NAIRA UPDATE: Nigeria Naira ends at record low despite CBN dollar sale

  Nigeria's naira ended at a record closing low against the dollar on Friday despite central bank intervention, dealers said.

The unit, which opened at 193.60 naira, firmed to 185.80, lifted by the intervention. It quickly fell back to close at 193.90. The naira closed at 192.70 on Thursday.

Currrency users were holding on to cheap dollars bought at the almost-daily central bank interventions, dealers said, because they believed the naira would continue to weaken as falling oil prices hurt Nigeria's economy.

SEPLAT Petroleum Buys 40% of OML 53; 22.5% of OML 55

 Nigerian oil and gas firm SEPLAT Petroleum Development Co PLC (SEPLAT.LA) said Thursday it has bought a 40% working interest in OML 53, onshore north eastern Niger Delta, from Chevron Nigeria Ltd. for $259.4 million.

It has also concluded negotiations to buy 56.25% of Belemaoil Producing Ltd., a Nigerian special purpose vehicle that has bought a 40% interest in the producing OML 55, located in the swamp to coastal zone of south eastern Niger Delta.

NNPC holds the remaining 60.00% interest in OML 55, and Seplat's effective working interest in OML 55 as a result of the acquisition is 22.50%, it said.

 SEPLAT is paying $132.2 million for its 22.50% interest in OML 55, after adjustments. It has also advanced certain loans of $80.0 million to the other shareholders of Belemaoil to meet their share of investments and costs associated with Belemaoil.

In addition, SEPLAT said talks are underway to determine repayment terms for the initial deposit against the acquisition of $52.5 million that Belemaoil funded with bank debt, which may be added to the total amount loaned to Belemaoil by SEPLAT.

Current gross production at OML 55 is 8,000 barrels of oil per day. Seplat has been designated operator of OML 55. The Company will also

Nigeria naira ends at record low despite cenbank dollar sale

 

Nigeria's naira ended at a record closing low against the dollar on Friday despite central bank intervention, dealers said.


The unit, which opened at 193.60 naira, firmed to 185.80, lifted by the intervention. It quickly fell back to close at 193.90. The naira closed at 192.70 on Thursday.

Currrency users were holding on to cheap dollars bought at the almost-daily central bank interventions, dealers said, because they believed the naira would continue to weaken as falling oil prices hurt Nigeria's economy.

Nigeria central bank intervention lifts naira marginally

Nigeria's central bank sold an undisclosed amount of dollars on Friday to boost interbank forex market liquidity and prop up the naira.



The central bank has been intervening almost daily in the interbank market since the start of the year. The naira has suffered as falling oil prices weaken Nigeria's economy, causing foreign investment to dwindle.

The unit, which opened at 193.60 naira, firmed to 190.80, lifted by the intervention. It quickly fell back to 193.40 by 1239 GMT.

The naira closed at 192.70 on Thursday.

Naira takes further bashing in forex market

Nigeria’s naira fell 0.75 percent in volatile trades against the dollar shortly after the forex market opened as demand for the greenback surged amid thinning liquidity, dealers said.

The naira, which opened at 192.70 to the dollar, quickly hit a record low of 194.30. It closed within a range of 190.10 to 192.40 the previous day.

The naira is trading outside a target of 160-176 to the dollar, which the central bank set following a devaluation in November and has continued to hit record lows despite the bank’s regular interventions.

Meanwhile, the CBN plans to sell $76.3million to the 2,544 burea de change operators in Nigeria, to improve dollar availability in the country. each BDC will get $30,000 from the special sale.

By noon today, a dollar fetched N210 in the parallel market.

African currencies seen under pressure

 Nigeria's naira is expected to remain volatile next week hit by the slide in crude prices after touching a new record low on Thursday, while other currencies are also seen on the back foot due to rising dollar demand from local importers.

