Fitch Revises Rivers State Outlook to Negative; Affirms at 'BB-'

Fitch Ratings has revised the Outlook on the Nigerian State of Rivers' Long-term foreign currency Issuer Default Rating (IDR) to Negative from Stable. The agency has also the affirmed Long-term foreign and local currency IDRs at 'BB-' and its National Long-term rating at 'AA-(nga)'. The Outlooks on the local currency IDR and on the National Long-term rating remain Stable. 


Under EU credit rating agency (CRA) regulation, the publication of local and regional government (LRG) reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from this in order to comply with their legal obligations.

Fitch interprets this provision as allowing us to publish a rating review in situations where there is a material change in the creditworthiness of the issuer that we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status.

The next scheduled review date for Fitch's ratings on Rivers State was originally 11 September 2015. However, following the downgrade of Nigeria's Outlooks we have taken a similar rating action on Rivers State as the issuer is rated at the same level as the sovereign for the Long-term foreign currency IDR.

Fitch Affirms 10 Nigerian Banks' Support Ratings on Sovereign Outlook Revision

Fitch Ratings has affirmed the Support Ratings (SRs) and Support Rating Floors (SRFs) of 10 Nigerian Banks. They are Zenith Bank Plc (Zenith), FBN Holdings Plc (FBNH), First Bank of Nigeria Ltd (FBN), United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc (GTB), Access Bank Plc (Access), Diamond Bank Plc (Diamond), Fidelity Bank Plc (Fidelity), Union Bank of Nigeria Plc (Union) and First City Monument Bank Limited (FCMB). 


The rating actions follow Fitch's revision of the Outlook on Nigeria's Long-term Issuer Default Ratings (IDRs) to Negative from Stable.

Fitch has also affirmed the IDRs and National Ratings of six banks, namely FBN, UBA, Diamond, Fidelity, Union and FCMB. The Outlooks on these Long-term IDRs remain Stable. These banks' IDRs and National Ratings are driven by the probability of sovereign support, as indicated by their SRFs.

The National Ratings of Stanbic IBTC Bank Plc (SIBTC) and Stanbic IBTC Holdings Plc (SIBTCH) are unaffected by the sovereign rating action, as their 'AAA(nga)' ratings are based on the support that the bank and the holding company derive from Standard Bank Group Limited (SBG; BBB/Negative).

The Viability Ratings (VRs) of Fitch-rated Nigerian banks are unaffected by the sovereign rating action. Therefore, the IDRs and National Ratings of Zenith, FBNH, GTB and Access are unaffected, as these are driven by the banks' standalone strengths, as indicated by their VRs. Fitch recently reviewed all Nigerian banks' VRs (see 'Fitch Affirms 10 Nigerian Banks on Peer Review; Stable Outlook", dated 23 February 2015).

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Fitch Revises Nigerian State of Lagos' Outlook to Negative; Affirms at 'BB-'

Fitch Ratings has revised the Outlook on the Nigerian State of Lagos' Long-term foreign currency Issuer Default Rating (IDR) to Negative from Stable. The agency has also affirmed the Long-term foreign and local currency IDRs at 'BB-' and its National Long-term rating at 'AA+(nga)'. The Outlooks on the local currency IDR and on the National Long-term rating remain Stable. 


The next scheduled review date for Fitch's ratings on Lagos State was originally 11 September 2015. However, following the downgrade of Nigeria's Outlooks we have taken a similar rating action on Lagos State as the issuer is rated at the same level as the sovereign for the Long-term foreign currency IDR.

KEY RATING DRIVERS
The rating action on Lagos follows the same on Nigeria's sovereign Long-term IDR's Outlook on 30 March
The rating action reflects the application of Fitch's 'International Local and Regional Governments Rating Criteria - Outside United States', according to which subnationals' ratings usually cannotbe higher than their sovereign.

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WEEKAHEAD-Presidential election outcome to buoy Nigerian naira

 

Nigeria's naira could firm against the dollar on the parallel market next week after a peaceful election .

The naira firmed to 210 to the dollar on the parallel market from 226 a week ago after opposition leader Muhammadu Buhari won in a vote that avoided the violence of previous polls.

However, the currency traded within the 199-199.50 band on the official interbank market, where it has been stuck since February, after the central bank pegged the rate.

In a sign of relief, individuals who had stockpiled dollars to hedge against political risk fearing the election could be marred by violence were exchanging their funds for the naira.

GSK Nigeria 2014 pretax falls 36 pct to 2.7 bln naira

 

GlaxoSmithKline Consumer Nigeria said on Thursday it's 2014 pretax profit fell 36.2 percent to 2.75 billion naira ($14 million).

 

The drugmaker's revenue rose to 30.52 billion naira from 29.18 billion in the same period, it said in a statement.

The company has proposed a dividend of 0.75 naira per share and one new share for every four existing shares to shareholders, unchanged from the previous year.

Nigerian Economy: Awaiting the New Government

 

While awaiting the Transition to a new Government, Tackling the high rate of Poverty, epileptic power supply, unemployment, even distribution of wealth and social liberation comes in to focus. A yearning that has been long awaited.

Over the last 16 years, Nigeria can indeed say she has grown over her counterparts in the continent economically; rebasing trails into our minds. However, with the assurances gotten from the President-elect, there seems to be hope and we expect the Economic team to swing into action after May 29.

