The Nation Newspaper

Category: Capital Market

  • Africhange UK to expand $8b remittances flow to Africa with discounted rates

    Africhange UK to expand $8b remittances flow to Africa with discounted rates

    Africhange, a global remittance services provider, has inaugurated its operations in the UK. The new unit offers more efficient, cost-effective and reliable solutions for individuals to send and receive money internationally and is expected to boost over $8 billion annual remittances flow  from the UK to Africa.

    Starting with the UK-Nigeria corridor and expanding to include Ghana and Kenya before the end of the year, Africhange’s new Authorised Payment Institution Licence will underpin the delivery of a range of payment solutions, including remittance services, for UK users. With Africhange, students enrolled in UK universities can get discounted exchange rates on top of the market-leading rates available to the general public.

    Africhange is also planning to introduce its innovative loyalty program (Afripoints) which allows users to earn cash rewards for sending or receiving money through the platform. With Afripoints, users are able to accumulate points for every transaction, which can be withdrawn as cash or spent as discounts on transactions. This programme is already available to users in Canada, Australia, and Nigeria, and will soon be launching in the UK.

    Africhange currently supports remittance services across more than 100 corridors globally, with more corridors across Africa, Europe, Asia and the Americas to come, as well as a broader range of payment and financial services for users.

    According to the founder and CEO of Africhange, David Ajala,  “Africhange’s entry into the UK market represents a significant milestone in our mission to deliver the best possible global payments experience for Africans in diaspora. Despite the significant inflows of remittance to the continent, the cost of sending money means a significant percentage of those funds don’t get to the recipients and we want to change that. We have big plans and we are looking forward to expanding our services, reaching more customers and ensuring that everyone can benefit from seamless and cost-effective international money transfers.”

    Remittances from the UK to Africa represent a significant and growing financial flow – more than $8 billion was remitted to various countries on the continent in 2023.

    Recent reports suggest that Nigeria is among the biggest global recipients of remittance from the UK, driven by strong historical ties between both countries, as well as a large and growing Nigerian diaspora in the UK.

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    However, according to the World Bank, Africa has some of the most expensive remittance corridors in the world, with up to 15 per cent of the overall amount to remit funds to some African countries.

    Africhange leverages its innovative platform to deliver seamless, cost-effective and user-friendly global payment experiences for users, enabling them to transfer funds internationally. Users can send money across the world in real-time, with competitive rates ensuring that more money reaches the recipients.

    The company supports money transfer services from Canada, Nigeria, Australia and the UK to various countries across the world, with a range of currencies including US Dollars (USD), Canadian Dollars (CAD), Chinese Yen (CNY), Nigerian Naira (NGN), Kenyan Shillings (KES), Ghanaian Cedis (GHS), Indian Rupees (INR), Australian dollars (AUD), British Pound Sterling (GBP) and more.

    Users in the UK can access Africhange by downloading the mobile app available on the App Store and Play Store or by visiting the company’s website.

  • ‘Fed Govt can raise $500b from capital market’

    ‘Fed Govt can raise $500b from capital market’

    The capital market can generate up to $500 billion to support the attainment of the $1 trillion agenda of the President Bola Tinubu’s administration.

    President, Chartered Institute of Stockbrokers (CIS), Mr Oluropo Dada at the weekend, said the capital market is ready to make pivotal contribution to the achievement of the $1 trillion economic target of the government.

    Dada spoke at his investiture ceremony as the 13th President and Chairman of Governing Council of CIS at the weekend in Lagos. The ceremony also marked the send-off for Mr Oluwole Adeosun, the immediate past president.

    He noted that in order to attain the $1 trillion economy agenda, the economy must attain a double-digit growth in Gross Domestic Product (GDP).

    “It is, therefore, my conviction that the capital market alone can generate up to at least half of the envisaged $1 trillion. It is, therefore, imperative that the size of the informal sector in Nigeria be substantially reduced, if we are to attain the objectives of accelerated GDP growth.

    “Appropriate policies should be crafted to encourage all public limited liability companies in Nigeria to obtain listing and public quotation on any of the Securities and Exchange Commission (SEC)-registered securities exchanges in the country,” Dada said.

