Nigeria Content Online

The
Nigerian Stock Exchange recorded a total gain of N2.334 trillion on
equities at the close of trading activities in October, showing the
improvement of some key market indicators on the upturn.

The
market value of the 214 listed equities, which opened the month at
N5.648 trillion, closed on the last trading day in October at N7.982
trillion, reflecting a N2.334 trillion gains, or a 41.32 percent
increase. Also, the NSE All-Share Index, which opened at 23,050.59
basis points, closed the month at 25,042.16, an increase of 1,991.57
units or 8.64 percent, as against the decline of 1,217.65 points or 5.1
percent recorded in September.

The
Exchange’s strategy and business development department said the
increase in market capitalisation in October can be attributed largely
to the listing of Dangote Cement in the Building Materials subsector.

“Other factors included the listing of Kaduna State Bond and the increase in equity prices,” it said.

The
Exchange also said the stock market recorded a 10-month growth rate of
55.4 percent and 40.8 percent in equity market capitalisation and
aggregate market capitalisation.

Market turnover

The
market recorded a turnover of 6.71billion shares, valued at N90.6
billion, in 117,203 deals during October, in contrast to a total of
4.84 billion shares, valued at N47.25 billion, exchanged during
September in 117,366 deals.

Consequently,
trading volume and value rose by 39 percent and 92 percent, while the
number of executed trades dropped by 0.1 percent, when compared with
September. The value of trades had in September rose by 0.7 percent,
while the trading volume dropped by 8.1 percent.

Aggregate
stock market turnover between January and October 2010 were 79 billion
shares, valued at N670.42 billion, exchanged in 1,677,550 deals. In the
comparable period during 2009, the market recorded turnover of 85.94
billion shares, valued at N582 billion, in 1,504,778 deals.

Measuring
by turnover volume, the Banking subsector was the most active in
October, with traded volume of 3.9 billion shares valued at N30.81
billion, while the Insurance subsector was second, with traded volume
of 893.14 million shares, valued at N595.54 million, exchanged in 4,220
deals. The Food/Beverages subsector was third, with transaction volume
of 351.72 million, valued at N10.1 billion.

A
total of 165 equities out of the 214 listed were traded during the
month, compared with 174 in September. First Bank of Nigeria Plc was
the most active stock in October, with transaction volume of 443.82
million shares, followed by Access Bank Plc, with 404.44 million shares.

Research
team at Access Bank said, “The market would likely receive further
support from the recent creation of the Alternative Securities/Private
Placement Exchange, to replace the second-tier securities market, in a
bid to stimulate the activities of the capital market.”

Bond trading

Over-The-Counter
(OTC) bond market, a turnover of 1.1 billion units worth N1.036 billion
was recorded in October, in contrast to a total of 998 million shares
valued at N946.5 billion exchanged during the preceding month.

The
most active bond, in terms of volume, was the 10 percent Federal
Government of Nigeria (FGN) Bond July 2030 (formerly 7th FGN Bond 2030
Series 3), with traded volume 284.8 million units valued at N230.5
billion. It was followed by 9.45 percent FGN January 2013, with a
traded volume of 123.65 million units valued at N127.84 billion.

The Federal
Government is considering a new biofuels development policy for a
viable alternative to the continued dependence on imported petroleum
products as fuels for energy supplies in the country.

A forum recently
facilitated by the Petroleum Products Pricing Regulatory Agency (PPPRA)
has already recommended the constitution of a technical committee to
undertake a comprehensive review of the 2007 national biofuels policy,
to remove all impediments to achieving the bio-fuels development
initiative, and replace with a framework that will be more commercially
friendly.

The Energy
Commission of Nigeria (ECN) is expected to provide the necessary
technical input to the deliberations, particularly concerning previous
and ongoing biofuels initiatives, as well as the existing relationship
between producers and foreign off-take partners from China and
Singapore. This will also enable Nigeria gain access to the carbon
credit available under the Clean Development Mechanism (CDM).

During a recent
meeting in Abuja, attended by the Department of Petroleum Resources
(DPR) and other government monitoring and regulatory agencies in the
oil and gas industry, members observed that the provisions of the
existing policy document were inadequate to help realise the national
objective.

Participants were
of the opinion that rather than have an agreement entered into solely
with the Nigerian National Petroleum Corporation (NNPC), as envisaged
under a previous arrangement, the proposed policy should make it an
industry-wide pact, to enable depot owners and petroleum products
marketers partake, in line with the current reforms in the petroleum
industry.

Unhelpful policies for local production

They also pointed
out that the current import-based policy on petroleum products supply
in existence was a dis-incentive to local production and domestic self
sufficiency in fuels production.

The Biofuels Policy
and Incentives (2007), which was approved by the Federal Executive
Council on June 20, 2007, and gazetted to facilitate the promotion of a
national bio-fuels development programme in the country, was, however,
found to contain some lapses, including its being dependent on import
as well as state-controlled monopoly.

The NNPC was
mandated to create an enabling environment for the take-off of a
domestic ethanol fuel industry, to gradually reduce the country’s
dependence on imported petroleum products, reduce the negative impact
of environmental pollution, as well as create a commercially viable
industry capable of sustaining the creation of domestic job
opportunities.

