- Tier-one banks shed weight as NGX All-Share Index gains 0.30%
The Senate on Wednesday grilled nominees for membership of the Central Bank of Nigeria’s Monetary Policy Committee over the forex crisis and unending food crisis.
President Bola Tinubu had, last week, forwarded to the Senate for confirmation, the names of nominees for the committee of the CBN.
In giving the request expeditious consideration ahead of the MPC meeting slated for next Monday, February 26, the Senate, through its Committee on Banking, Insurance, and Other Financial Institutions, grilled six out of the nominees with questions on required urgent solutions to forex volatility and food crisis.
The first to be grilled was the Director-General of the Securities and Exchange Commission, Lamido Yuguda, who informed the committee that his nomination into MPC would give the SEC the needed voice in monetary policy.
Yuguda lamented that the value of the Naira as it is today, is not real, having lost its intrinsic value but that the MPC, when inaugurated on Monday, would join other stakeholders to stabilise the national currency.
He said, “The value of any currency is measured by the goods and services that it can buy. The Naira, as it is today, does not possess that value sufficiently which is being critically looked into.”
In his submission, the nominee from Lagos State, Dr. Mustapha Akinkunmi, said the way out now is to target the exchange rate and not inflation as currently being tackled which hasn’t yielded so much result.
He said, “A more proactive way of addressing the Naira volatility problem at hand is for the CBN to target the exchange rate itself and not inflation.
“The inflation the country is facing now is largely that of food inflation, which is beyond CBN but for the entire country.
“Production and distribution of food commodities across the country would help to reduce the food inflation, while the aggressive target of the exchange rate would help to stabilise the Naira with the required increase in productivity.”
In a similar submission, the nominee from Imo State, Mrs. Aku Odinkemelu, said productivity is the key to arresting the volatility of the Naira and food inflation.
Other nominees grilled at the session by the committee were Prof. Murtala Sagagi, Kano State; Bamidele Amoo, Kwara State; and Aloysius Ordu, who worked with the World Bank and the African Development Bank for 30 years at different times.
In his closing remarks, the committee’s chairman, Senator Tokunbo Abiru (APC, Lagos East), told the nominees that their screening was done ahead of the MPC meeting slated for next Monday by the CBN.
Abiru said what Nigerians expect to come after the meeting is solutions to the rising inflation rate, worsening Naira volatility in the forex market and the general rejuvenation of the economy.
Tier-one banks shed weight as NGX All-Share Index gains 0.30%
Meanwhile, tier-one banks, Zenith, Access Corporation Plc and GTCO Plc recorded losses on Wednesday as the equities market staged a comeback from the previous session’s loss, recording a gain of 0.30 percent.
The Lagos bourse posted gains as the benchmark index rose by 0.30 percent to close at 101,362.38 points.
Gains in BUACEMENT (+4.93%), UBA (+0.21%), and FBNH (+9.96%) outweighed losses in ZENITHBANK (-0.42%), GTCO (-0.77%), and ACCESSCORP (-2.70%), keeping the market in the green.
The ASI year-to-date return rose to 35.56 percent, while market capitalization gained N165.09 billion to close at N55.46 trillion.
Analysis of Wednesday’s market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 1.15 percent.
A total of 302.74 million shares valued at N6.55 billion were exchanged in 8,611 deals. FBNH (+9.96%) led both the volume and value chart with 39.38 million units traded in deals worth N1.10 trillion
Market breadth closed negative at a 4.20-to-1 ratio with declining issues outnumbering the advancing ones. OKOMUOIL (-10.00%) topped forty-one (41) others on the laggard’s table while FBNH (+9.96%) led nine (9) others on the leader’s log.
The naira appreciated by 0.6 percent to N1, 542.58/$ at the Nigerian Autonomous Foreign Exchange Market.
At the money and fixed income market, the overnight lending rate expanded by 148bps to 25.4 percent, following the debits for Monday’s FGN bond auction (N1.49 trillion).
Sentiments in the NTB secondary market were bullish, as the average yield declined marginally by 1bp to 15.4 percent.
Across the curve, the average yield closed flat at the short end but contracted at the mid (-1bp) and long (-1bp) segments, due to buying interest in the 169DTM (-1bp) and 351DTM (-1bp) bills, respectively.
In the same vein, the average yield pared by 1bp to 17.8 percent in the OMO segment.
Meanwhile, the FGN bond secondary market closed on a bearish note, as the average yield expanded by 19bps to 16.4 percent.
Across the benchmark curve, the average yield advanced at the short (+22bps), mid (+26bps) and long (+15bps) segments as participants sold off the APR-2029 (+131bps), JUL-2030 (+76bps) and MAR-2036 (+153bps) bonds, respectively.