BusinessDay 21 Aug 2018

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Tuesday 21 August 2018 Four primary school teachers get all-expense paid trip to showcase Edo’s education reforms in Canada Four teachers championing the Edo Basic Education Sector Transformation (Edo- BEST) Programme in schools across Edo State have clinched an all-expense paid trip to Canada to attend and showcase the state public education reforms at the 27th edition of the Edo National Association Worldwide (ENAW) convention. The teachers are Idehen Ejiye Isaiah of Eguare Primary School, Ujiogba in Esan West Local Government Area (LGA); Erhabor Osasumwen Priscillia of Aisologun-Akenzua Primary School in Ikpoba-Okha LGA; Ogboko Edoghogho Yvonne of Okogbo Primary School, Okogbo, in Orhionmwon LGA, and Noragbon Enogie Osaru, head teacher, Emotan Primary School, Oredo LGA. The trip, according to the special adviser to the governor on Basic Education and chairman-designate, Edo State Universal Basic Education Board, Joan Osa Oviawe, is a form of motivation for the selected teachers, who will showcase in practical terms the reform by the Governor Godwin Obaseki-led administration to Edo people in the Diaspora. “SUBEB created an online portal two weeks ago, asking teachers in Edo State to apply or nominate someone for the all-expense paid trip to Toronto, Canada. “The criteria included that they should tell us about themselves and why they think they NNPC, First E&P sign GMoU with host communities in Bayelsa As part of its commitment to social performance and demonstration of value to its neighbouring communities within the Niger-Delta communities, the Nigerian National Petroleum Corporation (NNPC) and First Exploration and Petroleum Development Company Limited (FIRST E&P) joint venture have signed a global memorandum of understanding (GMoU) with the KEFFES Rural Development Foundation (KDRF) in Bayelsa State. The KRDF is the governing arm of the eight communities that have been identified as the communities to the Assets. The KEFFES communities comprise of Koluama 1, Koluama 2, Ezetu 1, Ezetu 2, Foropa, and Fish Town, Ekeni and Sangana. “KEF- FES” is an acronym formed from the initial letter of the names of each of the eight communities. The GMoU is aimed at formalising the partnership between NNPC/FIRST E&P, KDRF and the Bayelsa State government as critical stakeholders in the development of oil mining leases 83 and 85 (the Assets). FIRST E&P is Nigerian oil are the best for the trip. At the end, we got 89 entries. After screening we came up with the semi-final list. Those picked were made to face a panel. One Head Mistress, Noragbon and three teachers finally got the slot to represent Edo State in Canada after the final selection. Their passports were processed on Wednesday,” Oviawe said. In a message to the selected teachers, the SUBEB boss explained that the trip would be a mixture of educational and sightseeing experiences, as the teachers will meet with Edo people in Diaspora, visit schools in Canada and also key government functionaries. According to Oviawe, “You are going to Toronto on the Governor’s entourage to attend the annual convention of Edo people in Diaspora. By God’s grace, we will aim to leave by August 29. So, prepare yourself. After the convention, you will stay behind and will visit schools in Toronto and surrounding areas. If there is time, we will visit Ottawa, which is the Canadian capital. “We will do a tour of the Canadian Parliament and visit the residence of the Governor General of the country. The Governor General is the symbolic head of state of Canada, representing the Queen of England. If there is time, we may also visit Montreal, the French speaking part of Canada. Part of the school visit will be to observe their open day among other events.” and gas company established in 2011 and commenced operations in July 2012. At the signing ceremony held at the Ministry of Mineral Resources, Bayelsa State, the representatives of the eight communities expressed their delight with the GMoU, which seeks to among other things, encourage socio-economic development within the communities. Speaking on the rationale behind the GMoU, Emmanuel Etomi, general manager, corporate services, FIRST E&P, said the joint venture partners were interested in the wellbeing of their neighbouring communities and wish to contribute to their development. “We are particularly happy with our neighbouring communities represented here today. Since we opened conversation and started engagement with them, the response has been good. At every level of our development, we have ensured that the communities are involved because they are critical to our collective success. “As a company, we are particular about our social performance and interested in the good of all our valued community stakeholders”. C002D5556 BUSINESS DAY A1 NEWS Nigeria’s $3.9bn e-commerce industry to spur economic growth JUMOKE AKIYODE-LAWANSON Although e-commerce in Nigeria is predominantly urban, the industry recorded about $1.9 billion in 2016, and has been projected to reach an estimated $3.9 billion by 2020 if the right regulations to guard online sales are put in place to match up with global standards, experts say. Electronic commerce is a thriving global industry and has become more popular in Nigeria with increased internet penetration and high numbers of smartphone ownership. In advanced climes where access to the internet, and of course, literacy levels stand at appreciable levels, e-commerce has become a lifestyle for many. Interestingly, global retail sales, of which e-commerce makes up a major part, is