The Nation Newspaper

Tag: interest

  • Rekindling interest in agribusiness

    Rekindling interest in agribusiness

    In spite of its massive job creation potential, the agric sector is hardly attracting the requisite attention. But things may get better as the alumni of the Federal College of Agriculture, Akure, Ondo State, is making moves to re-awaken interest in agric entrepreneurship, DANIEL ESSIET reports.

    The  reunion of the alumni of the Federal College of Agriculture (FECA), Akure, the Ondo State capital, has opened a new vista of opportunity for the agricultural sector.

    The forum brought together agri-business representatives and  academics. The Country Representative, Harvest Plus, Dr Paul Ilona, gave the alumni and students insights on business opportunities in cassava production.

    The school  has  produced  men,  such  as the late Chief Moshood Abiola and  the Chairman of Elizade Group, Chief  Michael Ade Ojo,  who  have   worked extremely hard to become Africa’s most successful entrepreneurs.

    While many have chosen to pursue their own businesses, others have held on to government positions  and contributed to  changing   the way agric business is done.

    Some  alumni said if  the college is supported to  improve  on entrepreneurial education, the nation will  benefit tremendously. One  of  those who expresssed this view is  the Chief Executive Officer, X-Ray Farms Consulting and AF Marketing, Afioluwa Mogaji.

    Better known as African Farmer, Mogaji, who  obtained a National Diploma (ND) in General Agriculture from the college, created his own business  after  graduation.

    He founded his own farm production group that grows and sells vegetables. He is proud that the institution contributed to his greatness. It was with great enthusiasm that Mogaji began his endeavour, from the cultivation and processing stages, and all the way through to packaging and marketing.

    With his farms spread across the country, he earns money every day. The skills he has learned through the school’s programmes have been vital to his success as an entrepreneur.

    Named by the United States Agency for International Development (USAID) as a ‘Champion for Change,’ Mogaji said one of the challenges facing agriculture today is the shortage of people who view it as a business. He said younger farmers are  beginning to usher in a revolution in thinking agriculture  as an endeavour that needs a business and management perspective.

    To sustain agriculture as an industry, he said the government and the private sector need to empower more people to go into agriculture with a business management perspective where they take on risks and seek out returns.

    According to him, the government has to provide an environment that rewards the efforts of agribusiness-persons that are working to change agriculture into an integrated industry with best management practices, people and technologies.

    Earlier, Project Director, Cassava Adding to Africa (CAVA), Prof Kola Adebayo, a former student of FECA, said the agriculture sector represents great opportunity for young people.

    He said many Nigerians have found agro entrepreneurship to be a way out of poverty. And more are likely to take that path in the future.

    For young people to take to agriculture, he said farming must be made to be  intellectually satisfying and economically rewarding.

    To achieve this, he said young people should be given functional education to manage the entire crop cycle, starting with sowing and extending up to value addition and marketing.

    The Provost, FECA, Dr Samson Adeola Odedina, said Agribusinesses are facing a severe shortage of highly skilled workers. This, he attributed to disconnect between the content of education and the operations of agribusiness.

    He said institutions have not been able to  transition their research results into products and services, which enterprises need. To address this, institutions have to change the curricula to  train graduates on how to efficiently operate agribusinesses. creation to new heights.

    He said such programmes should  equip students with sound business concepts and commercial  understanding of the  agrifood industry.

    Odedina said graduates will have career opportunities in many areas, including food marketing, product development, packaging, sales, promotion, advertising, business development, retail management, brand management, food security and transport logistics.

    For him, a qualified agribusiness person must have business skills including agricultural expertise, finance, accounting, marketing skills, and human resource management.

    He said the college is determined  to establish a higher profile brand and reputation through quality graduates.

    As its graduates are successful, he said they will be able to give back to the school in some form.  By giving back to the school, they would have established a higher reputation for their alma mater, which further enhances the prestige of the  college certificates.

    He said the institution has raised many alumni, one of whom is Chief Ojo,  a business mogul. He said the college has produced experts that have  helped the government  and the private sector  to improve  food  production nationwide.

    In addition, Odedina  said  a lot  of  farmers  have  benefited from the college’s technical assistance, thus helping to ensure food security and improve livelihoods.

    Besides providing high-yielding seeds and equipment, he said the  college has supported farmers  with equipment  and techniques to  improve harvesting and preservation to ensure an all-year round farming. While food production  has increased, he said revenue to farmers and farmer households has also grown positively, with modern agriculture machinery also being introduced and training for local farmers.

    Due to the successes recorded in by alumni, the sector has been revolutionised.

    He, therefore, expressed the hope that the reunion  would deepen the successes made so far.