Nigeria
The naira recovered from its record low after the central bank sold dollars to prop up the local currency, dealers said, and more central bank interventions are expected next week.
The central bank has been intervening almost daily in the interbank market since the start of the year. The naira has suffered as falling oil prices weaken Nigeria's economy, causing foreign investment to dwindle.
The naira hit a record low of 194.65 to the dollar on Thursday and closed at 192.70 from 188.90 a week ago.
Month-end dollar sales by oil companies to meet their local obligations have not been sufficient in supporting the naira.
"Demand for the dollar remains strong in the market and we need consistent large dollar flows to reduce pent up demand in the market," one dealer said.
The local currency has stayed well below a trading band of 160 to 176 to the dollar, set after the central bank devalued the naira by 8 percent in November.

Kenya
The Kenyan shilling could come under pressure next week as liquidity improves in the money markets amid a reduction in the government's weekly borrowing from the local market.
The shilling closed at 91.25/35 on Thursday, up from 91.60/70 last week, driven by heavy hard currency flows.
"The liquidity will have improved. We might see the shilling under pressure," said a trader with a commercial bank.
The trader said overnight average interest rates could fall further after the government cut its weekly borrowing target in the local market by a third to 8 billion shillings ($87.62 million). Kenya has cut this financial year's local borrowing target by close to a quarter.

Uganda
The Ugandan shilling is forecast to trade in a range next week, but may weaken thereafter as foreign-owned corporates seek dollars to pay their dividends.
At 1024 GMT commercial banks quoted the shilling at 2,855/2,865, stronger than last Thursday's close of 2,860/2,870.
"Toward the end of February going into March dividend payments might push demand up and trigger some depreciation," said Faisal Bukenya, head of market making at Barclays Bank.
The local currency is now 3 percent weaker to the dollar so far this year. Bukenya said the shilling would trade in the 2,850-2,875 range next week.

Tanzania
The Tanzanian shilling is seen under pressure against the U.S. dollar in the days ahead, weighed down by demand for greenbacks from importers and a slowdown in inflows.
Commercial banks quoted the shilling at 1,830/1,840 to the dollar on Thursday, weaker than 1,782/1,792 a week ago.
Market participants expected the shilling to trade in the 1,840-1,850 range over the coming days.
The Bank of Tanzania said it had traded $86 million on the interbank foreign exchange market in the past week.

Ghana
Ghana's cedi could hit a fresh year-low against the dollar next week as demand for the greenback by local importers surges amid scanty hard currency inflows.
The local currency traded weaker on Thursday at 3.4700 to the dollar on Thursday compared with 3.3300 a week ago.
"(Dollar) supply has waned significantly while demand remains firm," Barclays Bank Ghana analyst Michael Akpakli said. He forecast the cedi could decline further to 3.5000 next week.
The central bank said last week it was ready to intervene "vigorously" this year to ensure a much more stability for the cedi, which slumped 31 percent in 2014.

Zambia
The kwacha is likely to be under pressure on light dollar inflows into Africa's second-largest copper producer as copper earnings dwindle.
Commercial banks quoted the kwacha weaker at 6.5500 per dollar on Thursday from a close of 6.4900 a week ago.
"The low copper prices could present a challenge to the kwacha," one commercial bank trader said.
The central bank was expected to intervene should the currency weaken below 6.6000 to the dollar, while support was seen at 6.5000, the trader said.
Kwacha weakness may be limited by investor interest in a Treasury bill auction later on Thursday, and as mining companies and other investors convert hard currency to kwacha to pay Value Added Tax (VAT) due by mid-month, the trader said.

Audit firm confirms missing money indicts NNPC, NPDC

The Nigeria National Petroleum Corporation, NNPC has been indicted by the  forensic report directed by the federal government to investigate  the alleged non-remittance of funds into the federation accounts between January 2012 to July 2013.

The Auditor General of the Federation, Ukura Samuel, made the revelation today at a news conference in Abuja. 
He said   the report revealed  that the total amount remitted to the federation account was fifty point eight not forty seven billion dollars as stated by the senate committee on reconciliation.

