Business
Nigerian Stocks Sustain Rally On Exim Bank Loan
Nigerian Stocks rose on Friday for the sixth day, the longest rally in five months, following a report that the U.S. Export-Import Bank approved a $1 billion loan supporting guarantees to 14 lenders bailed out by the Central Bank of Nigeria (CBN) in 2009.
The Nigerian Stock Exchange’s All-Share Index added as much as 1.8 percent, the most since October 5, to 21, 861.56 and was up 1.7 per cent, Bloomberg data show.
Gains were led by First Bank of Nigeria Plc, the nation’s biggest lender, Zenith Bank Plc, Oceanic Bank Plc and Stanbic IBTC Plc. The NSE’s Banking Index advanced for an eighth day, its best rally since May, last year.
The West African nation’s main index was the world’s second worst performer after Ghana’s last year, dropping 34 percent mainly on concern that bad debt at Nigerian banks had grown.
New York-based Eurasia Group estimated in May 2009 that the lenders has as much as N1 trillion ($6.8 billion) of toxic assets. A Central Bank audit of the industry resulted in N620 billion being injected into banks to cover bad debts in August and September last year.
The U.S. Exim Bank approved the loan based on policy changes undertaken by the Central Bank to overhaul the country’s financial system.
The Central Bank will guarantee all interbank borrowings until the end of this year, Governor Sanusi Lamido Sanusi said last week.
Sanusi expects Nigeria’s parliament to approve, in about three weeks, the creation of an asset-management company that will buy bad debts from commercial banks.
“We take comfort that the guarantee is for all the banks including the healthy banks and therefore gives no undue liquidity/funding advantage to any one group of banks, until, we suspect, audited accounts are published”, Brent Malahay, a Johannesburg-based analyst at J.P Morgan Securities Inc. wrote.
Investor Mark Mobins said Nigerian stocks have good valuations, with “nice opportunities in banks that have regional exposure”.
“Most interesting for us in Nigeria are the banks” Mobins, executive chairman of Templeton Asset Management Limited, which manages more than $30 billion in emerging-market assets, said in a phone interview from Singapore.
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Blue Economy: Minister Seeks Lifeline In Blue Bond Amid Budget Squeeze

Ministry of Marine and Blue Economy is seeking new funding to implement its ambitious 10-year policy, with officials acknowledging that public funding is insufficient for the scale of transformation envisioned.
Adegboyega Oyetola, said finance is the “lever that will attract long-term and progressive capital critical” and determine whether the ministry’s goals take off.
“Resources we currently receive from the national budget are grossly inadequate compared to the enormous responsibility before the ministry and sector,” he warned.
He described public funding not as charity but as “seed capital” that would unlock private investment adding that without it, Nigeria risks falling behind its neighbours while billions of naira continue to leak abroad through freight payments on foreign vessels.
He said “We have N24.6 trillion in pension assets, with 5 percent set aside for sustainability, including blue and green bonds,” he told stakeholders. “Each time green bonds have been issued, they have been oversubscribed. The money is there. The question is, how do you then get this money?”
The NGX reckons that once incorporated into the national budget, the Debt Management Office could issue the bonds, attracting both domestic pension funds and international investors.
Yet even as officials push for creative financing, Oloruntola stressed that the first step remains legislative.
“Even the most innovative financial tools and private investments require a solid public funding base to thrive.
It would be noted that with government funding inadequate, the ministry and capital market operators see bonds as alternative financing.
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