    He praised the West Africa Agriculture Productivity Programme (WAAPP) that gave the school the funds to work with schools and farming communities around it. Through adopted villages, he said the college has demonstrated the profitable of agriculture in poultry production, cassava production and value chains, and aquaculture production and processing to schools and communities in Ondo State and people are making a living from it.

    Meanwhile, the Chief Executive Officer and Programme Director of Multimix Academy, Mr. Obiora Madu  has said that  agribusinesses need  skills to compete in international markets.

    He said the nation has an agricultural potential to enable Nigerians capture large amounts of foreign currency and develop agriculture into an industry that benefits all.

    He said Nigerians need skills in  production, processing and distribution.

    The challenge to him and others is that the agriculture  sector  lacks  people with capabilities that will   provide needed the stimuli to help the agribusiness become a new industry. With the trends in the international food industry evolving, he said agro entrepreneurs have to develop a pragmatic export business plan,create a standard  product that will not be rejected by foreign buyers.

    Madu said his organisation is ready to work with the government to establish agriculture as a new business and find business persons that they can work together with.

    According to him, opportunities exist for business matching and that would-be entrepreneurs would find what’s important through firsthand experience in export agriculture.

    He stressed that agro businesses must appreciate the essential elements and overcome barriers in progressing to the next phase.

  • Wolves confirm Shola Ameobi interest

    Wolves confirm Shola Ameobi interest

    Wolverhampton Wanderers manager Kenny Jackett has confirmed that the club are interested in signing free agent Shola Ameobi.

    The 33 – year – old Ameobi recently trained with fellow Championship side Huddersfield Town but it appears the John Smith’s Stadium outfit are dilly – dallying on offering him a contract.

    Speaking to reporters after yesterday’s 0-0 draw with Brighton at Molineux, Jackett said that he will start running the rule over the former Nigeria international in the coming days.

    “He is going to train with us but it is early in the process, ” Kenny Jackett stated, according to Wolves’ official Twitter page.

    Shola Ameobi scored 79 goals for Newcastle United before departing Tyneside after the 2014 World Cup.

  • TSA: Depositors to get higher interest

    Depositors are to get more interest on their deposits in banks when the implementation of the Treasury Single Account (TSA) policy by the Federal Government and some state government begins, Managing Director, Meristem Wealth Management, Sulaiman Adedokun, has said.

    The TSA is a unified structure of government bank account enabling consolidation and optimal utilisation of government cash resources. It is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.

    The Federal Government has ordered each and every Federal Government ministry, department or agency to start paying into a TSA for all government revenues, incomes and other receipts. According to the directive, this measure is specifically to promote transparency and facilitate compliance with sections 80 and 162 of the 1999 Constitution.

    Adedokun said although the TSA is going to hurt banks, making less deposits available to them for on-lending to customers, depositors should expect a windfall from the policy. He said: “When government earnings are gathered in one single account, there will be many things to work out, especially funding of certain sectors of the economy. But that is on the logistics part of it. The actual impact of this is the crowd out effects from the banking sector because the interest will go up, as banks go on looking for more deposits”.

    He said the era of cheap funds from ministries, departments and agencies of government (MDAs) enjoyed by the banks are over.

    “They will have to look for other sources of deposits. That pushes the interest rate up, and that is where the money market fund will enjoy because you will now have rates that you can negotiate better with the bank,” he explained.

    “And again, with this, we have a better declaration of Nigeria funds. There has been general apprehension that with oil price declining, the economy is doomed. But the recovery we will be getting, if pursued effectively, will cushion the impact of the oil price fall.”

    Adedokun added that states may  get better allocation under the TSA regime because leakages will be blocked.

    For him, it is either government increases its revenues base, or blocks the cost of operation.

    “Blocking the leakages increases the margin of fund available to the states. We do not expect the oil price to go up significantly in the next three to five years because there is nothing showing that pattern. The change that has come to the global oil sector is a permanent change. It is a technology-driven change. Don’t forget that with that change, oil will eventually become something that is not of so much value because of new discoveries,” he said.

    Adedokun said his company has just concluded a N1 billion offer for Money Market Fund and Equity Market Fund which investors keyed into. He said the money market fund is for investors that want to pursue capital growth and earn steady income while the Equity Market Mutual Fund are for investors who can take risk and have their eyes on the long term.

    Adedokun said: “As an organisation, we want to drive value for our clients. We want to reach out to people that will be part of our success story. The Meristem Money Market Fund is for investors who are interested in a steady stream of income at money market rates while preserving the value of their investment, while the Meristem Equity Market Fund is aimed at investors who have a long term investment perspective”.

    For those that invested in the money market fund, the company will channel their money into deposits in banks, treasury bills, commercial paper, and bonds while the equity market fund is for stocks.

