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Nigerian Bourse Closes Bearish On Profit Taking

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Activities on the Nigerian Stock Exchange (NSE) closed bearish on Thursday with the market capitalisation losing N91 billion due to profit-taking on banking stocks.

Specifically, the market capitalisation which opened at N18.19 trillion shed N91 billion or 0.50 per cent to close at N18.10 trillion.

Also, the All-Share Index dipped 174.36 points or 0.50 per cent to close at 34,643.65 from 34,818.01 recorded on Wednesday.

Accordingly, the Month-to-Date and Year-to-Date gains moderated to 13.5 per cent and 29.1 per cent, respectively.

The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Presco, Stanbic IBTC Holdings, Guaranty Trust Bank, Dangote Sugar Refinery and Zenith Bank.

Analysts at Afrinvest Ltd. expected the market to close negative this week on sustained profit-taking.

Also, Market sentiment, as measured by the market breadth, was negative as 28 stocks lost, relative to 19 gainers.

Presco dominated the losers’ chart in percentage terms dropping 9.97 per cent, to close at N71.80 per share.

FCMB Group followed with 9.85 per cent to close at N3.02, while Linkage Assurance lost 9.09 per cent to close at 50k per share.

Fidelity Bank shed 7.02 per cent to close at N2.65, while Wapic Insurance dipped 6.67 per cent to close at 42k per share.

On the other hand, BOC Gases led the gainers’ chart in percentage terms, gaining 9.90 per cent to close at N6.77 per share.

Eterna garnered 9.89 per cent to close at N4.78, while Red Star Express rose by 9.79 per cent to close at N3.59 per share.

May and Baker Nigeria garnered 9.75 per cent to close at N3.49, while Cornerstone Insurance appreciated by 9.43 per cent to close at 58k per share.

Also, the total volume traded declined by 44.80 per cent with 364.92 million shares worth N3.50 billion in 6,340 deals.

This was in contrast with 661.13 million shares valued at N8.29 billion achieved in 7,324 deals on Wednesday.

Transcorp topped the activity chart with 50.74 million shares worth N53.92 million.

FBN Holdings followed with 38.55 million shares valued at N292.39 million, while Access Bank traded 25.89 million shares worth N227.16 million.

United Bank for Africa sold 24.78 million shares valued at N214.22 million, while Fidelity Bank transacted 24.36 million shares worth N67.04 million.

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Eskom Faces R5-Million Fine Over Kendal Power Station Pollution

On Friday, South Africa’s Minister of Environment, Forestry and Fisheries, Barbara Creecy notified Eskom of the decision by the National Prosecuting Authority (NPA) to pursue criminal prosecution.

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Eskom could face fines of up to R5-million under South Africa’s air quality legislation for supplying blatantly false and misleading information about its toxic pollution at the Kendal coal-fired power station to authorities.

On 28th January 2021, the state-owned energy utility will appear in the Emalahleni regional court on four counts of environmental transgressions.

On Friday 27th November, South Africa’s Minister of Environment, Forestry and Fisheries, Barbara Creecy notified Eskom of the decision by the National Prosecuting Authority (NPA) to pursue criminal prosecution.

The four counts, according to the department, are related to the emission of air pollutants at concentrations exceeding emission limits set in Kendal’s atmospheric emission licence (AEL); failure to comply with the conditions and/or the requirements of the AEL; committing an act likely to cause significant pollution of the environment, and supplying false and/or misleading information to an air quality officer.

Albi Modise, the Chief Director of Communications at the Department of Environment, Forestry and Fisheries, says the “criminal investigation as well as the compliance notice, read with the minister’s objection decision, is based on the findings of previous site inspections” undertaken at Kendal, which is one of the country’s biggest power stations.

Read also: Electricity blackout to linger till Thursday in SA – Eskom

This is the first criminal investigation where the National Prosecuting Authority has decided to pursue a prosecution for a breach of air quality legislation by Eskom.

