The Nation Newspaper

Category: Investors

  • Fed Govt raises savings bonds’ returns

    Fed Govt raises savings bonds’ returns

    By Taofik Salako, Deputy Group Business Editor

    The Federal Government is offering about 23 per cent increase on the interest or coupon payable on its current savings bond issue as government continues to increase returns on its debt issues in order to enhance the attractiveness of the sovereign bonds.

    Latest bond circular on the March 2021 issuance of the Federal Government of Nigeria Savings Bond (FGNSB) , which subscription closes on Friday, March 5, 2021, showed an increase of 22.95 per cent on the coupon payable on two-year savings bonds and 18.55 per cent increase on coupons payable on three-year savings bonds.

    The Two-Year FGN Savings Bond due March 10, 2023 carries a coupon of 5.181 per cent per annum as against 4.214 per cent for a similar bond issuance in February 2021.

    Also, the Three-Year FGN Savings Bond due March 10, 2024 carries a coupon of 6.181 per cent yearly compared with 5.214 per cent listed for a similar three-year bond issued in February 2021.

    The ongoing application list, which opened on Monday, March 1, 2021, is expected to close on Friday, March 5, while settlement will be done on Wednesday, March 10.

    Traditionally, minimum subscription to the FGNSB, usually offers at N1,000 per unit, is N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

    The bond pays coupon or interest rate on a quarterly basis. The coupon payment dates for the ongoing offers will be June 10, September 10, December 10, March 10 of every year respectively. The bond shall be redeemed at maturity through bullet repayment.

    The Federal Government had last month raised N673.12 million and N1.125 billion through its two-year and three-year bonds respectively. A total of 673,120 units of a two-year savings bond valued at N673.12 million were listed at par value of N1,000 per unit. The two-year bond carried a coupon of 4.214 per cent with maturity at February 10, 2023.

    Also, a total of 1.125 million units of a three-year savings bond valued at N1.125 billion at a par value of N1,000 were listed with a coupon of 5.214 per cent and maturity on February 10, 2024. The government had raised N18.14 million and N78.05 million through two and three year bonds in January 2021.

    The February bonds’ coupons, like the latest offers, had shown continued increase in yields on government securities.The two-year and three-year savings bonds issued in January 2021 had carried coupons of 2.19 per cent and 3.19 per cent.

    A similar two-year FGNSB issued last November and due on November 11, 2022 had offered a coupon of 1.759 per cent yearly. The three-year FGNSB issued last November and due November 11, 2023 had carried a coupon of 2.759 per cent.

    The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilisation of savings and investments.

  • Dangote Sugar increases dividend by 36.4%

    Dangote Sugar increases dividend by 36.4%

    By Taofik Salako, Deputy Group Business Editor

    The Board of Directors of Dangote Sugar Refinery (DSR) Plc has recommended 36.4 per cent increase in dividend payout after the sugar company bucked the global COVID-19 pandemic to post- strong growths in sales and profitability.

    Shareholders will receive a dividend per share of N1.50 for the 2020 business year as against N1.10 paid for the 2019 business year.

    Key extracts of the audited report and accounts of Dangote Sugar Refinery Plc for the year ended December 31, 2020 released at the Nigerian Stock Exchange (NSE) showed that group turnover increased by 33 per cent to N214.30 billion in contrast to N161.09 billion in 2019. Gross profit increased by 40.4 per cent to N53.75 billion compared with N38.29 billion in 2019. Profit before tax rose by 53 per cent from N29.82 billion to N45.62 billion. Profit after tax increased by 33.2 per cent to N26.70 billion as against N22.36 billion in 2019.

    Despite the disruptions to the economy, owning majorly to the pandemic, Dangote Sugar Refinery recorded increase in production volume which rose by 13.7 per cent to 743,858 tonnes in 2020 compared with 654,071 tonnes in 2019.

    The sugar group also posted increase in sales volume which rose by   6.9 percent from 684,487 tonnes to 731,701 tonnes.

    Group Managing Director, Dangote Sugar Refinery (DSR) Plc, Mr. Ravindra Singhvi attributed the improvements to operations optimization strategy despite momentary disruption caused by civil unrest in last quarter of the year, noting that growth continued to benefit from the sustained efforts to drive customer base expansion and several trade initiatives and investments.

    According to him, despite the socio-economic uncertainties occasioned by COVID-19 pandemic during the year under review, the sugar group continued on the growth path with commitments to improve performance and generate value for all stakeholders.

    “Our focus on the implementation of our key strategies in the face of the several challenges posed by the COVID pandemic, the peculiarities of the Apapa traffic situation, among others we achieved a topline growth in revenue of N214.30 billion, a 33.0 per cent increase over 2019; a 53 per cent year-on-year increase in profit before tax, and 33.2 per cent increase in profit after tax.

    “2020 was indeed very eventful for our company ranging from the weak macroeconomic fundamentals caused by the underlying impact of COVID-19 pandemic which saw to the steady rise in foreign exchange rate, high inflation and the significant rise in our cost of production, to the worsening traffic gridlock on the Apapa Wharf road which led to delays and at times disruption of the distribution and deliveries to customers,” Singhvi said.

    He added that the company activated its business continuity management system (BCMS) during the lock down periods due to the  pandemic and disruptions caused by EndSARS protests, which helped to minimise the adverse impact the situation had on businesses in the country.

    He noted that one of the key highlights of during the year was the successful completion of the scheme of arrangement – merger of Dangote Sugar Refinery Plc (DSR) and Savannah Sugar Company Limited (SSCL) with effect from September 1, 2020 to operate under one unified entity.

    “We are confident the merger will enable us to achieve operational, administrative and governance efficiencies resulting in increased shareholder value. We will continue to pursue our Backward Integration Projects, and other key initiatives to grow our sales volumes, market share, optimize cost and operational efficiencies,” Singhvi said.

    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.

    Singhvi outlined that in order to achieve its business goals, Dangote Sugar Refinery Plc acquired Savannah Sugar Company Limited, located in Numan, Adamawa State in December 2012, and embarked on the ongoing 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 is still ongoing as well as the development of the greenfield site acquired at Tunga, Nasarawa State for the achievement of 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. Massive developments in agriculture, irrigation infrastructure amongst others is ongoing at the site. However, Lau/Tau project is still on hold following the lingering compensation issue between the communities and Taraba state government.

  • United Capital declares N4.2b dividend as net profit rises by 57%

    United Capital declares N4.2b dividend as net profit rises by 57%

    By Taofik Salako, Deputy Group Business Editor

    United Capital Plc recorded well-rounded performance in 2020 with double-digit growths in turnover and profitability.

    Key extracts of the audited report and accounts of United Capital for the year ended December 31, 2020 released at the Nigerian Stock Exchange (NSE) showed that turnover rose by 50 per cent while pre and post tax profits jumped by 61 per cent and 57 per cent respectively.

    The board of directors of the investment banking group has earmarked N4.2 billion for distribution to shareholders as cash dividend for the 2020 business year, representing a dividend per share of 70 kobo. The dividend is payable to shareholders whose names appear on the register of members at the close of business on March 5, 2021.

    The report showed that gross earnings rose from N8.59 billion in 2019 to N12.87 billion in 2020. Net operating income grew by 58 per cent from N7.90 billion to N12.49 billion in 2020. Profit before tax leapt from N4.95 billion in 2019 to N7.95 billion in 2020. Profit after tax jumped from N4.97 billion to N7.81 billion. Earnings per share rose correspondingly by 57 per cent from 83 kobo in 2019 to N1.30 in 2020.

    The balance sheet also showed considerable improvements with total assets rising by 48 per cent from N150.46 billion in 2019 to N224.75 billion in 2020. Total liabilities grew by 52 per cent to N198.32 billion as against N130.88 billion in previous year. Shareholders’ fund rose by a quarter from N19.59 billion in 2019 to N24.43 billion in 2020.

    United Capital attributed the top-line growth to significant growths across its income lines, with fee and commission income rising by 77 per cent, investment income by 42 per cent and net trading income rising by 453 per cent.

    According to the company, there was also improved operational efficiency during the period as cost-to-income ratio declined by 4.13 percentage points, largely attributable to the faster growth in revenue relative to operating expenses.

    United Capital’s profitability margin also improved with pre-tax profit margin gaining 4.13 percentage points to 62 per cent in 2020 as against 58 per cent in 2019. Net profit margin increased by 2.79 percentage points to 61 per cent in 2020 despite a tax charge of 2.0 per cent for 2020 relative to a tax credit of N23.7 million in 2019.

    The balance sheet performance was driven by a 54 per cent increase in investment in financial assets, 44 per cent growth in the cash and cash equivalents line, a 60 per cent growth in managed funds, 43 per cent in other borrowed funds and 29 per cent growth in retained earnings.

    Group Chief Executive Officer, United Capital Plc, Mr. Peter Ashade said the impressive returns amid the unprecedented environment worsened by the pandemic during the 2020 financial year strengthen the outlook of the company.

    He said the results in 2020 empowered the company to adopt a more positive outlook for the year 2021 as it navigates the tough terrain compounded by a second wave of the COVID-19 pandemic among other severe economic challenges.

    “Despite the tough operating environment, all stakeholder groups can be assured of our commitment to providing best-in-class solutions to diverse client segments and delivering superior returns to shareholders even as we work with regulatory authorities to strengthen the broader financial system as the domestic economy continues on the path to recovery in the year 2021,” Ashade said.

  • Berger Paints appoints new director

    Berger Paints appoints new director

    By Taofik Salako, Deputy Group Business Editor

    Berger Paints Nigeria Plc has appointed a former staff of International Finance Corporation (IFC), Mr Victor Adeniji as an independent non-executive director effective from February 16, 2021.

    In a similar vein, two of the company’s directors, Chief Musa Danjuma and Chief Nelson Nweke, would be retiring from the board effective from the 2021 annual general meeting (AGM).

    A statement signed by the Company Secretary and Legal Adviser, Berger Paints of Nigeria Plc, Mr Ayokunle Ayoko indicated that Adeniji’s appointment would be ratified at the company’s AGM.

    According to the company, Adeniji would be bringing on board, almost four decades of extensive financial services sector experience encompassing multilateral development finance, investment banking and asset management at top-flight institutions, most notably the World Bank and International Finance Corporation (IFC).

    Adeniji is the Chief Executive Officer of TechnoFuture Nigeria Limited, a Lagos-based technology skills training company and West Africa franchisee for an innovative Canadian e-learning product.

    He recently co-founded Communities United to Remove Epidemics (the CURE Initiative), a non-swprofit that operates in the public health space. He is the co-author of Economies of Help: The Concept Behind the Consortium for Humanitarian Intervention (International Psychology Bulletin, June 2015).

    Adeniji studied Economics at Pembroke College, Cambridge University, where he earned BA and MA degrees in 1986 and 1990, respectively. In 2002 he served as a member of the Securities and Exchange Commission (SEC) Committee on Corporate Governance that drafted a muscular corporate governance code for listed companies. In 2001, he was nominated as one of the 100 Global Leaders for Tomorrow by the World Economic Forum.

     

  • FMDQ Exchange admits Parthian Partners’ N20b commercial paper

    FMDQ Exchange admits Parthian Partners’ N20b commercial paper

    By Taofik Salako, Deputy Group Business Editor

    The FMDQ Securities Exchange Limited has admitted the N20 billion commercial paper (CP) issuance programme of Parthian Partners Limited to its platform.

    The registration of the CP programme strategically positions Parthian Partners Limited to raise short-term finance from the debt capital market with speed at a time in the future when it determines suitable, through CP issues within the CP programme limit.