    He added that the money market fund’s objective is to seek current income and stability of principal by investing in a select portfolio of short term money market securities, while the Equity market fund’s objective is to seek long term capital appreciation through investment in equity securities with a focus on a portfolio of stocks listed on the floor of the Nigerian Stock Exchange.

    Adedokun explained that the equity market fund is for all classes of investors that are willing to take more risk for returns on investment while the money market fund is also ideal for all classes of investors that value liquidity and security of assets.

  • NCC: Regulating in whose interest?

    What exactly is happening in the Nigerian telecoms industry? Whose interests are the operators serving? And more importantly, in whose interest is the Nigeria Communications Commission (NCC) regulating the industry? These questions have been nagging at one’s mind for a while. Things however came to a head when not long ago news filtered in that the NCC was attempting to stop an operator from offering lower tariff rates to its customers. Technical-sounding reasons were given for the ban, but it is clear that there is more than meets the eye.

    If you are a subscriber to any of the “Big Four” networks in Nigeria – and who isn’t? –Then you must have noticed how aggressively competitive the operators are. The industry is acclaimed to be one of the most competitive in the world, for good reason.As we all know, the good thing about competition is that consumers are ultimately the highest beneficiaries. Who can so soon forget that per-second billing was introduced into the Nigerian market as a result of competition, not regulation? Or that of all the goods and services produced in Nigeria, only telecoms services have recorded significant price drops– from about fifty naira per minute in 2002 to less than seven naira per minute currently. Also, it was competition, not regulation, that drove the price of SIM cards from about N20,000  (yes)  in circa 2002 to less than N100 in 2015. If telecoms networks have grown to provide coverage all over the nooks and crannies of Nigeria and literally democratized “talking”, it is because of competition, not regulation.The value added services, the houses, cars, millions of naira and other gifts showered on consumers to keep us talking on their networks has been the results of competition, not regulation. Indeed, if the industry is today one of the brightest spots in Nigeria’s corporate future, it is because of competition, more than anything else.

    It is for this reason that we as consumers must be apprehensive when we notice that competition in the telecoms industry is being jeopardized. We should be even more concerned because there are indications that the industry regulator may have been captured by interests other than that of the consumer, and that it is protecting these interests above that of consumers in very blatant ways.

    Flashback to 2013 when  the NCC declared two of the operators as dominant operators and ordered them to make certain changes in order to prevent them from abusing their so-called dominant status. As a result of that declaration, the biggest operator (MTN) which then had  about 50 million customers on its network was asked to charge the same tariff rate for its on-net and off-net calls. Now, the reason given by NCC was that they needed to make the market more competitive. But the impact of that decision was that MTN was forced to charge its customers higher tariff rates than what was charged by its competitors. So whose interest did NCC protect by that decision? Was it the interest of the over 50 million Nigerians on MTN who had to either pay more to MTN (as if MTN wasn’t making enough from them already!) or were forced to buy SIMS on other networks – and new handsets to go with it, just to enjoy the lower tariff rates that the other networks were charging. For some reason, neither MTN nor consumer protection advocates did anything about the folly in this decision.

    Recently, we again heard that NCC had directed MTN to withdraw a tariff rate plan that it allegedly launched without NCC approval. We will not hold brief for MTN here – their publicists are paid well enough to do that! Apparently, NCC’s letter was leaked to the press and it went viral. This is a shame in itself. Why any self-respecting regulator would leak official communication in the media is beyond us, but again, the NCC as one of Nigeria’s most well-heeled regulators can speak for itself. What concerns us is that the tariff rate that NCC asked MTN to withdraw is probably the lowest tariff rate MTN has ever charged its customers. This is in the interest of consumers. We all know how stingy the folks at MTN are, so why should the NCC ask MTN to withdraw this rare gift to its consumers, when NCC should be the one asking operators to charge less!? What is even more troubling is the fact that the tariff rate of N6.60 which NCC is trying to deny MTN’s over 60 million consumers is freely available to subscribers on other networks!

    So we ask, whose interest is NCC protecting, and on whose behalf is it regulating? Given the curious speed by which the news back then hit the airwaves (it was reliably gathered that it even trended on twitter – pushed by professional publicists and “twitter marketers”) it is almost certain that it was one of MTN’s competitors that tried to force a reversal of this low tariff rate. There are still indications that the competitor is still up in arms using proxy, but it would be a sad day indeed if a government institution funded by tax payers is now turned into a willing tool to force anti-competitive actions against the interests of the largest block of consumers in the market.

