Monthly Digest – January 2024

CONTENT

01: SAVINGS

02: FINANCIAL ADVISORY

03: CURRENCY

04: STOCK EXCHANGE

SAVINGS

The Power of Savings: Saving money is a fundamental financial habit that plays a crucial role in securing our financial future. By consistently setting aside a portion of our income, we build a safety net that can help us weather unexpected expenses, achieve our goals, and create a foundation for long-term financial stability.

Introducing Thrift Wise: Thrift Wise is an investment product that embodies the spirit of savings and provides a platform for individuals to grow their financial resources in bits without stress.

 

Benefits of Saving with Thrift Wise:

  1. Interest Earnings: By depositing your savings with Thrift Wise, you can earn competitive interest rates on your funds. This means that your money works for you, gradually increasing over time and helping you achieve your financial objectives faster.
  2. Security and Trust: Thrift Wise prioritizes the security of its customers’ savings. With robust security measures and adherence to regulatory standards, you can trust that your funds are well protected and managed with utmost professionalism.
  3. Financial Education: Thrift Wise goes beyond just being a financial product; it strives to educate its customers about the importance of saving and making sound financial decisions. Through workshops, online resources, and expert guidance, Centrum Finance empower individuals to develop strong financial habits and make informed choices.

Getting Started with Thrift Wise: Opening a savings account with Thrift Wise is a simple and straightforward process. Centrum Finance’s friendly and knowledgeable staff are readily available to guide you through the account setup, answer any questions you may have, and help you select the best savings plan that aligns with your financial goals.

Conclusion: In conclusion, savings are the cornerstone of financial well-being, and Thrift Wise serves as an exemplary product that promotes this essential habit. By saving with Thrift Wise, you can enjoy the benefits of interest earnings, secure your funds, access valuable financial education.

Remember, no matter where you choose to save, cultivating the habit of saving is a powerful step towards achieving financial success. Start your savings journey today and reap the rewards in the years to come.

 FINANCIAL ADVISORY

The Importance of Financial Advisory: Financial advisory services play a crucial role in guiding individuals, businesses, and organizations through complex financial decisions. Whether it’s managing investments, structuring deals, or navigating intricate financial landscapes, expert advice can make a significant difference in achieving desired outcomes.

Introducing Structured Finance: Structured finance is an area of expertise within financial institutions that focuses on designing customized financial solutions for complex transactions. It involves creating innovative and tailored strategies to optimize financing, manage risks, and achieve specific financial objectives.

Benefits of Financial Advisory:

  1. Customized Solutions: Structured finance advisory provides personalized solutions that are designed to meet the unique needs and objectives of clients. With a deep understanding of financial markets and innovative structuring techniques, advisors can tailor financial solutions that align with specific requirements.
  2. Risk Mitigation: Structured finance advisors employ advanced risk management techniques to identify, assess, and mitigate potential risks associated with complex financial transactions. By carefully analyzing the inherent risks, they help clients make informed decisions and develop risk management strategies that safeguard their financial interests.
  3. Optimized Financing: Through structured finance advisory, clients can optimize their financing strategies by exploring alternative sources of funding and structuring transactions in a manner that maximizes cost-efficiency and flexibility. Expertise in structured finance allows clients to access innovative financing solutions that might otherwise be challenging to navigate independently.
  4. Market Insights and Expertise: Financial advisors possess extensive market knowledge and expertise. They continuously monitor market trends, regulatory changes, and industry developments, providing clients with valuable insights to make informed decisions and stay ahead in an ever-evolving financial landscape.
  5. Getting Started with Structured Finance Advisory: If you are seeking specialized financial guidance or contemplating complex financial transactions, engaging the services of a structured finance advisor can help. Experienced advisors will assess your unique requirements, provide comprehensive analysis, and guide you through the intricacies of structuring transactions to achieve your financial goals.

Conclusion: In conclusion, financial advisory services, particularly in the realm of structured finance, are indispensable in navigating complex financial landscapes. Structured finance advisory provides customized solutions, mitigates risks, optimizes financing strategies, and leverages market insights and expertise to help clients achieve their financial objectives.

CURRENCY:

Naira depreciates by 37.6% at official market in January 2024.

 

The exchange rate between the naira and dollar closed the month of January at N1,455.59 representing a whopping 37.6% depreciation in one month.

According to Nairametrics data, the exchange rate closed at the end of December 2023 at a rate of N907.1/$1.

