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51 foreign investors exit equities, bond markets

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51 foreign investors exit equities, bond markets

51 foreign investors exit equities, bond markets
April 18
06:35 2016

Fifty-one foreign investors repatriated profits from their investments in equities and Federal Government of Nigeria (FGN) bonds last week.

The investors considered Nigeria’s foreign exchange policies of the Central Bank of Nigeria (CBN), especially its refusal to devalue the naira, unfavourable to their investments. They pushed the transactions through Stanbic IBTC Bank, published data on forex disbursement for last week showed.

The major part of the $15.91 million forex was disbursed by the lender to investors divesting from the country, local businesses importing petroleum products, payment of school fees abroad and settlement of Personal Travel Allowances (PTAs) and Business Travel Allowances (BTAs).

Details of the transactions showed that foreign investors took $6.8 million of the disbursed cash. Stanbic IBTC Bank disbursed $100,000 to 32 investors divesting from the equities market. The beneficiaries are Merill Lynch International, HSBC, Brown Brothers, JPM Securities, The Bank of New York Mellon 1, The Bank of New York Mellon 2, HSBC Funds Services London, Deutsche Bank London, Standard Bank of South Africa, and Credit Suisse International, among others.

For raw materials, the bank disbursed $1 million each to Pure Flour Mills Nigeria Plc and Flour Mills Nigeria Plc. Bua Sugar Refinery got $500,000 for the importation of raw sugar. Prudent Energy & Services Limited $1,170,267.10 for petroleum products.

General sentiments in the equities market were bearish. Average yield across benchmark bonds closed at 11.6 per cent at the end of the first trading session of the week, rising five basis points from the last trading session of the previous week.

Though the spread between the official and parallel forex market remains, the volatility recorded in rates earlier in the year has subsided. The CBN, however, is still unable to meet the dollar demands as seen in the amount returned by the CBN to the Deposit Money Banks for unfilled bids at the forex auction.

The official naira rate at the CBN remained at N197 to dollar whilst naira/dollar rates at the Interbank stayed at N199 to dollar. The naira/dollar rate was stable at the Bureau-De-Change as it exchanged at N320 to dollar on all trading days of last week. The parallel market also remained stable as the local currency exchanged at N323 to dollar on all trading day of the week, except Monday when it appreciated by N1.00 to N322 to dollar. Current Gross foreign reserves level was at $27.47 billion as at April 14, down about $70 million from last Monday’s reserve level.

GTBank disbursed forex to 82 customers, including Dozzy Oil and Gas, which got $1.16 million. Danium Energy Services, Midland Rolling Mills; M.R.S Oil and Gas; Shiv Lila Polymers Limited each got $1 million for raw materials import. The bank also paid school fees to over 25 customers. Several others got PTAs.

United Bank for Africa (UBA) Plc paid $1 million to IATA for remittances for ticket sales; $1 million to Matric Energy for the importation of dual purpose kerosene and $1 million to NFE Industry Limited for the importation of Prime Steel Bullets. There were several other disbursements for BTAs and PTAs customers as well as parents paying school fees for their children abroad.

Fidelity Bank disbursed $100,000 each to United Africa Laboratory Limited and Onward Stationary Stores Limited for the importation of sealing machines and uncoated woodfree offset paper. There were several disbursements for school fees.

Access Bank disbursed $1 million to Air France for ticket sales remittances and $1.9 million to Blakeney Management for repatriation. There were other disbursements to Bhojsons, Techno Oil Limited and Nestle Nigeria Plc, among others.

Other lenders that made forex disbursements during the week were FirstBank, First City Monument Bank, Wema Bank and Sterling Bank, among others.

The funds were sourced from the Central Bank of Nigeria (CBN) and sold to the beneficiary customers at the official rate of N197.50 to dollar. The beneficiaries used the funds for the importation of goods, services and other items that fall within the CBN-stipulated import approval list.

CBN Governor, Godwin Emefiele has consistently assured stakeholders that the country will continue to meet mature financial obligations to foreign investors and her international trading partners.

For the CBN, the ongoing weekly publications on forex utilisation are meant to promote transparency and accountability on the side of the lenders, which act as a link between the regulator and the forex users.

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Mujeeb

Mujeeb

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