Category: Investors

As the April 12, 2022 deadline for the mandatory recapitalisation  in the pension industry draws near, boards of Pension Fund Operators (PFOs) are being changed, The Nation has learnt.

Findings show that many PFOs, which include Pension Fund Administrators (PFAs), Pension Fund Custodian (PFCs) and other operators, would cross the recapitalisation hurdle and meet the minimum share capital base of N5 billion.

The National Pension Commission (PenCom) mandated PFAs to increase their minimum share capital base from N1 billion to N5 billion last year with the April deadline.

As at December 2020, the regulator approved new directors for some PFOs.

In the new order, IEI-Anchor Pension has a new Acting Managing Director in the person of Ms Jolaade Oduntan, taking over from Mr. Glory Etaduovie; Chevron Closed PFA Chevron has a new Managing Director in person of Temitope Adegbonmire, taking over from Adesola Okeowo.

Fidelity Pension got Acting Managing Director, Donald Okorie Onuoha. He takes over from Amaka Andy-Azike.

Others are Chairman, Leadway Pensure, Olusegun Aganga; Acting Chairman, AIICO Pension, Asue Ighodalo; and Executive Director, NLPC PFA, Adefoluso Agbede.

UBA PFC has a new Executive Director in person of Mr. Yomi Onitiju; Independent Non-Executive Director, FCMB Pensions is Titi Odunfa Adeoye; Non-Executive-Director,Trustfund Pensions is Joseph Ajaero; Non-Executive Director, PAL Pensions is Charles Ifedi; and the Non-Executive Director, Progress Trust CPFA is Abiodun Yusuf.

Similarly, the Commission approved the exit of some directors from seven firms during the period under review.

They are Etaduovie;Andy-Azike;   Okeowo; Managing Director, AIICO Pension, Managing Director, Eguarekhide Longe;   Managing Director, CrusaderSterling, Adeniyi Falade; Executive Director, CrusaderSterling, Conrad Ifode;   Non-Executive Directors, Leadway Pensure, Sarbeswar Sahoo and David Bell; and Company Secretary, First Pension Custodian, Adeyoola Adebayo.

The Oak Holdings, a hybrid financial institution group, has launched into the Nigerian financial industry with four subsidiaries to provide services to different clients in the financial services industry.

The subsidiaries included The Oak Homes, The Oak Capital, The Oak Digital Bank and The Oak Asset Management

Speaking at the launching ceremony in Lagos, founder and Chief Executive Officer, The OAK Holdings, Mr. Olukayode Olusanya said the company’s multi-asset strategy combines different types of assets, including equities, fixed income securities, private and mutual funds, indexing, money market instruments among others to create a more nimble, broadly diversified portfolio for its proprietary investment objectives.

He explained that Oak Homes is a leading real estate development company with its primary business in Lagos, Nigeria but it has recently made foray into the United Kingdom and the United States.

He added that in addition to core real estate development, the company is also engaged in facility management, construction and infrastructure development and it is manned by an innovative and creative team with combined experience spanning more than four decades.

He said The Oak Capital is a venture capital firm with a bias for supporting underserved start-up founders creating lasting solutions to problems in the African continent by leveraging the use of technology to promote growth of their businesses.

According to the Founder, The Oak Capital seeks to back audacious, young entrepreneurs who are solving critical problems across different sectors in Africa, by providing pre-seed and seed stage funding.

Citing statistics from the Credit Bureau Association of Nigeria, Olusanya said limited funding remains a critical bottleneck to the growth of small businesses in Nigeria, as only about four percent have access to credit.

He remarked that while there has been significant funding for start-ups from foreign venture capital firms, such is concentrated on elite founders and at much later stages, a development which make most indigent young founders struggle to raise funding at very early stage of their businesses.

He said the venture capital is established to make outstanding investment deals in sub-Saharan Africa as it is sector agnostic but with bias for businesses driving technological innovations, financial inclusion, improve health care services and enable food security.

