The Nation Newspaper

Tag: Investor

  • Investor, black market rates near convergence

    The rates at which naira traded in the investor foreign exchange window and black market over the weekend came close to converging, traders said, as the Central Bank of Nigeria (CBN) continued its bid to improve dollar liquidity in the economy.

    The Organisation of Petroleum Exporting Countries (OPEC) member, which has at least six exchange rates, is grappling with a currency crisis caused by low oil prices, which created chronic dollar shortages. It wants to attract foreign investors and maintain a strong currency to ward off inflation.

    The CBN created a new forex window in April to allow investors trade the naira at market-determined rates in a move intended to improve dollar supply and attract foreign investors, who fled Nigeria at the start of the currency crisis.

    The naira was quoted at N368 to the dollar on the black market last Friday. In the investor window, the naira was quoted at N367.83 to the dollar.

    “The convergence of rates, at least for a segment of the market, demonstrated the success of the central bank’s intervention, said Razia Khan, Africa Chief Economist at Standard Chartered Bank.

    Khan said by addressing the demand for dollars, the CBN had been able to reduce the extent to which the naira would have depreciated on the black market.

    The local currency traded at about N520 to the dollar on the black market in February and at N400 in the forex window when it opened in April, before appreciating towards convergence in the past few months.

    “The convergence has provided the CBN another opportunity to put in place a sustainable reform of the market to enhance the value of the naira,” Association of Bureaux De Change Operators President Aminu Gwadabe, told Reuters.

    Gwadabe said the CBN has consistently been selling about $40,000 a week to each of its 3,250 members, improving dollar liquidity. The bank last week said the investor window had handled $2.2 billion of trade in the past seven weeks, but had accounted for almost 30 per cent of that trade itself as it worked to keep the window operating.

    The CBN has sold more than $5 billion since it began its interventions in February, helping to restore confidence in the market

  • Foreign investor to raise stake in Union Bank

    Foreign investor to raise stake in Union Bank

    •To increase holding from 31 to 44.5%

    Co-founder of Atlas Mara Ltd, Diamond Bob, will raise his investment in Union Bank of Nigeria Plc, from 31 per cent to 44.5 per cent.

    To achieve this, he plans to sell his stake in Atlas Mara, which has dropped almost 80 per cent since an initial public offering. He will raise more than the company’s market value by selling a 35 per cent stake to Fairfax Africa Holdings Corp.

    Union Bank is Atlas Mara’s single biggest investment in Africa. The bank announced plans to raise capital through a rights issue in November as Nigeria’s small- and mid-sized lenders struggled to cope with a contraction in the economy of Africa’s biggest oil producer.

    Atlas Mara agreed to acquire an indirect 13.4 per cent shareholding in Lagos-based Union Bank from the Clermont Group for $55 million, it said. Union Bank is going through regulatory approvals and will then start the share sale, spokeswoman Ogochukwu Ekezie told Bloomberg.

    It said Atlas Mara, which owns banks in seven African countries, has plunged in value since its December 2013 Initial Public Offering (IPO) after growth across the continent slumped and currencies weakened amid a commodities rout.

    “The firm expects to get $200 million from selling new stock to existing shareholders and Fairfax Africa and will also issue a fresh convertible bond to the Toronto-based investment company, the company said in a statement on Wednesday. Atlas Mara will use the proceeds to boost its holdings in Union Bank of Nigeria Plc to 44.5 per cent from about 31 per cent,” Bloomberg report said.

    Diamond, 65, in February ousted Chief Executive Officer John Vitalo and pledged to cut annual operating costs by $20 million after rising expenses threatened the company’s ability to expand through acquisitions.

    “A strategic partnership with Fairfax Africa creates a strong relationship between two like-minded, long-term investors in Africa. Each is focused on capitalizing on the long-term growth potential of Africa and provides permanent capital to support growth,” Atlas Mara said

    The partnership with Fairfax Africa, which last year bought Zurich Insurance Group AG’s South African business and rebranded it Byte Insurance, will give Fairfax four of the nine seats on Atlas Mara’s board. A new management incentive plan will also be put in place, while Diamond will continue as Atlas Mara’s executive chairman, the company said. Existing investors face a dilution of about 35 percent, according to data compiled by Bloomberg.