The Auditor General added that the forensic report also asked the NNPC and SPDC to refund one point four eight billion dollars to th‎e federation account .

Meanwhile, ‎the forensic experts that audited the alleged NNPC's non-remittance of funds to the federation accounts has recommended the urgent review  and structuring of the current model that has been on operation since the establishment of the corporation as it can no longer meet the present day challenges .

The group also called for an official directive to be written to support the legality of the kerosene subsidy cost to be followed by adequate budgeting and appropriation.

BDCs to get $76.3m from CBN on Friday

The Central Bank of Nigeria (CBN) plans to sell $30,000 to each  of the 2,544 bureau de change operators on Friday, it was learnt yesterday.

The $76.32 million is an addition to the weekly sales to the operators.
The move, the apex bank said,  is aimed at increasing dollar liquidity in the system and freeing the naira from pressure.

A dollar was selling at N209 in the parallel market operated by bureau de change agents on Tuesday. The interbank market rate hit N190.08 on thin trades.

The bank is trying to narrow the gap at which the naira, hard hit by the drop in oil prices, trades on the interbank market through its regular interventions and is also trying to curb speculation.

Interested BDC operators are to fund their accounts latest today to accommodate the special intervention.
Meanwhile, the apex bank has also instituted  a N300 billion Real Sector Support Facility (RSSF) to enable it unlock the potential of the real sector to engender output growth, value added productivity and job creation.
A report by the CB N released yesterday, said the facility will be used to support large enterprises for start-ups and expansion financing needs of N500 million up to a maximum of N10 billion. The real sector activities targeted by the facility are

Nigeria naira sheds 1.1 pct on low dollar liquidity

 

 The Nigerian Naira shed 1.1 percent in mid-morning trades on Wednesday, driven lower by low dollar liquidity amidst rising demand for the greenback, dealers said.


The naira, which opened at 190.30, quickly fell to 192.30 to the dollar by 1050 GMT. The unit closed at 189.15 naira the previous day.

Meanwhile. dealers said Italy's ENI sold $24 million to some lenders to buy naira for its local operations, but it was insufficient to help quench dollar demand.

Standard Bank sells London unit stake for $75 mln less than expected

  

 

Standard Bank said on Monday it sold a stake of its London business at $75 million less than what had been previously agreed, sending its shares lower.

Africa's largest lender by assets had previously agreed to sell 60 percent of its London-based Standard Bank Plc global markets business for about $765 million to the Industrial and Commercial Bank of China.

At 0830GMT, its shares were down 1.4 percent at 152.39 rand. The stock had dropped to as much as 151.50 rand earlier.

Last year, Standard Bank took an $80 million hit from its exposure to the alleged multi-pledging of metals in Qingdao, China. The lender said in a statement on Monday it retains the right to any recoveries from that exposure.

The lender also flagged its full-year earnings could range between a 5 percent increase or drop.

Guinness Nigeria H1 pretax profit falls 27.4 pct

 

 

Guinness Nigeria said on Monday that first-half pretax profit fell to 4.65 billion naira ($24.5 million), down 27.4 percent from 6.41 billion naira year ago.

 

However, turnover rose to 55.26 billion naira in the six-month period to December from 52.75 billion a year earlier, the local unit of Diageo said in a filing with the Nigerian Stock Exchange (NSE).

South Africa's SacOil says could exit Nigeria assets

 

 

 

 South Africa's oil and gas explorer SacOil Holdings said on Monday it may cancel an agreement to complete an appraisal on a prospective oil asset in Nigeria and could exit other assets as the price of oil tumbles.

 

SacOil said in August it had acquired 20 percent in a prospective Nigerian oil licence, and later said in November it had completed research of the site.

SacOil said in a statement it would also make a decision on whether to continue exploration on similar assets in Malawi, Mozambique and the Democratic Republic of Congo as the price of oil dips to six-year-lows on oversupply concerns.

The company has previously said it would focus on more cash generative assets.
SacOil reported a 23 percent decline in profit after tax in the six months to August due to higher operating costs.