    He reaffirmed the commitment of the stockbrokers to supporting the ongoing recapitalisation programme in the banking sector, noting that the institute had made recommendations to the government and capital market regulators on how the new capital injection in the banking industry can be implemented seamlessly.

    “My vision is to build a Nigerian capital market in which securities professionals get the attention and patronage that they deserve. We want a market that is all-inclusive, with all stakeholders working as partners. My team and I will work assiduously towards upgrading capacity building in our community, while at the same time ensuring that there is a symbiotic relationship between securities dealers and all trading platforms in the country,” Dada said.

    Adeosun presented some of the major achievements during his tenure and commended Dada for his sterling contributions as the 1st Vice President during the period.

    Special Guest of Honour, Vice President, Kashim Shettima, urged the institute to partner with the Federal Government in order to transform the economy.

    Shettima, who was represented by his Special Adviser on Economic Matters, Dr Tope Fasua, explained that the economy would experience significant growth once the country overcomes the ongoing reforms.

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    Governor Abiodun Oyebanji of Ekiti State, commended the institute and assured it of support for Dada’s administration through partnership with the institute for market development.

    He described Dada as a man of integrity with track records of performance.

    After the swearing-in of Dada as the President, in line with the tradition of the institute, Dada sworn in Mrs Fiona Ahimie and Dr Akeem Oyewale as the 1st and 2nd Vice President respectively.

    Goodwill messages were presented to the new president by the Lagos State Governor, Director General, Securities and Exchange Commission (SEC), Nigerian Exchange Group Plc, Chartered Institute of Bankers of  Nigeria (CIBN), Association of Securities Dealing Houses of Nigeria (ASHON) and Founding Partner, Wole Olanipekun & Co, Chief Wole Olanipekun amongst others,  while a keynote address was delivered by the Chairman, Chapel Hill Denham, Mr Bolaji Balogun.

  • NGX poised to support banks with N4.2tr capital injection

    NGX poised to support banks with N4.2tr capital injection

    The Nigerian Exchange (NGX) is poised to help banks to raise some N4.2 trillion to meet their new capital requirements under the ongoing banking recapitalisation.

    Acting Chief Executive Officer, Nigerian Exchange (NGX), Mr. Jude Chiemeka, said the Exchange through first-in-class bespoke technology is well poised to support the new cycle of capital raising by banks and other companies in diverse sectors.

    Chiemeka spoke at a webinar on rights issue. It was part of the NGX’s investor education series initiatives.

    He noted that the webinar is apt and timely given recent developments in Nigeria’s financial market space.

    “As we may be aware, the apex bank has mandated banks to recapitalise their operations. This recapitalisation will result in the emergence of stronger, healthier, and more resilient banks thereby supporting the achievement of a $1 trillion economy by the year 2030.

    “Bigger banks with larger capital base and capacities can underwrite larger levels of credit, thereby providing a pathway to the revitalisation of the economy,” Chiemeka said.

    According to Chiemeka, NGX as the foremost platform for capital formation in Africa is properly positioned to provide the necessary support to market operators, banks, and the government to achieve set goals.

    “Our history as an Exchange gives credence to our novel contribution to the success of the banking sector recapitalisation over 20 years ago (in 2004) which has been one of the major pivots for a stable financial system in Nigeria.”

    “Data from KPMG estimates that within the 2024 -2026 window for the banking recapitalisation exercise an aggregate of over N4.2 trillion in fresh capital injection is required to satisfy the new capital requirement across all types and classes of banks.

    “Right issues are one of the preferred means by which they would be seeking new capital injection to fulfill the apex bank’s requirement,” Chiemeka said.

    He pointed out that other listed companies in other sectors have also been quite active in rights issuance with N3.6 billion raised so far through rights issue.

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    He assured that the NGX remains highly invested in providing an efficient, liquid, and transparent market for investors and businesses in Africa, to access capital and build wealth.

    Executive Commissioner, Operation, Securities and Exchange Commission (SEC), Mr. Bola Ajomale, commended the NGX for organszing this webinar at this time where over N4 trillion fresh capital injection is required to satisfy the new capital requirement across all types and classes of banks.

    “The capital raising might go through the right issues process. Out of the six-capital raised in the market this year, four are right issue. Consequently, as the apex regulator, the SEC will continue to support all efforts aimed at making our markets fairer, more efficient and more transparent, particularly in the areas of regulation and technology,” Ajomale said.

