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Facebook shares slip on report of widened probe on data scandal

By News Desk, with Agency Report,

Shares of Facebook Inc fell more than 1 percent in premarket trade on Tuesday, after a report said that a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.

Facebook faced intense scrutiny from the embarrassing scandal that affected millions of users whose data was improperly accessed by the political consultancy.

The Federal Bureau of Investigation, the Securities and Exchange Commission and the Federal Trade Commission have joined the Department of Justice in its inquiries about the two companies and the sharing of personal information of 71 million Americans, the Washington Post reported citing five people.

A Facebook spokesperson told Reuters on late Monday that it is cooperating with officials in the U.S., UK and beyond.

“We’ve provided public testimony, answered questions, and pledged to continue our assistance as their work continues,” the spokesperson said.

The emphasis has been on Facebook’s sharing of information square with the underlying facts and whether the company made sufficiently complete and timely disclosures to the public and investors, according to the Washington Post.

Facebook shares were down 1.4 percent at $194.64 in premarket trading on the Nasdaq.

The stock lost about 18 percent of its value in the seven trading days after the data scandal broke, but has since gained about 30 percent.

Xiaomi raises $4.72 billion after pricing HK IPO at bottom of range

By Business Desk,

China’s Xiaomi Corp priced its Hong Kong initial public offering (IPO) at the bottom of an indicative range, raising $4.72 billion in the world’s biggest tech float in four years, people close to the transaction said on Friday.

That values the firm at about $54 billion, almost half the valuation industry insiders touted at the beginning of the year.

The pricing comes at a delicate time for Hong Kong’s stock market, with the benchmark Hang Seng index falling 6.5 percent this month and 4.8 percent this year as investors fret over escalating trade tension between the United States and China.

As such, Xiaomi’s share sale is widely seen as a test of market sentiment for what is expected to be a packed second-half of the year for Hong Kong IPOs, with offerings including online food delivery-to-ticketing services platform Meituan Dianping.

China Tower, the world’s largest mobile mast operator, has won approval for a Hong Kong IPO that could raise up to $10 billion. However, its listing timing will depend somewhat on how well Xiaomi’s deal is received, sources have told Reuters.

“Xiaomi’s pricing won’t be good news for market sentiment,” said Hong Hao, chief strategist at BOCOM International. “But other IPO candidates will still flock to the market to list before market conditions become more challenging.”

Xiaomi is selling about 2.18 billion shares at HK$17 each ($2.17), the bottom of a price range of HK$17 to HK$22, two of the people said. That makes the IPO the largest in the technology sector since Alibaba Group Holding Ltd (BABA.N) raised $25 billion in New York in 2014.

Xiaomi declined to comment. The people declined to be identified as the information was not public.

The HK$17 price represents a multiple of 39.6 times 2018 earnings and 22.7 times Xiaomi’s 2019 earnings forecast by its underwriting syndicate. At present, rival Apple Inc (AAPL.O) is trading at 17 times trailing earnings and 14 times forward earnings, showed Thomson Reuters data.

“I’m not surprised at all by its pricing at the bottom,” said Hong. “It claims to be a hardware plus internet services company, but the majority of its revenues come from the smartphone business. It’s still way more expensive than Apple on a price-earnings basis.”

Xiaomi’s price values the firm at $53.9 billion before the exercise of a “greenshoe” or over-allotment option, whereby additional shares are sold depending on demand.

The valuation is far below the $100 billion touted by sources earlier this year as well as the more recent $70 billion-plus target that some analysts and investors saw as aggressive. Xiaomi was valued at $46 billion in its last fundraising in 2014.

Xiaomi’s IPO adds to the $6 billion of new listings so far in 2018 in Hong Kong and is set to be the first under the city’s new exchange rules permitting dual-class shares common in the tech industry in an attempt to attract tech floats.

It was initially expected to raise up to $10 billion, split between Hong Kong and mainland China, but last week shelved the mainland offering until after listing in Hong Kong. Cornerstone investors included U.S. chipmaker Qualcomm Inc (QCOM.O) and telecom service provider China Mobile Ltd.

Set up in 2010, Xiaomi doubled its smartphone shipments in 2017 to become the world’s fourth-largest maker, according to Counterpoint Research, defying a global slowdown in handset sales. It also makes internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers.

Beijing-based, Cayman-domiciled Xiaomi is due to start trading in Hong Kong on July 9.

NSE list Dangote Cement as top gainer, market indices rebounds by 0.34%

By Business Desk,

The Nigerian Stock Exchange (NSE) performance has improved after Dangote Cement top gainer list, ending six-consecutive days downward movement with important market indices appreciating by 0.34 per cent.