    No doubt, the Nigerian telecommunications industry has witnessed remarkable growth over the years. Understandably, pundits are quick to credit the NCC for this success. However, the NCC’s recent actions are beginning to call into serious question its capability to protect the interests of consumers. Regardless of whatever technical issues there may be between MTN and the NCC, it is unfair to deprive its over 60 million consumers of the benefits of lower tariff rates. Competition is at play here, and we must all insist that the NCC should stand firmly behind consumers, regardless of whose ox is gored. NCC should protect consumers, not MTN’s competitors.

    • Ezedi, a telecoms analyst wrote in from Lagos.
  • Reversal of textile ban: In whose interest?

    Reversal of textile ban: In whose interest?

    The Federal Government has lifted the ban on the importation of textile materials and there is palpable fear among stakeholders on the possible backlash of the policy on the local plants. Some say it has rubbished the N100 billion revival pill by the government to revive the industry. Others insist it is not a death-knel for the sector, writes Assistant Editor, MUYIWA LUCAS.

    WHAT hope for the textile industry? Its future looks bleak, stakeholders believe. They say the industry may go into extinction by the Federal Government’s decision to lift the ban on the importation of textile and furniture materials.

    The new policy has elicited mixed reactions since it was announced last week. Some have predicated the end of the industry, arguably the largest employer of labour in the country if properly coordinated. Yet, others say the policy has a potential to encourage competition between local fabrics and imported textile products.

    The removal of textile and furniture from the list of prohibited items came under the Import Adjustment Tax (IAT) of the new Common External Tariff (CET), involving about 15 countries in the West African sub-region. It is subject to review every five years. The CET allows for free movement of goods and services within the sub-region.

    What is baffling to some stakeholder is why would a government that has granted a N100 billion lifeline to revamp an ailing industry opens its borders for the importation of materials to compete in the local market.

    But to some, it is too early to cry foul. In a telephone chat with The Nation, Chairman, Adhama Textile, Kano, Alhaji Saidu Adhama, argued that there was never a time a blanket ban was placed on textile products.

    According to him, only ‘African Prints’ textiles were banned outright. It said textile products from other places could not be said to have been banned since they could be imported if the importer once the importer was ready to pay the duty.

    Adhama contended that the issue at stake cannot be on lifting of ban, but on the correct payment of duty on such imported materials. He explained that even when the goods were banned, they still found their way into the local market.

    He said: “There is no justification to continue deceiving Nigerians that they are banned when already the imported textiles has saturated the local market. For instance, in a period of six months, Asians, especially the Chinese, flood the Kano textile market alone with goods worth $4 billion.”

    Adhama described the legitimisation of textile materials’ importation to allow government earn more revenue from the duty to be paid.

    The problem of imported textile materials saturating the local market has remained a hydra-headed monster for both the government and operators in the sector. The recent clampdown on 75 warehouses near the Trade fair Complex, Zoo Road, Kano, by men of the Nigerian Customs Service (NCS), gave credence to the fears of indigenous players in the textile sector.

    In the aftermath of the raid on the 75 warehouses, housing textile materials worth about N400 billion, allegedly owned by Chinese businessmen, were sealed. Sources close to the textile owners told The Nation that although the warehouses were sealed, the goods were not confiscated as the owners were told to pay the correct duty to the Federal Government coffers after which their wares would be released.

    It was alleged that the Customs men, who carried out the raid, were lenient during the operation. One of the sources claimed fabric owners, who could not afford to pay immediately, got a soft landing.

    Adhama suggested: “For those who could not pay the duty immediately, Customs divided their goods into three parts, released a part to them to sell and then use the proceed to pay before they can get the remaining part of their goods. This is a good approach.

    “Now, at 35 per cent, do you know how much will accrue to government purse? If these goods enter our markets even when it was said to be banned, then it makes sense for government to unban and let people pay correct duty.”

    The Nation gathered that the removal of the product from the prohibition list dates back to April 11, 2015. It is believed that the implementation of the policy became necessary, following the financial quagmire the country has found itself, especially the new administration; hence, the resolve of the NCS to implement the directive.  The financial woes have been further compounded with the tumbling oil prices at the international market.

    An industrialist and Managing Director, Emzor Pharmaceuticals, Dr. Stella Okoli, may have captured the country’s financial situation aptly.

    She said: “Nigeria is earning much less from the sale of crude oil presently. There must be a way of generating revenue to run the economy. This drop in revenue has made servicing our import-dependent nation and industries challenging.”

    Adhama shares Okoli’s views. “Since oil has lost its market value, there has been a revenue drop for Nigeria and that means NCS has to up its ante by generating more money for the Federal Government.

    “The government wants to use this lifting of ban to generate money into its purse,” he said.

    Adhama said the government was suffering a huge re loss for the period the ban lasted. He alleged that those closed to the corridors of power usually got waivers.

    According to him, the indiscriminate granting of waivers accounted for revenue loss and complicated the enforcement of the ban on goods on the prohibited list.

