The Nation Newspaper

Category: Money

  • BFI Group gets BPE offer letter on ALSCON

    BFI Group Corporation has received an offer letter and Share Purchase Agreement (SPA) from the Bureau of Public Enterprises in respect of Aluminium Smelter Company of Nigeria (ALSCON).

    In a statement, BPE said the offer is in compliance with the Supreme Court judgment of July 6, 2012 as well as the directive of the National Council on Privatisation (NCP), which met at the Presidential Villa, Abuja on January 22, 2013.

    BFIG, the plaintiff in the suit at the Supreme Court, is expected to execute the SPA and pay the agreed 10 per cent of the offer price of $410 million (which is $41 million) within 15 days of the execution of the SPA.

    The statement recalled that the court had stated among other averments that “an order of specific performance is hereby decreed mandating the respondent to provide the mutually agreed share purchase agreement for execution by the parties.

    That it said, will enable the plaintiff pay the agreed 10 per cent of the accepted bid price of $410 million (i.e, the sum of $41 million) within 15 working days from the date of the execution of the Share Purchase Agreement in accordance with agreement dated 20/5/2004 and the 90 per cent balance of bid price shall be paid within 90 calendar days.

     

     

     

     

     

  • Fed Govt’s domestic debt hits N6.5tr

    The domestic debt of the Federal Government rose to N6.54 trillion at the end of December last year, FBN Capital, an investment and research firm has said.

    In an emailed report obtained by The Nation, the firm explained that the current debt figure is equivalent to 15.3 per cent of estimated 2012 Gross Domestic Product (GDP). The quarter to quarter increase of N190 billion compares with N200 billion in third quarter and N180 billion in second quarter of 2012. This, it said, underpins the BB- ratings from both Fitch, and Standard and Poor’s for Nigeria’s sovereign credit ratings for its local currency obligations. The Debt Management Office’s (DMO’s) series covers only sovereign naira borrowings.

    However, the report said should the obligations of state governments, Asset Management Corporation of Nigeria (AMCON) and public agencies such as the Nigeria National Petroleum Corporation (NNPC) and external debt be combined, Nigeria debt statistics could theoretically reach 40 per cent of GDP under a worst case scenario.

    It however, said the Federal Government is alert to the rising cost of domestic debt service within total expenditure, and has therefore proposed to launch a $1 billion Eurobond and a smaller foreign currency issue for the Diaspora this year. Its 2013 budget proposals it added, also include plans for a sinking fund to redeem “one or two” of the Federal Government bond issues.

  • Low turnout mars SGBN’s account validation

    Majority of the customers of the defunct Societe Generale Bank of Nigeria (SGBN) failed to turn up for the bank’s ongoing account validation exercise, which started last Tuesday, The Nation’s investigation has revealed.

    At the Lagos validation centres visited yesterday, staff of the bank, which now operates under a new name – Heritage Bank, were seen sitting idly with no customer to attend to.

    At the AIB Plaza, Victoria Island; University of Lagos Guest House in Akoka and Eko FM Multipurpose Hall, Ikeja – all in Lagos State where the exercise is taking place, there was low turnout of customers. Not even a single customer was seen at the Eko FM Multipurpose Hall after our correspondent had waited for over 40 minutes yesterday. But a staff of the bank who asked not to be named said 20 customers were able to validate their accounts on Tuesday, adding that by 2pm yesterday, only 10 customers had turned up for the exercise.

    However, at the AIB Plaza centre, only one customer turned out after 30 minutes of waiting.  The source however, explained that for an exercise of this nature, there are likely to be doubts in some quarters before confidence is built. She said: “People have been coming, especially the people that have their money trapped in SGBN over nine years ago. One of the things that we discovered is that because of the goodwill that the bank has, the customers are happy that the bank is coming out of the ashes and many of them have asked that their accounts be retained in the new bank”.

    The source explained that because Tuesday was the first day, there were people with doubts about how the exercise will work. “Some people will want somebody to call them,” she said.

    The source explained that at the point of validation, customers are expected to come with identity card, cash withdrawal form and deposit slip. For current and corporate accounts, the account holders are expected to bring their cheques or cheque stumps. Customers can also come with their Automated Teller Machine (ATM) cards.