Minister lauds NHF E-collection

The Minister of Lands, Housing and Urban Development, Mrs Akon Eyakenyi has commended the Management of the Federal Mortgage Bank of Nigeria (FMBN) on the enhanced transparency in the collection and management of the National Housing Fund (NHF) through the creation of the electronic collection platform (e-collection).

Eyakenyi who spoke in Abuja said this has enabled the bank to create appreciable volume of mortgages to support home ownership and development of such innovative products such as Informal Sector Housing Scheme which are all aimed at improving accessibility to home ownership for Nigerians on-shore and off-shore.

The Minister also commended the past management of the bank who she said worked assiduously to facilitate the delivery of 17,240 housing units during their four years tenure adding that they also recovered N6, 907,362,104.49.

She therefore urged the new management to surpass its predecessors so as to transform the operations of the bank to compete favourably with similar mortgage institutions in other parts of the world and urged the management to work closely with the board of the bank so as to make the bank vibrant, efficient and effective.

Speaking earlier, Managing Director of the Bank, Gimba Ya’u Kumo  assured Nigerians that the bank would work to continue to provide quality and affordable houses to Nigeria and strive to improve its balance sheet and promisedthat the team would recapitalise the bank and improve the balance sheet structure to modify its standing as a financial institution.

According to him, “Our strategy will involve developing pro-active and effective strategies to attract offshore funding for affordable housing to Nigerians as well as improving service delivery to NHF contributors across the country. We also plan to look at improvement of members of staff welfare across board to ensure a well motivated workforce and profitable operations”.

The FMBN boss said that the completion of ongoing housing estate projects under the Ministerial Pilot Housing Scheme nationwide and the completion of the Goodluck Jonathan Legacy Estate in Kaba District in the Federal Capital Territory, FCT, will be vigorously pursued.

CBN Mulls Stress-testing Banks

Owing to banks’ exposure to the oil and gas sector in the face of tumbling oil prices as well as the risk management deficiencies revealed by a recent risk-based supervision exercise conducted by the Central Bank of Nigeria (CBN), the apex regulator is broaching the idea of stress-testing banks.

Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane stated this in his latest monthly economic news and views presented at the Lagos Business School’s executive breakfast meeting.

Rewane said the bank would need the exercise “like a bullet in the head.”
He listed increased non-performing loans (NPLs) and provisioning as well as oil and gas risk assets as the likely focus is a stress test is to take place.
He stated that banks with oil and gas exposure would be the focus, adding that “higher NPLs, lower earnings and dividends.”

“CBN will most likely allow the banks ride out the storm. A bail out too expensive, Nigeria cannot afford a banking shock,” he said.

A senior official at the World Bank recently stressed the need for Nigeria and other oil producing countries whose revenue have dropped and are hit by increasing negative macroeconomic outlook, to stress-test their banking system.

This, according to the expert, would enable them determine what would happen “to your banks if, all of a sudden, foreign currency became scarce?”

Senior Director of the World Bank's Global Practice for Macroeconomics and Fiscal Management, Marcelo Giugale, who said this, argued that such an exercise would enable Nigeria and other oil producing countries to find out if there are loans concentrated “on a few construction or trading companies that could go belly up as the oil boom comes to an end.”

He indicated that oil exporters  such as Nigeria, Russia, and Venezuela, would lose a great deal as a result of the falling oil price, while oil importers - like China, India, and Japan -- will gain a bit. According to him, among oil exporters the impact of the falling oil prices would vary a lot because the countries are not all equally prepared to cope with the situation.

Not all of them used well the "good times" of $100-plus a barrel, he said.

The CBN recently postponed an earlier directive that deposit money banks should strengthen their capital buffers in order to mitigate shocks as a result of their exposure to the oil sector.

The decision, according to the central bank, was to ensure that the on-going implementation of the Basel II/III capital adequacy framework is not dislocated.

Nevertheless, the banking sector regulator urged banks to put in place adequate risk mitigating techniques for the management of their oil and gas risk exposures.