    Stakeholders are also not oblivious of the negative implications of the new policy, especially its effect on the sustainability of the capacity utilisation of local textile plants. They are promising to give the government a chance, even as they express their reservations.

    The Vice President, Small and Medium Industries, Manufacturers Association of Nigeria (MAN), Alhaji Ali S. Madugu,said with textile duty now put at 35 per cent, the NCS’ ability to enforce the policy to the letter was giving him concern.

    He, however, believed there will be no problem once correct duties are collected on imported textile and furniture materials.

    So pathetic was the situation of the textile industry that the Federal Government had to grant a N100 billion bailout. The relief, arranged to rescue the sector, has not had the desired effect.

    The lifting of the ban may have driven into the coffin of the moribund sector by the same government trying to rescue it.

    Experts agreed that Nigeria may have been a signatory to the Economic Community of West African Community (ECOWAS) Treaty, and as such, incapacitated to breach the treaties. Yet, there is a need for caution so as not to endanger the domestic economy. In this lies a huge challenge for the local industry.

    Mrs. Okoli described as regrettable that the once vibrant textile industry has gone comatose, despite the bailout granted the sector.

    “How well did they (textile firms) utilise the bailout fund?”, she asked rhetorically.

    But Adhama said it will take more than funding to revive the textile sector.

    If the records of the Bank of Industry (BoI) are anything to go by, only 60 per cent of the N100 billion have been disbursed.

    Both Madugu and Adhama are of the view that the government should create incentives to cater for the  interests of local textile industries to avail them the opportunity of competing favourably with their foreign counterparts, failing which, the bailout would have amounted to a waste.

    Madugu argued: “The intervention fund alone will not restore the lost glory of the sector. The Federal Government is not forthcoming on the other requirement to make the sector survive. The situation on ground in respect of the textile industry is not that of NCS or BoI. It is the fault of the Federal Government who gives waivers indiscriminately without protecting local firms.”

    Adhama and Madugu expressed the conviction that despite the textile market being saturated with over 85 per cent imported printed fabrics, most of them sub-standard fabrics from, the local players can favourably compete in the circumstance, if certain measures are put in place and policies implemented.

    They urged the Standard Organisation of Nigeria (SON) to be alive to its statutory responsibility of ensuring that sub-standard textiles no longer find their way into the country.

    Besides, they are seeking protection for all textile products that can be produced locally; while other imported fabric should be made to pay proper duty.

    The duty so paid, Madugu argued, should be channelled to the development of the local textile sector.

    He said: “The Federal Government should know who is importing what and where they source their foreign exchange from; not that people will earn foreign exchange from this economy and repatriate it abroad.

    “This won’t make the naira strong against the dollar. We are not afraid of competition; our quality is high here and we can compete favourably in terms of quality; but we cannot compete in price because importers do not pay the right duty on their goods.”

    Textile manufacturers are optimistic that the creation of three million jobs was achievable with the right incentive for the sector to thrive.

    But, to achieve this, they want the an enabling law guaranteeing them a market share of 25 per cent of the textile requirement of Nigerians.

    “We in the textile sector want the federal government, Bank of Industry and the National Assembly, to pass a law guaranteeing us at least 25 per cent market share in the country.  This will help us achieve the three million job creation target the government has promised. We are hopeful that with the current effort of the BoI and the NCS, this can be achieved,” Adhama assured.

    The Nation learnt that the bailout to the sector could not yield the desired result for a number of reasons, one of which was that at the time of granting the relief, the plants had already gone moribund, and needed to be renovated.

    Besides, the operators had obtained loans to expand their businesses and immediately the bailout entered their accounts, the banks deducted their outstanding credit, thus leaving the manufacturer with little or nothing to trade with.

    “How can you bail me out with money when the banks are waiting for me to deposit the money and seize it to liquidate earlier loans taken and injected into the business,” Madugu quipped.

    Given the prevailing circumstances, there are concerns over the repayment of the bailout already granted manufacturers.

    Madugu, who described the bailout as “a waste,” said  the repayment terms of the facility will definitely be hampered by the unbanning of the goods because the sector will now be more open to ‘dumping’ from outside the shores of the country.

    Experts also agree that BoI’s ongoing 44 financed projects under its Cotton, Textile and Garment (CTG) intervention fund with a N46.89 billion loan, and five projects under wood and leather sector intervention fund, for which N1.93 billion has been sunk, are now under threat.

    The Nigerian Textile Manufacturers Association (NTMA) had earlier warned that such unbanning of textile materials may threaten the repayment of loans taken under the Textile Cotton Revival Fund.

    The association argued that beneficiaries of the loan are being exposed to unfair competition through unbridled importation of textile materials.  It said there was no way the textile manufacturers could operate competitively to repay the loan if they were not protected.