    Explaining how the validation exercise is conducted, she said:”We have to call up a customer number from the server base at the head office.  Then, cameras and pictures of the customers will be captured and stored. The forms are submitted to the control officer who sends same to the validation officer. The validation officers will then find out if the accounts exist, and if verified, the account holder is referred to the cashiers who then write a cheque for customers that want their money to be paid”.

    However, for the customer that has no evidence to show that he has an account with the bank, the case can only be treated when the bank finally begins operation. She said the bank has enough funds to pay all depositors should they want their money to be paid. “Management has made adequate preparation for everybody and we have the financial strength to pay everybody if the need arises,” she said.

    The Management of Heritage Banking Company had in a statement issued two weeks ago said the exercise was in line with the terms of the Central Bank of Nigeria (CBN) approval of its banking licence to offer commercial banking services under a Regional Bank status.

     

     

     

     

  • Wema Bank, three others now market making stocks

    THE Nigerian Stock Exchange (NSE) yesterday announced the addition of four new stocks to its market making programme. They are Flour Mill, Unilever, Royal Exchange, and Wema Bank Plc. This brings to 43 the total number of market making stocks at the Exchange.

    According to the NSE, the inclusion of the stocks from Consumer Goods and Financial Services sectors became effective today.

    The addition of the new stocks was in line with the planned phased approach for introducing stocks to the programme from the baskets allocated to the Market Makers on the Exchange.

    Meanwhile, transactions on the floor of the NSE closed with a further appreciation on the twin market indicators. The All-Share-Index and market capitalisation improved by 77 basis points each.

    Specifically, gains recorded by market heavy weights strengthened the indicators’ returns today. Nestle, FBNH, Nigeria Breweries, GTBank and Guinness added values to their previous closes to push indicators to two-day consecutive uptrend.

    Lead indicator, NSE-ASI added 243.99 points to hit 31,815.45 points while the capitalisation went up by N78 billion to close at N10.179 trillion. These represent a growth of 0.77 per cent respectively.

    Nestle continued the streak of appreciation hitting highest price ever at N840.10. It added N49.85, representing 6.31 per cent growth as a market making stock.

    The market equally benefited from value appreciation posted by some mid-capitalised stocks such as Diamond Bank, Julius Berger, Flour Mills, PZ Cussons, UBA and Dangote Sugar.

    However, the volume of shares traded stood at 424.661 million worth N3.850 billion across 6,505 deals. This was lower than 507 million units worth N3.1 billion exchanged in 6,666 deals on Tuesday.

    On the price movement tables, a total of 111 equities were traded while 40 appreciated. The remaining 25 recorded price reduction. Julius Berger topped the gainers’ chart with an increase of N6.00 or 9.92 per cent to close at N66.50 per share while Nestle followed with a gain of N49.85 or 6.31 per cent to close at N840.10 per share. PZ Cussons gained N1.90 to close at N34.00 per share.

    Others on the top 10 were Port Paint, Flourmills, Eterna Oil & Gas, Fort Oil, Livestock, Vitafoam and AG Leventis added N0.20, N4.05, N0.22, N0.75, N0.11, N0.20 and N0.07.

    International Breweries led others on the losers’ chart with a drop of N2.80 to close at N25.20 per share followed by Prestige Assurance with a drop of N0.06 to close at N0.60 per share.

    Others were Unity Bank, UACN, UAC-Property, Berger Paint, CAP, Honeywell Flourmills, JohnHolt and Nigerian Aviation Handling Company.

    On the activity chart, the banking sub-sector maintained its dominance in volume terms with 211million shares worth N1.7 billion followed by the insurance sub-sector with 99 million units valued at N61 million.

    The food products subsector trailed with 27million units worth N169 million.

    Trading in the shares of Unity Bank buoyed activities in the banking sub-sector with 42 million shares worth N30 million while the insurance sub-sector was enhanced by activities in the shares of Niger insurance with 62 million units worth N31 million.

     

  • More loans for SMEs, says CBN

    SMALL and Medium Scale Enterprises (SMEs) will get more loans after the Central Bank of Nigeria (CBN) reduces the cost of banking services by 30 per cent, the Head, Shared Services, CBN, Mr Chidi Umeano, has said.

    He told The Nation that efforts were on to ensure that banks achieved 30 per cent cost reduction, and further lend to SMEs, among others in the economy.