Business management consultancy EE Business Intelligence reported this week on the findings of an internal investigation compiled by Eskom’s audit and forensic team into Kendal’s air quality compliance and reporting.

This was instituted by the power utility’s chief executive officer, Andre de Ruyter in May.

The internal investigation found that exceedances of particulate matter atmospheric emissions of up to 10 times the allowable limit of 100mg/Nm3 occurred consistently for extended periods over the past two years at Kendal and that this was having a significant impact on people and the environment.

Between April last year and 31 March this year, EE Business Intelligence reported that the investigation found continuous and almost daily particulate matter emission exceedances by all six generation units at Kendal power station of up to 13 times the statutory particulate matter emission limit.

Related: Eskom’s bid for bigger tariffs rejected by South African court

Modise says that Eskom’s internal report notwithstanding, the department had already instituted both criminal and administrative enforcement action based on evidence that the company was in noncompliance with environmental law.

“Furthermore, and on the face of it, the contents of this report seemingly support the charges, which Eskom is currently facing,” says Modise.

Energy analyst Chris Yelland, the managing director of EE Business Intelligence, believes Eskom itself will have to face the music.

“It’s interesting as to whether people will face these consequences in their personal capacity or in their capacity as employees of Eskom. I will imagine that Eskom may be subject to sanctions. Obviously, that’s a matter for the court to decide. Frankly, there are people who bear responsibility both at the power station and at Eskom Megawatt Park,” Yelland said.

“Eskom uses load-shedding as a threat: ‘If you shut us down because we’re in non-compliance, we could have load-shedding’. But [Minister] Creecy has avoided this through phased-in shutdowns of units at Kendal,” Yelland said.

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Uganda Safeguards Financial Stability Amid COVID-19

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The Bank of Uganda (BOU) on Wednesday reported that the country was advancing in safeguarding financial stability, but risks still remain amid the ongoing COVID-19 pandemic.

The central bank said decisive monetary and macro-prudential policies had reduced short-term risks to financial stability.

The report issued on Monday showed that since June, the central bank had maintained an accommodating monetary policy stance, with its rate maintained at 7.0 per cent. This has continued to support loan repayments and private sector credit growth.

Through the quarter, liquidity conditions in the banking system continued to improve, partly supported by the BOU’s policies and strong growth in deposits.

The cost of borrowing in the money markets has been reduced, with the weighted average interbank seven-day and overnight rates reduced to 7.3 per cent and 6.8 per cent in September, as against the 10.2 per cent and 8.7 per cent in the same corresponding period in 2019, respectively.

In addition, offshore investor inflows into the domestic financial markets continued to grow, enhancing the availability of funding for banks and supporting the stability of the Ugandan shilling.

Offshore investors’ total assets in the banking system rose to 1.6 trillion shillings ($438.4m) in September, from 1.4 trillion shillings ($383.6m) at the end of May.

This reversed the trend of outflows that was experienced in March and April, at the height of the uncertainty and risk aversion in global financial markets.

Banks also experienced growth in liquidity assets, which was largely supported by the rising investment in government securities amid low credit growth and a pickup in deposit growth.

The build-up of liquid assets, according to the report, resulted in an improvement in the resilience of the banking sector to systemic liquidity risk.

According to the report, banks, in the year to September, increased their investment in domestic government debt.

The investment grew by 24.7 percent, driving the growth in total assets of 19.0 per cent.

Commercial banks hold about 40 per cent of the government’s domestic debt. This increased investment in government debt partly reflects risk aversion due to concerns about asset quality amid the pandemic.

Although the asset quality, as measured by the ratio of non-performing loans to total loans (NPL ratio) worsened across the banking industry over the year ended in September.

On a quarterly basis, commercial banks’ NPL ratio for September was an improvement compared to 6.01 per cent in June.