    Fairfax Africa agreed to buy at least 30 percent of the $100 million of new shares at a price of $2.25 apiece, representing an implied purchase price of 0.33 times book value, the company said in a separate statement. Atlas Mara’s stock has traded at an average this year of $2.26, according to data compiled by Bloomberg. The shares rose 1 percent to $2.54 as of 1:05 p.m. in London, giving the company a market value of $197.5 million.

    “Banks are at the forefront of economic development in sub-Saharan Africa,” Prem Watsa, Fairfax Africa’s chairman, said in the statement. “Atlas Mara represents a unique opportunity to invest in many profitable banks in the region at a very attractive valuation.

  • Core investor acquires Wema’s 75% stake in GNI

    Core investor acquires Wema’s 75% stake in GNI

    Wema Bank Plc has secured  approval of the Nigerian Stock Exchange (NSE) to sell its 75 per cent majority equity stake in Great Nigeria Insurance (GNI) Plc to Insurance Resourcery and Consultancy Services Limited.

    A document obtained by The Nation at the weekend indicated that authorities at the NSE, where both Wema Bank and GNI are listed, have approved the divestment. Under the transaction, a block divestment of 2.87 billion ordinary shares of GNI currently held by Wema Asset Management would be transferred to Insurance Resourcery and Consultancy Services, a relatively unknown firm.

    The divestment is valued at N1.44 billion at current market value of GNI, which currently has total paid up capital of 3.827 billion ordinary shares of 50 kobo each with a market capitalisation of N1.91 billion. GNI is trading at its nominal value of 50 kobo per share.

    GNI at the weekend indicated that Wema Bank was its core investor. “Besides many well meaning Nigerians ,who invested in Great Nigeria Insurance Plc, our other core investors are Wema Bank Plc and Odua Investment Group of Companies. Our relationships with these great groups have created a synergy for the growth of our business,” GNI stated in its corporate profile.

    GNI started operations in 1960 and its businesses include general and life insurance.

    Following the Central Bank of Nigeria (CBN)’s banking regulatory regime that required banks to either divest from non-core banking subsidiaries or form a holding company to hold those subsidiaries, Wema Bank had opted to divest from its non-core banking businesses, including GNI. The bank had since divested from Wema Insurance Brokers Limited, Wema Registrars Limited, Independent Securities Limited and Whyte Cleon Limited. It also integrated operations of four subsidiaries into its core banking business including Wema Asset Management Limited, Wema Securities and Finance Plc, Wema Homes (Savings and Loans) Limited and Wise Properties Limited. Wema Bank had 100 per cent equity stakes in the trio of Wema Registrars, Wema Insurance Brokers and Whyte Cleon Limited while it had 94.7 per cent stake in Independent Securities and 75 per cent in GNI.

    Meanwhile, the new core investor would be required to restructure GNI’s issued share capital to dilute the existing concentrated shareholdings of the core investors and allow more investments from the investing public.

    In the latest report on public shareholding status in quoted companies obtained by The Nation, the NSE indicated that GNI and 10 other companies were in violation of the listing requirement, which compels companies quoted on the main board of the NSE to ensure that a minimum of 20 per cent of its issued shares is in the hand of the general investing public.

    Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market in their securities. The free float requirement for companies on the main board is 20 per cent while companies on the second board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors, who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    The report indicated that GNI currently has 16 per cent of its issued shares in the hands of the general investing public.

    According to the report, the management of the NSE had given GNI a deadline of July 8, 2016 to free more shares for the general investing public.

  • Stockbrokers’ chief harps on investor’s education and training

    Stockbrokers’ chief harps on investor’s education and training

    Chartered Institute of Stockbrokers (CIS) President, Mr. Oluwaseyi Abe, at the weekend stressed the importance of investor education and acquisition of relevant skills as part of the catalysts for the development of the Nigerian capital market.

    Abe, who led the council of the CIS on a courtesy visit to the Nigerian Stock Exchange (NSE) at the weekend in Lagos, said investor education has become more compelling as new products are being introduced into the, noting that the more investors understand the benefits and risks of investment in the capital market, the better for the long-term sustainable development of the market.

