The Nation Newspaper

Category: Business

  • Experts seek help for courier business

    Dearth of loanable funds, perception and the problems in the capital market have been identified as the major challenges affecting the courier industry.

    Stakeholders in the business said if these factors were addressed, the industry would not only create more job opportunities to absorb the growing army of the unemployed, it would also grow the nation’s Gross Domestic Product (GDP).

    During separate interviews with The Nation, the Secretary, Association of Nigeria Courier Operators (Anco), Siyanbola Oladapo, and the Head, Operations and Logistics, Bestlink Express Limited, Luke Nwalor, lamented that the activities of illegal operators were also taking a toll on their business.

    “The greatest asset the (big operators) have is access to capital which we do not have. A typical bank in Nigeria is ready to give FedEx N1 billion (as loan), but they cannot give that kind of money to any indigenous operator,”Oladapo said.

    He said another challenge is perception. He claimed that some people prefer foreign operators. He said though foreign operators charge exhorbitant fees for the same service, some Nigerians still patronise them, adding that it was high time the perception was changed.

    Nwalor said the capital market crunch has added to the woes of the indigenous opertors, because frims no longer go to the Nigeria Stock Exchange (NSE) to raise funds as they did in the past. This development, he said, had taken toll on the profit margin of the operators.

    “The capital market crunch has affected the industry adversely. In the past, so many companies gave us their annual report, dividend warrant, public offers but since the crisis began in the last three or four years, no company has gone to the capital market to raise funds. That means we have lost a substantial amount of revenue. So many companies have also not hold their annual general meeting (AGM) in the last three years. This also translates to loss of revenue to the courier sector. The companies are not oing well, that is why they cannot hold their AGMs while we too that would have carried their annual reports are losing too,” Nwalor lamented.

    He said because of the harsh economic climate, some people too started cutting corners by giving out businesses that ought to have gone to courier firms to bus conductors.

     

     

     

     

     

  • Succour in health, safety management

    Succour in health, safety management

    Health Safety and Environment appears abstract on the surface but it has potential of providing thousands of jobs, writes AKINOLA AJIBADE.

     

    For job seekers, it is time to look inward and tap into opportunities around them as white collar jobs have become difficult to come by.

    The situation is getting trickier as companies are either closing down or relocating to neighbouring countries where they hope to get comparative advantage.

    The Manufacturers Association of Nigeria (MAN), in a report, said the prevailing economic condition is taking its toll on the sector as millions of people have lost their jobs. More people, it said, would join the labour market as the country continues to grapple with epileptic power supply, among other problems. It added that capacity utilisation has dropped because companies operate with a few hands.

    Tower Aluminum Nigeria Plc is facing that kind of crisis. The company, in a statement, said it is facing extinction because of shortage of materials. The company said its over 1,500 direct workers would be affected by the development.

    With no jobs anywhere, the unemployed are faced with the reality of creating jobs for themselves.

    An area with job prospect is Health Safety and Environment (HSE). It has to do with the safety and welfare of workers. It lays emphasis on the health and ecological protection of workers and ensures that companies achieve their objectives of posting good returns on investment. It presupposes that companies operate in a friendly environment where physical and natural disasters are averted to some extent.

    Introduced in the oil and gas industry decades ago to reduce the effects of effluents or oil discharges, HSE has taken a multi-disciplinary dimension. Companies have realised the need to employ HSE experts for growth.

    In the past, oil and gas and maritime firms mandated their workers to get a certificate on HSE, in addition to their academic qualifications to fit into the system. They later realised that they needed skilled personnel to handle such issues. This development has opened opportunities for trainers and consultants to earn a living.

    President, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr Babatunde Ogun, said there are untapped opportunities in HSE.

    Ogun said the prospect of getting jobs as health and safety management experts was high, advising the unemployed to try the area.

    The area, he said, has opened job windows for people, since Nigeria is one of the largest producers of oil in the world.

    He said HSE has the potential to create thousands of jobs, adding that people can work on their own or with the oil companies.

    Ogun said: “There are lot health, safety and environmental issues in the (Onshore and Offshore) segment of the oil industry. There are issues relating to the physical condition of oil workers, safety of the oil sites, effects of oil leakages, gas flaring, among others. These must be handled by experts. Because the oil industry is broad, different safety and health related issues do comes up daily. People working in the area of health, safety and environmental management have a wider scope of activities. They work in line with the situations on ground. They carry out maintenance jobs, ensure safety of equipment, workers and oil sites.”

