The Nation Newspaper

Category: Money

  • Nigerian equities have prospects for huge future gains, says Afrinvest

    Nigerian equities have prospects for huge future gains, says Afrinvest

    Inspite of the steep declines that started this year, Nigerian equities have prospects to deliver considerable long-term return to investors, Afrinvest Securities has stated.

    In a preview of the market in 2016, Afrinvest Securities said the equities market has huge opportunities that could surmount the present slowdown and deliver better returns to investors over the long-term.

    The investment firm noted that investors must not be discouraged by the current cloudy and disquieting moment but rather should focus on the long-term potential of the equities.

    “Nevertheless, we maintain that the equities market presents a huge opportunity for long term positioning at the moment despite the obvious pessimism and difficulties,” Afrinvest Securities stated.

    According to the report, the financial market is currently going through a turbulent time as a reflection of the intensity of instability in the global and domestic environment. From slowing growth concerns in China and plunging commodity prices in the global market to fiscal and currency crises in the domestic economy.

    The report outlined that the key concerns affecting investor sentiments were broadly the revenue structure of government which is mainly skewed to oil, the structure of foreign exchange earnings and foreign exchange restrictions and policy flip-flops that have rendered the operating environment for existing businesses and large companies decidedly negative and, tragically, increasingly hostile to the sorely needed foreign capital inflows.

    “Whilst a blurry fiscal direction as well as instability in the global oil market kept investors watching, the scale and frequency of policy reversals by the apex bank have effectively doused any remaining morsel of investor optimism towards investing in Nigeria in the present time despite enticingly depressed asset prices. This has been amplified by the position to sustain an unrealistic exchange rate at the official/interbank market relative to the parallel market,” Afrinvest Securities stated.

    The report projected three possible scenarios playing out in the equities market in 2016. Firstly, the bull case scenario with 20 per cent probability which sees the benchmark index at the Nigerian Stock Exchange (NSE), the All Share Index (ASI), recording a marginal gain of 1.2 per cent in 2016. The second scenario, the base scenario, with 50 per cent probability which sees the NSE ASI declining by 5.9 per cent and the third scenario, the bear case scenario, with 30 per cent probability which sees the NSE ASI dropping by 9.4 per cent in 2016.

    “Our overall expectation is a negative return of 5.9 per cent for the NSE ASI in 2016 bringing the index to close at 26,951 points by year-end,” Afrinvest Securities concluded.

    The investment firm advised investors with short-term outlook to reduce exposure to equities and amass fixed income securities by adopting an active fixed income trading strategy in 2016.

     

     

  • Ecobank enhances financial backing for SMEs

    Ecobank enhances financial backing for SMEs

    Ecobank Nigeria has restated its commitment to be the leading Small and Medium Enterprises (SME) friendly and supporting bank in the country.

    Speaking at a public forum in Lagos, Head, SME and Value Chain Banking, Ecobank Nigeria, Sunkanmi Olowo, said the various initiatives recently embarked upon by the bank were targeted at increasing funding and support to the SME sub-sector.

    He stressed that, Ecobank having recognised SMEs as the engine room of the nation’s economic growth, would continue to step up support to the sub-sector.

    Among various initiatives the bank had embarked on recently include: launching of SME Club, unveiling e-commerce online platform, MyMall, and training and providing financial support to some SMEs under the Ecobank New Venture Initiative’ (ENVI), among others.

    The Ecobank SME Club aims to provide preferential business Support and tailored products and services to its teeming customers across the country. The SME Club serves as a platform for adding value to SMEs through information mining, networking and capacity building.

    According to Sunkanmi, “The benefits of SME Club to customers are numerous. It offers business/capacity development and technical assistance; provides business, accounting, tax, legal and other services and platforms; B2B linkage across Africa; access to market information, economic updates, exchange rate information; international markets and finance; online marketing/sales (24/7); active support from government backed organisations and quarterly working sessions led by experts.”

    Ecobank MyMall Nigeria is an online trading platform essentially for SME operators to sell and market their goods and services. The online marketplace, www.mymall.com.ng according to the bank, is targeted at driving the growth of the SME sub sector in Nigeria. He explained that MyMall is indicative of the already successful Ecobank SME club which had significantly impacted a number of SMEs by providing expert guidance and tools to properly establish and succeed at running an SME.

  • Lagos, Access Bank, partner on CSR

    The Lagos State Government has partnered with Access Bank’ Corporate Operations Division to carry out Corporate Social Responsibility (CSR) works. Both institutions have rebuilt Keke Nursery and Primary School Agege, Lagos state.