    Parthian Partners provides competitive wholesale brokerage services in the African over-the-counter (OTC) markets. It also trades in Federal Government of Nigeria (FGN) bonds and treasury bills, state government bonds, local contractor bonds, corporate bonds and Eurobonds, providing regular market updates and liaising with market participants and regulators in the African markets to provide independent research on the African fixed income market.

    FMDQ stated that the admission was part of continuing efforts to ensure corporates seeking a viable avenue to raise capital to meet their financing needs are able to use a virile debt capital market.

    According to FMDQ, in support of the growth and revitalisation of the Nigerian economy, it championed the resuscitation of the CP market to provide corporate and commercial businesses with the opportunity to meet their short-term funding requirements, while building their profiles within the Nigerian debt capital market.

    “In addition to its commendable and efficient registration process, FMDQ Exchange, through its Quotation Service, will provide stakeholders and market participants with credible and real-time information as part of the Exchange’s commitment to facilitate transparency in the fixed income market space,” FMDQ stated.

    FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group providing a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement and depository services, as well as data and information services across the debt capital, foreign exchange and derivatives markets in Nigeria.

     

  • Allianz Nigeria increases capital to N18.5b

    Allianz Nigeria increases capital to N18.5b

     

     

    Allianz Nigeria has announced an increase in the company’s authorized share capital from N10 billion to N18.5 billion.

    This is coming on the heels of the creation of 17 billion ordinary shares, allowing Allianz Nigeria to increase its Company’s authorized share capital from N10 billion to N18.5 billion.

    Team Lead, Customer Experience, Allianz Nigeria, Uti Ellu, who made this known to journalists said the shares have been issued and allotted in favour of the regional legal entity that is the holding company for Allianz Nigeria (Allianz Africa Holding GmbH).

    She said the National Insurance Commission (NAICOM) has been informed of the capital inflow.

    She further stated that the move to strengthen the capital base of its local operations reaffirms Allianz‘s commitment to business in Africa’s most populous nation, making Allianz Nigeria one of the very few insurers to announce compliance with the new capital regime.

    She said: “As part of a wider restructuring of the business, Allianz Nigeria had in December 2020 reconstituted its shareholding to make Allianz the sole investor, and further streamlined its business operations by taking the company private, now operating as Allianz Nigeria Insurance Limited.

    “Other internal changes include the appointment earlier in September 2020 of a new Managing Director, Ms Adeolu Adewumi-Zer and Executive Director, Mr Jaideep Goel to succeed outgoing executives. Rounding out the new leadership team are Mr Oyetunji Oshiyoye as Chief Customer Officer, Mr Uyi Osagie as Chief Financial Officer, Ms Abimbola Alabi as Chief People Officer and Mr Enahoro Ikhidero as Chief Technology Officer.

    “In line with corporate governance and regulatory provisions, the Board of Directors in December 2020 approved the appointment of Chief Dickie Ulu, incumbent Independent Director, as the new Chairman of the Board to succeed the outgoing chairman, Mr Fola Adeola who had resigned as Board chair after half a decade of distinct service.

    Noting that Mr Adeola’s absence will be felt because of his insightful guidance and wealth of experience, Ms Adewumi-Zer expressed her confidence that Chief Ulu is uniquely qualified to fill the position and steer the Board of the company through the next phase of its transformation, in line with the Allianz Group‘s ambitious growth plans for Africa.

    Ms Adewumi-Zer also appealed to customers who have been experiencing challenges in routine claim settlements.

    She noted that, with the restructuring of the business now completed, the focus will be to expedite settlement of all outstanding claims.

    “As risk bearers, claims settlement is the core of any insurance business and we are fully awake to our obligations to all stakeholders. Our focus in 2021 will be the fulfilment of such obligations as we rebuild trust in Allianz as the top insurance brand in the world”, she added.

