By Taofik Salako, Deputy Group Business Editor

Nigerian equities ended the first trading in 2021 with a net capital gain of N458 billion, setting out on another bullish run after netting N6.48 trillion as full-year return in 2020.

With 31 gainers against two losers in the first session of the year, average return for the day stood at 2.18 per cent, building on full-year return of 50.03 per cent recorded last year.

The All Share Index (ASI) – the value-based common index that tracks all share prices at the Nigerian Stock Exchange (NSE), rallied to 41,147.39 points from the year’s opening index of 40,270.72 points.

Aggregate market value of all quoted equities also rose from the year’s opening value of N21.057 trillion to close the first trading at N21.515 trillion.

All sectoral indices closed positive with the NSE Industrial Goods Index leading with average gain of 4.7 per cent. The NSE Insurance Index followed with a gain of 4.4 per cent. The NSE Banking Index appreciated by 3.7 per cent. The NSE Consumer Goods Index rose by 1.4 per cent while the NSE Oil & Gas Index inched up by 0.1 per cent.

Total turnover stood at 211.93 million shares valued at N1.41 billion in 3,438 deals. The most active stock was AIICO Insurance with a turnover of 87.5 million shares. FCMB Group followed with a turnover of 19.7 million shares while Transnational Corporation of Nigeria placed third with 12.8 million shares.

“We anticipate a sustained bullish performance in the next trading session,” Afrinvest Securities stated.

Benchmark indices at the NSE showed average full-year return of 50.03 per cent by the sound of the last closing gong for the 2020 business year. This implied net capital gain of N6.483 trillion. The recent highest return was 42.3 per cent recorded in 2017.

Many leading investment firms at the weekend said they expected the market to continue on its positive trajectory citing the impending earnings season and the relatively higher dividend yields for equities compared with the crashed rates at the fixed-income markets.

Through the lockdowns and disruptions occasioned by  pandemic, and later the unrests due to protests against police highhandedness, the stock market braced the odds of hyperinflation and economic recession to sustain and build up attractive return since the second quarter.

While a steep decline of 18.75 per cent in March 2020 had driven the first quarter to a negative return of -20.7 per cent or net loss of N2.68 trillion, the market recovered in the second quarter with positive average return of 14.12 per cent or net capital gains of N1.656 trillion. It continued its rally with average return of 9.61 per cent or net capital gains of N1.23 trillion in third quarter 2020.

The 2020 recovery is particularly spectacular when viewed against the background of negative performance in recent years. After posting a world-ranking return of 42.3 per cent in 2017, the market had reversed to negative in 2018 with average full-year return of -17.81 per cent.  In 2019, investors suffered net loss of about N1.71 trillion with negative average return of -14.60 per cent. Prior to 2017, the stock market had been on a losing streak since 2014. Investors lost N1.75 trillion in 2014 and followed this with another loss of N1.63 trillion in 2015. Against the general expectation that political transition and new government will quicken a rebound, equities closed 2016 with a net capital loss of N604 billion.

With inflation rate at 14.89 per cent, yield or coupon or interest rate at the fixed-income market ranging from less than one per cent to a little above one per cent for one-year instrument to some seven per cent annual coupon for two decades and a half instrument, Nigerian equities’ return is the most attractive and the only positive-yielding return in 2020, even when adjusted for inflation and cost of capital.

Group Head, Emerging Businesses, Access Bank Plc, Ayodele Olojede speaks on the importance of micro, small and medium businesses and the philosophy driving the bank’s  pursuit of products and services to support small businesses.

 

Importance of micro, small and medium enterprises

Let’s take a look at the market statistics for micro small and medium enterprises (MSMEs). Over 41 million MSMEs are responsible for over 84 per cent of labour force and they contribute over 50 per cent to Gross Domestic Product (GDP) -this is a sector that you want to be deliberate about its growth and how the players achieve scale. The published statistics from the National Bureau of Statistics between 2013 and 2017 reflected an overall growth of five million new businesses from 37 million to over 41.7 million. However, the market recorded a decline of about 60 per cent in the number of medium-sized enterprises from 4,670 to 1,793. What does this tell you? The opportunity for small business to scale is limited.

Impact of lockdowns on MSMEs

The lockdown experienced in 2020 as a result of the pandemic worsened the market situation resulting from less in-person interactions, less in-person payment options, lesser need for brick and mortar store businesses.