    CBN, he said, has identified cost drivers in the industry, and the possibility of reducing them to aid lending.

    “Banks are incurring huge expenses in cash handling, he said, adding that they have in the process transferred the cost on loans seekers,” he said.

    He said CBN introduced cash-less policy to reduce the cost of banking services, and further increase accessibility to loans. According to him, there would be more lending opportunities for SMEs, as the cash-less policy takes off fully in the country.

    Umeano said CBN had met SME operators in Lagos, to fashion out ways of using the cash-less programme to enhance their operations.

    According to him, there would be more lending opportunities for SMEs, as the cashless policy takes full effect in the country.

    He said: “The SMEs owners have been accommodated well in the cashless net. They are part of our plans. We have explained the value chains in the cashless initiative to them, the use of Point of Sale (PoS) providers, and what they need to do access facilities from the banks.

    “We believe that there will be increase access to facility and service levels across the industry, once banks have reduced their operational cost by 30 per cent. The motive for the cashless policy is to reduce cost of banking services (that is the cost of credit and the likes in the economy). This will increase lending opportunities for informal sector operators, that formed 70 per cent of the country’s population.”

    The cash-less guidelines, he said, had been structured in such way that SME owners are protected.

    CBN, he said, has provided card acceptance guidelines that accommodate all operators in the financial chains.

    Manufacturers Association of Nigeria (MAN), president Alhaji Bashir Borodo has praised the CBN initiative. He said the decision to make banks to lend more to SMEs is a good one capable of stimulating the economy’s growth.

    He described funding as the major problem facing SMEs, adding that their potentials would be galvanised when they have access to funds.

    Borodo said CBN’s reforms agenda “greatly” impacted on the economy, stressing that the apex bank has assisted SME operators via granting them N200 billion loans two years ago.

    A teacher at the Lagos Business School, Dr Austin Nweze, said SME operators had long been denied access to loan. Nweze said it would be good if banks are able to increase funding to SME owners. He said the problem facing banks is the capacity to do what is going to benefit the economy.

     

  • Firm holds forum on budget today

    The Bureau for Business Information (BBI) is organising a two-day business roundtable on policies and variables that would shape the economic and investment landscape.

    The event, billed to hold between today and tomorrow, will aid the strategic positioning of investors and others in the economy.

    The organisation said issues, such as the Euro Zone crisis, the looming fiscal cliff in the United States, Global Economic Outlook in the year, implications for private sector performance, structure and contents of 2013 budget vis-à-vis inherent challenges and opportunities for investors would be discussed during the two-day events.

    Others are outlook for foreign exchange, inflation and national outlook, interest rates, SWOT analysis of sectors, such as manufacturing , real estate, maritime, agriculture, oil and gas, retail trade, information and communication technology(ICT), capital market, consumer spending structures on sectoral and regional basis, among other financial services institutions.

     

  • How Nigeria can sustain growth, by AfDB

    Nigeria needs a stable environment to sustain its economic growth, the Country’s Representative, African Development Fund (AfDB), Mr Ousmane Dore, has said. Speaking during a stakeholders’ forum in Lagos, Dore said a stable macro economic environment is what the country needs to move forward.

    He said: “I think the Nigerian government can do is to have a degree of macro economic environment, that is stable and sound in place to encourage growth of investments.”

    He said the government needs to put in place fiscal monitoring policies in place to aid economic growth, advising that efforts must be made not to go back to a more volatile economy of the 70s and 80s.

    Ousmane said the document on Vision 2020, transformation agenda, and national implementation programmes talked about development of private sector, adding that efforts have not been geared towards that direction.

    “ The government policy must ensure that the environment is conducive for this kind of transaction to take place. The government cannot do better if there is no good environment in place. That is talking about regulatory environment such as the institutional reforms that led to the establishment of the ICRC, and the capacity building. All these would help in bringing about good financing”, he added. CBN assures.

     

  • Recapitalisation: Mortgage banks in merger, acquisition talks

    Ahead of the April 31 recapitalisation deadline, Primary Mortgage Institutions (PMIs) are forming an alliance to meet the new capital base.

    Last year, the Central Bank of Nigeria (CBN) directed mortgage institutions that want to operate nationally to raise their capital from N100 million to N5 billion and their state counterparts, N2.5 billion.