He added that the Oak Asset Management Limited provides fund management and portfolio advisory services to a wide range of clientele. The company analyses risks and estimates investment gains before making investment decisions in a bid to ensure that its strategy deliver maximum investment returns to its investors, he said.

The digital bank is an economic driver and a vehicle of economic empowerment which enables the company to “provide the wings for its clients to fly,” he said.

Olusanya observed that with access to credit being a major deficiency for SMEs, the Oak Digital Bank proposes value to its clients with strong inclination to have zero deficiencies.

He added that the bank is set up as a digital bank to support its businesses entities and will run a lean and efficient model while leveraging non-traditional systems and methods such as mobile App, Web and digital kiosks.

Former Group Managing Director of First Bank Nigeria Plc, Mr. Bisi Onasanya, who graced the launching, among other dignitaries, advised the board and management of Oak Holdings to create financial advisory services department to relate with customers with a mindset of guiding the needs of its clientele. He urged those who graced the launching to endeavour to do business with the group in the future.

Besides Olusanya, the group management team include: Eng. Elias Rassi, Chief Operating Officer, Oak Homes; Andrew Idechi, Chief Operating Officer , The Oak Digital Bank; Oladimeji Kuforiji, Legal Counsel. Others are Lucky Oboh; Head, Treasury, Oyedade Shokunbi, Venture Capital team Lead, among others.

FMDQ Securities Exchange Limited (FMDQ Exchange) has listed commercial papers (CPs) worth about N141 billion so far in 2022.

Quotation report at the FMDQ Exchange indicated that the securities exchange has so far listed 22 commercial papers worth N140.73 billion so far this year.

FMDQ Exchange noted that the increasing quotation of CPs underscored the fact that corporate institutions have continued to explore alternative financing options by tapping the debt capital market to sustain their business activities and plug capital shortfalls.

In the latest quotation, FMDQ Exchange admitted United Capital Plc’s N12.48 billion Series 8 Commercial Paper (CP) to its board. The United Capital’s CP was issued under the company’s N50 billion CP Issuance Programme.

The net proceeds of the United Capital’s CP will be used by the company to finance short-term working capital requirements.

FMDQ Exchange assured that in line with its strategic objectives to support institutional growth and deliver prosperity to Nigerians, the Exchange will continue to demonstrate its commitment towards delivering a globally competitive, operationally excellent, liquid and diverse market.

FMDQ Exchange reiterated its commitment to promotion and provision of a world-class quotation service, availing issuers and investors the much-needed global visibility, confidence and protection in the markets.

 

The Nigerian Exchange (NGX) has said collaboration and engagement with stronger voice will help to address several policy changes recently affecting the capital market.

Speaking at the Nigerian Economic Summit Group (NESG) Fiscal Policy Roundtable, Chief Executive Officer, Nigerian Exchange (NGX), Mr. Temi Popoola said all stakeholders must collaborate to sustain the growth of the capital market. The roundtable was tagged: Impact assessment of the 2021 Finance Act.

Popoola commended the economic policy direction of the current administration, citing the passage of the Petroleum Industry Act and the 2021 Finance act as indications of the government’s commitment to drive non-oil revenues into the country.

He said the tenets of the 2021 Finance Act brought a lot of more clarity on investment such as the Real Estate Investment Trust (REIT), Capital Gain Tax (CGT) and Securities Lending transaction.

He noted that investing in real estate investment brings a lot of potential gain, pointing out the diversity of assets in the market has helped to boost investors’ confidence.

Popoola said the introduction of the capital gains tax on transactions over N100 million is a welcome development in line with the government’s drive towards an increased tax bracket.

He, however, cited that the policy might have the adverse effect of discouraging high-end investors including institutional investors.

According to him, as retail investors were the primary drivers of the market in 2021 and largely fall below the N100 million cap, this policy should drive further participation by those in this category.