The statistics we have from a survey carried out by Fate Foundation on areas impacted by lockdown showed the top three to be cashflow, sales and revenue. About 72 per cent of businesses surveyed said that their business cashflow were severely impacted – and as they say – cash is king. Sales and revenue are also critical elements banks look at to assess and qualify business owners for loans.

This made more apparent the lack of infrastructure and access to digital resources for small businesses. It is also showing that technology is not necessarily a level playing field for market players. For technology to be considered a level playing field for small businesses to achieve scale, there are fundamental factors that needs to be addressed. We will look at five questions that will address this issue. What infrastructure and digital resources are available to MSMEs to participate strongly in the market and achieve scale? How can small businesses access these digital resources? What skill sets business owners have to optimise the use of the digital resources? What about trust issues? What about affordability?

Importance of tech-driven payment acceptance services

In addressing each of them, what infrastructure and digital resources are available to achieve scale? Payment acceptance service is a critical element. In the context of keeping safe, more businesses are using Whatsapp, Instagram, Telegram, Facebook to sell and those who can afford it are building their own website to transact their business online. However, they still receive payments by transfer through direct messages. No doubt direct messages have been helpful but as your business sales increase, how many customers could you attend to in a day without exhaustion as a small business owner! In fact, some direct messages never get responded to until days after!

If technology were a leveler and available for all, a critical digital resource that is needed is payment acceptance service for merchants to receive payments and provide better buying experience to individual buyers. This is especially necessary to manage stock out, which is recurring reason for not returning to the vendor’s page, because after going through direct message, the vendor will message you that the item of your choice is no longer available. Additionally, at the end of the day’s sales, the merchant still needs to reconcile account and track sales performance for the day!

A solution for seamless payment and account

At Access Bank, we have developed SWIFTPAY as part of our unending supports for MSMEs. SWIFTPAY is a payment acceptance service that we have introduced to support the transition and growth of our business customers. SWIFTPAY is just a payment link that can be hosted on your social media page , you can send to anyone to pay you . It is easy – less than five minutes to sign up, convenient, straight through and time-saving for everyone. It takes less than five minutes to sign up.

At Access Bank, we are committed to providing very practical solutions that supports the growth of our customers. We know that stronger participation in markets helps strengthen contribution to economic development.

We recently introduced visa business debit cards to our customers and we are the first to do in the industry in partnership with Visa. The business debit cards comes with higher withdrawal and spend limits for customers, it gives you discounts to courier services, you know logistics is a critical element for online business and it also comes bundled with access to Google business advisory services to learn how to manage your online store front .

Beyond payment and banking

We are just all about helping our customers better optimise business solutions. We also have partnerships that help customers create online store for as low as N25,000. You can see that our customers have access to the entire ecosystem that helps you sell beyond the proximity of your store. How do customers access these resources? Very easy! Just open a business account with Access Bank and you are automatically registered to use SWIFTPAY very swiftly. Activate and put the link on your social media page, send to anyone who wants to pay you and watch your sales grow. This is beyond account opening, beyond just lending and it is a commitment to providing value.

What about skill sets required to navigate and manage business online?  Let me share a story of my encounter with a business owner recently. I had to go to the Mainland to purchase an item and because it was a bad traffic day and I spent about three hours in traffic to get there. When I got to the store, I went straight to the store owner and I asked her; “madam, please why are you not online?  I don’t see myself coming back here again after what I just went through to get here”, and she started talking about how it has been frustrating for her to manage a store online and she had to stop altogether! What is lacking here is just the lack of knowledge of how to manage a store front online and she was missing out on online sales for this reason. What we have done is to partner with Google business advisory to help us train our customers on the nuances of online business. They will also be exposed to online tools to optimise business. Our small businesses also have the opportunity of enjoying Google ads to advertise online. Honestly, small businesses have never had it this good and I am excited we are helping making access to digital resources easy.

There are digital resources out there in the market, so what about trust issues?  With the rise in the popularity of social media as e-commerce comes the increase risk of fraud. Business identity fraud is on the rise with the use of logos and false pages to appear genuine and defraud unsuspecting potential buyers of funds. With SWIFTPAY, merchants do not have to worry about this because every merchant registered on SWIFTPAY will carry a ‘Verified by Access’ stamp to authenticate the page. So if you don’t see ‘Verified by Access’ on the merchant page or online store, please be careful.