    Managing Director, Skyfield Savings & Loans Limited, Mr Kola Abdul, said the alliance was formed at a stakeholders’ meeting.

    He said: “Ahead of the April 31 deadline, the Mortgage Bankers Association of Nigeria (MBAN) brought together operators to brainstorm on the issue of recapitalisation and the options to be adopted.”

    According to him, some firms have agreed to merge, while others want to grow organically to meet the deadline.

    He said negotiations had started among those planning to merge so as to get the needed capital before the deadline.

    The paramount issue facing the companies, he said, was how to meet the deadline, not the size of their businesses.

    Abdul said: “The smaller mortgage banks need to merge with the bigger ones in view of the recapitalisation deadline. The Central Bank of Nigeria (CBN) has provided a flexible recapitalisation regime by directing the firms to either play at the state or national level. Therefore, the issue of merger is a welcome development that would foster the growth of the sub-sector.

    “Given the situations on ground, the issue of mergers and acquisitions cannot be ruled out.”

    He said mortgage firms’ contributions to the Gross Domestic Product (GDP) is low, adding that it would improve after recapitalisation. The recapitalisation would make the firms more active and function well in the financial market, he said.

    MBAN Executive Secretary, Mr Kayode Omotoso, said mortgage institutions would shop for funds at the capital market.

    Besides, there would be mergers and acquisitions as well as take-overs in the sector in the coming months.

    “There would be mergers; there would be acquisitions; there would be takeovers; there would be strategic investments and there would be efforts to go to the capital market for the mortgage banks to meet up with the deadline. More mortgage banks will approach the capital market to raise equity while the sector will approach the capital market to raise equity, hybrid and long-term debt instrument to finance home ownership,” he added.

     

  • ‘CBN’ll sustain tight monetary policy’

    The Central Bank of Nigeria (CBN) is expected to sustain firm monetary policy this year, analysts at Renaissance Capital (RenCap), an investment and research firm has said. In an emailed report obtained by The Nation, the firm said, given its view on inflation, there is scope for a 100 basis point rate cut in 2013 to 11 per cent, although such slash will not take away from the Monetary Policy Committee’s (MPC’s) firm policy stance.

    “Downward adjustment of the Cash Reserve Requirement (CRR) would be more effective at relaxing the policy stance, than a rate cut. It is evident from the January MPC statement, that the committee would prefer to keep monetary policy from becoming overly accommodative, so that it can contain inflation and sustain a firm naira,” it said. It said the apex bank does not expect a change to the Cash Reserve Ratio from 12 per cent in 2013.

    Also, analysts at Cordros Capital Limited, said the CBN may not reduce the Monetary Policy Rate (MPR) within the first quarter. It said the CBN also retained the MPR at 12 per cent with a corridor of plus or minus two per cent, Standing Deposit Facility at 10 per cent and Standing Lending Facility at 14 per cent. It also maintained the Liquidity Ratio (LR) at 30 per cent and Cash Reserve Ratio (CRR) at 12 per cent.

    The firm explained that the decision means that other forms of monetary policy, such as Open Market Operations (OMO) will continue to be the preferred method for managing liquidity.

    It said inflation still remains above the CBN’s single-digit target, noting however that the pressures are expected to ease in upcoming months.

  • Promasidor gets Lagos tax compliance award

    Lagos State Government has presented Corporate Organisation Tax Compliance award to Promasidor Nigeria Limited, in recognition of its compliance with the state’s tax laws.

    The award was presented to the company by Lagos Sate Governor, Babatunde Fashola at the sixth Lagos State Taxation Stakeholders’ conference held in Lagos.

    Executive Chairman, Lagos State Board of Internal Revenue, Tunde Fowler, said Promasidor Nigeria has always been consistent and regular in paying its taxes. “This company has been regular in paying its taxes, without being pushed. Some other companies do pay through their agencies while it pays directly and promptly. In most cases, Promasidor calls us to their office that our payment is ready.” He enjoined other companies to emulate Promasidor and be tax complaint.

    Head, Legal and Public Relations, Promasidor Nigeria, Andrew Enahoro, said the firm is excited to be given the award. “We take paying tax seriously. As a company, we try as much as possible to ensure that all our documents are intact.

    We do not wait for them to come and tell us we are owing rather we go to them that this is our tax levy,” he said.