He also noted the potential macroeconomic effects of the finance act including the introduction of excise taxes on Non Alcoholic beverages and the Education tax and the potential impact on the abilities of the affected entities to raise capital and pay dividends to investors citing the timing and recovering economy as factors that may influence this.

He however noted that overall, the law serves to boost the capital market and the economy reiterating NGX’s commitment to adhering to government policy and driving growth in the capital market.

 

The Nigerian Exchange (NGX) and MTN Nigeria Communications Plc (MTNN) have signed a Memorandum of Understanding (MoU) to  promote financial literacy and enhance retail participation in the capital market.

The ceremony held between Chief Executive Officer  NGX, Mr. Temi Popoola and Chief Executive Officer, MTNN, Mr. Karl Toriola.

The MoU is a two-year partnership that will see NGX and MTNN collaborate to develop capital market solutions, leverage technology to support data dissemination and technology-as-a-service, promote capacity development, and eliminate barriers to retail participation in the capital market.

Speaking about the MoU, Popoola stated: “In building on our rich heritage as the first and foremost multi-asset securities exchange in Nigeria we are resolute in our commitment to democratise finance in Nigeria by leveraging current advancements in technology and relying on strategic partnerships. With its customer base of over 68 million customers, MTNN provides invaluable access to a large pool of potentialretail investors who can play an important role in Nigeria’s capital market, deepening their own financial resilience in the process. This collaboration with MTNN aligns with our aspiration to build an open, professional and vibrant exchange and we are indeed excited about this NGX era.”

Toriola added: “At MTNN, we believe we have a responsibility to ensure that our customers not only stay connected but can access increasing value and better services through our network, deepening their participation in the digital economy. Our collaboration with NGX gives us the opportunity to empower our customer base with the tools and the knowledge to engage effectively with the capital market and meet their financial and investment objectives. There is no better way to demonstrate our commitment to this than through the just concluded public offer for sale of MTNN shares, designed to enhance retail shareholder participation in the value that we create. We continue to identify other areas of cooperation with NGX and we look forward to a mutually beneficial partnership that will contribute to the inclusive growth of the Nigerian economy.”

MTNN recently completed a public offer of the sale of 575 million ordinary shares in MTNN held by the MTN Group leveraging the NGX sponsored digital platform. The offer, which was the first ever end-to-end digital offer in the Nigerian capital markets was oversubscribed by 139.4 per cent. The deployment of an electronic primary offer platform is consistent with the commitment of NGX to enhance the efficiency and reach of the Public Offer (PO) subscription process and operational work-flow to support issuers in raising capital and enhance the reach of POs while promoting financial inclusion and retail investors’ participation in the market.

UPDC Plc plans to increase shareholding of retail investors in the real estate company in order to improve its free float compliance.

Chief Executive Officer, UPDC Plc, Odunayo Ojo, said the company plans to increase the public ownership of the former UACN Property Development (UPDC) to 10 per cent.

Custodian Investment Plc owns 51 per cent controlling equity in UPDCV while UAC of Nigeria (UACN) has 43 per cent.

Regulatory report at the Nigerian Exchange (NGX) yesterday indicated UPDC has a free float rate of 4.98 per cent, 15.02 per cent of the 20 per cent regulatory requirement.

In August 2020, Custodian Investment and UACN had signed a binding agreement on the investment of UACN’s 51 per cent majority equity stake in UPDC to Custodian Investment. The transaction included sale of 9.47 billion ordinary shares of UPDC held by UACN, representing 51 per cent of UPDC’s issued share capital to Custodian.

Under the agreement, the shares were transferred in two tranches with initial sale of 946.56 million shares, representing 5.10 per cent of the issued share capital of UPDC, on execution of binding transaction agreements. Then, there was subsequent sale of 8.52 billion shares, representing 45.90 per cent of the issued share capital of UPDC upon receipt of requisite approvals.