    Managing Director, NG Clearing Limited, Mr. Farooq Oreagba emphasised the significance of the webinar as a distinctive platform for enhancing investors’ understanding of rights issues.

    He highlighted key aspects such as options available to investors during right issuances, the process of trading rights, and the settlement procedures.

    “With the webinar, investors would be well armed with the right information and resources to navigate the market as we expect a flurry of rights issues to hit the market soon,” Oreagba said.

    Managing Director, Chapel Hill Denham Securities Limited, Mr. Akeem Shadare highlighted that companies use rights issues to raise capital, often to pay down debt or fund expansion.

    According to him, shareholders can benefit from capital gains if the company uses the extra funds wisely.

    He however noted that since more shares are issued, the stock price may be diluted and likely decrease.

    Other speakers at the webinar includes Mrs. Onome Komolafe, Divisional Head, Business Services and Client Experience; Dr. (Mrs.) Catherine Nwosu, Managing Director, Africa Prudential Plc; Mr. Abimbola Babalola, Head, Trading & Products, Nigerian Exchange Limited.

  • Industrial & Medical Gases’ shareholders get N249m dividends

    Industrial & Medical Gases’ shareholders get N249m dividends

    Shareholders of Industrial and Medical Gases (IMG) Nigeria Plc have approved payment of N249.47 million as cash dividends for the 2023 business year.

    At the annual general meeting at the weekend in Lagos, shareholders unanimously approved payment of a dividend per share of 50 kobo for the 2023 business.

    Acting Chairman, Industrial and Medical Gases (IMG) Nigeria Plc, Aminu Ado said the company would sustain its performance in 2024 given its capital investment and optimisation of resources among other strategic initiatives.

    He said the company had a great year in 2023 with total revenue from the business growing from N5.33 billion 2022 to the N6.06 billion in 2023 while  profit after tax rose to N850 million from N440 million in 2022.

    “We intend to sustain the growth performance in 2024 by our capital investment, optimising the use of our resources, improving logistics, cost-cutting measures, generating new business prospects, and improving on employee training,” Ado said.

    Managing Director, Industrial and Medical Gases (Nigeria) Plc,  Ayodeji Oseni assured the shareholders of better future ahead.

    According to him, despite the prevailing national economic outlook, the future holds great promise for the company as it continues to consolidate and innovate.

    “We shall remain resolute in implementing our growth strategy as we navigate the challenging operating terrain that lies ahead, leveraging opportunities and production efficiencies plus our cost management drive towards sustainable profitability.

    “Our human capital remains the pivot of our transformation and future progress even at this trying time. We shall increase market presence and stakeholders’ engagement towards increased turnover,’ Oseni said.

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    Responding to a shareholder’s observation, the Finance Director, Adesina Alayaki, addressed some concerns about high electricity costs, saying some customers who rented cylinders had gone out of business.

    He also noted that IMG’s use of natural gas which is subject to volatility of forex costs had impacted the company’s operations.

    He, however, expressed optimism that IMG remained committed to its growth strategy.

    Shareholders praised the board and management of IMG for the performance in the 2023.

    President, Noble Shareholders’ Solidarity Association (NSSA), Mathew Akinlade, described IMG as a very liquid company with solid balance sheet.

    He noted that the company has capacity to pay higher dividend in the nearest future.

  • SEC, NPA, others score high on reforms

    SEC, NPA, others score high on reforms

    The Federal Government has rated six agencies high for their roles in facilitating ease of doing business in the country.

    The agencies included Securities and Exchange Commission (SEC), Nigerian Agricultural Quarantine Services (NAQs), Nigeria Maritime Safety and Administration Agency (NIMASA), Nigeria Export Import Bank (NEXIM), Nigeria Ports Authority (NPA) and the Nigeria Customs Service (NCS).

    The agencies scored 100 per cent in the Federal Government’s Regulatory Reform Action Plan, which is targeted at promoting ease of doing business.

    The plan, which is championed by the Presidential Enabling Business Environment Council (PEBEC) is targeted at equipping regulatory agencies that facilitate business environments to aid their efficiency.