projected to rise further to an estimated $27 trillion by 2020. Osita Anthony Aboloma, director-general, Standards Organisation of Nigeria (SON), said earlier this year that Nigeria would only be able to benefit from the digital advantage of e-commerce, which could add a significant value to the country’s Gross Domestic Product (GDP), if the industry was well monitored to ensure optimal service. “With the increasing volumes of consumer complaints being received on the quality of products sold online by the SON, Consumer Protection Council (CPC) and other sister regulatory agencies, it has become necessary to have a robust regulatory framework in place for this sector. “For instance, products like mobile phones, electrical and electronic devices cannot be physically viewed and tested before purchase online, while the claims on what they can do have been found in many cases to be inaccurate or sometimes out rightly false,” Aboloma said. Also, at an e-commerce forum organised for government agency representatives and stakeholders earlier this year, the issues of lack of trust, security and safety and poor knowledge were all raised as challenges hindering the rapid growth of e-commerce in Nigeria. According to Ezekiel Oseni from the Bank of Industry (BoI) at the event, Nigeria does not have enough regu- L-R: Feyisayo Fatona-Ajayi, head of Lagos office, Nigerian Economic Summit Group (NESG); Lawrence Anukam, directorgeneral, National Environmental Standards and Regulations Enforcement Agency (NESREA); Christian Wessels, founder, Sunray Ventures; Folashade Ambrose-Medebem, director, communications, public affairs and sustainable development, Lafarge Africa; Jide Jadesimi, executive director, business development, LADOL, and Tunde Olatunji, chairman, house committee on industry, Osun State House of Assembly, at the NESG stakeholders’ workshop to unlock investments for a sustainable circular economy, in Nigeria held in Lagos. Pic by Olawale Amoo TCN tells BEDC localised tripping not its affairs HARRISON EDEH, Abuja Benin Electricity Distribution Company (BEDC) recently alleged that the national grid was highly unstable, with over 2,000 tripping in its network between January and July 2018. In reply, the Transmission Company of Nigeria (TCN) says the alleged statement was clearly misleading because in the subsequent part of the same report, BEDC claimed significant improvement in its services, which could not have been possible if the national grid was weak as alleged. “BEDC has no imbedded generation hence it depends entirely on the national grid and could not have recorded such improvement if the national grid has not also improved,” TCN clarifies in a statement. According to the statement signed by Ndidi Mbah, general manager, public affairs of TCN, since the BEDC does not have embedded generation and does not own its own transmission network, achievements like improved electricity supply to over 54 communities, provision of 24-hour supply covering over 20km in Asaba among others, though commendable, clearly cannot happen if the national grid was as problematic as alleged in the report. The statement further noted that TCN had good working relationship with BEDC management and that both companies were working towards improving power supply to BEDC consumers. TCN, hence, said it would not join issues nor engage in unnecessary blame game with BEDC; however, for the sake of clarity, most of the so-called 2,000 tripping were actually on 33/11kV feeders in BEDC’s network due to faults. MMA2 to witness disruption over termination of staff appointment IFEOMA OKEKE Operations of not less than five domestic airlines may be disrupted following the decision of the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) National Executive Council (NEC) to picket the activities of Bi-Courtney Aviation Services Limited (BASL), operator of MMA2, over termination of appointment of union members. In a communiqué issued to the media yesterday, ATSS- SAN states it condemns in the strongest terms the uncivil manner by which the management of BASL ingloriously terminated the appointment of 26 of its staff that voluntarily joined ATSSSAN. According to the communiqué, “The NEC commended the intervention of lation around e-commerce and so retailers often hide behind the anonymity of the online space to sell substandard goods to unsuspecting customers. “Apart from the five principles recently introduced by the CPC, which include among others, that any item to be sold online must have full disclosure of description to clearly state its colour, size and any relevant information; sellers must ensure consumer protection privacy, prompt respond time to complaints and redress and to ensure that consumers are not exploited.” Oseni also mentioned that the BoI would not support any substandard product to go into the market, unless it had met all the regulatory requirements. the State Security Services (Airport Command), the Airport Police Command, the Military Commandant (MMIA Airport) and the Nigerian Civil Aviation Authority (NCAA) for the roles they played in seeking amicable resolution of the issue. “NEC thus condemned the deliberate frustration of the efforts of above government agencies by the management of Bi-Courtney. To this end, the NEC resolved that if the management of Bi-Courtney does not recall the terminated staff and allow unfettered unionisation of wiling staff of the company within two weeks from the date of the publication of this communiqué, ATSS- SAN shall embark on a series disruption of operations at MMA2 until the management of BASL complies with its demands.”