Both parties to the transaction had said the agreement marked the beginning of a partnership between Custodian and UACN that would achieve both companies’ respective objectives in the real estate industry. It was also described as a significant milestone that aligned with UACN’s strategy to focus on its core businesses.

Group Managing Director, Custodian Investment, Wole Oshin said Custodian was excited about the possibilities arising from the partnership with UAC which provides multiple levers for value creation.

He said the rationale for the transaction was that Custodian and UAC share the view that their ambitions for capturing opportunity in the real estate industry will be better achieved working in partnership.

“UPDC is one of Nigeria’s leading real estate development companies, having completed several landmark residential and commercial developments over the past 20 years. This transaction will provide custodian with a platform to capture arising real estate opportunities. It also immediately provides recurring cash flow visibility and attractive yields as a result of its direct exposure to Nigeria’s leading real estate investment trust (UPDC REIT) with a track record of profitability and annual dividend distribution which offers a good compliment for our product portfolio,” Oshin said.

He expressed confidence that the recent recapitalisation of UPDC, significant reduction in finance costs, and recently reconstituted leadership have repositioned the company to operate sustainably and capture growth opportunities aimed at increasing stakeholder value going forward.

Group Managing Director, UAC of Nigeria (UACN) Plc, Folasope Aiyesimoju said the transaction was a significant step in achieving the group’s objectives for UPDC, noting that in 2018, the board and management of UACN embarked on a strategic review to evaluate the performance of the company and its subsidiaries.

According to him, UACN’s objective was to achieve sustainable positive financial performance from existing operations and enable management focus on businesses that align with its strategy. In reviewing UPDC, the board weighed the long-term opportunities in the Nigerian real estate sector against the fundamental differences between the cash flow profile and capital needs of UPDC and those of the other entities in UACN’s portfolio. Following its review, the board concluded that it would be in the best interest of UACN to exit its interest in the real estate sector, allowing UPDC to operate as a standalone legal entity, free to source appropriately structured capital and to unlock value for its shareholders.

In September 2019, the boards of directors of UACN and UPDC jointly announced three significant strategic initiatives aimed at strengthening UPDC and positioning the company to operate as a standalone entity. This included a rights issue to recapitalise the business, plans for UACN to transfer UACN’s equity interest in UPDC pro-rata to UAC’s shareholders (UPDC unbundling), and plans for UPDC to unbundle the UPDC REIT to its shareholders (UPDC REIT unbundling). The N16 billion UPDC rights issue was successfully completed in April 2020, proceeds of which were used to reduce borrowing costs and significantly improve UPDC’s capital position.

“In the process of progressing the unbundling initiatives, UACN received a credible offer from Custodian. The terms of the offer compelled the board to re-evaluate the planned approach to deconsolidate UPDC and influenced the board’s decision to proceed with the sale of a portion of UACN’s interest in UPDC to Custodian, effectively putting an end to the UPDC unbundling. We are delighted about the positive impact that a strong anchor shareholder like Custodian will have on UPDC and are focused on ensuring a smooth transition,” Aiyesimoju said.

The audited report and accounts of United Bank for Africa (UBA) Plc have been released. What is working for the bank? That is the question that analysts have been answering in different ways. In this report, Deputy Group Business Editor Taofik Salako examines analysts’ reviews within the context of management’s outlook.

Most leading investment banking and research firms are placing United Bank for Africa (UBA) Plc as a “top pick” and a recommended “buy” stock.

The recommendations are based on analysts’ reviews of the latest audited report and accounts of the pan-African banking group, the current dividend payout and yield, the potential capital appreciation and the overall long-term outlook for the bank.

With appreciable growths in earnings, assets and profitability, UBA had hit new thresholds of size and customer deposits in its latest audited report.

