. Fitch has affirmed Ghana’s Long-Term Foreign-Currency IDR at ‘CC’. Fitch typically does not assign Outlooks to sovereigns with a rating of ‘CCC+’ or below.
Key Rating Drivers
LC Debt Restructuring Announced: The downgrade of Ghana’s follows the government’s announcement of a formal invitation to exchange local-currency debt. Fitch deems this to be the initiation of a default-like process, consistent with a ‘C’ rating.
Invitation to Exchange LC Debt: On 5 December, the government of Ghana published an Exchange Memorandum inviting eligible holders of local-currency domestic debt to exchange their existing bonds for new bonds. These new bonds will pay significantly lower coupons, with 0% coupon in 2023, rising to 5% in 2024 and to 10% from 2025 onwards, and effectively extend maturities for eligible outstanding local-currency domestic debt. The restructuring comes in the context of efforts to secure IMF support and a local-currency restructuring seems to constitute a necessary prior action.
LC Exchange Qualifies as DDE: In Fitch’s view, the debt exchange constitutes a distressed debt exchange under the agency’s criteria, given that it entails a material reduction in terms and is needed to avoid an outright default. Fitch will downgrade the LTLC IDR to ‘RD’ after completion of the debt exchange, which the government currently expects on 20 December. The IDR could then be upgraded to a rating appropriate for Ghana’s prospects on a forward-looking basis, but the LTLC IDR would be constrained by the fact that the foreign-currency debt situation would still need to be cleared.
Foreign-Currency Debt Not Yet Affected: The government also announced that it is preparing a restructuring of its external debt to restore debt sustainability. Fitch downgraded Ghana’s rating to ‘CC’ on 23 September to indicate the increasing likelihood of a default event as a result of these pressures and in anticipation that an IMF-supported macroeconomic reform programme would require some form of debt restructuring. Ghana’s already-high debt servicing burden and constrained access to finance both worsened during the successive shocks of the coronavirus pandemic and the Ukraine-Russia war, leading the government to seek IMF support in July 2022.
Partially Guaranteed Note Expected to Be Excluded: We have affirmed the rating on Ghana’s partially guaranteed notes backed by the World Bank’s International Development Association as the notes are expected to be excluded from an external debt restructuring even if other Eurobonds are included.
ESG – Governance: Ghana has an ESG Relevance Score (RS) of ‘5’ for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model. Ghana has a medium WBGI ranking at 50.8 reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption.
ESG – Creditor Rights: Ghana has an ESG Relevance Score (RS) of 5 for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight. The current rating action reflects Fitch’s view that a default event is imminent.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
-Completion of the proposed debt local-currency exchange would lead to a downgrade of Ghana’s LTLC IDR to ‘RD’.
– Failure to make scheduled coupon or maturity payments on Ghana’s foreign-currency bonds within the grace period would lead to a downgrade of Ghana’s LTFC IDR to ‘RD’.
– Signs that the partially guaranteed notes might be included in a restructuring could lead to a downgrade of their rating.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
– Withdrawal of the local-currency debt exchange offer and payment of upcoming coupon payments within stipulated grace periods.
– Evidence that foreign-currency debt would be excluded from the overall effort to address Ghana’s debt pressure could lead to an upgrade of the LTFC IDR and affected issuances.
Sovereign Rating Model (SRM) and Qualitative Overlay (QO)
Fitch’s proprietary SRM assigns Ghana a score equivalent to a rating of ‘B-‘ on the Long-Term Foreign-Currency IDR scale. However, in accordance with its rating criteria, Fitch’s sovereign rating committee has not utilised the SRM and QO to explain the ratings in this instance. Ratings of ‘CCC+’ and below are instead guided by the rating definitions.
Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch’s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.
Best/Worst Case Rating Scenario
International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. Best- and worst-case scenario credit ratings are based on historical performance
References for Substantially Material Source Cited as Key Driver of Rating
The principal sources of information used in the analysis are described in the Applicable Criteria.
Ghana has an ESG Relevance Score of ‘5’ for Political Stability and Rights as WBGIs have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Ghana has a percentile rank above 50 for the respective Governance Indicator, this has a positive impact on the credit profile.
Ghana has an ESG Relevance Score of ‘5’ for Rule of Law, Institutional & Regulatory Quality and Control of Corruption, as WBGIs have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Ghana has a percentile rank above 50 for the respective Governance Indicators, this has a positive impact on the credit profile.
Ghana has an ESG Relevance Score of ‘5’ for Creditor Rights, as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight. The imminent prospect of default reflected in the ‘C’ LTLC IDR has a negative impact on the credit profile.
Ghana has an ESG Relevance Score of ‘4[+]’for Human Rights and Political Freedoms, as the Voice and Accountability pillar of the WBGIs is relevant to the rating and a rating driver. As Ghana has a percentile rank above 50 for the respective Governance Indicator, this has a positive impact on the credit profile.
Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of ‘3’. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity.