The Nation Newspaper

Tag: Capital markets

  • Capital markets focus on investor education

    Capital markets across the world have launched a week-long investor’s education programme aimed at enlightening investors on basics of investing and the emerging trends in the global securities market.

    The International Organisation of Securities Commissions (IOSCO) on Monday launched its third annual World Investor Week (WIW), after successful organisation of the week-long event in 2017 and last year. IOSCO is global body of securities regulators and its members regulate more than 95 per cent of the world’s securities markets in more than 115 jurisdictions. Nigeria is a member of IOSCO.

    The WIW is a week-long, global campaign, which aims to promote investor education and investor protection, highlighting the various initiatives of securities regulators in these two critical areas.

    The WIW started on September 30, and will run through October 6, 2019. IOSCO members will provide, in their jurisdictions, a wide variety of activities, such as launching publications or services, promoting contests and organizsing workshops, conferences and other events. Many members leverage the event to organize further investor education activities throughout the year.

    According to IOSCO, given the digital environment, the WIW 2019 includes key messages regarding online investing, digital assets and initial coin offerings, as well as re-emphasizing the basics of investing.

    IOSCO noted that in last year’s WIW, IOSCO members and stakeholders from some 90 jurisdictions on six continents undertook a range of activities, such as offering investor-focused information and services, promoting contests to increase awareness of investor education initiatives, organizing workshops and conferences and launching local and national campaigns in their jurisdictions.

    Chairman, International Organization of Securities Commissions (IOSCO) and Chief Executive Officer, Hong Kong Securities and Futures Commission, Ashley Alder, said the third edition of the World Investor Week evidences IOSCO’s continuous efforts and commitment to investor education and protection.

    Ashley said IOSCO has been encouraging new initiatives among its members and preparing them for dealing with the challenges of increasingly interconnected and digitalised capital markets.

  • World Bank: Fintech has potential to transform finance, capital markets

    Financial technology (fintech) holds tremendous potential to transform finance and capital markets, the World Bank said at the weekend. It added that institutions such as the Organisation for Economic Co-operation and Development (OECD), an inter-governmental economic organisation with 36-member countries have been looking at data-driven financial markets and what could be learnt from that.

    The global bank said at the G20, digital financial education is a priority to ensure that fintech benefits are shared evenly by consumers as they choose financial products smartly. “Much of our work on finance and capital markets is also focused on the foundations of a digital economy that will digitally enable millions of people and small businesses to have access to finance, manage a savings account and securely transfer payments.

    “The progress we are tracking in many economies is faster where policy interventions are not interfering with market fundamentals. Regulators reaching beyond their mandates are experiencing success in protecting consumers, business conduct and laying the foundation for financial stability,” the global lender said in a report at the weekend.

    It said the next chapter in fintech regulation will emphasise proportionality and a shift from regulating institutions to regulating activities. Small fintechs, it said, have a very different risk profile from large banks. The need for new rules to cover technologies is important.

    “Rules, however, will need to accommodate the rapidly changing pace of technology. We can only succeed if the rules are tech neutral and based on principles so as not to undermine the prospects of fintech applications in many developing countries.

    “In the past few years, the emergence of fintech hubs has proven extremely valuable in convening the various stakeholders to share their knowledge, stories of success and challenge, their assessment of risks and opportunities. Engaging with the experts, investors, researchers, banks, consumers and regulators, financial institutions is facilitating the flow of new practices and applications while promoting cross border cooperation within and between jurisdictions that can potentially minimise regulatory arbitrage and fragmentation,” the report noted.

    According to the World Bank, it is true that in many developing economies the infrastructure, institutions and information technology to enable fintech are not very advanced. It is also true that fintech will not substitute for market inefficiencies. The reality, however, is that fintech can make up for many of these gaps.

    It explained that financing for development is critical, stressing that for many developing countries, these gaps undermine prospects of achieving the Sustainable Development Goals (SDGs) and supporting vital economic sectors.

  • AfDB to raise $7.24bn from capital markets next year

    The Board of African Development Bank has approved the institution’s 2019 borrowing programme to the tune of $7.24 billion to be raised from the capital markets.

    A statement said  bank   accesses a wide array of capital markets with the majority of its borrowing in US dollars and Euros as well as issuances in other public markets such as Australian dollars and pound sterling.

    The bank maintains an active presence in the socially responsible investment arena and continues to be a regular issue of Green and Social Bonds. These products serve to satisfy increasing demand for impact investment but also allow the bank to highlight its development mandate and promote sustainable and inclusive growth.

    The institution has also used its ‘High 5’ operational priorities as a platform to continue the issuance of theme bonds, including an inaugural ‘Integrate Africa’ bond, a ‘Feed Africa’ bond awarded Asia Pacific Deal of the Year by mtn-i, more than forty ‘Improve the Quality of the Life for the People of Africa’ bonds, and two taps of its ‘Light Up and Power Africa’ bond.

    The bank is keen to innovate to diversify its product range and, as the financial markets continue to look to a future after Libor, was able to combine innovation with its social responsibility program and issue the first ever Green SOFR-linked bond, in November.

    The bank will continue to promote the development of African capital markets with the issue of local currency denominated debt to facilitate the financing of its local currency operations, alongside other initiatives.

    “We continue to raise our profile in the capital markets to provide cost-effective resources to finance projects and programs on the African continent. We have a strong track record, a diversified funding profile, investors across the world and the benefits of a AAA rating to strongly support the African Development Bank mandate,” the bank’s Treasurer, Hassatou N’Sele said.