The report, for the year ended December 31, 2021, highlighted continuing growths in key profit and balance sheet indicators. With double-digit growth, UBA’s total assets crossed the N8 trillion mark, the first time for the pan-African banking group. The diversity of its operations across key African markets appears not only to be increasingly a major boost for profitability but also a buffer against specific market headwinds, especially in its domestic base.

Other African operations, excluding Nigeria, accounted for 63.2 per cent of the group’s profitability in 2021 compared with 55.4 per cent in 2020 while loans and advances as well as deposit in the segment also grew by 14.5 per cent and 27.3 per cent.

Analysts’ reviews

FSDH, a major investment banking group, led its latest “top picks” with UBA, with the bank ranking atop dividend yield table with 12 per cent dividend yield. FSDH’s analysis, which picked six stocks as “top picks”evaluated both fundamental operational results and trading pattern of the stocks. Key evaluation points included current and historical pricing trend, price-earnings ratio, current and average price-to-book value ratios and dividend. At 12 per cent, UBA’s dividend yield-the percentage of current dividend on the current share price and by implication, possible immediate returns, is significantly higher than coupons on Nigeria’s sovereign savings bonds. The two-year FGN Savings Bond, issued in February 2022 and due on February 07, 2024, carries a coupon of 7.220 per cent per annum while the three-year FGN Savings Bond due February 07, 2025 carries a coupon of 8.220 per cent per annum.

Afrinvest rated UBA “buy”, the highest rating for stocks with strong potential. Analysts at Afrinvest stated that UBA has potential return of more than 34 per cent. Providing context for their rating, analysts at Afrinvest explained that “buy” implies that “the expected total return over the next 12 months is 25 per cent or more. Investors are advised to take positions at the prevailing market price as at the report date”. Afrinvest further explained its approach to fair value estimate- a major determinant of analysts’ view.

“Our approach to establishing fair value takes into account a weighted average of price estimates derived from a blend of valuation methodologies including the Discounted Cash Flow (DCF) and its variants as well as other relative and comparable trading multiples valuation models.

“However, we attach the most weight to DCF valuation methodology, particularly the Dividend Discount Model (DDM), Free Cash Flow (FCF) model and Residual Income Valuation/Model (RIV/RIM). The utilisation of comparable trading multiples is guided by the analysts’ understanding of the banks’ fundamentals, as well as key price drivers from the firm, industry and macroeconomic perspectives,” Afrinvest stated.

After extensive fundamental analysis, analysts at Cordros Group described UBA’s 2021 performance as strong and sustainable.

“UBA’s strong financial performance and the corresponding increase in payout to shareholders bode well for the bank, and we expect to see sentiments improve in the short to medium term, which may potentially drive price action.

“We remain optimistic regarding the long-term outlook and expect financial performances to maintain the positive growth trajectory,” Cordros stated.

Core fundamentals

The audited results of UBA for the year ended December 31, 2021 showed appreciable growths across key financial metrics. Gross earnings rose to N660.2 billion in 2021, representing an increase of seven per cent on N616.8 billion recorded in 2020. Despite the huge challenging business and slow economic recovery in most of its countries of operations, UBA’s profit before tax rose by 20.3 per cent to N153.1 billion in 2021, compared with N127.3 billion in 2020. Profit after tax grew by 8.7 per cent to N118.7 billion in 2021 as against N109.2 billion recorded in the previous year.

Total assets rose by 11 per cent to an unprecedented N8.5 trillion in 2021, up from N7.7 trillion in 2020, thus marking the first time the bank’s assets will cross the N8 trillion mark. Similarly, net loans grew by 7.7 per cent to N2.8 trillion. Customer deposits rose by 12.2 per cent to N6.4 trillion in 2021 compared with N5.7 trillion in 2020, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the deepening of its retail banking franchise. Further analysis showed that in 2021, the bank’s operating income rose by 10 per cent to N443 billion compared with N403 billion in the previous year, whereas operating expenses closed the period at N279 billion. Earnings per share increased to N3.39 in 2021 as against N3.10 in 2020. The board of directors of the bank has recommended a final dividend of 80 kobo per share, in addition to an interim dividend of 20 kobo earlier paid, bringing the total dividend payout to N1 per share. This represents a payout ratio of about 29.5 per cent, indicating that the bank is locking in more earnings to drive growth.

