Daily Watch –TCN to expel Discos, NSE slumps 3.6% in June

The Nigerian Stock Exchange slumped by 3.55 percent in June as investors recorded losses totalling ₦479 billion. The market, which opened the month with a market capitalisation of ₦13.685 trillion, a value recorded on May 31, 2019, closed 1102.5 basis points lower at a market capitalisation of ₦13.206 on Friday, June 28, the last trading day in the month. Investors at the local bourse gained ₦50.9 billion in the last week of the month, after three consecutive weeks of losses, also the last week in the first half of the year. The NSE opened the year with a market capitalisation of ₦11.721 trillion, dropping to its lowest point during the year at ₦10.627 trillion on May 15, a day before the listing of MTN Nigeria Communications’ shares on the NSE. The listing drove market capitalisation up to ₦12.526 trillion as the telecom giant added ₦1.8 trillion on May 16. The market capitalisation climbed further to ₦13.400 trillion on May 21 and ₦13.864 trillion on May 23, after which it started declining to as low as ₦13.048 trillion on June 26. There was a rebound on June 27 as the market capitalisation gained ₦62 billion to settle at ₦13.110 trillion and a further ₦96 billion on June 28 to settle at ₦13.206 trillion. Analysts at Vetiva Capital Management said while the election season and MTN listing were the two major factors that shaped market performance in H1, it is expected that the second half of the year would be primarily driven by economic policy direction; early appointment of cabinet members, and  the listing of large corporates, among others.

The FG is set to commence the Ruga settlements Project across the country, investigations show. The pilot phase of the project, which has attracted harsh criticism, shall be in Taraba, Adamawa, Plateau, Kaduna and seven other states in the country. According to a document by the Federal Ministry of Agriculture and Rural Development seen by Punch, all was set for the implementation of the initiative, the execution of the project  would start in 11 states including Sokoto, Nasarawa, Kogi, Katsina, Kebbi, Zamfara and Niger. Senior officials at the ministry reportedly said the FG is determined to go ahead with the project amid the public outcry, particularly in the South. The source explained that the FG does not have the intention to grab lands from any state, but involves states that shown interest and ready for the project. The project, which is said to be part of the solution to the incessant clashes between farmers and herders, is expected to attract investments to the country. The immediate past Minister of Agriculture and Rural Development, Audu Ogbeh, had in May announced that President Muhammadu Buhari approved the Ruga settlement initiative earlier in the same month. Governor Bello Mutawalle of Zamfara State and Secretary to the Niger State Government, Ahmed Matane, have confirmed that their states will accept the proposed Ruga settlements for herdsmen. Meanwhile, the Speaker of the Benue State House of Assembly, Titus Uba, on Friday said the Assembly had called for the removal of the signboards erected in the communities earmarked for Ruga settlements in the state. 

Data from the FMDQ OTC Securities Exchange shows that the volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the foreign exchange market dropped marginally by 0.3 percent to $29.62 billion in the first half of 2019 (H1’19). This is compared to $29.7 billion in H1’18. The analysis of the daily transaction, however, showed a sharp decline in turnover in the Q2’19 when compared to turnover recorded in Q1’19. Forex Turnover in the window fell by 33 percent, q-o-q to $11.9 billion in the Q2 2019 from $17.72 billion in the Q1 same year. On a monthly basis, the turnover dropped by 22 percent to $3.2 billion in June from $4.1 billion in May. This, according to analysis, represents the fourth consecutive monthly decline in the volume of dollars traded (turnover) in the window since February. The data showed a rise in the monthly turnover in the window by 204 percent to $9.13 billion in February. This is an effect of the increased inflow from foreign portfolio investors (FPIs). It, however, dropped by 22 percent to $7.48 billion in March from where it dropped rapidly to $4.6 billion in April and $4.1 billion in May. Hence, a 33 percent decline in monthly turnover in June suggests continuous slowdown in dollar inflow from FPIs as the weekly turnover in the I&E for June showed that $330.61 million was traded in the first week of the month. Turnover rose by 153 percent to $837.53 million in the second week and down by 8.0 percent to $773.52 million in the third week. The turnover rose in the fourth week by 29 percent to $998.5 million. However, in June, the naira depreciated by 12 kobo in the window as the indicative exchange rate for the I&E  rose to ₦360.74 per dollar last Friday, from ₦360.76 per dollar in June.

The Transmission Company of Nigeria, which manages the power grid, has blamed electricity distribution companies for the incessant collapse of the grid leading to a blackout across the country. The grid recorded its eighth total collapse this year on Sunday, leaving consumers in blackout for several hours. Data obtained from the Nigeria Electricity System Operator, an arm of the TCN, showed that the total generation stood at 3,825 megawatts as of 6.00 am on Sunday, compared to 3,260.9MW same time the previous day. The grid suffered four total collapses in January and one each in February, April and May, the system operator said. Enugu Electricity Distribution Plc had announced on Sunday that “the present loss of supply in the entire South-East is as a result of a system collapse which occurred at 09.21 am of the day. This is tied to a fire outbreak on Benin 330KV transmission line reactor. The Kaduna Electricity Distribution also informed its customers about the system failure from the national grid. The TCN said that a high voltage following a massive drop of load by the electricity distribution companies caused the system collapse. The voltage also caused the fire incident in the 75MX reactor in the Benin Substation in Edo State. However, the company said power was restored in most parts of the country after restoration of the grid same day. Meanwhile, the TCN has said it may expel some Discos from the market as a result of their inability to provide their security cover. Last week, the Market Operator, an arm of the TCN, ordered the suspension of Enugu Discos, Ikeja Disco and Eko disco, from the MO-administered markets for failing to renew their security cover. Enugu Disco was given a disconnection notice while Ikeja and Eko Discos only got a notice of suspension from the market, according to the Managing Director, TCN, Usman Mohammed.