    Vice President, Kashim Shettima, noted that the long-term success of PEBEC hinges on Nigeria’s ability to institutionalise reform capabilities, foster deep collaboration across government, and maintain a commitment to continuous improvements of businesses.

    He added that the country is currently facing peculiar times, which requires developing solutions to improve the Ease of Doing Business across all sectors.

    Special Adviser to the President on Ease of Doing business, Dr Jumoke Oduwole, said the reforms operationalise earlier codified provision in the Business Facilitation Act 2022, and directly impact productivity and competitiveness of Nigeria’s economy.

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    Speaking after the release of the Plan’s results in Abuja, Director General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama said out of the 36 MDAs assessed, the report released by PEBEC puts the SEC as one of the highest with 100 per cent.

    “We are excited at this achievement and it is a call to do more in ensuring that investors find it easier doing business in the Nigerian capital market.

    “We are committed to accelerating the development of the capital market in a manner that would boost wealth creation, attract investments and create jobs for Nigerians,” Agama said.

    He assured that the new SEC management would change the narrative of the capital market and reposition it to the path that would boost economic growth.

  • ‘MSMEs need digital empowerment’

    ‘MSMEs need digital empowerment’

    Wema Bank Plc has urged stakeholders to prioritise digital empowerment for micro, small and medium enterprises (MSMEs) as a measure for championing a sustainable MSME ecosystem in Nigeria.

    This charge was made at the International MSMEs Day and MSME Awards Night 2024; a twofold event organised by the Federal Government of Nigeria through the Office of the Vice President in commemoration of World MSME Day 2024.

    Managing Director, Wema Bank Plc, Moruf Oseni, who was represented by the bank’s Executive Director, Retail and Digital Business, Tunde Mabawonku, emphasised the pressing need to prioritise technology and digital empowerment in complement to capacity development, financial empowerment and collaborative efforts, towards building a supportive ecosystem for MSMEs to thrive.

    “At Wema Bank, our approach embodies the saying ‘Give a man fish, he will come back but teach a man to fish, he will learn to fend for himself and others’. Technology and digital are the future, and intelligence is here to stay. What we are doing for these MSMEs is beyond providing the finances they need.

    “We are also focusing on empowering them with relevant and transferrable digital skills to ensure they are not left behind in this digital evolution. What are the skills they need to sell in this fast-growing digital world? To operate effectively? To compete? To maximise the resources at their disposal? These are the questions that drive us at Wema Bank,” Oseni said.

    According to him, the goal is digital empowerment for scale and to maximise impact as the bank continues to partner with several esteemed bodies and institutions across the world.

    “Collaboration for us is continuous so from small alliances that allow us to empower smaller businesses through significant platforms within their ecosystem to the bigger partnerships like the FGN-ALAT Digital Skillnovation Programme, we will continue to combine efforts and pool resources where ideal to create an enabling environment for businesses to thrive, provide financial support and other resources that these businesses need and empower them to skillfully utilise the resources available to them for maximum impact and growth.

    “Conversations like this are very important so we are more than glad to be part of it and to every business out there, we say Happy World MSME Day to you,” Oseni said.

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    He said Wema Bank has exemplified the significance of developing tailored and unique solutions to the evolving needs of diverse MSMEs across the nation.

    According to him, from proactively providing single-digit loans for female business owners through its women-focused proposition, SARA by Wema, to championing capacity building initiatives like the FGN-ALAT Digital Skillnovation Programme launched in partnership with the Federal Government of Nigeria to empower MSMEs with highly sought-after digital skills, the NYSC-ALAT Accelerator Programme in partnership with the National Youth Service Corps and Microsoft Philanthropy, the Transforming Nigerian Youth Programme in partnership with Pan-Atlantic University’s Entrepreneurial Development Centre (EDC), the Wema Bank SME Business School, and a host of others; it strikes no wonder that Wema Bank continues to receive recognition as a driver of positive change and empowerment in the Nigerian MSME Landscape.

    Wema Bank continues to prove its mettle not just as an enabler for MSMEs but also as the partner of choice for all. At the event, the bank also awarded a brand-new car to the female winner of the “Outstanding MSME Clinic” award category, in addition to the N2 million prize slated for this category.

  • Dangote Sugar launches N200b capital raising

    Dangote Sugar launches N200b capital raising

    Dangote Sugar Refinery (DSR) Plc has launched a N200 billion capital raising programme aimed at further diversifying the company’s balance sheet.

