The Nation Newspaper

Tag: FBN Capital

  • Tax revenues favour oil sector, says FBN Capital

    Tax revenues are heavily skewed towards the oil sector, FBN Capital, an investment and research firm has said.

    In January, the Federal Government earned N599.0 billion from oil receipts, which constituted 77.3 per cent of the total public revenue. The rise in oil receipts was attributed to increase in prices of crude oil in the international market.

    FBN Capital said 75 per cent of registered companies in Nigeria did not feature in the tax records, adding that 85 per cent of registered taxpayers had not filed returns for two years.

    “The weakness is in good part administrative. One reason for the sharp increase in tax collection in South Africa over 15 years has been the introduction and enforcement of a regulation that public contracts can only be awarded to companies, which are current with their tax obligations,”it said.

    Besides, the firm said there is a governance aspect of tax compliance, adding that taxpayers are less likely to meet their obligations if they question how the government deploys its revenues. “Taxation and representation together do not suffice. Taxpayers do have a vote but also have to have some confidence in their government,” it said.

    It said the Federal Government may be expecting a pick-up in total revenues once the petroleum industry bill is passed but the improvement on the non-oil side is set to be gradual.

     

  • Non-listing limits economic participation, says FBN Capital

    Non-listing of major companies in key sectors of the economy on the stock market limits the potential for Nigerians to benefit from the fastest growing sectors and tap into benefits created by economic expansion.

    FBN Capital Limited, an investment and finance company, made this known while reviewing the latest report from the National Bureau of Statistics (NBC).

    It said there were few inroads for Nigerians to benefits from resilient and fastest growing sectors of the economy because of they are not quoted on the Nigerian Stock Exchange (NSE).

    According to analysts at FBN Capital, the NSE is in dire need of new listings in key sectors of the economy including the telecommunications, oil and gas and solid mineral.

    The report noted that growth has picked up considerably in the solid minerals, and building and construction sectors, which were indicative of the resilience of the informal economy.

    “Equity investors may wonder how they can add exposure to liquid stocks in the fastest growing sectors. Outside cement, their possibilities are few. The NSE is in dire need of new listings in underrepresented sectors,” the report stated.

    It noted that the latest economic data from NBS showed the divergence of sectoral growth trends among the fastest growing sectors over the past year with slow growth for wholesale and retail trade, and telecommunications sectors.

    Analysts blamed the slowdown in these sectors to the insecurity in the north and the squeezing of demand after the petrol price increase in January 2012.

    They pointed out that the most striking adjustment in the full national accounts for the fourth quarter of 2012 just released by the NBS was the downward revision in oil and gas growth from -0.2 per cent year-on-year to -0.8 per cent.

    “This reinforces our point about the underinvestment in the oil province, which appears not to have moved the executive, the legislature and the many vested interests in their talks over the petroleum industry bill since 2008,” analysts stated.

    FBN Capital stated that it expected to see the reweighting and rebasing of the national accounts this year noting that the most important change would be the new sectoral weightings of the economy rather than the new figure for nominal Gross Domestic Products (GDP).

    The latest report underscored the advocacy by the NSE for government to introduce policies that would encourage large firms in the telecoms, power, agriculture, mining, and upstream oil and gas sectors to list their shares as a strategy to deepen the capital market.

    According to NSE, while it has initiated talks with some of the corporations in these sectors, government-backed incentives and policies for qualifying large companies including tax holidays, free land, and government loans among others would encourage the companies to list.

    Chief Executive Officer, NSE, Mr Oscar Onyema, has said the Exchange would direct its efforts towards wooing companies in the four sectors to list their shares on the Exchange.

    According to him, the sectors were important in the development of the stock market as they are crucial to the Nigerian economy.

    He noted that agriculture accounts for more than 40 per cent of GDP, oil and gas contributes more than 90 per cent of export earnings, telecommunications sector has more than 80 million GSM subscribers and includes the fastest growing telecoms operator in sub Saharan Africa while the emerging utility sector has strong potential.

  • FBN Capital wins EMEA awards

    FBN Capital Limited has been awarded the “Best Debt House in Nigeria 2012” for the third year running at the EMEA Finance Africa Banking Awards.