Affordability

SWIFTPAY is free. The processing charge is discounted up to 15 per cent to ensure you keep most of your earnings, unlike other services, if you sign up to our visa business debit cards. Business owners should worry less about financials and focus on their businesses with SWIFTPAY. You may want to ask how is SWIFTPAY different from other payment acceptance services. We are a bank, your account is already domiciled with us , you don’t have to go through any additional Know-Your-Customer (KYC) checks , your business is verified , we will use your financial records to lend you money . SWIFTPAY is part of a new campaign we have launched -’Your Business Matters’, a campaign to let our business customers know that their businesses matter to us and we will continually work with them to support their growth.

 

 

 

By Taofik Salako, Deputy Group Business Editor

Authorities at the Nigerian Stock Exchange (NSE) have blacklisted two persons and entered their names unto the list of persons not fit to engage in capital market activities.

A regulatory document obtained by The Nation indicated that the NSE has blacklisted the duo of Mr Uduma Arunsi, an executive director at Royal Trust Securities Limited and Mr Adewale Ogunbanwo, a former compliance officer at Dominion Trust Limited.

According to the Exchange, the duo were blacklisted in line with the provisions of Rule 1.24: Definitions, Rulebook of The Exchange, 2015, Dealing Members’ Rules as amended, which deal with offences and sanctions relating to market abuses, shares fraud and misconducts.

Arunsi was blacklisted for allegedly engaging in “msconduct and unauthorised sale of clients’ shares” while Ogunbanwo was blacklisted “for misconduct and fraudulent activities”.

“Dealing members are advised not to engage in any activity with the above-mentioned individuals,”NSE warned.

With the blacklist, the indicted persons will not be able to work in any stockbroking and investment firms in Nigeria, according to rule six, subsection 13 of the NSE Rules.

Read Also: Businessman arraigned for ‘N25m fraud’

Under the rule known as “Specific Actions Requiring Prior Consent of The Exchange”, a dealing member shall not be allowed to employ some categories of persons without the prior written consent of the Exchange.

These included directors, authorised clerks or other persons including principal officers such as the chief executive officer, chief finance officer, chief compliance officer and chief risk officer, who have been indicted by the NSE or Securities and Exchange Commission (SEC).

Others included any person who was an officer or employee of a dealing member expelled from the Exchange, any person expelled, as an authorised clerk or its equivalent, from any other exchange, any person refused admission as a member of the Chartered Institute of Stockbrokers or any person expelled from its membership, any person expelled as a member of any professional association or institute and any person who is insolvent or has been convicted of theft, fraud, forgery, or any other crime involving dishonesty.

Also, indicted persons may not be able to practice or operate in any country or jurisdiction where Nigeria has a subsisting Memorandum of Understanding (MoU) on capital market cooperation.

The Nation had earlier exclusively reported that the NSE had entered the names of no fewer than 33 persons in its “Blacklist”, an official record of all corrupt persons and indicted officials who are deemed unfit to engage in stock market activities.

This followed 2018 amended of the NSE rules, which enabled it open a formal record to be known as “blacklist” for the purpose of records of corrupt persons. The amendment was approved by the Securities and Exchange Commission (SEC) in December 2018.

The “blacklist” contained persons who were blacklisted for various crimes ranging from unauthorised sale of client’s shares, diversion of funds, professional misconduct and aiding and abetting criminal activities.

Those on the “blacklist” include stockbrokers, accountants, directors, compliance officers, registrar and information and technology specialists among others.  A breakdown showed that stockbrokers were more than half of the blacklisted persons while compliance officers also featured prominently.

To be included in the “blacklist”, the Exchange must have established a prima facie case and indicted such persons. Any blacklisted person shall no longer be entitled to privileges, services, recognition or access to the Exchange and its facilities. Such a person also shall not be permitted to deal or transact with or be employed by a dealing member or person.

The “blacklist” rule applies to all dealing member, an authorized clerk, an employee or director of a dealing member, a sub-broker, or any other capital market operator.

According to the rules, any person blacklisted by the Exchange may however apply to the Exchange for reinstatement after the expiration of the blacklisting period imposed by the Exchange; or where the blacklisting is not for life, a reasonable period has elapsed where no period is specified by the Exchange.

Any person applying for removal from the blacklisting and reinstatement into the capital market must “provide compelling reasons” in support of his or her application.

The “Blacklist” was meant to strengthen the hands of the Exchange in its fight against unauthorised sales of investors’ shares and diversion of proceeds by capital market operators.

A check had indicated that about 90 per cent of blacklisted persons were due to unauthorised sales of client’s shares. Other ranking crime was manipulation of the market or share prices.