    The NTMA had earlier reeled out conditions to be met by the government in case it decided to lift the importation on textile materials.

    Some of the conditions are: solving the challenges of the epileptic power supply, Low Pour Fuel Oil and a reduction in the price of gas.

    Others include granting textile manufacturers a five-year tax holiday; stoppage of exportation of cotton; strengthening the Customs to manage the borders and a textile development levy of 10 per cent to develop the industry as a replacement of the Textile and Cotton Revival Fund.

    Will the new policy endure? Only time will tell as there had been a reversal on the banning of textile materials in the past.

    “The Federal Government should know who is importing what and where they source their foreign exchange from; not that people will earn foreign exchange from this economy and repatriate it abroad”

  • Investors lose interest in equities over polls shift

    Investors lose interest in equities over polls shift

    The postponement of the general elections has heightened anxiety and dampened investors’interest in  Nigerian equities, analysts have said.

    The presidential and national assembly elections initially scheduled for Saturday, February 14 were shifted to March 28; the governorship and Houses of Assembly elections scheduled for February 28 were shifted to April 11. In the first trading session after the shift, Nigerian equities on Monday lost N208 billion.

    Analysts said the postponed elections could trigger negative reactions from investors, adding that the consequent disruptions could worsen the negative streak in the stock market.

    The market opened with average year-to-date return of -13.48 per cent. Before the poll shift, the market had sustained appreciable rally to close the week with average week-on-week gain of 1.43 per cent.

    Analysts at Afrinvest Securities Limited, said the shift could lead to a decline in investors’ preference for Nigerian equities.

    Accordingly, the market may likely react negatively to the shift in the general elections by six weeks.

    Analysts noted that although the shift may lead to relaxation in the charged political atmosphere, “the poll-shift has further increased socio-political uncertainty, adding to the risk profile of the                          Nigerian stock market”.

    Analysts said they however, did not expect a knee-jerk negative response given the current market situation at the stock market where most equities are significantly trading below their intrinsic values.

    The Managing Director, Financial Derivatives Company (FDC) Limited, Bismarck Rewane, also cited political tension as one of the reasons that would keep the market largely down in the weeks ahead.

    In his latest outlook on the equities market, Rewane said the downturn in the equities market will continue as negative sentiment would continue to dominate.

    According to him, three factors will continue to influence pricing trend at the Nigerian stock market, including corporate earnings, the general elections and the interplay of bargain hunters and profit-takers.

    He noted that weak corporate earnings for the year ended December 31, 2014 and political tensions, would serve as dampeners for the market, while the significant undervaluation of the market would continue to attract discerning investors.

    Rewane said there would be increased volatility at the stock market as the tussle between bargain hunters and profit takers is also expected to be intensified.

    Like several other analysts, Rewane outlined that the first and second quarter of this year might be dominated by the negative sentiments, while the equities are expected to stage strong recovery on the back of increased demand and positioning in the third quarter, which could extend into a stable phase in the fourth quarter.

    Exotix, a global finance and investment firm with offices in major global financial centres and significant imprints in Africa, said the delay to the election is a short-term negative for investors because it delays the currency devaluation and the resumption of structural reform that should have followed the election. Exotix coordinates its global operations through five major offices in London, New York, Lagos, Dubai and Nairobi.

    “The oil price collapse makes further devaluation inevitable, but political considerations have likely put off the full impact of this until after the election.

    “This necessary “clearing of the decks” for dollar-based international investors has therefore been delayed, too. In addition to this, we believe that post-election politics, regardless of the winner, are likely to see structural reform come back on to the agenda-there is simply less oil cash flow patronage to compete for after the oil price collapse; again, this is now delayed along with the election,” Exotix stated.

    Exotix sees substantial value in the Nigerian market to attract investors, describing the nation’s current outlook as “an opportunity in despair”.

    “Oil price collapse, election uncertainty, devaluation, restrictive bank regulation, Niger Delta oil theft and force majeure, consumer spending slowdown and Boko Haram are all serious concerns, but they are also all in plain sight.

    “A post-election, post-devaluation scenario of a resumption of structural reform and less restrictive bank regulation, while Pollyanna-ish for some, is worth considering, in our view, with Nigeria’s trailing price-to-book near a five-year low,” Exotix stated.

    Calm the nerves of investors.

    Investors in Nigerian equities lost about N3.4 trillion in January, indicating average month-on-month loss of 14.70 per cent. Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) closed January 2015 at N9.847 trillion as against its opening value of N11.477 trillion for the month. This represented a loss of N3.38 trillion.