  • Transcorp Hotels gets N9.93b new equity funds from shareholders

    Transcorp Hotels gets N9.93b new equity funds from shareholders

    By Taofik Salako, Deputy Group Business Editor

     

     

    Shareholders of Transcorp Hotels Plc have injected N9.93 billion in new equity funds into the hospitality and tourism company.

    Transcorp Hotels, owners of Transcorp Hilton Abuja and Transcorp Hotels Calabar, had in fourth quarter 2020 sought to raise N10 billion through the issuance of 2.66 billion ordinary shares of 50 kobo each at N3.76 per share to prequalified shareholders. The rights were pre-allotted to existing shareholders on the basis of seven new ordinary shares for every 20 ordinary shares of 50 kobo each held as at Monday, July 13, 2020.

    Official listing report showed that the rights issue recorded a subscription level of 99.34 per cent with shareholders accepting 2.642 billion ordinary shares of 50 kobo each at N3.76 per share. The newly issued shares have been listed at the Nigerian Stock Exchange (NSE).

    With the listing of additional 2.642 billion ordinary shares, the total issued and fully paid up shares of Transcorp Hotels increased from 7.60 billion to 10.24 billion ordinary shares of 50 kobo each.

    Managing Director, Transcorp Hotels Plc, Mrs. Dupe Olusola, said the company’s track record of excellent service delivery has positioned it as the first choice for international and local guests.

    “We are not resting on our oars but working round the clock to innovate new products and services to further delight our guests, notable of such is the launch of asset-light strategies to deepen our hospitality footprints across Africa,” Olusola said.

    She added that while the world has been greatly impacted by the COVID-19 pandemic, with the hospitality industry being one of the hardest hit, Transcorp Hotels is optimistic about a great recovery for the sector.

    She noted that shareholders’ approval for new capital raising showed that shareholders have confidence in the future of the company, assuring that the company will continue to play their part in ensuring a significant recovery to the Nigerian hospitality industry.

    Transcorp Hotels is the hospitality subsidiary of Transnational Corporation of Nigeria Plc. It owns and operates Transcorp Hilton Abuja, which provides luxury accommodation, excellent cuisine, conferencing and leisure facilities to business travellers and tourists from all over the world. The company also holds 100 per cent interest in Transcorp Hotels Calabar Limited, which owns and operates the Transcorp Hotels in Calabar.

  • What you should know about RSA Transfer Window

    What you should know about RSA Transfer Window

     Omobola Tolu-Kusimo

     

    WHAT is RSA Transfer?

    RSA Transfer is the transfer of an individual’s Retirement Savings Account (RSA) from one Pension Fund Administrator (PFA) to another, processed through the RSA Transfer System (RTS).

    How often can an RSA holder transfer his/her RSA?

    An RSA holder is only allowed to transfer his/her RSA once in every 365 days (12 calendar months) as stipulated in Section 13 of the Pension Reform Act 2014 (PRA2014).

    How is an RSA transfer initiated?

    An RSA transfer is initiated by the RSA holder through the PFA to which his RSA is being transferred. It is based on the provision of the PRA 2014, which empowers the RSA holder to select and change the PFA that will manage his/her RSA.

    What is the RSA Transfer System?

    The RTS is a computer-based application deployed by the National Pension Commission (PenCom) for the purpose of initiating, processing and monitoring the RSA Transfer process.

    What is a Receiving PFA?

    This refers to the PFA to which an RSA is being transferred.

    What is a Transferring PFA?

    This refers to the PFA, from which an RSA is being moved to a Receiving PFA.

    How does an RSA holder start the RSA transfer process?

    The RSA holder must first ensure that his/her personal details (Biometrics & Biodata) have been recaptured and updated on the Enhanced Contributor Registration System (ECRS). This also entails providing his/her National Identity Number (NIN) to the PFA. This requirement only applies to contributors that registered before July 1, 2019). Thereafter, the RSA holder should approach the receiving PFA and initiate the transfer request by providing his/her RSA PIN, surname, telephone number and email address.