    The African Banking Awards is regarded as the industry standard for banking excellence. FBN Capital won the 2010 and 2011 editions of the “Best Debt House”, and was again recognized as “a leader of local currency issuance in Nigeria”, having raised a combined N58bn for Ondo, Ekiti and Benue State Governments in the 12 months to June 2012 alone. It was also applauded for supporting corporate borrowers, particularly Lafarge Cement Wapco Nigeria where the sum of N11bn was raised in the local debt markets.

    According to Chris Moore, Publisher and CEO of EMEAFinance Magazine, FBN Capital has been at the forefront of bringing Nigerian sovereign, sub-sovereign and corporate debt to the attention of international investors and the larger global financial community. Last year they completed N1.7trn issuance for the Asset Management Corporation of Nigeria, and worked on Nigeria’s debt of US$500mn Eurobond issued in January 2011. Bayelsa State Government’s N50bn issuance, which was recognized as EMEA Finance’s Best Bond in Africa in our Achievement Awards 2010, is another landmark transaction delivered by the firm.

    “In previous years like the period from 2009 to 2010, FBN Capital was an adviser on seven of nine bond issuances. The Firm’s outstanding work in the debt area has seen it win a number of additional EMEA Finance house and deal awards including our ‘Best Local Currency Debt House in EMEA’ in our Achievement Awards 2011″, Moore noted.

    Speaking on the award, FBN Capital Deputy Managing Director, Mr. Taiwo Okeowo said the award is a tribute to FBN Capital’s strength in the Debt Capital Markets space, and a testimony to its strong deep understanding of client’s needs and investor preferences.

  • States’recurrent expenditure hits 58%

    The recurrent expenditure of the 36 states was 58 per cent of last year’s budget, FBN Capital, an investment and research firm, has said.

    In a report obtained by The Nation, the firm said on the surface, states have a better mix of expenditure but recurrent items accounted for 58 per cent of their aggregate spending in 2011, capital items 38.9 per cent and extra-budgetary costs 3.1 per cent.

    It said personnel consumed 19.2 per cent of the total and overheads a further 13.7 per cent even as Federal Government’s minimum wage legislation, pushed up the cost of salaries this year.

    At the Federal Government level, the firm said the rise in recurrent expenditure was affecting real sector funding and growth. It said personnel costs amounted to 36.5 per cent of total spending in 2011, and related overheads an additional 14.3 per cent. Statutory payments to bodies, such as the National Judicial Council and the National Assembly, have accounted for 5.9 per cent of government expenditure year to date.

    “We can grumble at inefficient capital spending by the Federal Government, and cite the thousands of unfinished projects it has sanctioned. That said, we should stress the swollen recurrent budgets, which constrained the development of productive sectors of the economy,” FBN Capital said.

    It noted that the recurrent/capital mix in Federal Government spending has been around 65/35 per cent, with the recurrent share increasing to 71 per cent year to date without transfers.The medium term framework assumes a cut in recurrent spending in real terms. Nominal remuneration can be maintained but the core assumption is that the government’s fiscal stance is not undermined by the 2015 elections,” the report said.

    FBN Capital said on the surface, state governments have a better mix of expenditure but recurrent items accounted for 58 per cent of their aggregate spending in 2011, capital items 38.9 per cent and extra-budgetary costs 3.1 per cent.

    Personnel consumed 19.2 per cent of the total and overheads a further 13.7 per cent even as Federal Government’s minimum wage legislation, will push up the cost of salaries this year.

  • FBN Capital appoints Feyisitan as COO

    FBN Capital appoints Feyisitan as COO

    FBN Capital Limited, the Investment Banking and Asset Management business of the FirstBank Group, has announced the appointment of Funke Feyisitan as Director and Chief Operating Officer.

    Ms. Feyisitan joins FBN Capital from JP Morgan in London, where she spent 15 years in product control, financial control and business operations management, and functioned across the securities and investment banking business. She was an Executive Director running the business operations platforms for Global Equity Capital Markets, and the Debt Capital Markets and Acquisitions & Leveraged Finance businesses in EMEA. She started her career as an auditor at BDO Binder Hamlyn UK, and then worked for Banker’s Trust (now Deutsche Bank) and SG Warburg (now part of UBS), before joining JP Morgan.

    Ms. Feyisitan is a Fellow of the Institute of Chartered Accountants of England and Wales, and an alumnus of Queen Mary University and Brunel University, both in London.