Providing additional breakdown, Cordros noted that the bank’s core income growth and lower funding costs supported its strong performance. Analysts noted that the bank’s core business interest income recorded a double-digit growth of 10.8 per cent to NGN472.26 billion, propelled by all contributory lines. Most significantly, incomes from loans and advances to customers  rose by 11.9 per cent, loans and advances to banks grew by 117.7 per cent, investment securities increased by 4.3 per cent while income from cash with banks improved by 5.2 per cent.

Also, interest expense declined by 6.4 per cent to N157.55 billion driven by the lower cost of borrowings. Interestingly, the bank recorded a marginal 0.4 per cent increase in funding costs for deposits, despite the 12.2 per cent growth in deposits owing to its improved CASA mix of 86.6 per cent in 2021 as against 81.8 per cent in 2020. The collective impact of higher income and lower expense led to a 22.1 per cent increase in net interest income to N316.71 billion. Likewise, impairment charges on loans and other financial assets declined by 52.4 per cent to pre-pandemic levels and supported profitability margins.

Analysts noted that the faster increase in operating income compared to operating expenses led to improved operational efficiency, with cost-to-income ratio moderating to 64.6 per cent in 2021 as against 65.5 per cent in 2020 and five-year average of 65.1 per cent.

Management outlook

Group Managing Director, United Bank for Africa (UBA) Plc, Kennedy Uzoka, said the results showed that notwithstanding the tight and challenging operating environment, UBA has continued to deliver significant performance.

He outlined that the quality of UBA’s portfolio as well as the strength of the bank’s credit risk management frameworks and policies remain the bedrock of the positive results that the bank has been recording over the years.

According to him, the current performance highlights UBA’s relentless customer focus, and leverage on its key strategic levers of people, process and technology.

He noted that 2021 could best be described as a year of global recovery; economies around the world began to witness early-stage recoveries, as supply chains recover from the devastating disruptions suffered in 2020.

“Looking forward, I am particularly excited about our ongoing enterprise transformation programme which is designed to enhance the bank’s process agility, service delivery and customer experience. We are also making sizeable investments in cutting-edge technology and cyber security, to keep our innovative digital banking offerings above the curve, as we tool and re-tool our human resources to compete and win in a rapidly changing and evolving landscape. This will ensure the bank continues to achieve respectable top and bottom-line growth through the medium to long term,” Uzoka said.

Group Chief Financial Official, United Bank for Africa (UBA) Plc, Ugo Nwaghodoh, said the bank has shown resilience by achieving sizeable growth and strengthened balance sheet despite the slow pace of economic recovery that characterised the year 2021.

He noted that through active and diligent assets and liabilities management, the bank was able to protect its net interest margin and achieved a downward moderation of Cost of Funds (CoF) by 70 basis points to 2.2 per cent from 2.9 per cent in the previous year.

According to him, the bank’s capital adequacy ratio at 24.9 per cent was well above the required regulatory minimum and reflects a strong capacity for business growth.

“The Group’s non-performing loan ratio improved further to 3.6 per cent from 4.7 per cent at the end of 2020. This testifies to the quality of UBA’s loan portfolio even as the bank remains relentless in its resolve to drive down the Cost-to-Income ratio, which stood at 63 per cent at the end of the year,” Nwaghodoh said.

He added that the bank achieved further strides in growing its business and gaining market share across its pan-African operations, with the region accounting for 63.2 per cent of the group’s profitability, compared to 55.4 per cent in 2020; loans and advances as well as deposit in the region were also up 14.5 per cent and 27.3 per cent.