    The benchmark index at the stock market, the All Share Index (ASI)-a value-based common index that tracks prices of all shares on the NSE, closed the month at 29,562.07 points, indicating a year-to-date return of -14.70 per cent. Total turnover in January had stood at 8.0 billion shares valued at N94.86 billion in 85,133 deals.

    The performance in the first month raised the spectre of the previous year. Nigerian equities ranked among the worst-performing stocks globally in 2014 with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N11.477 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

     

     

     

    Analysts at Vetiva Capital Management Limited however said investors in Nigerian equities may earn an average double-digit return of about 16 per cent this year, in spite of the bearishness that started the year.

    Vetiva, in its outlook for 2015, stated that Nigerian equities have been significantly undervalued by the previous bearishness and would witness considerable recovery this year.

    Analysts at Vetiva noted that while the performance of the equities market will correlate with the global oil price trend, a mid-point analysis suggests that Nigerian equities can make potential average return of 16 per cent this year.

    Analysts pointed out that while valuations appear relatively cheap, sustained pressure on oil prices will likely continue to constrain investor re-entry into equities. Analysts thus anchored their 2015 return expectation for the All Share Index (ASI) of the NSE on oil price performance in the year.

    According to analysts, using 16 year data, a correlation factor of 72 per cent between Brent crude prices and the ASI was established. The assumption of Brent crude recovering to $70/bbl by year end indicates a 22 per cent recovery from 2014 end position; thus, factoring in 72 per cent correlation suggests that amidst much volatility, the ASI holds a potential 16 per cent return in 2015 to 40,201.56 points.

    “Our scenario analysis indicate that at $100/bbl level, ASI would hold a potential 54 per cent return for the year, whilst at $20/bbl price level, the return potential is -47 per cent. Given that the market selloff in the final quarter of 2014 was broad based, we believe a market recovery in 2015 will equally be broad based,” Vetiva stated.

     

     

  • Show interest in governance, Akpabio tells youths

    Show interest in governance, Akpabio tells youths

    Akwa Ibom Governor Godswill Akapbio has urged the youths to show interest in governance, adding that they should be drivers of development.

    He spoke at an inter-denominational service to mark the 27th anniversary of the state creation and the 54th independence anniversary. The theme of the event, which held at the Ibom Hall Grounds, Uyo, was: “The God of Grace.”

    Akpabio said: “I charge the youths to rise up and protect the uncommon transformation of the state because there must be maintenance and sustainability of the developmental projects.

    “I also charge the youths to shun tribal sentiments and vote for a person, who will sustain the uncommon transformation as the next governor.”

    The governor said the next governor would sustain the legacy of his administration, urging the people to vote for a focused, sincere, liberal and non-tribalist candidate.

    Akpabio said the service was organised to thank God for what He had done for the state

    He said:  “When God gives you the opportunity to serve, do it sincerely and stop criticising others. I will not be distracted by critics. My administration will also continue to partner with the church.

    The governor congratulated President Goodluck Jonathan over his endorsement by various stakeholders. He urged the people to support the administration.

    A cleric, Bishop Emma Isong of the Christian Central Chapel International (CCCI), spoke on the theme: “Building A Legacy.” He said the governor has impacted on the state.

    He charged politicians to build worthy legacies while in office.

    Bishop Isong, on behalf of the Pentecostal Fellowship of Nigeria (PFN), Cross River State chapter, presented a plaque to Governor Akpabio as ‘The Most Christian Friendly Governor’.

    The Chairman of the Christian Association Of Nigeria (CAN), Archbishop Cletus Bassey, also extolled the virtures of the governor.

    He commended Akpabio for partnering with the church and touching the lives of Christians in the state.

  • Show interest in governance, Akpabio tells youths

    Show interest in governance, Akpabio tells youths

    Akwa Ibom Governor Godswill Akapbio has urged the youths to show interest in governance, adding that they should be drivers of development.

    He spoke at an inter-denominational service to mark the 27th anniversary of the state creation and the 54th independence anniversary. The theme of the event, which held at the Ibom Hall Grounds, Uyo, was: “The God of Grace.”

    Akpabio said: “I charge the youths to rise up and protect the uncommon transformation of the state because there must be maintenance and sustainability of the developmental projects.

    “I also charge the youths to shun tribal sentiments and vote for a person, who will sustain the uncommon transformation as the next governor.”

    The governor said the next governor would sustain the legacy of his administration, urging the people to vote for a focused, sincere, liberal and non-tribalist candidate.

    Akpabio said the service was organised to thank God for what He had done for the state

    He said:  “When God gives you the opportunity to serve, do it sincerely and stop criticising others. I will not be distracted by critics. My administration will also continue to partner with the church.

    The governor congratulated President Goodluck Jonathan over his endorsement by various stakeholders. He urged the people to support the administration.