    The exquisitely built school was handed over to the Executive Chairman, State Universal Basic Education Board (SUBEB) Dr. Ganiu Oluremi Shopeyin, who was represented by Mrs. Adaramosu H.I.

    Access Bank’s Executive Director Operations and I, Ojini Olaghere, who was  as represented by the Head Corporate Operations Division, Banjo Adegbohungbe praised the Lagos State Government for giving the bank the opportunity to share in the welfare of Nigerian pupils.

    “Access Bank is very concerned about the welfare of students in Nigeria, we believe that creating a great environment for learning will greatly improve the standard of education in Nigeria. We decided to rebuild Keke Nursery and Primary School because we understand that the future of our country is hinged on our children and educating them is the responsibility of all. Access Bank takes CSR seriously and we at the Corporate Operations arm are at the fore front of the Bank’s drive,” he said.

  • N35m caution deposit: CBN clears 128 BDCs

    N35m caution deposit: CBN clears 128 BDCs

    More Bureaux De Change (BDCs) yesterday scaled the Central Bank of Nigeria’s (CBN’s) N35 million mandatory capital base.

    This followed the removal of the caution deposit for all operators after the regulator stopped dollar sales to BDCs.

    Data released yesterday by the  apex bank showed that 128 BDCs recapitalised in the last one week, bringing the total number of operators to 2,964. There were 2,836 operators previously.

    The CBN is expected to refund nearly  N100 billion to all the BDCs that paid the mandatory N35 million caution deposit that was scrapped last week.

    A circular signed by CBN’s Director, Financial Policy & Regulation, Kelvin Amugo, said the decision was reached following recent development in the in the operations of BDCs in the economy, prompting the apex bank to refund the mandatory caution deposit of N35 million each to all BDC operators.

    He however, said the regulator will retain the N1 million licencing fee paid by each of the operators. Amugo said the eligible BDCs are expected to apply for refund of their caution deposit, attaching evidence of payment and bank transfer details.

    President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe told The Nation that the cash refund is a welcome development.

    He said the initiative is an indication that the CBN has finally shut its doors to the BDCs. He said since the caution deposit was to enable operators’ access the official forex window, the stoppage of dollar sales to BDCs by the CBN means the fund should be refunded.

    Gwadabe said the operators are still awaiting CBN’s modalities on accessing the autonomous forex market, to enable them continue in business.

    He said the fund will go a long way in boosting capacity of operators to stay in business, and also to source funds from other quarters.

    The CBN Governor, Godwin Emefiele had announced  a new foreign exchange (forex) policy that includes the stoppage of weekly dollar sales to BDCs.

    He said the regulator would henceforth discontinue its sales of foreign exchange to BDCs, adding that operators in this segment of the market, would now need to source their foreign exchange from autonomous sources.

    “They must however note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws,” Emefiele said at a news conference on the review of the forex policy in Abuja.

    ”The CBN would henceforth discontinue its sales of forex to BDCs. Operators in this segment of the market would now need to source their forex from autonomous source,” he said.

  • Prudential Financial, LeapFrog unveil $350m investment pact

    Prudential Financial, Incorporated (PFI) and LeapFrog Investments have announced the launch of a $350 million investment partnership to access high-growth markets in Africa.

    The PFI is a financial services leader with more than $1 trillion of assets under management as of September 30, 2015, with operations in the United States, Asia, Europe and Latin America.

    Managed by LeapFrog, the new investment vehicle will target investments in Nigeria and other leading economies, including Kenya and Ghana, to be made over a three- to five-year period.

    Executive Vice President and Chief Operating Officer of PFI’s International Businesses, Charles Lowrey, said the investment expands PFI’s footprint into Africa, a continent it believes offers tremendous potential for growth over the long term.

    “We are delighted to partner with LeapFrog Investments, given their deep experience in Africa, and their impressive record of success as insurance investors focused on emerging consumers,” he said.

    A Partner at LeapFrog Investments, Doug Lacey, said the global insurance industry is looking for ways to close the protection gap for millions of people in emerging markets. The life insurance companies will also benefit from the fund.

    “This partnership will help address that need.  Nigeria is a very exciting market, ranked in the top three in Africa for growth prospects, alongside Kenya and Ghana.

    “Insurance penetration in Nigeria remains low and we see real opportunities for growth. We are delighted to broaden our relationship with PFI, a values-driven partner whom we know well and greatly respect for its global leadership in life insurance, retirement and asset management,” he said.

  • S&P wants naira further devalued

    S&P wants naira further devalued

    •Interbank rates hit three-month high

    Ratings agency Standard & Poor’s (S&P), yesterday reinforced its call for the devaluation of the naira.

    I said this shouls happen at some stage in 2016 and in gradual adjustments, saying investors have seen a devaluation of the naira as long overdue after the economy was battered by the tumble in crude prices.

    Despite growing pressure, the government has kept the local currency at around N198 to the dollar on the official interbank market, while restricting access to dollars.

    “Their line has been to try to hold it as much as possible, and they are trying to continue that policy alongside the restrictions on imports as well,” said Ravi Bhatia, Director of Sovereign and International Public Finance at Standard & Poor’s.

    “But at some point, they are going to have to move, but I think they are going to try and do it incrementally and not in big jumps,” Bhatia said, adding he expected this to happen in one or two increments.

    Nigerian non-deliverable currency forwards, a derivative product used to hedge against future exchange rate moves, indicated markets expected the exchange rate at N265/dollar in six months time, and at N284 to the dollar in 12 months’ time.

    Brent crude accounts for about 95 per cent of foreign earnings. A devaluation would only go some way to improve the country’s situation, said Bhatia. “It will help a little, but the problems aren’t going to go away – there is no easy avenue for them really,” he said. He saw government talk of shifting to non-oil revenue as “overstated” and not easy to do. “Nigeria is going to face a very tough year in 2016.”

    Meanwhile, the overnight interbank lending rate rose sharply to five per cent, its highest since October, after the central bank drained naira liquidity through sales of (OMO) treasury bills, traders said.

    There was no official comment on the sudden rate rise, but higher rates could support the naira. The government, fighting intense pressure on the currency from the collapse in prices for Nigeria’s oil exports, has pegged the currency at around 198 per dollar on the official interbank market.

  • FCMB eyes higher earnings for subsidiaries

    FCMB eyes higher earnings for subsidiaries

    FCMB Group Plc has projects that its subsidiaries are well positioned to grow strongly this year. The concerned firms are First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited and CSL Stockbrokers Limited.

    In a statement, the holding company said its subsidiaries would also deepen the financial services support they provide to customers and the nation at large with their array of products and bespoke solutions to further enhance customer experience in their respective target markets.

    Managing Director of FCMB Group Plc, Peter Obaseki, said, ‘’2016 will be characterised by continued growth in retail contribution, stabilisation of wholesale banking revenues and increased focus on cost efficiencies’’.

    He added that the retail banking business of the Group, which is driven by First City Monument Bank (FCMB) Limited, has continued to ‘’show greater resilience and earnings momentum over the years’’.

    He disclosed that FCMB Group Plc would in the fourth week of January this year announce the completion of the banking subsidiary’s interim audit, which should pave way for the release of the 3Q15 earnings results of FCMB Group Plc.

    He said third quarter 2015 earnings will fall below earnings for the same period in 2014, due to a spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity. This trend, he added, will continue December 2015 and largely emanated from wholesale banking activities’.

    The Group Managing Director/Chief Executive Officer of the Bank, Ladi Balogun, said: ‘’we will continue to do the things we are doing well; driving low cost deposit growth, in order to bring down the cost of funds, through increased acquisition and collections.  We will also continue to raise our performance in customer service by building a vibrant, credible and relevant banking brand that everyone wants to bank with. Overall, we are confident this progress and momentum will be sustained, as we continue to grow our market share through service excellence while improving our efficiency ratios’’.

  • CBN’s forex policy raises production capacity for manufacturers

    Local manufacturers are pleased with the Central Bank of Nigeria’s (CBN’s) forex policy, saying it has raised  production capacity and enhanced their operations.

    Two leading local manufacturers in the packaging industry, acknowledged that the impact of the CBN policy on forex  has more than doubled their productive capacities, helping them to meet increased demand for their products.

    Deputy Managing Director, Tempo Paper Pulp & Packaging Limited, Nassos Sidirofagis, said since the policy’s implementation started, his firm has  increased its production capacity from 50 per cent to 70 per cent.

    He said this raised their export volume and foreign exchange earnings for their firms and the economy.

    He said the policy has helped manufacturers to realise the urgent need to expand because of increasing demand for their products.

    Sidirofagis said the company planned to start an expansion project due to expected increase in demand within this year and next.  “We have since developed capacity to also attract foreign investors, who we believe are exploring investment opportunities in our organisation. Therefore, on all sides this is a win-win situation for Nigeria and local manufacturers”, he said.

    On mitigating challenges facing local manufacturer’s capability to expand, he noted that government should focus more on manufacturers so that the local economy will not experience what Greece experience.