At the black market, the exchange also depreciated going from N1215 to N1470 to the dollar representing a 17.3% depreciation month to date.

Nigerians have had to grapple with a month-long depreciation of the naira as demand continued to outpace supply across markets.

The recent fall in the official exchange rate began on December 8th, 2023, when it first crossed the N1000/$1 barrier closing at N1099.5/$1. It appreciated afterward and then plunged again to N1,043 on December 28th. By January 9th, it fell it an all-time low of N1,089.51/$1 closer to the black-market rate of N1,245/$1.

It traded below the N1000/$1 price for the next 12 days until it fell to another all-time low of N1,348.62/$1 on the 29th of January.

CBN Forex Policy Actions

The Central Bank of Nigeria (CBN) has been actively addressing issues of foreign currency speculation and hoarding by Nigerian banks. A new circular introduced guidelines aimed at reducing the risks associated with these practices, noting that some commercial banks hold long-term positions in forex with the hope of profiting from currency depreciation​.

  • The Governor of the Central Bank, Mr. Yemi Cardoso, also recently stated that the naira is undervalued and promised to work towards real price discovery in the foreign exchange market in 2024.
  • The CBN plans to implement inflation-taming policies and collaborate with the Ministry of Finance to stabilize the exchange rate and curb inflation​.
  • These developments reflect the complexities and challenges in Nigeria’s foreign exchange market, with implications for businesses, individuals, and the broader economy.

Sources with knowledge of the exchange rate opine the depreciation on the official market is part of the apex bank’s attempt to allow the official rate to trade at par with the black market thus eliminating the disparity.

  • It is expected that this could allow most of the forex supplies in the black market to flow into the official market thus paving the way for stability.
  • Despite these moves, the major challenge faced by the country remains influx of foreign portfolio investments which many see as the final piece in the puzzle.
  • However, doing this will require that the central bank increase its benchmark lending rate which is currently at 18.75%.

The intent of the CBN is to raise rates to fall in line with Nigeria’s headline inflation rate.

STOCK EXCHANGE.

Equity Market cap nears 60tn.

 

In recent news, the market capitalisation of the Nigerian Exchange gained about N1.24tn at the end of Monday’s trading to close at N57.28tn, bringing it closer to the historic N60tn mark.

That was as the market value of Dangote Cement rose by 9.93 per cent to hit N13tn from N11.8tn at the close of trading on Friday. Also, Dangote Sugar Refinery Plc joined the ranks of companies worth N1tn as its share rose to N82.65.

The benchmark index of the exchange, All-Share Index went up by 2.22 per cent to close at 104,674.67 points. The year-to-date gains also improved to 39.99 per cent. Market breadth, which is the measure of investors’ sentiment, was negative compared to the previous day’s market breadth, as reflected in 25 gainers and 39 losers.

Oando led the gainers, appreciating 9.96 per cent to close at N13.80, Dangote Cement was up 9.93 per cent to close at N763 and Tripple G added 9.89 per cent to close at N3.11. Inversely, Daar Communications and Ikeja Hotel shed 10 per cent each to close at N0.81 and N6.75, respectively, to top the losers’ table. Cadbury, which recorded a N27bn loss in the 2023 financial year, depreciated by 9.80 per cent to close at N20.70 and the NPF Microfinance Bank lost 8.88 per cent to close at N1.95.

The volume and value drivers of the day’s market trend were led by Japaul Gold, Dangote Cement, Transcorp, United Bank for Africa, Zenith Bank and Guaranty Trust Holding Company Plc. At the close of trading, the transaction volume stood at 683.93 million, which was higher compared to 519.39 million traded the previous day.

The value of trade was N25.93bn from the 15,887 deals executed. Analysts have projected that the bullish run in the market would be sustained in the new week as the market eagerly awaits more corporate earnings releases.

However, there may be a possibility of profit-taking as investors engage in sectoral rotation, capitalising on stocks that experience pullbacks to position themselves strategically.

SOURCES: centrumfinanceltd.com, nairametrics, punchng.com

DISCLAIMER

This publication is produced by Centrum Finance solely for the information of users who are expected to make their own investment decisions without undue reliance on any information or opinions contained herein. The opinions contained in the report should not be interpreted as an offer to sell, or a solicitation of any offer to buy any investment. Whilst every care has been taken in preparing this document, no responsibility or liability is accepted by any member of the Company for actions taken because of the information provided in this publication.

 

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