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  • Global investors scramble for Nigerian assets over reforms benefits

    Global investors scramble for Nigerian assets over reforms benefits

    Investors across the globe are swooping on Nigerian assets as the impact of the Central Bank of Nigeria (CBN) reforms in the financial sector spreads to key sectors of the economy. Nigeria is finally getting a favourable nod from investors, pushing stocks higher and bond yields lower as painful reforms restore confidence, writes Assistant Editor, COLLINS NWEZE

    Global investors are increasingly drawn to Nigerian assets as the country’s economic indicators continue to improve. Nigeria’s sovereign risk spread has significantly decreased, reaching its lowest point since January 2020. This marks the successful elimination of the premium that had built up during the pandemic and the subsequent economic challenges.

    Despite the volatility caused by the U.S. President Donald Trump’s escalating trade war, which has sent emerging markets on a turbulent path, Nigeria has managed to remain resilient. The country has attracted a steady influx of foreign capital, bolstered by comprehensive currency reforms and a series of measures aimed at revitalizing Africa’s most populous nation’s economy.

    “Nigeria appears to be back in business as long-awaited economic reforms take shape,” said Emre Akcakmak, portfolio manager at East Capital. Key measures include improved currency liquidity, leeway for investors to repatriate their profit, and the stable naira. “We feel the Central Bank of Nigeria will continue to stem any sharp appreciation of the naira to limit profit taking from the fast money community,” Akcakmak said.

    “Portfolio inflows have likely been supported by improved confidence amid key structural reforms, better FX market functioning and moderating dollar-naira volatility, as well as the still-robust nominal yield buffer,” said Samir Gadio, head of Africa strategy at Standard Chartered Plc told Bloomberg. “Besides, Nigeria’s local market is seen as less correlated with global risk conditions than more liquid EM peers,” he said.

    Yields on Nigeria’s $1.5 billion Eurobond due in 2034 have declined to 9.69 per cent, the lowest since its early December launch, and a domestic debt auction was three-times oversubscribed recently, with the Open Market Operation bills allotted at 21.45 per cent versus 22.65 per cent.

    Exchange rate stability

    The naira broke key resistance levels at the Nigerian Autonomous Foreign Exchange Market as the Central Bank of Nigeria (CBN) began the implementation of the new Electronic Foreign Exchange Matching System (EFEMS). The platform, addresses long-standing issues of market opacity and inefficiency by facilitating smooth trading and consistency among participants.

    In the currency market, the naira appreciated against the dollar across all segments. CBN Governor, Olayemi Cardoso, had at the 2024 Chartered Institute of Bankers of Nigeria (CIBN) dinner held November 29 in Lagos, expressed strong optimism that measures being deployed by his administration will deliver benefits that would be felt by every Nigerian in no distant time. He said the need for reassurance on the expected outcomes from policy measures being deployed by the CBN was necessitated by the growing pains of Nigerians due to the further deterioration of key macroeconomic variables (notably, inflation and exchange rate) that are within the purview of the monetary policy authority relative to when he assumed office last year September.

    Cardoso over time, prioritized stabilising the exchange rate, curbing inflation, strengthening banks’ capital buffers, and fostering an environment conducive to the success of both businesses and individuals. Besides, the CBN under Cardoso also initiated banking industry recapitalisation to strengthen capital buffers for banks and redefined Net Open Position ceiling for banks (25 per cent short and zero per cent long on foreign currency) to unlock FX liquidity.

    Read Also: NNPCL slashes petrol price to N860/litre in Lagos, N880/litre in Abuja

    On recapitalisation of banks, Cardoso said: “This strategic move ensures that banks are well-capitalised, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to Micro Small and Medium Enterprises (MSMEs), rural communities, and other vulnerable segments that have previously struggled to access formal financial services.”

    Cardoso said the recapitalisation policy not only strengthens financial stability but also serves as a catalyst for inclusive growth. “By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity. Furthermore, with increased capital, banks can invest in technology and innovation, crucial for driving digital financial services such as mobile money and agent banking. These technologies are key to breaking down geographic and economic barriers, bringing financial services to even the most remote areas,” he added.

    More views from other stakeholders

    Analysts at Commercio Partners said Nigeria’s financial landscape has seen significant developments with the CBN introducing revised guidelines to enhance transparency and governance in the foreign exchange market. These guidelines emphasize ethical practices, real-time reporting, and regulated interbank trading while mandating compliance from banks, dealers, and BDC operators.

    Managing Director, Afrinvest West Africa Limited, Ike Chioke said naira recovery could be attributed to improved market confidence following the successful launch of the EFEMS designed to promote trading transparency. “Also, the liquidity supply boost provided by Nigeria’s successful pricing of $2.2 billion in Eurobonds earlier last week significantly boosted the exchange rate position against the dollar. We anticipate the Naira to regain more ground against the dollar, driven by aforementioned factors,” he said.

