VenturesNow

Nigerian stocks hit 10-month low on Dangote drop, election risk

Published

6 years ago

August 11, 2018

Nigerian stocks hit a 10-month low on Friday, dragged down by losses in the country’s biggest listed firm Dangote Cement and mounting concerns over political risk in the run-up to next year’s presidential election, traders said.

The stock market shed 2.9 percent this week, its biggest weekly fall since June 2018. It fell 2.17 percent on Friday after declining for a fifth straight day.

Dangote Cement is one of the most liquid stocks on the Lagos bourse and accounts for around a third of market capitalisation. The company fell 6.1 percent on Friday, its single biggest drop in more than a year and its lowest level in ten months. The reason was not immediately clear.

Reuters reported on Friday that an oil refinery being built in Nigeria by Aliko Dangote, Africa’s richest man, is unlikely to start production until 2022, two years later than the target date, citing sources with direct knowledge of the matter.

In July, Dangote Cement posted a 1.53 percent decline in pretax profit to 77.1 billion naira for the second quarter.

Analysts at FBNQuest Capital said Dangote Cement’s results were weaker than expected in the second quarter, citing that as a reason for the decline.

President Muhammadu Buhari’s re-election bid has become a contentious issue after a faction of his ruling All Progressives Congress last month said it no longer supported him, triggering a wave of defections to the opposition party.

Nigeria’s security forces temporarily stopped lawmakers entering parliament on Tuesday in a blockade seen by the opposition as a bid to intimidate its leaders. Some analysts said it highlighted the potential for a fractious campaign ahead of February’s presidential election.

“Recent events … have raised the level of political uncertainty and hit market activity. Market turnover declined to a 16-month low on Wednesday,” Vetiva Capital analysts wrote in a note. “We do not anticipate much joy for the market until the political terrain settles.”

Click to comment

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

2 days ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

VenturesNow

Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

4 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.