The following sectors you would agree needs serious attention: Power, Agriculture, Labour, Infrastructural development, Security, Social empowerment, Housing, amongst others.

The outgoing government cannot totally be written off in terms of performances in the different sectors that make up the economy, notably restoring confidence in the economy. Some analysts have also suggest the retention some cabinet members like the Minister of Agriculture, Finance, Works, Trade and Investments and a host of others, who are believe have the needed experience and expertise in completing the reformation in the economy.

Nigeria's Skye Bank plans $251 mln rights issue after debt sale

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Nigeria's Skye Bank plans to raise 50 billion naira ($251 million) via a rights issue by the third quarter of 2015 to expand its loan book after it completed the sale of short-term commercial notes last week, it said on Wednesday.

Skye Bank, which acquired nationalized lender Mainstreet Bank this year, said in a statement the shares sale is expected to commence after a shareholders' meeting scheduled for May.

The bank also said it raised 100 billion naira through the sale of 90-day commercial paper at 16.5 percent.

Shares in the lender rose 10 percent to 2.64 naira, tracking the overall rise on the main share index which is up 8.4 percent, lifted by positive sentiments after opposition leader Muhammadu Buhari's won a closely-fought presidential vote.

Nigerian Stock Market Rally after Buhari wins presidential vote

 Nigeria's main shares index soared to its single biggest daily gain this year on Wednesday while bond yields fell sharply and the naira currency surged in the black market as investors cheered Muhammadu Buhari's presidential election victory.

The main shares index rose 8.4 percent as financial markets welcomed the peaceful outcome of the closely-fought elections, marking the first time in Africa's most populous nation where a sitting president was voted out of power through the ballot box.

Analysts said foreign investors backed Buhari's victory and were taking position by snapping up shares across the board.

Meanwhile, yesterday the equities market closed on a positive note, as NSE ASI appreciated by +2.13 to close at 31,753.15 basis points, compared with the +1.73 appreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at -8.38%

Workers’ compensation gulped PHCN sales proceeds —BPE

 

 The Bureau of Public Enterprises has revealed that all the money realized by the Federal Government from the sale of the 17 successor companies of the Power Holding Company of Nigeria was expended on the entitlements of the workers of the defunct monopoly. 

The Director-General, BPE, Mr. Benjamin Dikki, who said this in Abuja on Tuesday, noted that the management of labour issues in the power sector was more challenging but President Goodluck Jonathan directed and insisted that every one of the over 47,913 workers of the PHCN must receive every kobo of his or her entitlements.

He added that as a result, all the proceeds from the sale of the unbundled companies of the defunct state monopoly were expended on the settlement of workers’ entitlements across the country.

The BPE boss said managing the various stakeholders was one of the greatest challenges to the reform and privatisation programme of the Federal Government.

Nigeria's 5-year Bond Yield Drops

Nigeria's five-year bond yield fell 33 basis points on Tuesday after a United States investor bought government debt.

The yield on the 2019 bond initially fell two basis points in early trades on Tuesday, the dealer said, adding that the debt fell further on large buying from the offshore fund.

Reuters reported that the five -year paper traded at 15.03 per cent from 15.36 per cent the previous Nigeria's foreign exchange reserves fell by 4.9 per cent to $29.79 billion by March 30, from $31.35 billion a month earlier.

Yields on $500 million of Nigerian dollar bonds due July 2023 had fallen for the eighth day on Tuesday, to the lowest since December 10.

Fitch Ratings Incorporated Revised Nigeria's BB- TO BB+

Fitch Ratings Incorporated (Fitch) has today affirmed Nigeria's BB- rating, but revised Nigeria's credit rating outlook to "Negative". This decision comes barely a week after another rating agency, Standard & Poor's (S&P), reduced Nigeria's credit rating by one notch from BB- to B+.

The review was initially scheduled to be published on 27th of March, 2015, but the ratings agency decided to wait till after the elections to publish its review.

The ratings agency noted that violence was very limited on election day and challenges were largely technical in nature.

In the statement released by the ratings agency, the revision of Nigeria's outlook was warranted by political and financial issues. According to Fitch, Nigeria's political risk has been heightened in the context of a tightly contested presidential election and potential transition issues. 

The ratings agency is wary about the decline in Nigeria's Excess Crude Account, which is Nigeria's key fiscal buffer, and does not expect savings to be rebuilt significantly by the end of 2016.

Fitch further warns that a serious prolonged breakdown in public order, continued erosion of fiscal and external buffers, and a reversal of key structural reforms in the polity could lead to a rating downgrade in September when its next review is scheduled.

Nigeria's naira firms 0.46 pct on parallel market after Buhari wins election

 

Nigeria's naira firmed 0.46 percent to 217 against the dollar on Wednesday on the parallel market after opposition leader Muhammadu Buhari won the presidential election in Africa's biggest economy, a black market dealer told Reuters.



The dealer said he had seen little demand for dollar compared with before the polls.

The interbank opened at 197 naira to the dollar, a level it had traded at since February, after the central bank pegged the rate, following a defacto devaluation.

Nigeria's foreign exchange drops to $29.81 billion by March 27

Nigeria's foreign exchange reserves fell by 4 percent to $29.81 billion by March 27 from $31.06 billion a month earlier.

Data from the central bank showed yesterday.

The data further revealed that the reserves of Africa's top crude oil exporter and biggest economy fell 21.32 percent by March 27 from $37.80 billion last March.