    Chioke, listed other key policies of the apex bank that supported naira rally as the clearance of the $7 billion FX backlog and resumed sales of Open Market Operation (OMO) bills to Foreign Portfolio Investors (FPIs) at market reflective rates.

    Sustaining battles against inflation

    CBN’s policies, including the exchange rate unification, have led to significant foreign capital inflows to the economy while reducing the its intervention in the forex market. The floatation of the naira and the clearing of over $7 billion FX backlog improved the country’s outlook with foreign investors as well as multilateral organizations, like the World Bank describing it as bold intervention to improve the economy’s sustainability in the long run.

    Cardoso disclosed that upon assuming office, his leadership prioritised rebuilding Nigeria’s economic buffers and strengthening resilience. Before he assumed office, inflation, which had surged to 27 per cent, was one of the most pressing challenges, partly driven by excessive money supply growth. While the GDP growth had stagnated at a meagre 1.8 per cent over the previous eight years, money supply expanded rapidly, averaging about 13 per cent growth annually.

    Economic prospects turn positive

    The Nigeria’s economy and businesses will have so many things to cheer in 2025 and the impact of the economic reforms in FX market, exchange and huge budge outlays begin to pay off for them. Nigeria’s economy is already exiting the most painful phase of the reform adjustment process in 2025, Non-Executive Director of Parthian Partners, Bismarck Rewane has predicted. Rewane projected that the economy would begin to recover from the toughest phase of its reform adjustments by 2025, emphasising the importance of strategic policy implementation and institutional reforms.

    He noted that while the fundamentals of Nigeria’s exchange rate indicate that the Naira should be stronger, achieving stability depends on an efficient and effectively managed FX system. He stressed that the primary challenge lies not in the reforms themselves but in their management, citing poorly sequenced policy changes and insufficient structural reforms as significant obstacles. He underlined the critical role of investment in driving economic growth. “Revenue alone is not enough,” Rewane stated. “Investment is key, but it will be influenced by confidence, transparency, and the right policies.”

    He also called attention to persistent challenges such as power supply inefficiencies and the lack of transparency in the oil and gas sector, which require immediate attention through structural reforms.  Rewane said that 2025 is going to be less hard, less painful, less difficult than last year. He said the fact that things were so difficult in 2024, does not in anyway indicate that the difficulties will persist this year.

    Associate Dean of Lagos Business School, Professor Olayinka David-West,  emphasized the importance of adopting a “digital-first mindset,” advocating for the use of technology and AI to improve fiscal discipline and economic planning.

    Director-General /CEO of the Lagos Chamber of Commerce and Industry (LCCI), Chinyere Almona, identified high energy costs as a major driver of inflation and stressed the need to resolve power supply issues to stabilise prices. CEO of NGX Regulation Limited, Olufemi Shobanjo,  harped the role of liquidity in capital markets, emphasising initiatives that enhance investor confidence and ensure market stability.

    Executive Director of Parthian Group, Yemi Sadiku, highlighted the need for an enabling environment to attract infrastructure investment, urging the government to create policies that encourage private sector participation. As Rewane aptly remarked, “The things outside our control far exceed what we can control, but by addressing these root causes, Nigeria can unlock sustainable growth and economic stability.”

    Chief Executive Officer, FirstBank Group, Olusegun Alebiosu said the improving government revenues, improved revenue-to-debt service ratio at 68 per cent and the growth in foreign reserve balances to over $40 billion represent positive indicators for the economy. He further said:  “Early signs such as the stability that characterized the forex market after the introduction of the electronic foreign exchange matching system in December 2024; the emergence of competition on the supply side of our nation’s downstream sector that is leading to falling prices in premium motor spirit (PMS) and the coming back on stream of the Port Harcourt & Warri refineries are indicative that there is, indeed, light at the end of the tunnel for us as a country.”

    Alebiosu said the sheer timing of the emergence of these developments has strengthened optimism about the Nigerian economy, especially coming into the new year 2025. Also, the government’s proposed N49.7 trillion 2025 budget is expected to provide sufficient economic stimulus in view of the lower likelihood for poor budget implementation due to improving government’s revenue position, adding that the projected GDP growth rate of 3.68 per cent for 2025 is a very likely outcome.

    He disclosed that due to the impacts of some of the “painful but necessary” reforms that the Government had pursued, inflationary pressures exerted considerable strain on household and corporate incomes in 2024, with the inflation rate reaching a three-decades high of 34.60 per cent in November 2024. In response, the Central Bank of Nigeria, through its Monetary Policy Committee (MPC), had steadily raised the benchmark Monetary Policy Rate (MPR) to 27.5 per cent in a bid to tame inflationary pressures. The combination of these actions has resulted in significantly higher cost of living/operations and funding for households and corporates.

