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CBN sell $1bn forex to clear backlog of demand

*As investors gain N32bn on NSE

By Nkiruka Nnorom

THE Central Bank of Nigeria, CBN, has sold foreign exchange, forex, worth N1 billion on the forward market to clear a backlog of dollar obligations in selected sectors.

Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele

The transaction, according to traders, was the largest special auction since the peg on the naira was removed in June.

This comes as the Financial Reporting Council of Nigeria, FRC, has lifted the suspension placed on the chairman of Stanbic IBTC Holdings Plc, Mr. Atedo Peterside, and three other directors of the bank following amicable resolution of the dispute over the bank’s audited financial statements for 2015.

The other directors affected include Mrs. Sola David Borha, CEO; Dr. Daru Owei, Chairman, Audit Committee; and Mr. Arthur Oginga (erstwhile Chief Financial Officer).

The development has, therefore, enabled them to sign where applicable, the audited financial statement, leading to issue of the 2015 financial statement and accounts.

In a statement to the Nigerian Stock Exchange (NSE) dated December 21, 2016 and signed by the Company Secretary, Chidi Okezie, Stanbic IBTC said following the resolution of the issue, FRC has authorized its external auditors, Messrs. KPMG Professional Services to sign the 2015 audited financial statements. The CBN, according to Reuters report, had told banks to prioritize airlines, manufacturing firms, petroleum products importers and agriculture sectors, the sectors worst hit by the dollar shortage, in the auction.

“The CBN sold $1 billion at last week’s special forex auction and directed banks to issue fresh letters of credit to reflect the amount sold in favour of the affected sectors,” Reuters quoted a senior currency trader as saying.

Traders said the central bank sold 30-day and 60-day forwards at the auction. The CBN had, December 19, instructed banks to submit their backlog of dollar demand from fuel importers, airlines, raw materials and machinery for manufacturing firms and agricultural chemicals for the special forex intervention.

Meanwhile, transactions on the Nigerian Stock Exchange, NSE, remained upbeat yesterday with investors gaining another N32 billion at the close of the day’s session. The market capitalisation of all listed equities rose to N9.215 trillion from N9.183 trillion, representing three percent increase, while the All Share Index, ASI, was up 0.4 percent to close at N26,782.93 points from 26,688.25 points.

Trading statistics from the Exchange showed that performance was positive in all the sectors with the banking and insurnace sector closing recording 0.4 per cent and 2.2 percent returns on the back of positive activity on the shares of Guaranty Trust Bank Plc and Law Union and Rock Insurance and Aiico Insurance Plc respectively. The consumer goods and industrial goods sector closed flat at 697.99 percent and 1,597.38 points respectively, while the oil and gas sector fueled by -9.72 percent decline on Forte Oil Plc recorded 0.5 per cent return.

National Aviation handling Company, NAHCO, Plc led the gainers, rising by 8.96 percent to close at N3.04. Law Union and Rock Insurance Plc trailed behind, rising by 8.82 percent to close at N0.74; Aiico Insurance ranked third with 6.78 percent increase to close at N0.63. Guaranty trust bank Plc went up by 6.77 percent to close at N24.74, while Livestock Feeds Plc closed as the last on the top five gainers’ table, appreciating by five percent to close at N0.84 per share.

On the other hand, Forte Oil led te other 19 losers in the day, declining by 9.72 percent to close at N93.54, followed by Unity Bank Plc, which fell by five percent to close at N0.57.

Champion Breweries Plc was down 4.80 percent to close at N2.38, while Airline Services and Logistics Plc depreciated by 4.71 percent to close at N2.43 per share.


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