    A cleric, Bishop Emma Isong of the Christian Central Chapel International (CCCI), spoke on the theme: “Building A Legacy.” He said the governor has impacted on the state.

    He charged politicians to build worthy legacies while in office.

    Bishop Isong, on behalf of the Pentecostal Fellowship of Nigeria (PFN), Cross River State chapter, presented a plaque to Governor Akpabio as ‘The Most Christian Friendly Governor’.

    The Chairman of the Christian Association Of Nigeria (CAN), Archbishop Cletus Bassey, also extolled the virtures of the governor.

    He commended Akpabio for partnering with the church and touching the lives of Christians in the state.

  • McIlroy’s rumoured love interest Nadia Forde escapes death

    McIlroy’s rumoured love interest Nadia Forde escapes death

    Rory McIlroy’s new potential love interest was lucky to escape serious injury after flipping her car six times in a serious motorway crash.

    Nadia Forde has been spotted out with McIlroy in Dublin following his split with world number 15 tennis star Caroline Wozniacki but was lucky to walk away unscathed after a wet weather smash in Warwickshire.

    The 25-year-old model lost control of her Fiat 500 in rainy conditions on the M40 before crashing into the motorway’s central reservation and flipping the vehicle six times.

    Forde was taken to hospital as a precaution in the early hours of Sunday morning due to a blow to the head but was later discharged.

    Her spokesman said: “Her guardian angel was working overtime. It was a real scare and the car was a complete write-off, but she is fine.”

    The singer is expected to take time out from promotional work for her new single as she recovers from shock.

    McIlroy is busy preparing for The Open, which he begins as third favourite today.

     

  • RT Briscoe loses N152m as interest expense rises to N1.47b

    RT Briscoe loses N152m as interest expense rises to N1.47b

    RT Briscoe (Nigeria) Plc recorded a loss before tax of about N152 million in 2013 as the company continued to wriggle in mounting interest expenses.

    Key extracts of the audited report and accounts of RT Briscoe for the year ended December 31, 2013 showed top-down decline in all key performance indices, underlining the decline in sales and continuing negative impact of the company’s financing expenses.

    The report indicated a loss before tax of N151.60 million in 2013, sustaining the red line that started in 2012 when the company lost N228.50 million. However, with tax gains of N59.59 million in 2013, net loss after tax dropped from N280.72 million in 2012 to N92.02 million in 2013.

    Turnover dropped from N21.98 billion in 2012 to N21.77 billion in 2013. Gross profit slipped from N2.68 billion in 2012 to N2.56 billion while operating profit dropped from N941.78 million to N801.81 million. Finance expense meanwhile rose from N1.26 billion in 2012 to N1.47 billion in 2013. The depressed bottom-line also impacted on shareholders’ funds, which slipped from N3.13 billion in 2012 to N3.05 billion in 2012.

    After several years of unbroken dividend payment, RT Briscoe Plc had entered the red zone in 2012. Shareholders saw a reduction of about 25 kobo in the underlying value of each of their shares as returns for the 2012 business year in contrast with dividend per share of 10 kobo received in 2011 and 2010 respectively. The board has also not recommended any dividend for the 2013 business year, obviously due to the negative bottom-line.

    RT Briscoe has been unable to actualize its recapitalization plan, forcing the company to depend on short-term bank loans. While the company’s total assets and liabilities declined in 2012, borrowings increased during the period, underlining the increasing dependence of the company on short-term funding. Borrowings, which were categorized as current liabilities and thus implied a short-tenor of a year, rose from N8.10 billion in 2011 to N8.93 billion in 2012. Total assets however dropped from N15.05 billion to N14.11 billion while total liabilities declined to N10.98 billion as against N11.53 billion in 2011.

    Audited report and accounts of RT Briscoe for the year ended December 31, 2012 indicated that turnover rose by 12 per cent from N19.61 billion in 2011 to N21.98 billion in 2012. The company had maintained appreciable profitability until financing charges for its N8.9 billion loans sucked all profit. Gross profit increased from N2.18 billion to N2.68 billion. After deducting administrative, selling and distribution expenses, operating profit stood at N941.8 million in 2012 compared with N965.66 million in 2011. However, interest expense jumped by 62.3 per cent from N776.38 million in 2011 to N1.26 billion in 2012, reversing the company’s profit before tax of N319.66 million in 2011 to pre-tax loss of N228.50 million in 2012. After taxes, net loss rose to N280.7 million in 2012 as against profit after tax of N149.9 million.

    The board of RT Briscoe has severally fingered what it described as “an unfortunate but unavoidable reality” of “high level of bank borrowings and short term loans as well as interest expenses.”

    On the heels of the loss in 2012, the board of directors of RT Briscoe had ordered the management of the company to immediately present a turnaround plan for the flagging company.