    He said the CIS places premium on the need to intensify efforts aimed at creating more awareness on the relevance of the market to all categories of existing and potential investors.

    He pointed out that while the market seemed gloomy at the present, there is hope that it would bounce back.

    He noted that other exchanges such as National Association of Securities Dealers (NASD), FMDQ Plc and Abuja Commodities Exchange have created alternative platforms for stockbrokers to practice, adding that the new trend in the financial market required additional skills on the part of stockbrokers.

    He assured the NSE of continued collaboration of the institute in order to build a strong and virile capital market in Nigeria.

    He urged the stockbrokers to work very closely with the CIS for enhanced professional development in view of the expanding nature of capital market operations, noting that the institute’s Continued Professional Development (CPD) programme had been expanded to bridge the skill gaps and position the stockbrokers to key into emerging opportunities.

    While pointing out that capital market regulators and operators had always worked on the same goal of market development, Abe said collaborative efforts have become more compelling in view of the challenges of globalisation.

    He reiterated that the CIS would always be prepared to partner individuals and institutions that share common values on the growth and development of the capital market.

  • Arbitration restores investor confidence, says Osinbajo

    Arbitration restores investor confidence, says Osinbajo

    A good commercial arbitration system will restore investor confidence in the Nigerian economy, Vice President, Prof Yemi Osinbajo, has said.

    The Vice President, who spoke at the First International Chamber of Commerce (ICC) Africa Regional Arbitration Conference in Lagos, said arbitration promotes the virtue of utmost good faith and constitutes a significant determinant of a country’s ranking in the yearly World Bank’s Ease of Doing Business report.

    Represented by the Minister of Justice and Attorney-General of the Federation, Abubakar Malami, the Vice President said any forward looking society must provide ways for resolution of commercial disputes, saying as lawyers and policy makers, “we are all aware that a fiscal resolution mechanism is a key factor involved in investment decision.”

    He said every business environment is prone to disputes, but stressed that every prudent society must design and constantly draw the processes through which disputes could be resolved in an amicable manner. “In the world of today, commercial arbitration is now recognised as a preferred method of solving several commercial disputes,” he said, adding that arbitration is now seen as not only possessing the desired speed, but also aggregating competency.

    The President of the Paris-based ICC Court of Arbitration, Alexis Mourre, stressed the need for more engagements and interactions on arbitration, adding that commercial practitioners would recognise arbitration just like common law and civil laws, pointing out that ICC is one of the key institutions that adopted arbitration and that 70 per cent of world arbitration came from ICC.

    The Chairman, Planning Committee, Nigeria ICC, Mrs. Dorothy Udeme Ufot, said  Committee came up with the idea of the three-day event with Arbitration and Africa: Prospects and Challenges as theme because Africa is the next major destination for Foreign Direct Investments (FDIs) by the international community.

    Ufot urged the international community to support Africa’s efforts to promote economic growth and investments, saying the interest of investors across the continent are so numerous that oil mining companies were looking forward to developing natural resources.

    At the panel discussion, the discussants, including the President, Nigeria Bar Association,  Augustine Alegeh, a representative from Dangote Group, Mr. Abdulah, Gbenga Oyebode, Founder/President, Econet Wireless Group, Strive Masiyiwa and other Senior Advocates of Nigeria (SAN), agreed that arbitration has become an integral part of dispute resolution. They agreed that employing arbitration in resolving disputes achieves faster results than long-drawn court processes.

    The former Minister of Justice and Attorney-General of the Federation, Bayo Ojo and a host of other lawyers from across Africa attended the forum.

  • Investor eyes Unity Bank

    Investor eyes Unity Bank

    Unity Bank Plc has forged a strategic alliance with Black Trituium, equity and investment fund manager, to enable them reposition the lender.

    The Nation learnt over the weekend that the new investor is committed to making significant equity investment in the bank.

    This strategic alliance will expand Unity Bank’s business scope, strengthen its capital base and support the bank’s retail strategy while meeting the investment objectives of Black Trituium.

    The Black Trituium manages funds for individuals and institutions such as Trade Union Congress (TUC) .