    Also speaking, Founder and Chief Consultant of B. Adedipe Associates Limited, ‘Biodun Adedipe said that pressure in the forex market will continue to drop in the coming months, which will lead to rebound in the naira exchange rate against global currencies. He said the improvement in local oil production has contributed significantly to reduced pressure in the forex market. Adedipe said the fundamental problems of developing countries have been reduced food deficit, energy deficit and manufacturing deficit. He called for an expansive domestic manufacturing, agribusiness and relentless, deliberate and focused export drive in the new year.

  • Investors net N2.06tr gains on earnings rally

    Investors net N2.06tr gains on earnings rally

    • •February rally lifts equities

    Investors in Nigerian equities market recorded net capital gains of about N2.06 trillion in February amidst release of several financial reports showing steady improvements in corporate performance.

    Benchmark indices for the Nigerian stock market at the weekend showed average return of 3.18 per cent in February, equivalent to net capital gain of N2.06 trillion.

    The All Share Index (ASI)- the value-based common index that tracks all share prices at the Nigerian Exchange (NGX) closed weekend at 107,821.39 points as against February’s opening index of 104,496.12 points, representing average return of 3.18 per cent or N2.06 trillion for the month.

    Aggregate market value of all quoted equities at the NGX also increased from the month’s opening value of N64.709 trillion to close February at N67.193 trillion, an increase of 3.84 per cent or N2.48 trillion. The additional increase in market capitalisation above the ASI’s average return was due to new listings during the month.

    The performance of the market in February more than doubled average gain at the beginning of the year, underlining investors’ reactions to earnings reports, which gathered momentum in February. Average return in January stood at 1.53 per cent, about N960.3 billion.

    With the February performance, average year-to-date return for Nigerian equities so far this year now stands at 4.76 per cent, about N3 trillion.

    A two-month review showed widespread bullish sentiments across the market. NGX Lotus II index appreciated the most by 11.23 per cent. NGX Premium index followed with a monthly year-to-date gain of 7.76 per cent, while NGX Banking index rose by 7.49 per cent.

    Others are NGX Pension, NGX Consumer Goods, NGX 30, and NGX Industrial Goods indices went up by 6.93 per cent, 6.25 per cent, 5.03 per cent and 1.34 per cent respectively. On the other side, NGX Oil & Gas index reported a decline of 5.55 per cent during the period under review, while NGX Insurance index declined by 0.24 per cent.

    Median estimate of projections on the outlook for the Nigerian stock market had indicated that the market could sustain its double-digit return, with capital gains in excess of N20 trillion in 2025.

    Experts projected that average capital gain on Nigerian equities for the year could be within a midpoint of about 31 per cent, with a tilt towards a more bullish possibility.

    This implies probable net capital gain of about N20 trillion, as against N15.4 trillion recorded in 2024.

    The sample included experts’ reports from Afrinvest West Africa, Cordros Capital Group, Arthur Steven Asset Management and CardinalStone among others.

    Aggregate market value of all quoted equities at the Nigerian Exchange (NGX) had opened closed 2024 at N62.763 trillion. The benchmark index for the equities market- the All Share Index (ASI) had closed 2024 at 102,926.40 points.

    The analyses predicted that the market value of all quoted companies could be in excess of N80 trillion on the basis of increases in market values of quoted companies.

    Read Also: Ministry projects $100b contribution to GDP, 2m jobs, others in 2030

    Additional listings could see equities’ market capitalisation at a milestone of N100 trillion, according to a more bullish projection.

    Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe, said the outlook for the Nigerian stock market remains positive.

    According to him, Nigerian equities could see average capital gain of 39 per cent, with the market expected to benefit from the ongoing market capitalisation, macroeconomic reforms and attractive valuation of the Nigerian market.

    He said Nigeria has relative market attraction, a key factor in attracting increased foreign portfolio inflows (FPI).

    He noted that the ongoing bank recapitalisation would boost investor confidence, while high-profile listings such as Dangote Refinery are expected to enhance market liquidity and broaden investment opportunities.

    ” Overall, the 2025 outlook for the Nigerian stock market remains optimistic, bolstered by strategic reforms, policy adjustments, and improving investor confidence. While challenges such as exchange rate instability and inflation persist, key sectors are positioned to drive market performance and deliver strong returns for investors,” Amolegbe said.

    Cordros Capital modelled three scenarios with the two highest probabilities that the equities market may return between 23.0 per cent and 61.0 per cent in 2025.

    Afrinvest projected average return of more than 30 per cent, citing the positive sentiment for the Nigerian market.

    “Our prognosis for 2025 suggests a positive risk assessment amid macroeconomic and market dynamics. On a base case, we anticipate a 30.4 per cent gain from improved sentiment towards ongoing bank recapitalisation exercise, new listings, resilient corporate earnings and expectation of CBN’s monetary policy easing in second half 2025,” Afrinvest West Africa stated.