“The improvement in the NPL ratio across the banking industry during the quarter to September 2020, partly reflects intensified loan recovery efforts, increased prudent write-offs and higher loan repayments following the lifting of the lockdown,’’ the report said.

The improvement in the NPL ratio is also attributed to the central bank’s COVID-19 credit relief programme, which has allowed distressed borrowers to restructure their loans, including accessing loan repayment holidays.

While the short-term risks to financial stability arising from the pandemic had been relatively contained, the outlook remains highly uncertain and depends on the evolution of the pandemic and the pace of economic recovery, the report said.

“Risks to financial stability are likely to remain heightened going forward, until economic recovery is stronger,’’ the report said.

The report warned that as banks move to digital or electronic transactions, including mobile money, to avoid the spread of COVID-19, there is a higher potential for cyber risk, fraud and operational risks.

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Egypt’s Tourism: Minister, Private Sector Discusses Field’s Opportunities, Challenges

The meeting was held to discuss a number of issues the Egypt’s tourism sector is facing, and to identify the challenges and obstacles the vital sector faces in light of the second wave of the global coronavirus pandemic.

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Egypt’s Minister of Tourism and Antiquities Khaled Al-Anani has held an expanded meeting with representatives from Egypt’s private tourism sector.

Some of those who were in attendance at the meeting were the President of the Egyptian Federation of Tourist Chambers, heads of chambers, heads of tourist investor associations, and tourism investors.

The meeting was held to discuss a number of issues Egypt’s tourism sector is facing, and to identify the challenges and obstacles the vital sector faces in light of the second wave of the global coronavirus pandemic.

It was also an opportunity for proposals to be submitted, and for a review of future visions for the advancement of Egypt’s tourism.

Read also: Egypt’s Sohag Governorate Receives EGP 5.8bn in Public Investments

The meeting began with a review of the current situation and mechanisms of work in the sector.

Al-Anani clarified some matters relating to new opening and closing times for tourist facilities, including restaurants and cafeterias, and the exceptions permitted under the decision.

He also clarified the regulations under the tourism and hotel establishment draft law, which will soon be presented to the cabinet.

The law aims to organise the mechanism of action in this regard, and end all obstacles and problems that investors face in Egypt’s tourism sector.

During the meeting, Al-Anani took the opportunity to listen to the problems faced by investors, and their demands and proposals.

READ: IMF: Exports, tourism and natural gas to drive Egypt’s economic growth

These include the problems they have faced with debts and the payment of dues for the use of facilities and some fees for government agencies.

The investors also called for the grace period to be extended for the initiative that covers defaulters repaying bank loans, and which falls under the Central Bank of Egypt (CBE) initiative.

The minister added that the state spares no effort in promoting Egypt’s tourism sector, and to help it overcome all possible obstacles. At the same time, the Egyptian government is working to provide the necessary support to alleviate the burdens on this important sector.

This comes as part of the cabinet decisions and the precautionary measures adopted by the state to preserve the safety of workers in the sector, as well as citizens and tourists.

During the meeting, many mechanisms and proposals that will contribute to increasing the tourist flow to Egypt from different markets were also discussed, in addition to ways to activate the internal tourism movement.

Related: Egypt’s rebounding tourism threatens Red Sea corals

Al-Anani also touched on the existing cooperation with the concerned ministries, especially the Ministry of Civil Aviation, to study the possibility of undertaking marketing initiatives.

These aim to encourage domestic tourism, including granting discounts on domestic airline tickets prices, and providing discounts on tickets to museums and various archaeological sites in Egypt’s tourist cities.

During the meeting, opportunities for investment to provide and operate visitor services in museums and archaeological sites, and opportunities for tourism investment in some tourism activities, were also reviewed.

The meeting also touched on the importance of coordination and joint cooperation between the Ministry of Tourism and Antiquities and the private sector.

This will see promotional campaigns for Egypt intensified, that will also serve to highlight the diversity of the country’s tourist destinations.

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