“The imperative for
a policy review is that given the fact that bio-fuels markets worldwide
are mandate-driven, Nigeria cannot afford to be an exemption. There
need for the biofuels policy document to be reviewed by a sub-committee
before presentation to the main committee. There is also the need to
incorporate other relevant organisations, such as the financial
institutions, farmers association, etc.,” said Abiodun Ibikunle, the
PPPRA executive secretary.

The technical
committee on biofuels development, which is expected to be inaugurated
next week by the minister of petroleum resources, Diezani
Alison-Madueke, will include the NNPC, Major Oil Marketers Association
of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association
(DAPPMA), DPR, PPPRA, and Standard Organisation of Nigeria (SON).

Others are
representatives of the ECN, Central Bank of Nigeria (CBN), New
Partnership for Africa’s Development (NEPAD), National Association of
Road Transport Owners (NARTO), farmers association, federal ministries
of finance and petroleum resources.

Exxon Mobil said on
Tuesday eight people were missing, following a raid on a Nigerian
offshore oil platform on November 14, that knocked out 45,000 barrels
per day of condensate production.

“Mobil Producing
Nigeria…confirms that unknown armed persons boarded the Oso platform
on November 14. At this time, eight people remain unaccounted for,” the
company said in a statement.

“NGL (natural gas
liquids) and condensate production of about 45,000 bpd on the facility
have been shut in, as a precautionary measure,” Exxon added.

Oso is one of Nigeria’s biggest condensate fields, with about eight platforms whose total output averages about 75,000 bpd.

The Manufacturers
Association of Nigeria (MAN) will not comment on issues of interest to
its members, particularly as it concerns credit availability.

The association,
whose mission statement is to promote, in close cooperation with its
members, other organs of the organised private sector, the government,
and other stakeholders in the economy, an enabling environment for
industrial development, growth and prosperity of the society at large,
declined to make comments on the state of credit availability to its
members, after several enquiries and visits to its Lagos office.

The World Bank last
week released a report titled ‘Nigeria’s credit squeeze and beyond’,
saying that there was no evidence of credit squeeze in Nigeria and that
credit to manufacturing and commerce have been squeezed, but only a
little, a contrary view to the general belief of a credit squeeze in
the nation’s economy.

“A credit squeeze
does not appear to have taken place. Credit was not going to productive
sectors, instead it was going to margin lending, oil importers, and
insider lending. In early 2010, liquidity rises and interest rates
plummet. After that, rumours and anecdotes about a credit squeeze start
to circulate,” the report said.

The organisation
insists that credit is growing in most sectors and that money is not
the solution, as there are lots of liquidity in the system.

“Our conclusion is
that the real sector is not affected. Credit to the real sector has not
been squeezed, because less than one percent of Nigerian businesses
ever had access to bank finance. There is the need for responsible
growth in lending to the real sector, current incentive for banks with
low interest rates on government paper and squeezed bank margins.”

Bashir Borodo, the
president, Manufacturers Association of Nigeria (MAN), refused to
comment as he did not pick his calls. Jide Mike, the director general,
promised to respond to enquiries related to credit to the manufacturing
sector, but did not do so, even after visits to the secretariat.

“We have a
procedure here. It is only the director general and the president that
can speak. I can only facilitate the process of getting a response,”
said Rasheed Adegbenro, the corporate affairs official of the
association.

The association
serves and represents nearly 2000 companies in private and public
sectors in manufacturing, construction, and service sectors of the
national economy. Among other things, it is supposed to advise,
consult, and where necessary, join issues with government and other
bodies. However, on matters that affect its members, it is reluctant to
speak up for them.

Exports from
Congo’s southern copperlands will rise 25 percent to over 1 million
tonnes next year due to renewed investor confidence, following a
government mining contract review, the top official in the province
told Reuters.

Moise Katumbi,
governor of Katanga Province, said companies and their backers were
boosting spending, following the conclusion of the review last month,
which resulted in Freeport-McMoRan Copper & Gold’s conceding a
small share of its huge Tenke Fungurume copper project to the state.

“After Tenke got
its revisitation, even the people who had a bit of fear are putting in
money. Everyone is financing now, even the banks,” Mr. Katumbi said.

Australia’s
competition watchdog has stopped South African grocer, Pick n Pay’s
sale of Franklins supermarket chain, to prevent creating a monopoly for
would-be buyer, Metcash.

The Australian
Competition and Consumer Commission said the A$215 million sale of the
chain would give Metcash a monopoly on grocery wholesaling in New South
Wales.

Pick n Pay, which
is selling the chain so it can focus on pushing further into
fast-growing Africa, will likely have to sell the business piecemeal.

Plan B of selling
the individual stores to independent supermarkets is not as attractive
because it may be a long process, and the net proceeds might not be as
good,” a Johannesburg-based analyst, who declined to be named, said.

Ghana’s 2011
budget, due to be unveiled on Thursday, will include major
infrastructure and other spending aimed at fostering economic growth
and employment, according to a summary published by the finance
ministry.

However, it came
with a warning that oil, due to start flowing from its Jubilee oilfield
in coming weeks, would only contribute six percentage points of total
revenues next year and that the West African country should not neglect
existing industries.

Analysts noted the
pledge to spend would be scrutinised for its impact on public finances
and whether it was accompanied by efforts to bolster Ghana’s low rate
of tax revenue collection.