    Multinational oil companies, he said, have not been able to employ enough people to render HSE services, adding that more workers are needed by the companies.

    He said HSE workers are needed in the banking industry, too.

    “Every sector of the economy requires the services of health safety and environmental personnel. Unfortunately, such workers are not enough in Nigeria. When there are oil leakages in the industry, multinationals cover them up to escape punishments. Such things cannot happen, if there are enough local safety and environmental experts on ground. The awareness is growing. With time, more people would go into safety and health area because of its immense opportunities,” he opined.

    Ogun said the government must compel foreign oil majors to comply with safety and environmental guidelines, arguing that the development would provide job opportunities for people.

    An expert, and a consultant on HSE, Mr Suleiman Ikhanaede, said HSE is a promising area for graduates willing to go into it.

    Ikhanaede said people must be certified before they can work in those areas. He said the training has exposed him to the rudiments of environmental and health management, arguing that people would earn a living once they can apply the right skills.

    He said companies are looking for those, who can train their staff on health, safety and environmental issues, adding that trainers earn good income.

    Companies, he said, are yet to give the area the desired attention, stressing that the future is bright for people that specialise in health and environmental areas.

    A geo-physicist, Mr Oyetunji Balogun, said people make a lot of money through consultancy. Balogun said HSE management is broad, arguing that people can consult for companies.

    “As many people that know their onions can go into consultancy. Thousands of companies are looking for means of mitigating natural and human disasters. Such companies are ready to hire anybody who understands the terrain well,” he said.

    The former President, Manufacturers Association of Nigeria (MAN), Alhaji Bashir Borodo, said the country lacks adequate manpower in health safety and environmental management.

    Borodo said companies spend fortunes on physical and material assets, adding that the safety of the assets must be guaranteed before meaningful growth can be recorded. He said people must be employed for the safety of the workers and the environment in which companies operate.

    “There is a dearth of workers in that segment. We need specialists in the area of health safety and environmental management to promote economic growth. That area is for educated and intelligent people. We have a pool of unemployed graduates who can easily fit into it.

    Safety and environmental issues are all encompassing. They cut across different sectors of the economy. This implies that various sectors need such workers to survive.

    He advised Nigerians to start their own businesses, adding that it will have a multiplier effect on the economy. He said this can be achieved when people originate their ideas, and execute them well.

     

  • ‘How workers frustrate NHIS implementation in states’

    Governor Emmanuel Uduaghan of Delta State has accused workers of frustrating state government’s willingness to implement the National Health Insurance Scheme (NHIS).

    Uduaghan, who made this known in Asaba, while contributing to discussions at the First National Health conference organised by Nigerian Medical Association (NMA), said the workers do this through their refusal to embrace the scheme.

    According to him, NHIS may not be replicated in the states, unless the workers agree to contribute to it.

    He said he was aware that a legislation to compel every employer and employee in the country to be enrolled on the scheme was in the offing, adding that beyond a law, advocacy was needed to make the scheme operational at the state level.

    According to him, relevant government authorities need to carry out serious advocacy and enlightenment on NHIS beyond just enactment of an act to compel workers to register in it.

    He said NMA had a big role to play in the acceptability of the scheme.

    Uduaghan urged NMA leadership to organise sessions to educate their members on the need to embrace the programme by agreeing to contribute from their salaries.

    The governor noted that workers in the state were quick to accept contributing to the Retirement Pension Scheme “not just because it is lawful, but because it has direct financial benefit to them.

    “With the pension, the workers quickly accepted to contribute because they know that they will get the money when they retire,” he said.

    On ways to achieve universal health coverage in the country, he called for training of physicians on preventive medicine, especially for those working in degraded environment.

    “The environment in states in the Niger Delta has been adversely affected, with water, air, soil and everything polluted,’’ he said.

    He noted that in such areas, ailments among the people were more in their psyche.

    The governor, therefore, said they need not just regular curative medication but more of counselling on preventive methods.

  • Mfbs sell shares to recapitalise

    Mfbs sell shares to recapitalise

    SOME operators of microfinance banks (MfBs) are selling their shares to meet the recapitalisation deadline imposed on them by the Central Bank of Nigeria (CBN), The Nation has learnt.

    It was gathered that the banks are seeking higher bidders in the subsector as the clamour for the extension of the deadline to December 2014 continues.

    The Chairman, National Association of Microfinance Banks(NAMBs), Mr Olufemi Babajide, confirmed the development, saying the liquidity squeeze in the industry has made it imperative for operators to seek a new lease of life.