On the latest development, All-Share Index rebounded by 129.59 points or 0.34 per cent to close at 37,992.12, against the 37,862.53 recorded on Friday.

Moreover, market capitalisation increased by N47 billion or 0.34 per cent to close at N13.762 trillion, compared with N13.715 trillion achieved on Friday, while  momentum was lifted by Dangote Cement which led the gainers’ table with N5, to close at N230 per share.

However, Cement Company of North of Nigeria followed with a gain of N1.20 to close at N25.95, while Guaranty Trust Bank added 35k to close at N41.05 per share, while Stanbic IBTC improved by 25k to close at N49, while Unilever also appreciated by 25k to close at N51 per share.

Conversely, Seplat topped the losers’ chart for the day, dropping by N34.20 to close at N650.80 per share.

Nestle trailed with a loss of N5 to close at N1, 490 while CAP dipped N1.80 to close at N35 per share.

Lafarge Africa was down by 90k to close at N38.10, while Guinness depreciated by 50k to close at N97 per share.

Also, the market volume and value appreciated by 83.83 per cent and 139.16 per cent, respectively.

Specifically, investors bought and sold 307.41 million shares valued at N3.42 billion, transacted in 3,822 deals.

This was in contrast with a turnover of 167.23 million shares worth N1.43 billion traded in 3,847 deals on Friday.

United Bank for Africa dominated trading activities, accounting for 43.71 million shares valued at N459.24 million.

Honey Well Flour came second with an account of 16.89 million shares valued at N34.23 million, while Zenith International Bank traded 16.19 million shares worth N418.66 million.

FBN Holdings sold 12.56 million shares valued at N133.72 million, while Sterling Bank exchanged 11.29 million shares worth N15.39 million.

China cuts banks’ reserve requirements to boost lending, as trade war looms

By News Desk, with Agency Report,

China’s central bank said on Sunday it would cut the amount of cash that some banks must hold as reserves by 50 basis points (bps), releasing $108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.

The reserve reduction, the third by the central bank this year, had been widely anticipated by investors amid concerns over market liquidity and a potential economic drag from a trade dispute with the United States.

But the 700 billion yuan ($107.65 billion) in liquidity that the central bank said will result from the reduction in reserves was bigger than expected.

Expectations of a cut had risen after the State Council, or cabinet, said on Wednesday monetary policy tools including targeted cuts in banks’ reserve requirement ratios will be deployed to strengthen credit flows to small firms and keep economic growth in a reasonable range.

Economists are not ruling out further reserve requirement reductions for the rest of the year as borrowing costs rise due to Beijing’s clamp-down on leverage in the financial system, a campaign now in its third year, while uncertainty over Sino-U.S. trade ties persists.

The People’s Bank of China (PBOC) said on Sunday that the latest targeted cut in some banks’ reserve requirement ratios (RRRs) – currently 16 percent for large banks and 14 percent for smaller banks – will take effect on July 5.

The PBOC said the cut will release about 500 billion yuan ($77 billion) for the country’s five large state banks and 12 national joint-stock commercial banks. Lenders are encouraged to use the money to conduct debt-for-equity swaps.

China’s policymakers have been pushing for debt-for-equity swaps since late 2016 to ease pressure on firms struggling with their debts.

The country’s top banks, controlled by the government, have rushed to sign deals with state-owned enterprises to ease their debt burden and give them time to turn around their business and improve their creditworthiness.

The latest RRR cuts will also release about 200 billion yuan in funding for mid-sized and small banks to increase lending to credit-strapped small businesses, the PBOC said.

The combined 700 billion yuan liquidity injection exceeded market expectations of 400 billion yuan. In the PBOC’s last targeted RRR cut in April, 400 billion yuan of net liquidity was released.

“The intensity of the move exceeded market expectations,” said Wang Jun, Beijing-based chief economist at Zhongyuan Bank.

“This move will help support the real economy and stabilize financial markets. We’ve seen rising debt defaults and funding strains on small firms, as well as a sharp adjustment in the capital market.”

But the latest reserve cut signals a “policy fine-tuning,” not a policy reversal, Wang said.

The central bank said on Sunday it will keep monetary policy prudent and neutral.

Sunday’s announcement followed the worst weekly loss in the Chinese stock market since early February as fears of a full-blown trade war with the United States weighed.

The Chinese yuan on Friday also fell to its lowest versus the dollar in more than five months, though it has remained firm against a basket of trading partners’ currencies, and a sharp depreciation is not in the cards.

TRADE WAR

The latest RRR cut is set to take effect a day before the United States and China are expected to begin collecting increased tariffs on respective lists of goods.