  • DMO lists FGN Savings Bond on NSE to service budget deficit

    DMO lists FGN Savings Bond on NSE to service budget deficit

    The Debt Management Office (DMO) on Wednesday listed series 1 of the Federal Government of Nigeria (FGN) Savings Bond worth N2.067 billion at N1,000 on the Nigerian Stock Exchange  (NSE).

    Dr Abraham Nwankwo,  DMO Director-General,  said in Lagos that the listing became imperative to guarantee liquidity of the bond.

    The News Agency of Nigeria (NAN) reports that the savings bond, the first of its kind in Nigeria was opened to the investing public by way of offer for subscription over a five-day offer period.

    The five-day period began on March 13, and would end on March 17, with N2. 067 billion raised from the retail market at 13.01 per cent coupon.

    Abraham stated that the bond would help to finance the nation’s budget deficit.

    According to him, the bond with subscription units of 2,577 will be issued monthly in tenors of two and three years, with quarterly payment of interest to investors.

    Nwankwo said that the response to the bond had been huge as individuals made enquiries with interest to participate in the bond.

    According to him, the bond will provide retail investors and ordinary Nigerians the opportunity to partake in infrastructural development of the country as well as generate good returns on their investments.

    “Over a year ago, the NSE mentioned the possibility of introducing retail bonds and we started working on it, with the team on NSE with the CBN, Securities and Exchange Commission and with other agencies that are relevant.

    “The FGN bond is meant for every Nigerian both at the grassroots as well as the common man.

    “The objectives of the bond had been achieved from the beginning as about 95 per cent of the subscriptions were from average individual Nigerians.

    “This means the grassroots’ common man dominate the FGN Saving Bonds,” Abraham stated.’’

    He said that the success showed that the initiative taken by the financial system and the NSE and other players in the market including stock broking community, had yielded fruits in terms of financial inclusiveness.

    The director-general commended all the stakeholders for the successful issuance of the first FGN Savings bond and urged Nigerians to be optimistic on the future of the nation’s economy.

    Also speaking, Mr Haruna Jalo-Waziri, NSE Executive Director, Capital Markets, said that the exchange was delighted with the savings bond listing which would mature in March 2019.

    Jalo-Waziri said that the bond among others would help to enhance the savings culture among Nigerians, while providing all citizens irrespective of income level an opportunity to contribute to national development.

    He stated that the FGN Savings Bond was safe and backed by the full faith and credit of the Federal Government of Nigeria, with quarterly coupon payments to bondholders.

    According to him, an interested investor needs to approach any of the accredited brokers and require only the sum of N5, 000 to subscribe with additions in multiple of N1, 000 subject to a maximum amount of N50 million.

    “We are pleased to list the series 1 of this innovative investment offering that caters to the retail segment of the Nigerian Capital Market.

    “The off take of the first tranche underpins the efforts of the Federal Government to continue to work with stakeholders to deepen the capital market while delivering value to investors at all income levels.

    “We look forward to continue the collaboration with DMO to list subsequent series of the Savings Bond”, Jalo-Waziri added.

  • Reconstitute Investment and Securities Tribunal, Reps tell FG

    Reconstitute Investment and Securities Tribunal, Reps tell FG

    The House of Representatives Wednesday urged the Federal Government to expedite action on the reconstitution of the Investment and Securities Tribunal membership.

    The House also mandated its committee on Capital Markets and Institutions to liaise with the Federal Ministry of Finance and other relevant MDAs with a view to working out short term solutions that will enable the Investment and Securities Tribunal function before the reconstitution of its membership.

    The resolution of the House was sequel to the passage of a motion by a member, Tajudeen Yusuf with the title: “Need for the immediate reconstitution of the Investment and Securities Tribunal.”

    The lawmaker, while presenting the motion noted that following the dissolution of Ministries Departments and Agencies by the Federal Government on 16 July, 2015 through a circular from the Office of the Secretary to the Government of the Federation, the Investment and Securities Tribunal has not been able to sit to adjudicate issues that bother on the Capital Market.

    He further stated: “Concerted efforts to make the federal government realize the strategic importance of the tribunal to the national economy, and therefore the need for reconstitution of its membership and reiterate its status as a civil court and not a board, has yielded no positive results.”

    He expressed concern that in the last eighteen months of the non- reconstitution of the Tribunal, the case docket has grown with about 51 pending cases.

    “Prior to the dissolution of the Tribunal, it had from inception in 2007 adjudicated on matters with a cumulative monetary value of about N400 billion, which had gone a long way in stabilizing the market and the economy.

    “The continued non- reconstitution of the membership of the Tribunal is grossly affecting its role as the Capital Market Adjudicator through which disputes are resolved.”

    Yusuf said the non- reconstitution has impugned on the credibility of the Tribunal as Capital Market stakeholders now doubt its relevance and investors’ confidence is gradually being eroded.

    “Due to the unfortunate situation, while many litigants are getting restive and frustrated as they cannot find any lawful avenue to ventilate their grievances, some are mooting the idea of self- help, which is inimical to the health of the Capital Market and national economy.

    “The Federal Government does not realize that for the Capital Market to play its role as the alternative source for long term capital amidst dwindling oil revenue and comic recession, there is urgent need to strengthen the Investment and Securities Tribunal,” he said.

    When the Speaker, Yakubu Dogara called for a voice vote on the motion, it was passed with no dissent.

  • SEC suspends Ecobank from capital markets

    SEC suspends Ecobank from capital markets

    The Securities and Exchange Commission (SEC) has suspended Ecobank from all capital market activities and from being a receiving bank because of irregularities surrounding a margin loan, a notice on its website said on Thursday.

    SEC, according to Reuters, said an Ecobank client Arian Capital Management had used capital from another company as collateral for a margin loan from the lender.

    After suspending Arian, the SEC said it had asked Ecobank for an explanation but the bank did not.