    Under the N200 billion multi-instrument issuance programme registered with the Securities and Exchange Commission (SEC), the company can raise additional capital through equity and debt issuances in whatever mode.

    The board of the company stated that registration of the multi-instrument issuance programme represented a significant step as it reinforces the company’s commitment to diversifying its funding sources in alignment with its corporate objectives.

    “The management of the company will take decisions to proceed with issuances of any series of securities under the multi-instrument issuance programme in due course, subject to prevailing market conditions and obtaining relevant regulatory approvals.

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    “The specific details of such issuance will be disclosed in the appropriate transaction documents at the relevant time,” the board stated in a regulatory filing at the Nigerian Exchange (NGX).

    Dangote Sugar Refinery is Nigeria’s largest producer of household and commercial sugar with 1.44 million metric tonnes refining capacity at the same location. Its refinery located at Apapa Wharf Ports Complex, refines raw sugar imported from Brazil to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.

    The company’s backward Integration goal is to become a global force in sugar production, by producing 1.5 million metric tonnes per annum of refined sugar from locally grown sugar cane for the domestic and export markets.

    In order to achieve its business goals, Dangote Sugar Refinery had acquired Savannah Sugar Company Limited, located in Numan, Adamawa State in December 2012, and embarked on rehabilitation of its facilities and expansion of its 32,000 hectares’ sugarcane estate. In September 2020, the scheme of merger between DSR and Savannah Sugar estate was completed which gave birth to a bigger and stronger business with considerable opportunity for growth and delivery of superior benefits to all stakeholders. The expansion and rehabilitation of the sugar estate as well as the development of the greenfield site acquired at Tunga, Nasarawa State were aimed at achieving DSR’s sugar for Nigeria development master plan.

    The Nasarawa Sugar Company Limited is the registered subsidiary of Dangote Sugar Refinery Plc. The 78,136 hectares Sugar Project Site is located at Tunga, Awe Local Government Area, of Nasarawa State.

  • Equities continue decline with N49b loss

    Equities continue decline with N49b loss

    Nigerian equities continue on the downward trend yesterday as profit-taking transactions on mid and large cap stocks overshadowed gains by the majority of traded stocks.

    Benchmark indices at the Nigerian Exchange (NGX) indicated average decline of 0.09 per cent, equivalent to net capital depreciation of N49 billion.

    The All Share Index (ASI)-the value-based common index that tracks all share prices at the NGX, dropped from its opening index of 99,304.12 points to close at 99,217.60 points.

    Aggregate market value of all quoted equities also declined from its opening value of N56.175 trillion to close at N56.126 trillion.

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    With 27 gainers to 23 losers, the negative overall market situation was driven by losses in mid and large-cap stocks, especially Dangote Sugar Refinery, Lafarge Africa, Oando, Zenith Bank and Honeywell Flour Mills.

    On the upside, Okomu Oil recorded the highest gain of 10 per cent to close at N291.50 per share. John Holt followed with a gain of 9.79 per cent to close at N3.14. Consolidated Hallmark Holdings increased by 9.43 per cent to close at N1.74 per share. Secure Electronic Technology appreciated by 9.09 per cent to close at 60 kobo while Regency Alliance Insurance rose by 7.14 per cent to close at 45 kobo per share.

    On the negative side, Oando led the losers with a drop of 9.75 per cent to close at N12.50 per share. University Press followed with a loss of 9.09 per cent to close at N2.50. Academy Press lost 8.0 per cent to close at N1.84 per share. Honeywell Flour Mills dipped by 7.94 per cent to close at N3.13 while UPDC lost 7.86 per cent to close at N1.29 per share.

    The momentum of activities also slowed down, with total turnover dropping by 62.86 per cent to 361.573 million shares valued at N6.163 billion in 8,511 deals. Transnational Corporation (Transcorp) topped the activity chart with 47.509 million shares valued at N581.921 million. Guaranty Trust Holding Company (GTCO) followed with 37.853 million shares worth N1.647 billion. Veritas Kapital Assurance traded 34.951 million shares valued at N31.384 million. FBN Holdings (FBNH) traded 27.402 million shares valued at N548.257 million while Access Holdings transacted 26.980 million shares worth N504.365 million.