    Babajide said sales are ongoing in the sub-sector, adding that the pace is slow because of lack of funds.

    He said: “ Merger and acquisition, outright sales are going on among the banks, but the pace has been slow because of lack of funds and the need to carry out due diligence. The subsector is not attractive to existing and new investors in view of the economic meltdown of 2008, and the revocation of the licences of some of the banks in 2010.”

    He said the categorisation of the banks in line with the required capital base is a welcome development, adding that the banks want the deadline to be extended to December 2014.

    According to him, the CBN’s support fund, NIRSAL fund and others would have been disbursed to MfBs. This, he said, would make the banks attractive to investors.

    “Under the NIRSAL programme, which is an initiative of the CBN, farmers have already been paired with the branches of MfBs. If such branches are closed, it will be a setback for the programme. This will compound the low productivity in the agricultural sector, and Nigerians would go hungry” 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.

     

  • ‘Local banks can fund power projects’

    ‘Local banks can fund power projects’

    There are some businesses which require high stakes. One of them is power. Since it is in the big league, it requires those with financial muscle to play in it. In the past, those in the business sought funding from financial institutions abroad. They no longer need to do so to participate in the ongoing privatisation of the sector. Nigerian banks, says Managing Director/Chief Executive Officer of Skye Bank, Kehinde Durosinmi-Etti, can take up the challenge. He spoke with Group Business Editor AYODELE AMINU.

     

    What is your forecast for the money and capital markets this year?

    For the banking industry, I think what you will get in 2013, is more of what happened in 2012. We expect to see more consolidation of the banks. The banks are behaving well, the Central Bank of Nigeria (CBN) regime is strong in terms of supervision and corporate governance and risk management practices in all the banks are good. So, we don’t expect any shock this year. For the stock market, we saw a trend in the last quarter of the year. Between the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), there are lots of initiatives they are taking to deepen the market and they are quite novel. They are doing a lot to make the market robust. The inclusion on the JP Morgan index has helped, though what you have there is ‘hot money,’ a lot of short-term money that can go as quickly as they come, depending on how good or bad the economy is, and there is no how you won’t have some bad news that can affect their behaviour. Some of them, based on certain news, may take their money out. But we feel that 2013, for the stock market, should be more of what we had in 2012.

    The CBN has deferred the implementation of the cash-less policy in other states and one of the reasons given was that some banks are not making enough investment in Point of Sale (PoS) terminals and other alternative channels. With that, do you see the policy as a failure?

    I think the cash-less policy is laudable. This is something the Bankers’Committee of which I am a member supported. We discussed this at the Bankers’ Committee. If you look at the time the PoS started, they were probably less than 10,000 machines, but as at October, we had over 200,000 machines. That is a phenomenal growth. There are challenges, the biggest of which is communication and infrastructure, just like our telephones and the CBN and the Bankers’ Committee have done a lot of work trying to overcome these challenges, but as we see, with our telephones, these challenges have been with us for a while. Like other things, such as Automated Teller Machines (ATMs) and Information Technology (IT) in general, infrastructure is always a challenge, but we always invest a lot more to get the required service delivery. Why it is difficult here is because the service delivery is with individual merchants, not banks. ATMs are managed by banks, so you can make sure that the installation works. But if a PoS, which is with the merchant doesn’t work, it’s discouraging. Some banks have embraced it. If you are a bank that is focused on retail, if you are a large money-centred bank, you focus on it, if you are a niche bank that has a few branches and is not focused on retail; you are not focused on PoS. So, some banks have so many PoS while others have very few. But it is out of choice. That is competition and nobody is forced to do it. Really, it is due to your appetite and interest.

    Do you foresee the cash-less policy assuming a national spread this year?

    The plan was to do Lagos and then roll out to five major cities across the country. The performance of these only was to determine how many more to follow in the remaining parts of Nigeria. The limited success and the issues encountered have called for more introspection and a review of what we have done so far, and that has slowed down the pace of rollout. Twice we wanted to move ahead to new cities, but we felt that we should take a look again. So, there are learning points and we are looking at how best to approach other cities that we want to go into. So, the Central Bank, along with the banks is looking at these things. I am sure that, in due course, we would determine what to do. Whether we would be able to take on the whole of Nigeria in 2013, I am not sure if we would achieve that with the level of caution that is being employed now. But I feel that we would take on quite a few more cities and locations in this year.