    A double-digit return in 2025 will mark the sixth consecutive bullish run for the Nigerian market. The ASI had made the top global chart in 2024 with average return of 37.65 per cent, equivalent to net capital gain of N15.4 trillion.

    The ASI had closed 2023 as one of the three best-performing markets globally. Average return for Nigerian equities in 2023 stood at 45.90 per cent, equivalent to net capital gains of N12.81 trillion.

    The market had broken its well-known previous cycle of decline in pre-election year to record its third consecutive positive performance in 2022, with full-year average return of 19.98 per cent, equivalent to net capital gain of N4.455 trillion. It had closed 2021 with average return of 6.07 per cent, equivalent to net capital gains of N1.278 trillion. In the throes of the outbreak of COVID-19 pandemic in 2020, it had recorded average return of 50.03 per cent, representing net capital gains of N6.483 trillion.

    ASI closed 2023 at 74,773.77 points as against its opening index of 51,251.06 points for the year. It had opened 2022 at 42,716.44 points.

    Aggregate market value of all quoted equities had also risen from 2023’s opening value of N27.915 trillion to close the year at N40.918 trillion. It had recorded N22.297 trillion as opening value for 2022.

    Amolegbe, who explained the pricing dynamics at the stock market, had noted that the market performance could only be interpreted that investors were reacting to the positive outlook for the economy.

  • Top 5 Affordable Villa Communities Under $ 750k in Dubai for Nigerian Investors

    Top 5 Affordable Villa Communities Under $ 750k in Dubai for Nigerian Investors

    Dubai, an internationally active real estate center, is drawing investors from all over the world—including Nigeria. Dubai’s property investment market is very appealing for many reasons including a rich lifestyle, zero-tax income, and a strong economy. There are plenty of choices for Nigerians who seek reasonably priced villas, however, of great quality in Dubai, which are also very wise for investment purposes.

    This article looks at 5 reasonably priced areas Nigerians might buy in Dubai for around $750,000. We’ll look at these residential locations and their additional perks with helpful insights from Bayut, one of the most prominent real estate websites in the UAE. You can quickly find different affordable villas for sale on Bayut and compare them using its smart features to pick the one that best meets your needs.

    Top 5 Affordable Villa Communities Under $ 750k

    1.   DAMAC Hills 2 (Akoya Oxygen)

    Although DAMAC Hills 2 is famed for its luxury and has every convenience one could ever desire, it remains peaceful with modern homes and amazing vistas. The estate’s designers created four diverse clusters: Vardon, Camellia, Albizia, and Amargo, all of which promote eco-friendly living. The absence of public transportation further increases the calm and quiet of the region, even with expressways providing easy access.

    Pricing:

    3 BHK villa starting price: AED 1,200,000 (USD 327k)

    4 BHK villa starting price: AED 1,380,000 (USD 376k)

    5 BHK villa starting price: AED 1,580,000 (USD 430k)

    Villa ROI: 6.97%

    2.   The Valley by Emaar

    Emaar is developing the Valley on the outskirts of Dubai so that it provides a peaceful setting far from metropolitan noise. Families looking for reasonably priced first-class villas within a self-contained environment would find this to be the ideal location. Emaar guarantees a well-planned property in a desirable location, as well as the required amenities offered by contemporary engineering.

    Pricing:

    3 BHK villa starting price: AED 2,100,000 (USD 572k)

    4 BHK villa starting price: AED 2,480,000 (USD 675k)

    ROI: 6.24%

    3.   Dubailand

    Dubailand is a great project because of the relatively affordable homes surrounded by a lively environment. Those who like customized homes that fit their tastes will find great delight in this area. Dubailand has many family-friendly elements. This estate compound’s proximity to the major roads and surrounding areas of interest guarantees rapid access, therefore enhancing the investment attractiveness.

    Pricing:

    3 BHK villa starting price: AED 1,650,000 (USD 449k)

    4 BHK villa starting price: AED 1,700,000 (USD 463k)

    5 BHK villa starting price: AED 2,100,000 (USD 572k)

    ROI: 6.29%

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    4.   Jumeirah Village Circle (JVC)

    Because of its outstanding location and reasonable price, Jumeirah Village Circle (JVC) is a popular residential neighborhood among purchasers in the somewhat higher villa range. Because it provides everything they would need, the location has drawn numerous investors who either are young professionals or have children. It has so many conveniences that enable residents to have pleasant lives. The estate, as it is planned to be readily accessible and safe, will satisfy those seeking a location that cares for everyone.