  • Sterling Holdco gets shareholders’ nod to raise N200b for recapitalisation

    Sterling Holdco gets shareholders’ nod to raise N200b for recapitalisation

    Shareholders of Sterling Financial Holdings Company (Sterling Holdco) Plc have approved plans by the company to raise up to N200 billion in new capital, giving a major boost to the group’s efforts to meet new minimum capital for banks.

    At the annual general meeting, shareholders authorised the board of the company to “raise additional capital of up to N200 billion through the issuance of shares in the Nigerian capital market by way of rights issues, private placements, public offerings, private and other transaction modes”.

    The meeting also empowered the board to increase the share capital of the company by the allotment of up to 40 billion ordinary shares of 50 Kobo each “at any time or times during the period of two years” from the date of the passage of the resolution.

    Shareholders also waived their preemptive rights by allowing the board to sell any shares not taken up by existing shareholders within the period stipulated under a rights issue to other interested existing shareholders and where following such offer, any portion of the shares, remain unsubscribed, to other interested investors on similar terms to the right issue or offer for subscription.

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    Addressing the shareholders, Group Chief Executive Officer, Sterling Financial Holdings Company (Sterling Holdco) Plc, Yemi Odubiyi, said the new capital injection would not only allow the bank to meet the new minimum capital requirements stipulated by the Central Bank of Nigeria (CBN) but also strengthen the bank to deliver higher values to shareholders.

    “This capital infusion will strengthen and position us for sustained growth,” Odubiyi said.

    He highlighted the performance of the holding company’s current subsidiaries; Sterling Bank, a conventional bank, and The Alternative Bank, an ethical banking business.

    He outlined that the group intend to further build its non-banking revenue lines to enhance the group’s rapid growth and capture even more value for shareholders by offering a wider range of services under the trusted Sterling brand.

    He assured that the group will continue its current trajectory by maintaining a customer-centric approach, while making strategic investments in sustainable ventures that align with the company’s core values.

    Shareholders expressed their delight with the leadership and financial performance of the group noting that the group was able to post impressive growth numbers in its first full year of operations, despite a challenging macro-economic environment.

    The holding company delivered a 36 per cent increase in its assets size, growing to N 2.5 trillion, and a 26.6 per cent rise in its earnings to deliver N 221 billion. Both figures represented a significant increase in the group’s performance as contained in its annual report and financial statements for the 2023 financial year.

    Dissecting the numbers further, the group earned N 156 billion and N 65.7 billion in interest and non-interest income respectively, representing a growth of 21.5 per cent and 40.6 per cent from the 2022 financial year’s numbers. It achieved this while attracting N 1.8 trillion in customers’ deposits into its two banking subsidiaries: Sterling Bank and The Alternative Bank. With these, the group posted N 21.6 billion in profit, representing 75 kobo in earnings per ordinary share for 2023.

    Sterling HoldCo recently completed its transformation from a bank to a full-fledged financial holdings company by delisting, transferring, and relisting all shares to the Sterling Financial Holdings Company on the floor of the Nigerian Exchange (NGX).

    The management of the group has said the holding company affords Sterling the opportunity to leverage its successful HEART strategy, which has seen the group make consolidated investments in the health, education, agriculture, renewable energy, and transportation sectors, growing the company’s year-on-year profits to record highs in recent years.

    With the adoption of the Holdco structure now in full effect, Sterling now possesses the latitude to make inroads into other sectors within financial services, such as pensions, asset management, payment services, real estate, and different verticals, along with the current banking licenses held by the commercial and ethical banking subsidiaries, Sterling Bank and The Alternative Bank, which will operate as limited liability companies within the publicly traded holding company.

    Sterling has maintained impressive momentum in recent years, featuring on the prestigious the 100 fastest-growing companies in Africa list for 2023, as published by the globally recognized Financial Times, its citation as Africa’s Most Valuable Commercial Bank Brand for 2023 in a poll conducted by GeoPoll and Kantar for African Brand Magazine, and was been named a top three employer in Nigeria by LinkedIn in the social network’s Top 25 List for 2023.