    The power sector privatisation is on and we understand that some of the preferred bidders are negotiating with the banks. Do you think that Nigerian banks have the financial muscle to finance the acquisition of the power assets?

    Definitely, our banks have the capacity and capability to fund power projects. Already, banks are funding multi-billion dollar projects either through syndications or club deals. Both local and international banks are doing that in other sectors. So, the power sector is going to get a lot of investments from banks and other investors that are non-banks would put money in equity. So, the banks in Nigeria have the capacity to fund the power sector adequately.

    So, how many of the firms is Skye Bank negotiating with?

    Well, we are talking to two of the winners. We would participate in the programme. We are leading a syndicate and other banks have shown interest also because there is a lot of values added in the sector.

    How will you assess economic performance in 2012?

    2012 was an interesting year both for country and the economy. For the country; the Federal Government settled down to work. Key areas, such as power, agriculture, manufacturing, infrastructure were addressed and, at the end of the year, privatisation took place in the power sector and the process is ongoing and we feel that with a lot of investment in power, production will go up in 2013. The Central Bank of Nigeria (CBN) got involved in agriculture few years ago and the Minister of Agriculture has stepped up and done a miraculous work.

    Bank lending to agriculture has increased from one to three per cent and the target for 2017 is 10 per cent of aggregate lending. We are involved in new initiatives in lending to agriculture. We are trying to make it more bankable. You would see that agricultural production went up in 2012 and this should continue in 2013. Banks were involved in cropping, animal husbandry and processing in 2012, and there were direct initiatives in fertiliser and seeds financing. So, you see fertilisers getting to the end users much more and also better quality seed is being distributed at affordable prices to farmers. So, that has helped production a lot and we should see that improving in 2013. On infrastructure, we have seen the airport and we have seen a lot of road contracts taking place. The states and the Federal Government are doing a lot on infrastructure.

    Security, however, is still of concern, but it is fairly under control. A lot more still has to be done. I believe that the assistance of the international community where you could get better technological assistance would be of great help in resolving a lot in security. In banking, I think 2012 was a year of realisation of the efforts of the industry. With the support of the CBN, the Asset Management Corporation reported ground breaking profits. The banks are relatively sound and are all behaving responsibly and ready to support the growth of the economy. There are good signs for the banking industry today as competition is back. We have seen relatively stable interest rates with inflation at 12 per cent, still high, but stable. Interest rates are still a bit high, but that was necessitated by the fact that government borrowing is still high and also due to the need to stabilise exchange rates. So, the tightening of money supply pushes the rates up. But we feel that 2013, interest rates should slide a bit. One of the things still holding interest rates where they are is the need to maintain exchange rate. So, the tightening would continue and the CBN would continue to maintain that stance as long as there are signs that the exchange rate may go out of control. The stability in the exchange rate has enabled banks and companies to plan and has created a platform for us to work

    What is the market share of Skye Bank and how does the bank intend to grow?It is believed that Skye Bank is public sector biased. Is that true?

    The market share of Skye Bank is about 4.5 per cent of the industry and we have about 270 offices all over the country. We believe that we have a decent market share as we are a mid-sized bank. We believe that we have the ability to compete with all the banks and we do compete with all the banks in all lines of business. In terms of growth, our strategy is to grow organically and in growing organically, we shall do so in tandem with the growth in the industry. But we would also look at opportunities to acquire or merge with other banks as the opportunities arise. You know, in this environment, merger and acquisition is not a common thing like abroad where you can approach a bank and you guys would just marry each other. So, when the opportunity arises, we would look at the situation and see what is possible to decide on what to do. Really, merger and acquisition is not the answer because it is not the size of the bank that is critical, but the level of efficiency, the strength of the capital, and the quality of its loan which all translate to efficiency. We believe that you must be have the sizeable and we believe that Skye Bank has this as we have a N1.3 trillion balance sheet and we feel that at that size, we can take up 80-90 per cent of the transactions in the industry by ourselves and we can syndicate or arrange funding where necessary. We have taken up many sizeable projects and we have seen a lot of leadership, innovation and have carried out landmark transactions in the economy. So, we believe that we also want to do the right things at the right time. We believe that as an institution, with bias for prudence, probity and the core values that we have in the way we do our business, our bank would sustain growth over time. The bank plays in all sectors; we do not discriminate and public sector is the largest spender in Nigeria. So, we have to focus on public sector and we add a lot of value to public sector. But likewise, we do more business with small and medium enterprises (SMEs) and other areas of the economy such as manufacturing, oil and gas. On the single obligor limit, I think it is okay. It cannot be reviewed upwards; at best it can be reviewed downwards because as banks grow in size, the obligor limit can only go one way-downwards. But I think for now, it is okay.