“We recognise the changing competitive landscape and are proactively positioning to consistently deliver on our strategic objectives and commitment to shareholders,” Nwaghodoh said.

With a stable board and management with core banking experience, increasingly strong fundamentals place UBA at an advantageous position to weather the headwinds and harness emerging opportunities. UBA is strategically important as a first tier pan-African bank with more than 25 million customers, 274,000 shareholders and 10,200 employees – 44 per cent females. The outlook must be reassuring to shareholders and other stakeholders.

 

Investors in Vitafoam Nigeria Plc are in for wider dining tables as subsidiary of the leading bedding and home luxury group, Vitaparts Nigeria Limited, launched Nigeria’s first indigenous oil filters for automobiles.

Vitaparts produces two variants of oil-filters for automobiles: Spin-on Vitafilter and Cartridge Vitafilter.

Operations Manager, Vitaparts Nigeria Limited, Eghosa Osadolor, said that the innovative products were customised on the basis of the user’s engine.

According to him, Vitaparts is set to revolutionise the automobile industry with the manufacturing of oil filters for automobiles.

“The vision which birthed the company stemmed from the need to offer tested and trusted oil filters and other automobile parts that will serve Nigerians and their automobiles. The oil filters are manufactured in different sizes and are produced based on the user’s car engine. The filters are readily available for purchase at the Vitaparts office, various mechanic workshops, and accredited dealers across the country,” Osadolor said.

He noted that over the years, Vitafoam has carved a niche for itself and transitioned from being just a manufacturer of flexible, reconstituted and rigid foam products to offering complete household furniture solutions to customers seeking comfort and reliability.

According to him, in demonstrating that innovative and forward-thinking attributes, the company has recently added to her numerous value-adding products in the automobile industry; the production of oil filters for automobiles.

“The product provides the best performance for automobile engines; it is optimised for both synthetic and conventional engine oils and has a minimum oil change interval of 10,000km,’’ it said.

With state-of-the-art testing equipment, the filters have been confirmed to meet international standards,” Osadolor said.

He added that manufactured with quality materials, the oil filters are produced to effectively remove contaminants in engine oils, maintain the life of your engine and provide optimal engine performance that meets the needs of mechanics, spare part dealers, importers, car assembly plants, and service centres in Nigeria.

He explained that Vitaparts Nigeria Limited was floated by Vitafoam Nigeria as part of the manufacturing company’s drive to expand its products range beyond rigid foams.

The NGX Regulation (NGX RegCo), the self regulatory organisation (SRO) that regulates the Nigerian Exchange (NGX), has clarified that the market regulator and the Exchange do not determine the listing price of companies seeking to list their shares on the Exchange.

In a reaction to misconception in some quarters on the roles of NGX RegCo and NGX in the listing of companies’ shares, NGX RegCo stated that there is need to provide clarifications to the public on its function with respect to listing applications, particularly as it relates to the determination of a company’s listing price.

Some commentators had raised concerns that NGX RegCo’s due diligence during the listing application review process should have uncovered the listing prices of some companies deemed unreasonably high and intervened accordingly.

According to NGX,  a company seeking to list its equity securities on NGX, where the equity securities of the company have not already been listed on NGX, is required to indicate the proposed listing price of the equity securities in its application to list. The company is also required to submit a pricing memorandum, which is a document that details methodologies and assumptions adopted by the copany and its advisers in arriving at the proposed listing price, among other documents.

“In reviewing the listing application, NGX RegCo does not intervene in the proposed listing price, as obtains in some other jurisdictions. However, NGX RegCo reviews the pricing memorandum to understand the basis of arriving at the listing price and to evaluate whether the pricing methodologies and assumptions are based on generally accepted valuation principles.

“It is the responsibility of the company and its advisers to determine the listing price using a generally accepted pricing methodology. The listing requirements of NGX do not require NGX RegCo to determine a fair price of equity securities or to fix the listing price for a company.”

