NGX urges banks to embrace ESG for global competitiveness

•Index dips by N27b amid profit-taking in 21 stocks

Following Nigeria’s commitment to adopt the International Sustainability Standards Board (ISSB), Chief Executive Officer of NGX Regulation Limited (NGX RegCo), standards, Tinuade Awe, said there is a need for Nigerian banks to swiftly integrate environmental, social and governance (ESG) principles into their business model.

Awe said doing so would give them a competitive edge in the global market.

The call to action was made during a session on ‘ESG in the Financial Services Industry: Challenges, Opportunities, and the Next Steps’, held at the 16th yearly Banking and Finance Conference organised by the Chartered Institute of Bankers of Nigeria (CIBN).

Awe pointed out that ESG reporting is a dynamic and significant issue with various global standards and frameworks in place, leading to complexity for both investors and companies worldwide. She emphasized the growing international consensus on the necessity for standardised ESG reporting and suggested that Nigeria’s banking sector could play a pivotal role in adopting and implementing these standards.

“Early adoption of ESG standards, particularly those established by the ISSB, is a critical move for Nigeria, including its banking sector. It ensures consistency, attracts foreign investment, and allows Nigeria to have a voice in shaping its own ESG reporting criteria”, Awe noted.

She further explained the importance of avoiding fragmentation and the opportunity for Nigeria to establish its unique cultural and social identity within the ESG reporting framework, rather than being subject to foreign standards.

Awe also pointed out that the introduction of the European Sustainability Standards by the European Union could have ripple effects beyond the EU, potentially affecting Nigeria. Additionally, she highlighted that the International Sustainability Standards Board (ISSB) is set to implement its IFRS 1 and 2 standards in January 2024.

She said there is a need for strong collaboration with relevant institutions to prevent fragmentation and ensure a unified approach to ESG reporting.

“Embracing ESG principles is not only a strategic move for Nigerian banks but also an opportunity for the country to define its role in the global ESG landscape”, she said.

Meanwhile, negative sentiments resurfaced in the equities sector of the Nigerian Exchange Limited (NGX) as market capitalisation dipped by N27 billion, amid profit-taking in Dangote Sugar Refinery (DSR) and 20 stocks.

At the close of the transaction yesterday, market capitalisation depreciated by N27 billion or 0.07 per cent to N37.373 trillion from N37.4 trillion reported the previous day.

The all-share index, which measures the performance of listed equities depreciated by 48.4 basis points to 68,286.28 points from 68,334.68 points reported the previous day.

The downturn was impacted by price depreciation in large and medium capitalised stocks amongst which are; DSR, GTCO, National Salt Company of Nigeria (NASCON), Nigerian Breweries, International Breweries, Champion Breweries and African Prudential.

Reacting to market performance, Head of Equity, Planet Capital, Dr Paul Uzum, attributed the negative sentiments to profit-taking, according to him, investors leveraged the capital appreciation recorded in the market in the past few weeks to recoup their investment.

He said the downtrend may continue because of anticipations of improved third-quarter earnings as more corporates are releasing their financials and investors repositioning for interim dividends.

He added that the election tribunal judgment will not have any impact on the market because investors based their decisions on economic policies not who emerged as the president.

“Market operators did not expect any surprises from the election petition tribunal. We know that in Africa, the precedent is that a presidential election has never been annulled by the courts, the outcome was expected, and the slight fall in the market is attributable to demand and supply forces for the day.

“Secondly, the market has moved on and is now reacting to government policies, not to who is ‘president’, so even if there were to be changed in government, since the manifesto of the major contenders are similar, changes at this time will not have any significant impact on the market”, he said.

Vetive Dealings and Brokerage said: “We expect a similar mixed session tomorrow, as investors continue to cherry-pick attractive names across the board while taking profit on recent gainers.”

The volume of shares traded during the day declined by 179.198 million, representing 47.32 per cent as investors traded 378.654 million shares valued at N5.482 billion in 7671 deals against 557.852 million shares worth N10.21 billion exchanged hands the previous day in 9818 deals.

An analysis of the investment showed that Guinea Insurance led the gainers’ table with 10 per cent to close at 23 kobo while Betaglass followed with a gain of 9.91 per cent to close at N47.15 kobo.

Caverton gained 9.84 per cent to close at N1.34 kobo. Oando Plc added 9.7 per cent to close at N7.35 kobo. CWG added 9.11 per cent to close at N4.79 kobo.

On the contrary, Vitafoam Nigeria Plc topped the losers’ chart, declining by 10 per cent to close at N22.50 kobo. Veritas Kapital trailed with a loss of 7.69 per cent to close at 24 kobo. Linkage Assurance fell by 5.56 per cent to close at 85 kobo.

DSR dipped by 4.76 per cent to close at N66.65 kobo while International Breweries was down by 4.35 per cent to N4.40 kobo. Transactions in the shares of Oando Plc led market activities with 83.526 million shares valued at N609.377 million. United Bank for Africa followed with an account of 35.627 million shares worth N533.748 million.

TransNational Corporation of Nigeria exchanged 26.657 million shares valued at N177.694 million. AccessCorp traded 18.534 million shares worth N321.08 million while Omatek exchanged 15.729 million shares worth N9.437 million.