Fears of a full-scale trade war with Washington have magnified concerns about the outlook for the world’s second-largest economy, following weaker-than-expected Chinese growth data for May and as Beijing’s financial regulatory crackdown starts to weigh on business activity.

Net exports overall were already a drag on growth in the first quarter after giving an added boost to the Chinese economy last year, highlighting the need for sustained strength in domestic demand if significant new U.S. tariffs are imposed.

Beijing is also likely to backtrack on efforts to reduce its reliance on debt if the dispute escalates into an all-out trade war, some economists say.

Beijing’s financial risk clamp-down has already slowly pushed up borrowing costs, and is restricting alternative, murkier funding sources for companies such as shadow banking.

Strained liquidity conditions have caused a growing number of credit defaults with private companies facing mounting refinancing risks. Latest official surveys also showed tight funding has hit smaller manufacturers.

The weighted average lending rate for non-financial firms, a key indicator reflecting corporate funding costs, rose 22 basis points in the first quarter to 5.96 percent, PBOC data showed. That compared with a total of 47 basis points in 2017.

Policymakers have been trying to strike a delicate balance between the need for tougher supervision and reforms and ensuring the stability of the financial system, while keeping economic growth on track.

ANZ Research said on Sunday that it still expects another 50 bps RRR cut in October.

Economists still expect China’s economic growth to slow to 6.5 percent this year from 6.9 percent in 2017, citing rising borrowing costs, tougher limits on industrial pollution and an ongoing crackdown on local governments’ spending to keep their debt levels in check.

($1 = 6.5027 Chinese yuan renminbi)

NSE lists Dangote Cement,Unilever as top losers

By Business Desk,

The Nigerian Stock Exchange (NSE) has listed Dangote Cement as its top losers’ on chart with a loss of N5.30 to close at N225 per share, with Unilever trailing the thread with a loss of N2.25 to close at N50.75, while Forte Oil dropped by N1.75 to close at N34.05 per share.

Besides, Nigerian Breweries was down by N1.50 to close at N110.50, while Lafarge Africa Wapco shed N1 to close at N39 per share.

Conversely, Okomu Oil Palm recorded the highest gain to lead the gainers’ table, increasing by N4 to close at N94.20 per share.

Cement Company of Northern gain of 75k to close at N24.75, while Guaranty Trust Bank advanced by 65k to close at N40.70 per share.

Zenith International Bank added 20k to close at N25.90, while NEM Insurance improved by 14k to close at N3.04 per share.

The volume of shares transacted dropped by 38.38 per cent, while the value of shares declined by 65.12 per cent.

Consequently, a total of 167.23 million shares worth N1.43 billion were traded by investors in 3,847 deals.

This was against 271.40 million shares valued at N4.10 billion achieved in 3,766 deals on Thursday.
Fidelity Bank was the most active stock for the day, trading 26.63 million shares worth N60.58 million.

Honey Well Flour Mills traded 19.35 million shares valued at N41.56 million, while United Capital sold 15.58 million shares worth N49.79 million.

FBN Holdings exchanged 10.56 million shares valued at N112.42 million, while NEM Insurance traded 9.33 million shares valued at N27.93 million.

Meanwhile, trading activities at the  Exchange  maintained a negative trend on Friday as crucial indicators of the performance of the capital market declined further.

For instance, the all-share index lost 290.07 points or 0.76 per cent to close at 37,862.53 compared with 38,152.60 recorded on Thursday, while volume of shares traded and value declined by 38.38 per cent and 65.12 per cent, respectively.

Similarly, the market capitalisation shed N105 billion or 0.76 per cent to close at N13.715 trillion in contrast with N13.820 trillion achieved on Thursday due to losses.

The market had remained in red throughout the week due to liquidity challenge and profit taking on blue chips.

BDC lobbies for supplus Yuan disbursement

By NewsDesk,

The Association of Bureaux De Change Operators of Nigeria (ABCON) has urged Central Bank of Nigeria to approve Renminbi (Yuan) disbursements to its members so as to deepen China-Nigeria Swap deal.

However, the President, ABCON, Aminu Gwadabe, said that approval of their request would enable BDCs sell Personal and Business Travelling Allowances to its customers in Yuan.

Speaking on need for the apex bank to look into the disbursement, Gwadabe stated that the sale of BTAs and PTAs to China bound businessmen will make them get used to the authentic features of the Yuan to avoid being issued fake currencies for transactions.

The ABCON chief applauded the CBN for taking proactive measures in prosecuting the deal and the stability of the Naira at the nation’s foreign exchange market.