    Pricing:

    3 BHK villa starting price: AED 2,550,000 (USD 694k)

    4 BHK villa starting price: AED 2,320,000 (USD 632k)

    5 BHK villa starting price: AED 2,890,000 (USD 787k)

    ROI: 7.25%

    5.   Al Furjan

    Al Furjan’s well-considered residential complex by Nakheel combines contemporary and traditional ways of living. Its proximity to important sites drew a lot of investors. The location is perfect for families, as it is near Ibn Battuta Mall and offers a variety of outdoor activities in its parks. Al Furjan is a great investment alternative for individuals who want to make consistent income from property in Dubai as, despite its higher price range, it offers a good mix of residential choices and community feelings.

    Pricing:

    3 BHK villa starting price: AED 3,000,000 (USD 817k)

    4 BHK villa starting price: AED 3,500,000 (USD 953k)

    ROI: 6.23%

    Disclaimer: Prices and ROI may vary based on property size, features, and market conditions. Research thoroughly and consult an experienced real estate professional before deciding.

    Factors to Consider When Investing in Dubai Real Estate

    Consider the following when making real estate investment in Dubai:

    • Budget: Think first about your budget so that the area you choose to live in will fit your financial situation.
    • Location: Consider existing location, potential growth of the property, and closeness of facilities before choosing one.
    • Property Type: Choose whether to invest in a villa or a townhouse.
    • Rental Yield: Assess at expected ROI after estimating rental income.
    • Developer Reputation: Choose a well-known developer with a solid prior track record.
    • Legal and Financial Advice: Seek legal and financial experts to help you guarantee a seamless and safe investing process.

    Conclusion

    For Nigerian investors looking into the Dubai real estate market, these areas are a good fit since they are affordable and have room for growth. Every community offers advantages to fit every kind of investment. When choosing any property for sale, investors have to take into account what they want out of their investment over many years and grasp the current real estate market to ensure that their investment is secure.

    Frequently Asked Questions

    Q1. Can Nigerian investors visit Dubai to view properties before buying?

    A:  Before making a purchase, Nigerian buyers can inspect Dubai homes. With their tourist visa, they may evaluate real estate investments themselves. The visit could focus on local amenities, way of life, and areas of community under development.

    Q2. Are there any taxes or fees associated with buying property in Dubai?

    A: While personal income is not taxed in Dubai, buying real estate comes with certain fees. Buyers should budget agency costs, property registration, upkeep, and service expenses. New residences and some real estate transaction services are also subject to 5% VAT.

    Q3. What types of properties can Nigerian investors buy in Dubai?

    A: Freehold villas, apartments, townhouses, and off-plan projects in Dubai are purchasable by Nigerian investors. Freehold properties are preferred by foreign investors as they provide them with complete ownership of real estate free from any restrictions.

  • New mutual fund for high networth investors

    New mutual fund for high networth investors

    United Capital Asset Management Limited has launched a new mutual fund aimed at ensuring stable returns to value investors.

    The new mutual fund, known as United Capital Stable Income Fund, is a specialised, open-ended, naira-denominated mutual fund that invests in a diversified portfolio of money market and fixed-income securities including government bonds, corporate bonds, and other fixed-income securities.

    United Capital Asset Management, a subsidiary of United Capital Plc, the only publicly quoted investment banking company, designed the new fund as a low-risk investment product aimed at providing investors with stable returns over a medium to long-term period while ensuring the preservation and protection of their capital.

    Managing Director, United Capital Asset Management Limited, Odiri Oginni said the new fund underscores the company’s commitment to delivering innovative and reliable financial solutions for investors.

    “We are thrilled to introduce the United Capital Stable Income Fund, the latest fund in the array of our mutual fund offerings, to the investing public. This fund was created in response to the growing market demand for low-risk investment options that offer stability and consistent returns, especially amidst current market volatility. It offers a well-diversified portfolio and is specially designed for investors who prioritise capital preservation and steady growth, ensuring that investors can achieve their financial goals with confidence and peace of mind.

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    “We are confident that the fund will perform excellently in the market. It is professionally managed by top-tier portfolio managers who use innovative strategies, thorough market research, and analysis of pricing trends, to ensure the fund performs optimally,” Oginni said.

    According to her, in addition to capital preservation and consistent returns, the new fund offers investors annual dividends and an opportunity to invest in a diversified portfolio aimed at providing competitive yield, liquidity, and safety.

    With a minimum investable amount of N50 million and a minimum subscription of 500,000 units and multiples of 100,000 units thereafter, the fund targets qualified institutional investors and high net worth individuals (HNIs) as defined by the Securities and Exchange Commission (SEC) rules.

  • NIDOA-U.S.A seeks environment conducive to attracting more investors in Nigeria

    NIDOA-U.S.A seeks environment conducive to attracting more investors in Nigeria

    Nigerians in Diaspora Organisation Americas (NIDOA)-U.S.A., has called on the federal government to invest in creating an enabling environment that can encourage investors to do business in Nigeria.