    The collaboration with Unity Bank is expected to expand the retail and Small and Medium Enterprises segment of the bank.

    Investment analysts see this as a unique opportunity that has the potential of broadening the bank’s customer base and provide long term stakeholder value.

    Furthermore, given the current economic outlook, this strategic alliance will come with immediate benefits that will enhance the capacity of the bank to meet the needs of its banking public.

    The alliance will also support government’s initiatives aimed at driving growth in the real sector through Small and Medium Enterprises (SMEs) and retail products, with particular focus on the agricultural sector.

  • Low investor confidence worries private sector

    The confidence level of investors and private sector operators  in the economy is waning, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, has said.

    Speaking with The Nation, he said except urgent and decisive action was taken, with direction given to the economy, investors will shy away from the economy and this will spell doom for the nation.

    While commending the purported truce between the executive and legislature on the budget, Yusuf said it is coming almost late, with the better part of the year gone.

    While commending the Town Hall Meetings by the government, Yusuf regretted that it was not inclusive.

    “We learnt traditional rulers, youths and market women were present, but we wondered how they missed out on the Central Bank of Nigeria whose Foreign Exchange (forex) policy is crippling the Organised Private Sector (OPS) and manufacturers,” he said.

    The LCCI helmsman said, for instance, that some manufacturers are currently having issues of credibility and integrity with their suppliers abroad because of challenges of remittances as a result of CBN’s policy.

    He despite this, government organised a Town hall meeting without inviting CBN. “We expected an all-inclusive participation with entrepreneurs, investors, Nigerian National Petroleum Corporation (NNPC) and members of the private sector to make it more robust,” Yusuf pointed out.

     

  • Investor pledges $30m for Oyo agric initiative

    Investor pledges $30m for Oyo agric initiative

    The new agriculture initiative of Governor Abiola Ajimobi of Oyo State is being boosted with an investment of $30m by a Nigerian entrepreneur.

    Mr. Babs Aina, Managing Director of Numerix Development Limited, offered to invest the sum in the sector with a view to  rejuvenating the state’s economy.

     Mr. Aina made the pledge at the second consultative assembly organised by the state at the International Institute of Tropical Agriculture, Ibadan.

    He promised that the figure would progressively increase to $100m in the next few years, adding that the investment would target maize and soya beans in the interim.

    At the forum were the Director-General of IITA, Dr. Nteranya Sanginga; Director, Institute of Agricultural Research and Training, Prof. James Adediran, top officials of research institutes and the Head, Development Finance office of the Central Bank of Nigeria, Ibadan, Mr. Bamiji Akinola.

    Also in attendance at the event tagged “AgricOyo” were top officials of the Cocoa Research Institute, National Horticultural Research Institute, Forestry Research Institute of Nigeria, federal ministry of agriculture, among others.

    Speaking at the event, the governor stressed that the target of the state was to harness the agriculture potential of the state with the ultimate ambition of becoming the food basket of the South-West, Nigeria in the short run and West Africa in the long run.

    Ajimobi called for attitudinal change among the people, advising that the people must work hard to survive instead of relying on prayers alone to provide their needs.

    He said, “Now that oil, which is the major source of economy of Nigeria, has crashed the government and our people should put to maximum use the available landmass, physical infrastructure and clean environment to invite investors for the economic growth of the country.

    “Nigeria is now at crossroads, because even our strategic reserve is nothing to write home about. Oil is our largest source of income in Nigeria, but it has crashed due to oil glut in the international market.

         ”We are very lucky in Oyo State. Out of our 33 local governments, 28 are agrarian. So, what Lagos State has in water, Oyo State has in land. We need to harness these through the agriculture value chain to revive our economy.”

  • ‘Ogun to partner genuine investors’

    The Ogun State government will partner, encourage and accommodate only genuine investors.

    Commissioner for Commerce and Industry Bimbo Ashiru said this when some  investors from Brazil visited him in Abeokuta, the state capital.

    Ashiru said investors have been signifying interest to invest in the state.

    He said the nation’s first ethanol factory was inaugurated last year in the state, producing 5,000 tons of ethanol per year .

    “We are assuring you of full support in establishing your company here.