Gwadabe noted that the swap deal and its full implementation would continue to shore up the value of the naira as pressures hitherto put on it by the dollar would be reduced.

NAN reports that the CBN sealed about N720 billion deal with the Peoples Bank of China in a move that would facilitate trade between both countries and maintain financial market stability, among others.

The CBN noted that the 41 items earlier banned on June 23, 2015 remained banned under the new deal.

The apex bank also disclosed at the end of the Bankers Committee Meeting that it would give incentives to Nigerians who import goods from China.

The committee agreed that importers of Chinese goods would be encouraged to bring invoices in Renminbi.

Since the Chinese Yuan joined the International Monetary Fund (IMF) basket of currencies in 2016, it was fast gaining recognition by both European and African Central Banks to be used in their foreign reserves.

Stock Exchange delists Vono, Ashaka Cement, others

By Business Desk

The Nigerian Stock Exchange (NSE) expelled no fewer than 22 companies between 2016 and 2017 over non-performance and failure to meet the required post-quotation standards.

Data obtained by from the exchange showed that the delisted companies included Cappa and D’Alberto, Intercontinental Bank Preference shares, IPWA, G Cappa and West African Glass Industries.

Others were Investment & Allied Insurance, Alumaco, Jos International Breweries, Adswitch, Rokanna, Vono Products, Lennards Nigeria, P.S. Mandrides & Company, Premier Breweries, Costain, Navitus Energy, Nigerian Ropes, Beco Petroleum, M Tech Communication, MTI, UTC and Ashaka Cement.

However, Seven-Up Bottling Company, African Paints and Afrik Pharmaceuticals were delisted in 2018.

Delisting is the process of removing a company from the official list of the stock either voluntarily or by compulsion.

It was revealed that under a voluntary delisting window (which seldom happens), a quoted company can decide to delist from the exchange due to reasons such as merger/acquisition.

On the other hand, the NSE can compulsorily delist a firm when it fails to meet up with post-quotation standards.

The exchange, however, listed only five new companies: The Initiatives, in 2016, while Transcorp Hotels, Global Spectrum Energy Service, Jaiz Bank and Med-View Airline were listed in 2017.

Oscar Onyema, Chief Executive Officer, NSE, said recently that companies in their life cycle would be listed, while others would be delisted over time.

Onyema said the development was the reality that exchanges around the world experienced.

“Companies will delist for different reasons from voluntary to regulatory delisting, mergers and acquisitions and other things that would cause them to delist.

“Our job is to make sure that we make it easy for companies to come in and if they want to leave, that they leave in an orderly manner.

“So, what we have tried to do with our listing rules in the last one to two years is that we have tried to enhance the rules to ensure that companies behave in an orderly fashion,” Onyema said.

Speaking on the issue, Prof. Sheriffdeen Tella of the Economics department, Olabisi Onabanjo University Ago-Iwoye, Ogun, told NAN that the development was due to the economic situation.

Tella said the Nigerian economy had not performed creditably in the last three years. “The economy entered recession in 2015 and started coming out sluggishly towards the end of 2017.

“A depressed economy cannot encourage investments, either direct investment or portfolio investment, which has to do with the stock market activities.

“So, potential new entrants into the stock market were not encouraged to get listed on the market by the state of the economy,” Tella said.

He explained that those that were delisted were companies that either withdrew voluntarily or were removed by market regulators for non-performing, noting that they were all products of recession.

Sola Oni, Stockbroker and CEO, Sofunix Investment and Communications, said the stock market was a barometer that gauges the mood of the economy.

Oni explained that companies had suffered untold hardship during the recession as production costs shot up and the purchasing power of investors dwindled.

According to him, raising fresh capital requires investors’ willingness to buy shares, and that quoted companies had to exercise caution in order not to risk under-subscription.

Oni, however, expressed optimism that the market would pick up going by the positive economic indicators.

“There is light at the end of the tunnel as economic variables are showing positive signals.

“Some quoted companies had successfully floated rights issues and more will follow suit as recession has ebbed away and investors’ hope is on the upbeat,” Oni said.

NSE records trading resumption on 0.45% growth

By Business Desk,

The Nigerian Stock Exchange (NSE) has opened trading on a positive note on Monday with crucial market indices appreciating following gains by large and medium-size stocks.

The All-Share Index, within about six hours of trading on Monday, rose by 175.09 points or 0.45 per cent to close at 38,844.32 compared with 38,669.23 achieved on Friday.

Market capitalisation increased by N64 billion or 0.46 per cent to close at N14.071 trillion against N14.007 trillion recorded on Friday.

