Oil price hits $50/barrel

   Brent crude, against which Nigeria’s oil is priced, hit $50.14 per barrel at 8:30am, data from Energy Intelligence showed.

    The difference between the global benchmark and Nigeria’s budget benchmark has now risen a little above $12 per barrel. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had recently said the nation’s oil output had dropped to 1.4 million barrels per day from 2.2 million bpd.

    

United Capital Gains N1.5bn from Sale of Insurance Firm

  United Capital Plc has completed the sale of its 50 per cent holding in United Metropolitan Life, a joint venture established in 2005, to its Joint Venture partner, Metropolitan International Holdings (Proprietary) Limited.

 The purchase consideration for the shares in United Metropolitan Nigeria Life amounted to N3.25 billion and the transaction closed on 10 May, 2016. United Capital realised a capital gain of N1.5 billion from the transaction.

The Group Chief Executive Officer, United Capital, Mrs. Oluwatoyin Sanni, said: “This marks the conclusion of a very successful investment. Our objective is always to maximise shareholder return and we look forward to redeploying the capital in further ventures. We remain strongly convinced of the opportunities in the Nigerian financial services sector.”

 She explained that all requisite regulatory approvals have been obtained and the Nigerian Stock Exchange has since been notified of the divestment.

“United Capital Plc remains committed to achieving its goal of building Africa’s leading investment and financial services group and to continue delivering service excellence across all of its business units in pursuit of these strategic objectives,” Sanni assured.


Excerpts from ThisDay

Nigerian stock exchange(NSE) gains N354bn

The Nigerian Stock Exchange All-Share Index on Wednesday had a huge return since the beginning of this year.The market capitalisation appreciated by N354bn to close at N9.706tn from N9.352tn on Tuesday, while the NSE ASI closed at 28,260.61 basis points from 27,231.50 basis points the previous day.

A total of 474.402 million shares worth N3.503bn exchanged hands in 5,260 deals on the floor of the NSE on Tuesday.

The financial services and industrial goods sectors were the biggest beneficiaries of the renewed investor interest as they gained 589 basis points and 416 points. 

Analysts at Vetiva Capital Management Limited said, “Given the strong demand observed in today’s (Wednesday) session as indicated by market breadth, volume and value, we see room for further gains in Thursday’s (today) trading session as the MPC’s decision to adopt a flexible exchange rate continues to whet investor appetite for stocks across sectors.”

Bond prices also rose as traders bought debt to cover positions taken before the central bank decision as they had expected the main rate to stay at 12 per cent to boost the country’s economy in view of slowing growth.

However, the naira remained flat against the United States dollar at the parallel on Wednesday as news over the adoption of a flexible exchange rate policy by the CBN created uncertainties in the forex market.

MTN launches digital TV service

MTN Nigeria yesterday commenced the pilot of its digital television broadcasting service in Jos, Plateau State.

The TV service, which goes live today (Thursday), is sequel to the issuance of a digital broadcast licence to MTN for N34bn, by the Nigerian Broadcasting Corporation in 2015.

  MTN Nigeria Executive, Lynda Saint-Nwafor, said Nigerians could now watch TV programmes on their smartphones and other devices via Over-the-Top platforms like WhatsApp, BlackBerry Messenger, Facebook and Twitter, amongst others.

According to the CEO, MTN Nigeria, Ferdi Moolman, "subscribers will have the freedom to watch their favourite programmes when they choose the MTN Video-on-Demand service, rather than having to watch at a specific broadcast time"

   Moolman added that MTN was committed to providing Nigerians with innovative digital platforms, which will enhance the way we live, work and play.He said, “Once we commence full commercial activities, the TV service will deliver an exciting bouquet of rich local and international content to Nigerians.

FIRS now seals off companies that are in tax default

      FIRS began the sealing off of  companies that have failed to comply with their tax obligations. FIRS explained that the action is only applied to companies that are clearly in default of the following;

• Failure to file VAT returns over an extended period of time. Some of the affected companies are said to have failed to file monthly VAT returns for up to 3 years.
• Failure to pay undisputed tax liability whether arising from self assessment or a tax audit.

    

Bizblogterm of the week:DEVALUATION

 


        Devaluation is a reduction in the value of a country's currency within a fixed exchange rate system.Devaluation is a monetary policy of a country and its always the last resort when a country is being faced by economic downturn.
     
        Devaluing a currency makes the country's exports to be less expensive and in turn makes their imports more expensive.Thus,if a country largely depends on imported goods then devaluation might increase the cost of living of the populace. This implies that whatever your N50,000 can buy before devaluation,same amount will now be use to buy much lesser quantities.

    

   

Nigeria to devalue Naira To N250 – $1

       A report on Tuesday, May 24 had suggested that the CBN governor, Godwin Emefiele, was expected to make an announcement on how the devaluation would look be and its process


        The Governor, who announced this during a briefing at the end of the Monetary Policy Committee (MPC) meeting at the CBN headquarters in Abuja, said he would give details of the flexible forex regime in a few days.

     Authoritative sources said that the CBN would set the new exchange rate at N250 – $1 from its current about N198 – $1 regime.

    “The MPC (Monetary Policy Committee) voted unanimously to adopt a flexible exchange rate policy to restore the automatic adjustment properties of the exchange rate,” Emefiele said, adding that the “bank would retain a small window for funding critical transactions” and that “details of operations of the market would be released by the central bank at the appropriate time”.


     The Governor also announced that the MPC retained the MPR at 12%, CRR at 22.5% and Liquidity Ration at 30%.

Exchange rate as at 25/05/2016

COUNTRY          CURRENCIES       IN NGR(Naira)
 EUROPE                     EUR                         N382/Euro
US DOLLAR               USD                          N342/Dollar

GBPOUNDS               GBP                          N490/Pound