    Isaac Inyang, past chairman of NIDOA – USA Board of Directors, gave the advice in a telephone interview with the News Agency of Nigeria (NAN).

    Inyang was speaking against the backdrop of the International Day of Cooperatives celebrated annually on July 6.

    The day with the theme: “Cooperatives building a better future for all”, provides opportunities for cooperative societies to showcase their current and historical contributions to building a sustainable future.

    He said although the government had made efforts to attract investors into Nigeria, it should create an environment conducive for compatriots abroad to invest in the recovery of the economy of the fatherland.

    “Nigerians in the Diaspora have a big role to play in the economic recovery of their fatherland, as applicable in any nation.

    “Nigeria is blessed with massive resources that Nigerians can tap from to help develop the nation’s economy.

    “Nigerians are quite blessed, such that you find compatriots stand out in their roles at any economic sector that they find themselves in every nation of the world.

    “If you go into business you will find Nigerians doing well, particularly in corporate fields, pharmaceuticals, medical, education and health among others.”

    He decried poor policy implementation as having hindered efforts by past government administrations to attract investors wanting to carry out business in the country to do so and build Nigeria’s economy.

    He restated Nigeria is endowed with human and natural resources, but urged the government to make the nation’s infrastructure, electricity power supply, and security to boost the business environment functional to promote economic growth.

    “We are waiting for the government to provide an enabling environment that will encourage more Nigerians living abroad to drive investment in the country.

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    “Nigeria has a unique environment for business investment, but it is difficult to come out from the Diaspora and break into such an environmental system if you do not have government support.

    “We need the government to overhaul business infrastructure and put necessary measures in place for businesses to thrive.

    “I have great hope Nigerians are ready and willing to return home and invest if given the opportunity.

    “The government has to be serious in encouraging NiDO to come in and invest. We are ready to come home and help if the doors are opened for us,” Inyang said.

  • Fed Govt: incessant strike calls can scare investors away

    Fed Govt: incessant strike calls can scare investors away

    Incessant calls for strikes can scare investors away, the Federal Government told Labour leaders yesterday.

    Minister of State for Labour and Employment, Nkeiruka Onyejeocha, appealed to them to see industrial actions as the last option.

    “Issuing constant strike threats could send wrong signals to potential investors.

    “This is not healthy for our business environment,” she said.

    The minister spoke when she met with the leadership of the Trade Union Congress (TUC) to review the agreement reached in October 2023.

    The Nigeria Labour Congress (NLC) is mobilising for protests over the government’s alleged failure to comply with the agreement.

    But the TUC, which disagreed with the NLC on the protest, joined the minister on a tour of the Port-Harcourt refinery.

    The refinery visit is one of the items listed in the 16-point agreement reached with the government.

    Onyejeocha said the refinery would soon start producing two million litres of premium motor spirit (PMS) otherwise known as petrol and 2.2 million litres of diesel per day.

    According to the minister, the refinery was 80 per cent completed.

    She explained that the old plant would begin with 54,000 barrels per day, while the new plant which is currently going through its last phase of completion would begin production before the end of the year.

    “The combined capacity of the two plants, when fully on stream, would produce 10 million litres of PMS per day,” Onyejeocha said in a statement by the Director of Press and Public Relations, Federal Ministry of Labour and Employment, Olajide Oshundun.

    The minister reiterated the government’s commitment to social dialogue with the labour and other stakeholders towards achieving industrial peace.

    The statement reads: “During the review, the minister read each item on the memorandum of understanding.

    “Among them were the payment of four out of six months on wage award, the committee of minimum wage review, payment of outstanding salaries and wages of tertiary education workers in federal-owned educational institutions, suspension of VAT on diesel, and payment of N25,000 conditional cash transfer to 3,140,819 households, including the pensioners.

    “While she said the government has made a huge financial commitment to the provision of CNG buses and conversion kits, she also explained that the procurement process was slowing down the launch but measures were already in place to fast-track the process.

    “The minister explained that the government has commenced a series of engagements with relevant stakeholders on tax incentives, just as the leadership crises rocking the National Union of Road Transport Workers (NURTW) and Road Transport Employers Association of Nigeria (RTEAN) have been resolved.

    “Among the progress made is the subsidised distribution of fertilisers to farmers across the country, engagement with various state governments and the private sector on the implementation of wage awards for their workers, and plans to encourage Micro and Small Enterprises (MSEs) to create jobs and boost the economy.

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    “The minister said reports by organised labour and government established that the Port-Harcourt refinery is 80 per cent completed.”

    TUC Secretary General, Nuhu Toro, commended the government for the progress made but differed on some of the items.

    He said, for instance, that while the issue of RTEAN has been resolved, that of NURTW has not.

    “You have carefully done justice to the items, and we commend you and the federal government, but we expect the fulfilment of all the agreements,” Toro said.