Tuesday 21 August 2018 A2 BUSINESS DAY Access Bank Rateswatch KEY MACROECONOMIC INDICATORS Indicators Current Figures Comments GDP Growth (%) 1.95 Q1 2018 — lower by 0.16% compared to 2.11% in Q4 2017 Broad Money Supply (M2) (N’ trillion) 24.81 Decreased by 1.41% in June 2018 from N25.17 trillion in May’ 2018 Credit to Private Sector (N’ trillion) 22.28 Increased by 0.34% in June 2018 from N22.21 trillion in May’ 2018 Currency in Circulation (N’ trillion) 1.90 Decreased by 1.56% in June 2018 from N1.93 trillion in May’ 2018 Inflation rate (%) (y-o-y) 11.14 Decreased to 11.14% in July’ 2018 from 11.23% in June’ 2018 Monetary Policy Rate (%) 14 Raised to 14% in July ’2016 from 12% Interest Rate (Asymmetrical Corridor) 14 (+2/-5) Lending rate changed to 16% & Deposit rate 9% External Reserves (US$ million) 46.46 August 15, 2018 figure — a decrease of 1.30% from August start Oil Price (US$/Barrel) 72.98 August 17, 2018 figure— an increase of 0.87% from the prior week Oil Production mbpd (OPEC) 1.67 July 2018 figure — an increase of 4% from June 2018 figure STOCK MARKET Indicators Friday Friday Change(%) 17/08/18 10/08/18 NSE ASI 35,266.29 35,446.47 (0.51) Market Cap(N’tr) 12.87 12.94 (0.51) Volume (bn) 0.27 0.19 41.08 Value (N’bn) 2.72 2.03 33.94 MONEY MARKET NIBOR Tenor Friday Rate Friday Rate Change (%) (%) (Basis Point) 17/08/18 10/08/18 OBB 7.3300 8.4200 (109) O/N 8.3300 9.2500 (92) CALL 8.1250 8.4000 (28) 30 Days 12.4103 11.1140 130 90 Days 13.2799 12.4048 88 FOREIGN EXCHANGE MARKET Market Friday Friday 1 Month (N/$) (N/$) Rate (N/$) 17/08/18 10/08/18 17/07/18 Official (N) 306.10 306.00 305.80 Inter-Bank (N) 353.77 352.28 347.76 BDC (N) 361.00 360.50 361.00 Parallel (N) 360.00 360.00 360.00 BOND MARKET AVERAGE YIELDS Tenor Friday Friday Change (%) (%) (Basis Point) 17/08/18 10/08/18 3-Year 0.00 0.00 0 5-Year 14.41 13.96 45 7-Year 14.74 14.10 64 10-Year 14.52 14.01 51 20-Year 14.79 14.33 46 Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc. COMMODITIES MARKET Indicators 17/08/18 1-week YTD Change Change (%) (%) Energy Crude Oil $/bbl) 72.98 0.87 13.22 Natural Gas ($/MMBtu) 2.93 (0.68) (4.12) Agriculture Cocoa ($/MT) 2144.00 0.66 10.74 Coffee ($/lb.) 104.75 (1.97) (19.55) Cotton ($/lb.) 81.39 (7.08) 5.02 Sugar ($/lb.) 10.29 (3.65) (32.88) Wheat ($/bu.) 569.75 (2.86) 31.43 Metals Gold ($/t oz.) 1177.12 (2.79) (10.66) Silver ($/t oz.) 14.65 (4.68) (14.78) Copper ($/lb.) 261.15 (4.90) (20.33) NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS Tenor Friday Friday Change (%) (%) (Basis Point) 17/08/18 10/08/18 1 Mnth 10.42 9.89 53 3 Mnths 11.67 11.30 37 6 Mnths 13.05 12.79 26 9 Mnths 12.93 12.71 22 12 Mnths 13.24 12.69 55 ACCESS BANK NIGERIAN GOV’T BOND INDEX Indicators Friday Friday Change (%) (%) (Basis Point) 17/08/18 10/08/18 Index 2,637.04 2,665.95 (1.08) Mkt Cap Gross (N'tr) 8.48 8.57 (1.10) Mkt Cap Net (N'tr) 5.40 5.51 (1.96) YTD return (%) 7.35 8.53 (1.18) YTD return (%)(US $) -48.03 -47.82 TREASURY BILLS (MATURITIES) Tenor Amount Rate (%) Date (N' million) 91 Day 3384.18 10 15-Aug-2018 182 Day 69,565.35 10.4 1-Aug-2018 364 Day 20,000.00 11.22 15-Aug-2018 (0.21) Market Analysis and Outlook: August 17 - August 24, 2018 Global In the US, core consumer inflation accelerated to 2.4% year-on-year (y-o-y) in July, up from 2.3% in June, data released by the Labour Department show. This is the highest in nearly 10 years and suggests that the Federal Reserve will remain on track to increase the policy rate in September. The acceleration in core inflation was mostly driven by steep