    Talking about growth and opportunities, the process for the sale of the three banks wholly owned by AMCON will start this year. Which of them will Skye Bank consider for possible acquisition?

    That would be pre-mature. But we would look at them; we cannot say which one we would go for, because we do not know what is in there. But we would look at all of them when the time comes.

    Given the number of banks that we have at present, will you say the country is under banked or over banked?

    Well, it is not the number of banks that determines whether you are under banked or over banked. It is the level of penetration that determines that. The kind of environment also can determine the number of banks you can have. Like in the United States, we have over 10,000 banks, in some countries you have about four banks and in others, a few hundred. I think that our culture, our diversity, and our varied interests determine the number of banks that we have. At one point, we had almost 130 banks and, today, we have about 24 plus another two coming up, and over the next few years, maybe more would come. Some people say it is not sustainable, but what I say is that it is really the penetration that matters. Banks are all able to carve a niche, there is a lot of money in Nigeria. There is a lot of interest. Nigeria is diverse and there are lots of interests. So, banks can create niches for themselves and are able to play as niche players. You can’t have so many big banks. I think that is where the confusion is, because every bank is looked at to attain a big size. So, really, it is more of the penetration because if you look at it, in urban areas, they say we have as much as 80 per cent penetration within the adults and in rural areas, only about 30 per cent. Really, we are still very far from what we can attain. Also, the government is the biggest player in business and if a lot of government businesses are privatised, what that does is that it grows the wallets of the banks. Also, if a lot of the accounts that are being lodged with the CBN are taken out of its domain that would increase the wallet for banks. Then, there is so much cash outside the banks. So, really, what would determine a lot of all these factors is the size of the market and how the players would play. I believe that our level of diversity and the depth of the economy can sustain the number of banks we have.

    Fingers are being pointed at the banks and bureaux de change over the rising cash trafficking these days. What is your take on that?

    Well, the bureaux de change have done nothing wrong. If you want to take money out of the country, you declare it. And dollar is not under cash-less, so you can go and buy dollar from the banks or the bureau de change in any quantity you like. There is nothing wrong, but if you want to take dollars out of the country, you declare it. That is all. So, there is no law that has been violated in the ordinary way.

    The House of Representatives says it intends to push for a legislation that would strip the CBN of its banking supervisory power and create an independent body to regulate he banks. Do you support the idea?

    I read it in the newspapers and was surprised. You know it is difficult to have an opinion. But what I can refer to is that in the United Kingdom, years ago, they took out the supervisory arm from the Central Bank and created the Financial Services Authority (FSA). After the crisis, they said the FSA did not do a good job and so they want to return that function to the Central Bank. But we are thinking the opposite. So, there is no one that is right and there is no one that is wrong.

    But the question I would ask is what is motivating them to do that? What is their motivation? The CBN has done a very good job in sorting out the banking crisis and they are supervising banks much better than before. I think it is more of the focus and the leadership that drive the result as opposed to the structure. Either structure could work; that is my take.

    Is the $79 per barrel oil benchmark sustainable?

    On the oil price benchmark, I like to be a bit more conservative. I will favour more of the $75 per barrel. Really, I think it is slightly political and also to try and maximise cash into the budget, that is why we have the $79 per barrel. Now, the issue of oil price today in Nigeria, in the short-run, it may be sustainable. You have every West African country producing oil, even East Africa, but in five to eight years, the oil will not add up to something significant and if the United States is not importing oil again because they are almost self sufficient, the oil price would even be half of that. That is a bigger worry for us as a country. If we do not get our act together within the next five to eight years, we would be in trouble as a country. So, I think the next five to eight years is extremely critical to us as a country. We need to diversify, we need to invest in infrastructure, we need to take care of security, we need to sort out all our problems and become a wealthy, up and coming country.

    We understand Basel 111 implementation has been shifted forward. What is the level of implementation of Basel 111 by Nigerian banks?

    For Basel 11, you know Basel in itself is more applicable to international banks while Basel 111 takes care more of capital requirements. So for Basel 11, the aspect of it that relates to us is being implemented and we believe that in the course of 2013, we would have full implementation of the aspects that relate to banks.