    According to him, some of the items have not been fully implemented but from TUC’s assessment, the government has achieved 50 per cent implementation. 

    Toro said: “Fifty per cent is a pass mark, but we urge you to do more.

    “We know there are challenges, but we are very optimistic that they could be addressed.”

    The minister disagreed with the 50 per cent rating by the union, but Toro said it was a positive grade.

    Deputy TUC President, Kayode Alakija, urged Onyejeocha to get more information to clear some grey areas.

    He said: “We will appreciate it if you back up the VAT with empirical data.

    “You said you got the information from the office of the Finance Minister.

    “So, we would appreciate it if they could supply you with data on how they arrived at the information.”

  • Investors buy into Nigeria’s economic reforms

    Investors buy into Nigeria’s economic reforms

    • Policy clarity, outlook build confidence

    Foreign and domestic investors are swarming on Nigeria’s sovereign issues amidst growing confidence that ongoing macroeconomic reforms would lead to considerable improvements in the medium to long-term.

    Investors opted for longest-tenored of the three tenors in the latest auction of Nigerian Treasury Bills (NTBs) by the Central Bank of Nigeria (CBN). The one-year NTBs were oversubscribed by 211 per cent, in what analysts said was a sign of confidence on the government’s reforms.

    Nigeria’s dollar bonds have also turned into one of the world’s top performers in 2023, with a 25 per cent return. Nigerian equities had also closed the year with average return of 45.90 per cent, one of the three highest returns globally.

    A Bloomberg report indicated that Nigeria’s bond returns put it as one of the world’s 10 best-performing bond, attributing the performance to investors’ positive perception of the major reforms in Africa’s biggest economy. Average performance for emerging market and frontier peers was 5.8 per cent, according to a Bloomberg index.

    The report attributed Nigeria’s securities’ performance to “a slew of economic changes” by President Bola Tinubu, who plans to simplify the country’s tax laws and improve electricity supply this year, after removing costly fuel subsidies and multiple foreign exchange (forex) rates in the previous year.

    Emerging Markets Strategist, Societe Generale SA, London, Gergely Urmossy said investors were optimistic about the outlook for the Nigerian economic reforms.

    “The market is buying into the idea that Nigeria has enough hard currency on its balance sheet. Given the government’s reformist agenda, fundamentals are more likely to improve than worsen,” Urmossy said.

    Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the subscription pattern for previous day’s NTB auction was indicative of improving investors’ confidence.

    “Interest seems skewed towards the longer end of the curve, which is an indication of confidence in the government and its reforms,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.

    Investors had staked N1.87 trillion on the 364-day NTBs, 211 per cent above the initial offer size of N600 billion, enabling the apex bank to increase allotment by 51 per cent to N908.75 billion. The 91-day and 182-day NTBs were significantly undersubscribed, but the long stake by investors enabled the government to hit its N1 trillion target.

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    Amolegbe noted that the “massive oversubscription shows the significant system liquidity”, strengthening the prospects for government to pull through its ambitious economic targets.

    Market pundits have also taken note of the changes in stakeholders’ relations and responsiveness to the market by the Ministry of Finance and the CBN.

    Market analysts said increasing clarity on Nigeria’s macroeconomic management enables the market to accurately price Nigerian assets.

    Urmossy said the narrowing risk premium in the Nigerian debt compared to South Africa shows a lot of the potential is already priced in.

    “The next leg is following through and delivery. Without delivering, the spread could widen again if fatigue takes over the market awaiting the reform results,” Urmossy said.

    Managing Director, Financial Derivatives Company (FDC), Mr. Bismarck Rewane, said the spike in NTBs rates should give the naira a major lift.

    According to him, right policy steps would stimulate the recovery of the nation’s currency, which had earlier been classified as one of the worst-performing currencies.

    He said the apex bank must maintain a clear and stable policy stance and should avoid “panic mode” in its efforts to restore the value and stability of the country’s forex.

  • Investors net N902b gain as stock market regains rally

    Investors net N902b gain as stock market regains rally

    • Scramble for banks’ shares on forex reforms

    After two days of consecutive decline, Nigerian equities regained their rally as investors increased demand for quoted shares amidst expectations of full-year dividends.

    The recovery at the market was also accentuated by noticeable increase in demand for banks’ shares. Most analysts expected the ongoing foreign exchange (forex) reforms to continue to impact banks’ earnings positively in the meantime.

    Nigeria’s largest banks including Guaranty Trust Holding Company (GTCO), Zenith Bank, FBN Holdings, Access Holdings and United Bank for Africa (UBA) were among the highest gainers yesterday, rising by nearly the highest allowable daily percentage change of 10 per cent. Most other banks also appreciated.

    With extreme volatility in the forex market, Nigeria is furthering reforms to block leakages that allow for high speculation and abuse of the open-market system adopted in replacement of the previous government-determined system.