    For him, the CBN should continue to implement the policy for the next two or more years, to facilitate full development of local capacity to attract investors.

    Also speaking, Group Operation Manager of SREN Chemicals Limited, Oluwasesan Taiwo-Tijani, said his firm has benefitted from the CBN foreign exchange policy. He explained that the policy has forced several companies who are import-driven to patronise SREN Chemicals and hence, raised their transaction volume and profitability.

    “This impacted on our sales with our productive capacity increased by 30 per cent,” he said.  Taiwo-Tijani urged the Federal Government to retain the policy so as to sustain local content development and to turn Nigeria into an export dependent country.

    He urged the CBN and Federal Government to mitigate challenges facing local manufacturer’s capability to expand so as to enhance the economic development f the country.

  • Kano Governor signs N274.3b budget

    Kano Governor signs N274.3b budget

    Kano State governor, Dr. Abdullahi Umar Ganduje has signed into law, the state’s 2016 Appropriation Bill, assuring that its implementation would commence immediately.

    The budget, tagged ‘A Peoples Budget for Self Reliance,’ is in the tune of N274.3 billion, with 70 per cent of it devoted to capital expenditure, while 30 per cent was set aside for recurrent expenses.

    Shortly after signing the bill, the governor disclosed that “it reflects the vision of the administration for diversification of the state’s revenue, with a view to laying a solid foundation for the pursuit of its development objectives”.

    Governor Ganduje explained that although the budget is coming at a turbulent period in the governance of the state, the state Internal Revenue Service, with its technical partners have convinced the state executive and legislature that with political commitment, the set target would be achieved.

    The governor expressed delight that the budget was subjected to public hearing, pointing out that to date; no state in the federation has allowed the public to directly make input in its budget. However, he assured that the government would create an enabling environment for the state legislature to perform its oversight functions, while implementing the budget, stressing that the legislators are at liberty to visit any government Ministry or agency and monitor transactions for accountability and transparency.

    The Kano state House of Assembly Speaker, Alhaji. Kabiru Alasan Rurum, disclosed to the governor that the assembly conducted public hearing on the budget, so as to allow direct involvement of the people in governance.

    He therefore appealed to residents of the state to rally round the Ganduje led-administration to facilitate the significant execution of the budget, despite the prevailing harsh economic realities in the country.

  • British Council, FirstBank announce Lagos Theatre Festival 2016

    British Council, FirstBank announce Lagos Theatre Festival 2016

    The British Council has, for three years, been working on a theatre programme to stimulate innovation in theatre practice in Nigeria. The council sought to offer opportunities for professional exchange between Nigerian and British theatre makers and this birthed the Lagos Theatre Festival in 2012.

    This year, Lagos Theatre Festival returns bigger and better than ever as part of UK/Nigeria 2015 –16; a major season of arts in Nigeria aimed at building new audiences, creating new collaborations and strengthening relationships between the UK and Nigeria. First Bank of Nigeria Limited is a major promoter of the British Council Lagos Theatre Festival 2016 as part of its First@arts initiative.

    In preparing for the UK/Nigeria 2015–16 season of Arts, the British Council desired to engage New Voices in Theatre and requested the submission of scripts for the Lagos Theatre Festival from emerging playwrights who were asked to reflect the experiences of young people living in Lagos today. A record number of 64 applications were received over a four week period and four plays were shortlisted by a panel of writers for a creative writing workshop and script development.

    The plays are: Every Single Day by Olubunmi Familoni, The Wait by Bode Asiyanbi, Barcode Dialogue by AtinukeAweda and Dialing Love by Paul Ugbede. The winning playwrights have been awarded a cash prize of #100,000 each with an option of producing their plays at the Lagos Theatre Festival scheduled for February 23 – 28 2016.

    First Bank of Nigeria Limited is a prime promoter of the creative arts industry in Nigeria is supporting the arts under the auspices of the First@arts initiative which is driven by the quest to promote the arts and preserve cultural heritage. Through First@arts, FirstBank has encouraged home-grown human capacity development and enhanced the creation of employment opportunities within the arts industry, thereby creating a sustainable value chain and contributing to the growth and development of an evolving art economy in Nigeria. The Bank is pleased to support the Lagos Theatre Festival even as it promotes new talents in the creative arts industry. FirstBank believes that promoting the arts and preserving contemporary culture is essential for our generation and the future generations.

    The Lagos Theatre Festival 2016 will take place at several venues on Lagos Island and the mainland with a curated programme running alongside a fringe strand ofaffiliated performances allowing a greater than ever number of artists and audiences to take part.