Presco led the gainers’ table, gaining N3.35 to close at N73.70 per share.
Nascon followed with a gain of N1.60 to close at N24, while Nigerian Breweries gained N1 to close at N118 per share.

Flour Mills added 60k to close at N33, while Guaranty Trust Bank gained 45k to close at N41.60 per share.
On the other hand, Lafarge Africa posted the highest price loss to lead the laggards’ table with a loss of 75k to close at N39.05 per share.

Berger Paint trailed with 45k to close at N8.55, while Eterna Oil depreciated by 31k to N6.25 per share.
BOC Gases declined by 22k to close at N4.21, while Ikeja Hotel lost 10k to close at N2.53 per share.

The volume of shares traded closed higher with a growth of 187.18 per cent.

Consequently, investors bought and sold 603.17 million shares worth N3.89 billion transacted in 3,832 deals.

This was in contrast with 210.03 million shares valued at N3.89 billion exchanged in 4,141 deals on Friday.

A breakdown of the activity chart shows that Ikeja Hotel dominated trading activities with 279.64 million shares worth N704.99 million.
U,nited Capital Plc followed with an account of 79.128 million shares valued at N253.965 million, while Africa Prudential sold 56.77 million shares worth N242.91 million.

Dangote Sugar exchanged 32.52 million shares valued at N641.92 million, while Access Bank traded 22.345 million shares worth N241.05 million.

Naira drops by 50 kobo hrs after CBN review exchange rate

By NewsDesk,

Naira has dropped from market by lost 50 kobo, hours after the Central Bank of Nigeria (CBN) reviewed  exchange rate of the Naira against Dollar at parallel market,

However, from the market table, Naira was sold at N360.5 to a dollar at parallel market in Lagos on Tuesday, while Pound Sterling and the Euro closed at N490 and N425, respectively.

At the Bureau De Change Window (BDC), the Naira was sold at N360 to a dollar while Pound Sterling and the Euro closed at N490 and N425, respectively.

The paper bill exchanged at N360.78 to a dollar at the investors’ window, while it closed at N306 at the CBN window.

On the development, currency traders expressed shock as the exchange rate flattened to N360 to the dollar on Monday and BDCs had boycotted the CBN window when they were selling at a loss for many months prior to the rate review on Monday.

Shares down five days consecutively, N299 billion loss

By NewsDesk,

Capital market has for five days consecutively closed on Nigerian Stock Exchange (NSE) negatively, dipping further by N145 billion and recording a loss of N299 billion in two days.

The loss closed record on Friday, while on Thursday, the exchange pared its stock value by N154 billion, with market capitalization closing at N14.389 trillion.

The free fall continued on Friday, with the market capitalisation shedding N145 billion or 1.01 per cent to close lower at N14.244 trillion.

Similarly, the All-Share Index which opened at 39,723.85 lost 400.23 points or 1.01 per cent to close at 39,323.62 following pride loses.

A breakdown of the price movement table shows that Guinness topped the losers’ chart for the day, shedding N4 to close at N100 per share.
Flour Mills Nigeria trailed with a loss of N1.50 to close at N49, Julius Berger was down by N1.45 to close at N27.55 per share, while Glaxosmithkline depreciated by N1.02 to close at N20.50 per share.

Commenting on the persistent market drop, Mr Ambrose Omordion , the Chief Operating Officer, InvestData Ltd, attributed the development to the exit of foreign portfolio investors.

Omordion said foreign portfolio investors were offloading and running for safety as “political risks” surrounding the 2019 general elections were beginning to play out.

He said investors at the moment had two options of investing for long-term or to sell down in order to cut the huge losses to invest back when eventually the market rebounded.

On the other hand, MRS led the gainers’ table, gaining N1.70 to close at N36.05 per share.
UACN followed with a gain of 55k to close at N15.05, while Fidson Healthcare gained 25k to close at N5.95 per share.

Ikeja Hotel added 23k to close at N2.58, while Sterling Bank increased by 6k to close at N1. 35 per share.

On a bright note, FCMB group recorded the highest volume of activities during the day, trading 44.016 million shares worth N98.29 million.

The financial service sector remained the most active with Zenith International Bank emerging the toast of investors, accounting for 22.21 million shares valued at N590.59 million.

United Bank for Africa sold 21.43 million shares worth N228.17 million, while Regency Alliance Insurance traded 20.81 million shares valued at N5.41 million.

FBN Holdings trailed with an exchange 19.99 million shares worth N194.09 million.
In all, investors bought and sold 295.99 million shares valued at N2.95 billion achieved in 4,911 deals against the 256.43 million shares worth N2 billion transacted in 4,111 deals on Thursday.