    Renowned for its irreverent brand voice and enviable talent management practices, Sterling recently received three citations for Company Leadership Gender Diversity, Gender Diversity in Supply Chain, and Family-Friendly Workplace as bestowed by the International Finance Corporation (IFC) and the Nigerian Exchange (NGX) at the Gender Leader Awards 2023

  • How to make banks’ recapitalisation seamless, by stockbrokers

    How to make banks’ recapitalisation seamless, by stockbrokers

    As the first of several offers expected under the new banking recapitalisation exercise kicked off, stockbrokers, the largest trading group in the capital market, at the weekend outlined ways to make the recapitalisation programme most beneficial to the banks and the nation generally.

    In a blueprint titled: “Stockbrokers’ Position Paper on the Banking Sector Recapitalisation Programme of the Central Bank of Nigeria (CBN)”, stockbrokers called for adoption of technology, effective collaboration among the regulators and compliance with extant rules and regulations in order to ensure the success of the recapitalisation programme.

    According to stockbrokers, the recapitalisation programme would position the banks in Nigeria to support the growth of the economy, enhance their global competitiveness, promote financial inclusion and generate about N3.9 trillion.

    Speaking under the aegis of the Chartered Institute of Stockbrokers (CIS), stockbrokers said in order to ensure effective capital raising exercise by banks, there should be a wholesome adoption of technology in every stage of the process.

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    “As we have seen in recent public offerings, the path of reaching out to investors through telephone apps is what endears the young generation, including the millennials to modern day investments. Banks should consider raising a significant portion of the additional capital through public offers, in order to increase the number of investors in the market. It is sad that, in a country of over 200 million people we still have just about 7.0 million people that have investments in the capital market. So, attracting more new investors should be a key objective of the exercise.

     “It is important to emphasise that time is of essence in the recapitalisation process. We recognise the fact that the Central Bank of Nigeria (CBN) will have to check and verify the list of subscribers to every new bank issue before the list is sent to the SEC for approval to allot shares. We urge the CBN to carry out this verification process speedily, using technology, in order to reduce the time involved. Furthermore, the issuing houses may send the list of subscribers to the CBN in batches, on a daily or weekly basis, from the date the issue opens until it closes. By this, the load of verification will be substantially reduced for the CBN when the offer closes and returns are made. Between the CBN and the SEC, the time taken from an offer’s closing date to the allotment date should not exceed 20 working days. This assurance is important as investors do not want their monies to sit idle for an extended period of time. The CBN and SEC should work closely together in the recapitalisation process,” CIS stated.

    They pointed out that the CBN should, in the course of this process, open up the banking industry to more players, to deepen competition and de-concentrate market control from the hands of a few big banks.

    According to stockbrokers, the United States has over 4,000 commercial banks in the system, while the UK has over 300. With increase in the market capitalisation of banks, the concentration risks where a few listed companies control a high percentage of the total market capitalisation will be reduced, as more banks join the league of mega-companies.

    Given the possibility of money laundering, CIS urged greater due diligence on persons and institutions making abnormally large investments during the exercise.

    “Furthermore, there should be strict adherence to good corporate governance by all participating entities. Adequate provisions should be made for the protection of minority shareholders in the implementation of the bank recapitalisation policy.

    “We enjoin capital market operators to provide wholesome professional advice to both existing and prospective investors during the exercise. This will entail revamping their research machinery and investing more on skilled personnel and technology. The general public are strongly advised to seek professional advice from certified stockbrokers, who are the first line experts in securities and investment matters.

    “We urge all parties concerned to ensure that they comply with all relevant laws of the land in the course of the banking sector recapitalisation exercise. Investors may verify from the Securities & Exchange Commission (SEC) the authenticity of any institution claiming to be a party to any of the bank offers.

    “Additionally, investors may obtain the list of bonafide individual stockbrokers from the Chartered Institute of Stockbrokers’ website or that of securities dealing firms from the Association of Securities Dealing Houses of Nigeria (ASHON). They may also obtain valid information from the Nigerian Exchange Group (NGX Group), the FMDQ Securities Exchange, NASD and other SEC-licensed securities exchanges in Nigeria.