“As it is well known, one of the functions of an efficient securities market is to determine fair prices of securities through the operation of market forces. Following listing, where the listing price of a company is perceived to be too high or too low, the market price is expected to be appropriately corrected by the market forces of demand and supply to arrive at a fair price as trading commences.

“As such, the power is in the hands of investors and their advisers, when transacting in the market, to assess share prices or other securities of companies of interest, and to determine whether the securities are overvalued, undervalued or fairly valued in order to take appropriate positions on the securities. In other words, it is not unusual for investors to view the listing price of an Issuer either with respect or with skepticism, identifying mispricing when it exists and acting accordingly. This corrective action is a hallmark of any free and fair market,” NGXRegCo stated.

The SRO assured the investing public of its commitment to promoting the integrity, transparency and efficiency of the capital market, by ensuring that the standards set are effective in maintaining a fair and orderly market where investors are adequately protected.

Minister of Finance, Budget and National Planning, Dr Zainab Ahmed has underscored the importance of financial inclusion and gender balance in the nation’s development.

She said considering the low level of representation of women in business and political roles, specific actions must be taken as individuals, at the corporate level and in government to create a ‘seat at the table’ for women in areas such as access to financing and capacity building for women-owned businesses.

She noted that ensuring equal access to information, boosting financial inclusion, financial literacy amongst women and girls and closing the digital gender gap among other steps would help in mainstreaming women into national development.

Ahmed spoke at the maiden conference of the Society of Women in Taxation (SWIT) in Cotonou, Republic of Benin. The theme of the conference was: “The roles of professional women in nation b”.

SWIT is the female arm of the Chartered Institute of Taxation of Nigeria (CITN).

She noted that the subject matter was one that was very close to her heart given that she’s a woman who has been given a role to play in nation building.

She however encouraged all and sundry to be deliberate in efforts to give more voice to women in leadership roles across all spheres of society.

“I want to encourage all women attending this conference, as well as our male allies, to consider the promotion of increased opportunities for women in leadership roles in the workplace as a collective task. In my position as the Minister of Finance, Budget and National Planning, women represent 50 percent of my personal team. On committee assignments I have also sought to ensure women are well represented and take a lead in driving the discussions that lead to better policy making,” Ahmed said.

National Chairperson, Society of Women in Taxation (SWIT),  Dr Abiola Adimula, said the conference was to deliberate on individual and collective roles in nation building in order to impact societies positively.

“We need to be strategic to know what we ought to do and be available to act as Agents of change in our respective spaces towards national development. That is why we have brought you all as professional- women and men alike to deliberate on what we need to do positively to impact each and every aspect of our lives,” Adimula said.

She thanked the Kwara State Government for sponsoring not less than 18 participants.

President, Chartered Institute of Taxation of Nigeria(CITN), Mr.  Adesina Adedayo expressed his excitement to be part of the great initiative.

He said the issue of gender balance and the need to accord women equal opportunities have gained more momentum globally.

“Over the years, many women have broken the ice in feats achieved in nation building. It has been observed that countries with increase women’s participation and leadership in civil society and political parties tend to be more inclusive, responsive, egalitarian and democratic,” Adesina said.

Chairman and Chief Executive Officer, Nigerians in Diaspora CCommission (NIDCOM), Mrs Abike Dabiri-Erewa, who attended virtually, encouraged women to actively participate in politics at the local, state and national level, not necessarily contesting for elections.

“If the professional women want to change the status quo, then they should actively participate in political affairs,” Dabiri-Erewa said.

She however acknowledged the fact that it might be difficult but the importance cannot be overemphasised as it enables them to be part of decision making.

Former Deputy Governor of Osun State and former Minister of Defence, Erelu Olushola Obada who also attended virtually, gave a deep insight on the important roles women can play as evident in academics, business, public service and politics.

According to her, the percentage of women participation in leadership roles is very low and there should be a significant adjustment.