The Nigerian Stock Exchange plans to introduce trading in financial derivatives next year as it seeks to deepen the market. Speaking at the Abu Dhabi Investment Authority organised Africa Investment Summit, CEO, Oscar Onyema, said the NSE will launch with equity index futures and then grow the list from there. The local bourse plans to introduce futures and options to enable investors to hedge and manage risks. Onyema has been floating plans to introduce derivatives trading since his appointment in 2011 but has continually delayed its launch due to the lack of a central counterparty clearing house, which one has now been set up. The bourse is seeking a license for it from regulators. The NSE is also in talks with regulators to increase the share of pension fund investment into equities, to raise the current allocation to stocks at 4.95 percent, Onyema said. There are already signs that stocks are starting to “rally a little bit” thanks to an inflow of pension-fund money after the Central Bank of Nigeria tightened restrictions on which investors could trade its high-yielding, short-term, fixed-income debt securities. The exchange is also lobbying the FG to offer tax breaks to companies and exempt securities transactions from value-added tax to boost investment, as Onyema is looking to complete a demutualization of the exchange early next year, a process that will convert it to a shareholder-owned public limited liability company from a member-owned mutual organisation.
The CBN says it recorded a total of $11.69 billion foreign exchange inflow in Q3 2019. The figure showed a decline of 6.7 percent and 9.5 percent compared to Q2 2019 and Q3 2018, respectively. The CBN says the development, relative to Q2, reflected mainly the fall in non-oil receipts as the aggregate outflow from the monetary regulator was $15.30 billion, indicating an increase of 22 percent above the level in Q2. The regulator also said that the rise in outflow, relative to the preceding quarter, reflected mainly the increased interventions in the forex market and other official payments. In total, the forex flows through the CBN in the period under review resulted in a net outflow of $3.61 billion, compared with the net outflow of $0.02 billion and $4.47 billion in the preceding quarter and the corresponding period of 2018, respectively. The aggregate forex inflow into the economy amounted to $25.76 billion in the Q3’19, indicating a decline of 5.7 percent, compared with the level in the preceding quarter, but an increase of 4.3 percent above the level in the corresponding period of 2018, the bank said. The development, it said, was as a result of the 6.7 percent and five percent declines in the inflow through the CBN and autonomous sources, respectively. The oil sector receipts, which accounted for $4 billion, rose by 4.9 percent and 3.5 percent above the levels at the end of the preceding quarter and the corresponding period of 2018, respectively.
Data from the PPPRA shows that the NNPC is subsidising the cost of petrol consumed across the country by ₦19.37 per litre. The state oil firm is spending about ₦1.1 billion based on the consumption of 55 million litres, which the state oil firm says the country consumes each day. The corporation said, in its July 2019 financial and operations report, that a total of 55.74 million litres of petrol was consumed across the country on a daily basis. Findings from the PPPRA showed that the landing cost of petrol as of 18 November 2019 was ₦144.7/litre, while the distribution margin was put at ₦19.37/litre. A summation of the landing cost and the distribution margin gives the total and actual cost of ₦164.07/litre. The product is, however, sold at a regulated price of ₦145/litres at petrol stations across the country.
The Minister of Mines and Steel Development, Olamilekan Adegbite said there are 1,759 illegal mining sites in operation all over Nigeria. Adegbite said the FG has been engaging mining operators in these communities to lure them into formally registered cooperatives for the purpose of safely mining the country’s resources. so far, 1,346, artisanal mining operators have been drawn into forming registered Artisanal Mining Cooperatives, in readiness to access SmalI-scale Mining Licenses. Each of the 1,346 mining cooperatives comprises over 10 members; with additional 20 mine workers for each cooperative, he said. Recently, the FG has been making attempts to revive the mining sector as the sector only contributes less than 1 percent to the country’s GDP.