    We have over 58 companies in Ogun State, the state is an industrial hub and investment destination of choice,” the commissioner said.

  • Investor flees Nigeria after being paid N32b for vessels

    Investor flees Nigeria after being paid N32b for vessels

    An investor got N32 billion for vessels, which he never delivered, a minister said yesterday.

    Transportation Minister Rotimi Amaechi said the unnamed investor fled after collecting the cash during the Dr. Goodluck  Jonathan administration.

    The money was paid from the Cabotage Vessel Financing Fund (CVFF), which indigenous ship owners last month urged Amaechi and Acting Nigeria Maritime Administration and Safety Agency (NIMASA) Director-General  Haruna Baba Jauro to speak on.

    The CVFF was created by the Coastal and Inland Shipping (Cabotage) Act, 2003 to promote ship acquisition by supporting ship owners.

    Section 42, Part VIII of Section 44 of the Act empowers NIMASA to collect and administer the fund, under guidelines by the Minister of Transport, after approval by the National Assembly.

    The fund was established to boost local content in the shipping industry.

    Amaechi, who spoke yesterday in Abuja when he appeared before the Senate Committee on Marine Transport, did not name the investor.

    Amaechi said about N300 billion  was released to encourage investors in the maritime sector by the last administration but the many went down the drain.

    He said: “In fact, there is a particular man who collected N32billion and left the country. I don’t think that the Federal Government needed to release N52bn to investors in the maritime industry.

    “What we are considering is to facilitate a partnership arrangement between the operators and foreign investors in which case we can support Nigerians who had shown serious interest in the business with about 40 percent of the investment while their foreign partners bring 60 percent. That will assure us that we would recoup our investment.

    “One of those who collected the aviation bailout who has done nothing with the money is walking freely on the streets of Nigeria; his airline is dead and he did not even deem it fit to inform the ministry.

    “I am protecting the maritime funds and we could only disburse it after we have seen the President,  the foreign investors who will partner with the Nigerian investors that meet our guidelines. We have the N52bn in the Treasury Single Account (TSA) of NIMASA.”

    He told the committee that as a result of massive fraud, NIMASA may be scrapped.

    The minister said the Federal Government might be forced to approach the National Assembly to repeal the Act establishing NIMASA, if its management fails to justify the utilisation of the huge resources at its disposal.

    Amaechi lamented that NIMASA had nothing to show for the N63billion revenue it generated in 2015.

    He cited the instance of lack of equipment at the agency’s search and rescue unit meant to monitor movement of vessels and provide treatment for injured personnel.

    He said: “Currently, the way NIMASA is, if you look at it very well, it was worse in the last administration. It was as if it was established just for the purpose of collecting money and nothing more. What we need to do is to ensure that NIMASA discharges its core responsibilities.

    “If NIMASA outsources its core responsibility, then it has no business existing. If it is just to collect money from individuals, anybody can do that.  We can hire a tax collector to collect money from maritime operators on behalf of Federal Ministry of transport.

    “So, it is either NIMASA sits up and carries out its own responsibility or we come to the National Assembly to repeal the Act setting it up and allow the department of marine security in the ministry of transportation to discharge the responsibility currently being discharged by NIMASA.

    “We are not going ahead with the university project proposed by NIMASA because we have an institution in Oron, we have Nigeria Institute of Transport Technology, Zaria, and we have the Nigerian College of Aviation in Zaria which we could upgrade to a University status and NIMASA is proposing to build a new one.

    “Who will attend the University? How many parents will allow their children to go to such place where it proposes to site the University? What is the aim of the University that we cannot achieve in Oron where they have all the necessary infrastructure.

    “I don’t think we are proceeding with the university being proposed by NIMASA because it is a waste of resources, and unfortunately a lot of money had already been released for the University project hence there is no structure on ground but just the feasibility study.

    “Whoever that is holding on to the money should better return it. The Chinese company contracted confirmed that only the feasibility study was in place.”

    Former President Goodluck Jonathan approved that the NIMASA University should be located at Okerenkoko, Warri South West Local Government.

    Amaechi also explained that an arrangement had been put in place to ensure that the dollar revenue accruable to NIMASA was paid directly to the Federation Account to boost foreign exchange for the country.