     

  • Flour Mills notifies NSE on merger

    The Nigerian Stock Exchange (NSE) said Flour Mills of Nigeria Plc has notified that its board and that of the Niger Mills Company Limited, have been in discussions and negotiations with regard to merging their respective businesses.

    Report from the Exchange stated that the proposed Scheme of Merger will be undertaken pursuant to Part XII of the Investment and Securities Act No. 29 of 2007.

    Flour Mills currently holds 99.97 per cent equity in Niger Mills and the proposed merger will facilitate the consolidation of the companies’ operations and processes into a single enlarged entity.

    However, the proposed merger, according to the notification, is expected to build a more efficient company, positioned to create potential savings through the optimisation of overhead costs, particularly administrative costs relating to maintaining two distinctive entities.

    The report said the merger will be achieved by the transfer of all of the assets, liabilities and undertaking of Niger Mills to Flour Mills, in exchange for which ordinary shares of Flour Mills will be issued to the minority shareholders of Niger Mills or alternatively a cash consideration in lieu of the allotment of the said Flour Mills shares be made to the minority shareholders. Upon the Scheme becoming effective, all shares held in Niger Mills shall be cancelled.

    The Board of Flour Mills believes that the enlarged Entity will consolidate Flour Mills’ leading position in the flour milling industry, accessing positive economies of scale and realizing significant synergies through enhanced operational and administrative efficiency and a unified product delivery platform, and thereby providing immense benefits to the shareholders and customers of Flour Mills.

    The Federal High Court has directed that separate meetings of the shareholders of the merging entities be convened at a Court Ordered Meeting scheduled to hold on 20th February, 2012; at Zinia Hall, Eko Hotel and Suites, Victoria Island, Lagos by 10.00 a.m. Entitled to attend and vote at the meeting are those shareholders, whose names appear on the Register of members on 29th January, 2013, the report added.

    Meanwhile, trading on the floor of the NSE in the last one week of four trading sessions saw a turnover of 2.612 billion shares worth N19.152 billion in 27,186 deals in contrast to a total of 3.259 billion shares valued at N21.636 billion that exchanged hands the previous week in 34,651 deals.

    The Financial Services sector was the most active accounting for 1.969 billion shares valued N11.081 billion carried out in 16,303 deals.

    The top three sectors represented by the Financial Services, Consumer Goods and Services sectors accounted for 2.353 billion shares valued at N16.900 billion traded in 21, 988 deals, thus accounting for 90.06 per cent, 88.24 per cent and 80.88 per cent, of the volume, value and number of deals respectively.

    Also traded last week was 196 units of New Gold Exchange Traded Funds (ETFs) valued at N504,481 which exchanged hands in four deals in contrast to a total of 565 units valued at N1.440 billion transacted last week in fourdeals. There were no transactions through the stock market in the FGN Bonds, State/Local Government Bonds and Corporate Bonds/Debentures sectors.

    The NSE All-Share Index appreciated by 2.12 per cent to close Friday at 31,583.49 while the market capitalization of the listed equities also appreciated by 2.12 per cent to close at N10.103 trillion.

    Likewise all the NSE sectorial indices appreciated: the Bloomberg NSE 30, Bloomberg NSE Consumer Goods, Bloomberg NSE Banking, Bloomberg NSE Insurance, Bloomberg NSE Oil/Gas and NSE Lotus II appreciated by 2.41 per cent 0.06 per cent, 1.41 per cent, 1.26 per cent, 1.20 pet cent and 3.26 per cent respectively.

     

  • ‘DMBs provide 70% of total banking credit’

    The deposit money banks (DMBs) provide close to 70 per cent of total credit in the banking system, FBN Capital has said.

    It said that net loans from the banking system including the Central Bank of Nigeria (CBN) to the private sector, defined as the domestic economy other than the Federal Government, contracted by 0.9 per cent month on month in December and increased by just 7.4 per cent year on year.

    It said the modest rate of loan growth over the year may surprise, given GDP growth of more than six per cent. “We could query both data series but we can also observe that the marked slowdown of lending growth since the twin bank bailouts of 2009 has had a limited effect on Gross Domestic Product expansion,” it said.

    FBN Capital said although some might argue that the banks’ cash reserve requirement (CRR) of 12 per cent inhibits lending growth but the growth was subdued before the increase in the CRR by the Monetary Policy Committee in July 2012.

    “Over this period the banks have enjoyed higher and safer returns in the government debt market although this advantage has been eroded by the yield compression of about 600bps on FGN bonds and NTBs since August 2012,” it said.