    After the successful validation of the biodata, the RSA holder’s fingerprint will then be captured to authenticate his/her identity and conclude the transfer request. The receiving PFA prints two copies of the confirmation slip, which should be signed by the RSA holder as proof that he/she initiated the transfer.

    A copy of the confirmation slip will be given to the RSA holder while the other copy is retained by the receiving PFA.

    What information does an RSA holder need to provide to enable him/her transfer an RSA?

    The RSA holder needs to provide the following details to the receiving PFA to enable him/her transfer his/her RSA from his PFA: Surname, RSA PIN, telephone number, email address (not compulsory but highly desirable for receiving updates on the status of the RSA transfer request) and fingerprint of the RSA holder, which should be captured live by the receiving PFA.

    When can an RSA holder submit an RSA transfer request?

    An RSA holder can submit an RSA transfer request any time within the year, provided that the request is not submitted before the expiration of 365 days after the last RSA transfer.

    Does an RSA holder need to inform his/her PFA before transferring his/her RSA?

    No, the RSA holder does not need to inform his/her current PFA before transferring his/her RSA.

    However, it is important for an RSA holder that registered before July 1 2019, to have recaptured his biometrics and biodata with his/her current PFA, otherwise the transfer request cannot be initiated.

  • ‘Aviation reinsurance rates rose by 250%’

    ‘Aviation reinsurance rates rose by 250%’

     Omobola Tolu-Kusimo

     

    AVIATION reinsurance rates rose by up to 250 per cent at the key January 1 renewal date, broker Willis Re said in a report on Monday, with the market still reeling from the impact of Boeing 737 MAX crashes two years ago.

    The 737 MAX resumed commercial flights in the United States last week, following a 20-month safety ban after two fatal crashes in five months killed 346 people. (Editor’s note: The report is titled “Willis Re 1st View January 2021.”)

    Insurers and reinsurers face claims from the crashes relating to hull and product liability that could amount to more than $2 billion, a large sum in a relatively small insurance sector, Willis Re International chair James Vickers told Reuters.

    Global Aviation Deaths Rose in 2020, Although Number of Crashes Fell

    Aviation underwriters are also suffering from lower premiums due to worldwide lockdowns and travel bans, as insurance contracts are often negotiated based on the amount of time planes spend in the air.

    Reinsurers, which share the burden of large risks with insurers in return for part of the premium, are also seeing rate rises in other areas.

    Vickers said the biggest disagreements between insurers and reinsurers had been about cover for cyber attacks and communicable diseases such as COVID-19. Reinsurers are largely excluding these risks from policy wordings, he said.

     

    • Culled by Insurance Journal

     

     

  • Retirees urge Fed Govt to clear arrears

    Retirees urge Fed Govt to clear arrears

     Omobola Tolu-Kusimo

     

    RETIREES under the Contributory Pension Scheme (CPS) have appealed to the Federal Government to release more funds that can pay the backlog of their accrued rights.

    The Contributory Pensioners Union of Nigeria made the appeal in a communique made available to reporters by the President, Comrade Mathew Shittu, and Secretary, Elijah Akingbade

    Shittu, who lauded the National Pension Commission (PenCom), urged the commission to engage the Federal Government to pay the arrears.

    He frowned at the Federal and state government’s intension to borrow from the CPS fund at the expense of their members who were yet to get their retirement benefits.

    Read Also: PenCom surveillance shows PFAs failure on corporate governance, others

    He said it was unfortunate that states that have not joined the pension scheme want to reap where they have not sown.

    Meanwhile, the Federal Government last week released N11.818 billion for paying accrued rights.

    The Director-General, PenCom, Mrs. Aisha Dahir-Umar said the accrued rights represent benefits for employees of Treasury Funded Ministries, Departments & Agencies (MDAs) who worked up to June 2004, when the Pension Reform Act was introduced.

    She said the commission appreciated the efforts of the Federal Government in ensuring that the accrued rights arrears were cleared.