     “CIS represents the rule of law, so the 2024 – 2026 Banking Sector Recapitalisation Programme should be undertaken strictly in accordance with the extant laws of the Federal Republic of Nigeria and the rules, regulations and usages governing the Nigerian financial system; money and capital markets. The exercise bears a strong and feasible potential to move Nigeria closer to sustainable double-digit GDP growth and the envisaged $1 trillion economy,” CIS stated.

     first of several offers expected under the new banking recapitalisation exercise kicked off, stockbrokers, the largest trading group in the capital market, at the weekend outlined ways to make the recapitalisation programme most beneficial to the banks and the nation generally.

    In a blueprint titled: “Stockbrokers’ Position Paper on the Banking Sector Recapitalisation Programme of the Central Bank of Nigeria (CBN)”, stockbrokers called for adoption of technology, effective collaboration among the regulators and compliance with extant rules and regulations in order to ensure the success of the recapitalisation programme.

    According to stockbrokers, the recapitalisation programme would position the banks in Nigeria to support the growth of the economy, enhance their global competitiveness, promote financial inclusion and generate about N3.9 trillion.

    Speaking under the aegis of the Chartered Institute of Stockbrokers (CIS), stockbrokers said in order to ensure effective capital raising exercise by banks, there should be a wholesome adoption of technology in every stage of the process.

    “As we have seen in recent public offerings, the path of reaching out to investors through telephone apps is what endears the young generation, including the millennials to modern day investments. Banks should consider raising a significant portion of the additional capital through public offers, in order to increase the number of investors in the market. It is sad that, in a country of over 200 million people we still have just about 7.0 million people that have investments in the capital market. So, attracting more new investors should be a key objective of the exercise.

     “It is important to emphasise that time is of essence in the recapitalisation process. We recognize the fact that the Central Bank of Nigeria (CBN) will have to check and verify the list of subscribers to every new bank issue before the list is sent to the SEC for approval to allot shares. We urge the CBN to carry out this verification process speedily, using technology, in order to reduce the time involved. Furthermore, the issuing houses may send the list of subscribers to the CBN in batches, on a daily or weekly basis, from the date the issue opens until it closes. By this, the load of verification will be substantially reduced for the CBN when the offer closes and returns are made. Between the CBN and the SEC, the time taken from an offer’s closing date to the allotment date should not exceed 20 working days. This assurance is important as investors do not want their monies to sit idle for an extended period of time. The CBN and SEC should work closely together in the recapitalization process,” CIS stated.

    They pointed out that the CBN should, in the course of this process, open up the banking industry to more players, to deepen competition and de-concentrate market control from the hands of a few big banks.

    According to stockbrokers, the United States has over 4,000 commercial banks in the system, while the UK has over 300. With increase in the market capitalization of banks, the concentration risks where a few listed companies control a high percentage of the total market capitalization will be reduced, as more banks join the league of mega-companies.

    Given the possibility of money laundering, CIS urged greater due diligence on persons and institutions making abnormally large investments during the exercise.

    “Furthermore, there should be strict adherence to good corporate governance by all participating entities. Adequate provisions should be made for the protection of minority shareholders in the implementation of the bank recapitalisation policy.

    “We enjoin capital market operators to provide wholesome professional advice to both existing and prospective investors during the exercise. This will entail revamping their research machinery and investing more on skilled personnel and technology. The general public are strongly advised to seek professional advice from certified stockbrokers, who are the first line experts in securities and investment matters.

    “We urge all parties concerned to ensure that they comply with all relevant laws of the land in the course of the banking sector recapitalization exercise. Investors may verify from the Securities & Exchange Commission (SEC) the authenticity of any institution claiming to be a party to any of the bank offers.

    “Additionally, investors may obtain the list of bonafide individual stockbrokers from the Chartered Institute of Stockbrokers’ website or that of securities dealing firms from the Association of Securities Dealing Houses of Nigeria (ASHON). They may also obtain valid information from the Nigerian Exchange Group (NGX Group), the FMDQ Securities Exchange, NASD and other SEC-licensed securities exchanges in Nigeria.

     “CIS represents the rule of law, so the 2024 – 2026 Banking Sector Recapitalisation Programme should be undertaken strictly in accordance with the extant laws of the Federal Republic of Nigeria and the rules, regulations and usages governing the Nigerian financial system; money and capital markets. The exercise bears a strong and feasible potential to move Nigeria closer to sustainable double-digit GDP growth and the envisaged $1 trillion economy,” CIS stated.