increases in the rental cost of housing. Meanwhile, headline inflation reached 2.9% y-o-y, similar to June and the highest rate in more than six years. In a separate development, China’s overall trade surplus narrowed to $28 billion in July from $42 billion in June. Imports rose by 27.3% y-o-y, while exports increased by 12.2% y-o-y. Steel product exports dropped by 15% y-o-y in the wake of a 25% tariff introduced by the US. In contrast, aluminium products exports, now subject to a 10% tariff by the US, increased by more than 18%. On balance, imports were up on higher commodity shipments to China. One exception was soybean imports which fell by 26% y-o-y following the introduction of a 25% tariff by China on US soybeans. Elsewhere, in the Eurozone, gross domestic product (GDP) growth for the second quarter (Q2) was revised up as Germany and the Netherlands posted stronger-than-expected growth for the period. The Q2 GDP growth was revised upward to 0.4% quarter-on-quarter from the previous estimate of 0.3%, according to data released by Eurostat, the statistics agency of the European Union (EU). Analysts believe the upward revision to GDP growth in the second quarter will make policymakers at the European Central Bank more confident that they are right to be winding down their asset purchases. Domestic The Central Bank of Nigeria (CBN) and the Bankers’ Committee have agreed to provide single-digit interest rate loans to operators in the manufacturing and agricultural sectors of the economy. These loans are expected to be availed from commercial banks’ cash reserve requirement (CRR) with the apex bank. The CBN Governor had, at the last Monetary Policy Committee meeting held in July announced that the apex bank was working on the modalities for the scheme. Speaking at the end of the meeting, the Director of Banking Supervision stated that these loans are long term loans of seven years with two year moratorium on principal. He further stated that although agriculture and manufacturing are the initial sectors that are being considered, a bank can apply if there is a job-creating sector that the bank is operating in. In a separate development, Nigeria’s annual inflation rate dropped further to 11.14% year-on-year in July 2018. The National Bureau of Statistics (NBS) disclosed this in its Consumer Price Index (CPI) report titled ‘CPI and Inflation Report July 2018’, released last week. The decline is 0.09% points less than the rate recorded inJune 2018 (11.23%) and represents an eighteenth consecutive disinflation in headline inflation year-on-year. Nigeria's inflation rate has continued to decline since February 2017 after reaching more than 12 year-high. According to the report,food index droppedat 12.85% in July 2018 compared to 12.98% in June 2018, representing the tenth consecutive decline in year on year food inflation since September 2017. Meanwhile, core inflation, which excludes the prices of volatile agricultural produce stood at 10.2% in July 2018, down by 0.2% from the rate recorded in June 2018 (10.4%). This represents the 16th consecutive decline in year on year core inflation since March 2017. Stock Market The bearish trend in the local bourse was unrelenting last week as the equities market closed in the red owing to negative sentiment towards large cap stocks across sectors. Accordingly, the All Share Index (ASI) fell 0.51% week-on-week to settle at 35,266.29 points. Market capitalization also contracted N7 billion to close at N12.87 trillion. Investor sentiment remained shaky against the backdrop of a sell-off in emerging markets assets. This week, we expect the bearish performance to be sustained as investors continue to take profit following some less-than-stellar corporate scorecard releases. Money Market Money market rates trended downwards for th the week ended July 17 2018 due to net inflow from Open Market Operations (OMO) of about N300 billion. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates declined to 7.33% and 8.33% from 8.42% and 9.25% respectively the previous week. Longer dated placements witnessed mixed direction. Call rate declined to 8.13% from 8.45, while the 30-day and 90-day NIBOR closed higher at 12.41% and 13.28% from 11.11% and 12.40% the prior week. This week, the liquidity seen in the market is expected to prevail as OMO maturity of N364 billion hits the market next week. Foreign Exchange Market The local currency remained unchanged at the parallel market at N3620/$, same as the previous week. In contrast, at the interbank window and official market, the naira depreciated marginally by 0.42% and 0.03% to close at N353.77/$ and N306.10/$ from previous week. The relative stability of the local currency continues to be supported by the apex bank’s resolve to keep the currency exchange rate stable. This week, we envisage the naira remaining at prevailing levels. Bond Market Last week, average bond yields trended higher largely on account of selloffs from foreign investors, a fallout of the current risk-off sentiment towards emerging markets, owing to the crisis in Turkey . Yields on the five-, seven-, ten- and twenty-year debt papers settled higher at 14.41%, 14.74%, 14.52% and 14.79% from 1 3 . 9 6 % , 1 4 . 1 0 % , 1 4 . 0 1 % a n d 1 4 . 3 3 % respectively the previous week. The Access Bank Bond index fell by 28.92 points to close at 2,637.04 points from 2,665.95 points the previous week. This week we expect that the bearish sentiment in the market will persist as macro fundamentals have not changed. Commodities Oil prices retreated last week after government data showed a jump in stockpiles of US crude. US commercial crude inventories rose by 6.8 million barrels according to an Energy Information Administration report. Oil prices were also weighed down by the ongoing trade dispute between the United States and China which continues to feed concerns that global economic growth will slow and ultimately shrink demand for oil. The OPEC basket of crudes price$2.56, or 4%, to $69.47. In a similar vein, precious metals prices edged lower amid a widespread downdraft in the metals sector, fueled partly by a strengthening US dollar. Gold fell $33.76 or 2.79%, to $1,177.12 an ounce,silver decreased 72 cents to $14.65 per ounce. This week, oil prices are likely to rise buoyed by reports that the US and China are to resume trade talks at the end of the month. For precious metals, prices may nudge higher following the announcement by Turkey’s Central Bank of a series of measures to offer liquidity and cut reserve requirement for banks, in a bid to save lira from its crisis driven by the US sanctions and doubled tariffs on silver and aluminum for 50% and 20% respectively. MONTHLY MACRO ECONOMIC FORECASTS Variables Aug’18 Sept’18 Oct’18 Exchange Rate (Official) (N/$) 346.90 347.02 348 Inflation Rate (%) 9.34 9.00 9.00 Crude Oil Price (US$/Barrel) 76.75 76.00 77.00 Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation. For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com
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