Foreign investors pulled $4.5 bln from Nigeria's stock market in 2014

Foreign investors sold off Nigerian stocks valued at 846.5 billion naira ($4.5 billion) last year, stock exchange data showed on Monday, 65 percent more than in 2013 as falls in oil prices and the naira currency depressed sentiment.

 

With an Islamist insurgency raging in the country's north and political risk added to the mix in the rum-up to national elections later this month, the exodus has extended into 2015.
Nigeria's main share index, which was up 1.1 percent on Monday, has fallen 14.7 percent so far this year. It shed 16 percent in 2014.

Top decliners this year include Dangote Cement, which accounts for a third of market capitalisation, down 22 percent, and Transcorp down 13 percent.

Foreign investors increased the pace of stock market outflows from September, selling out of the relatively liquid banking, consumer and oil sectors as the price of Brent crude, the benchmark against which Nigeria's oil is priced, slumped.

Soludo blasts Okonjo-Iweala, claims N30tn was stolen under her watch

The ongoing war of words between the former Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo and the Minister of Finance, Dr. Ngozi Okonjo-Iweala has taken a new dimension as he has launched another attack on the minister, challenging her to give account of the N30tn reportedly stolen under her watch.

Soludo was reacting to Okonjo-Iweala’s earlier article where she described him as an ‘intellectual hara-kiri’ following his recent hard knock on the current government over the dwindling fortunes of the nation’s economy.

The former apex bank boss in a 10-page response to Okonjo-Iweala’s response said the nation was in for a very chaotic time this year because the economy had been grossly mismanaged by the minister.

Okonjo-Iweala had in a statement on Wednesday described Soludo as an “embittered loser in the Nigerian political space.”

But Soludo, in his new article, released on Sunday, said if the prices of crude oil in the international market failed to rebound, Nigeria would face an unprecedented level of economic crisis with horrible attendant hardships for the citizenry.

“Our public finance is haemorrhaging to the point that estimated over N30tn is missing, or stolen, or unaccounted for, or simply mismanaged,” the former CBN governor stressed.

In the piece entitled, ‘Ngozi Okonjo-Iweala and the missing trillions’, Soludo said the sharp decline in the naira-dollar exchange rate from 158 a few months ago to 215 currently showed that trouble was already at the doorstep.

He added that “unless oil price recovers, this is just the beginning,” adding, “For the sake of Nigeria, I won’t keep quiet anymore!”

“Part of my frustration is that five years after, everything I warned about has come to happen and we are conducting our campaigns as if we are not in a crisis. As a concerned Nigerian, I have a duty to speak out again,” he said.

The former Ananmbra State guber aspirant, who x-rayed, how N30tn allegedly stolen under Okonjo-Iweala’s watch, said, “Under you as the Minister of Finance and coordinator of the economy, the basket of our national treasury is leaking profusely from all sides. Just a few illustrations! First, you admit that ‘oil theft’ has reduced oil output from the average 2.3 – 2.4 million barrels per day to 1.95 mpd (meaning that at least 350,000 to 450,000 barrels per day are being ‘stolen’). On the average of 400,000 per day and the oil prices over the past four years, it comes to about $60bn ‘stolen’ in just four years.

“In today’s exchange rate, that is about N12.6tn. This is at a time of cessation of crisis in the Niger Delta and the amnesty programme. Can you tell Nigerians how much the amnesty programme costs, and also the annual cost for ‘protecting’ the pipelines and security of oil wells? And the ‘thieves’ are spirits?

“Secondly, my earlier article stated that the minimum forex reserves should have been at least $90bn by now and you did not challenge it. Rather, it is about $30bn, meaning that gross mismanagement has denied the country some $60bn or another N12.6tn. Now, add the ‘missing’ $20bn from the NNPC. You promised a forensic audit report ‘soon’, and more than a year later, the report itself is still ‘missing’. This is over N4tn, and we don’t know how much more has ‘missed’ since Sanusi cried out.