    The deadline for banks to sell excess forex expired yesterday with the Central Bank of Nigeria (CBN) warning of immediate sanctions for banks that violate forex rules. 

    Benchmark indices at the Nigerian Exchange (NGX) indicated average gain of 1.63 per cent yesterday, equivalent to net capital gain of N902 billion.

    With nearly three gainers for every loser, the recovery at the market was driven by widespread positive sentiments.

    The rally beat several analysts’ projections of continuing bearish trading, underlining the strong expectation on the impending release of the audited reports and accounts of most quoted companies and declaration of dividends.

    Extant rules at the Nigerian market require quoted companies to release their audited report and accounts not later than 90 days after the end of the year. Companies are also expected to release their quarterly report not later than 30 days after the end of the period.

    Most companies at the NGX use the Gregorian calendar as their business year, with the financial year ending December 31. Thus the deadline for the submission of the quarterly report is January 30, 2024 and for the full-year report, March 30, 2024.

    The All Share Index (ASI)-the value-based common index that tracks all share prices at the NGX, rallied 1,647.79 points or 1.63 per cent to close at 102,802.25 points as against its opening index of 101,154.46 points.

    Aggregate market value of all quoted equities rose by N902 billion from its opening value of N55.358 trillion to close at N56.260 trillion.

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    There were 53 gainers to 18 losers. Chams Holding Company, Guaranty TCO, Veritas Kapital Assurance and Caverton Offshore Support Group emerged the highest price gainer of 10 per cent each to close at N2.64, N40.70, 66 kobo and N1.87 respectively, per share.  NASCON Allied Industries followed with a gain of 9.98 per cent to close at N67.75, while Zenith Bank advanced by 9.97 per cent to close at N38.60, per share.

    For banks, FBN Holdings and Access Holdings rose by 9.91 per cent each, UBA rallied by 9.84 per cent, Unity Bank rose by 9.87 per cent, Fidelity Bank appreciated by 9.86 per cent, FCMB Group gained 9.50 per cent, Jaiz Bank rose by 8.88 per cent while Wema Bank closed higher by 8.0 per cent.

    On the negative side, Deap Capital Management and Trust led the losers with a drop of 9.88 per cent to close at 73 kobo. CWG followed with a decline of 9.87 per cent to close at N6.85. R.T. Briscoe Nigeria shed 9.86 per cent to close at 64 kobo per share. University Press lost 9.76 per cent to close at N3.33 while McNichols depreciated by 9.43 per cent to close at N1.44 per share.

    The momentum of activities also improved as turnover rose by 14.93 per cent to 861.005 million shares valued at N12.155 billion in 12,851 deals. Universal Insurance led the activity chart with 113.758 million shares worth N42.514 million. Transnational Corporation (Transcorp) followed with of 91.016 million shares valued at N1.156 billion. Zenith Bank traded 74.317 million shares valued at N2.761 billion. United Bank for Africa (UBA) traded 69.178 million shares worth N1.717 billion while Veritas Kapital Assurance traded 58.739 million shares worth N35.954 million.

  • Recapitalisation: Investors in safety flight to big banks

    Recapitalisation: Investors in safety flight to big banks

    • Macroeconomic outlook in favour of banks

    Investors appeared to be realigning their portfolios in favour of major banks in a move to hedge against recapitalisation risk and optimise gains from the current macroeconomic outlook.

    Transactions at the stock market have shown a pattern of trades increasingly in favour of the leading tier 1 banks.

    Trading report at the weekend indicated that Nigeria’s three largest banks – Access Holdings, Guaranty Trust Holding Company and Zenith Bank – were the three most active stocks at the stock market.

    Trading on the three banks accounted for nearly half of total value of transactions at the Nigerian Exchange (NGX) last week, a large volume against the traditional moderated trading pattern of high-cap stocks.

    The NGX Banking Index recorded average gain of 7.01 per cent last week, the highest by any sector. The performance of the banking sector was largely the driving force behind overall market gain of 1.18 per cent.

    Nigeria’s benchmark equities index, the All Share Index (ASI) of the NGX, rose from its week’s opening index of 71,541.74 points to close weekend at 72,389.23 points, an increase of 1.18 per cent.

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    Aggregate market value of from its week’s opening value of N39.149 trillion to close weekend at N39.613 trillion, representing net capital gain of N464 billion.

    Access Holdings, which led the activity chart, made the top 10 gainers’ list with average gain of 9.63 per cent to close weekend at N22.20 per share.  

    The trio of Access Holdings, Guaranty Trust Holding Company and Zenith Bank accounted for 491.53 million shares worth N15.47 billion in 5,997 deals, representing 26.12 per cent and 48.90 per cent of the total equity turnover volume and value.

    Total transaction at the NGX stood at 1.88 billion shares worth N31.63 billion in 33,020 deals last week as against 2.42 billion shares valued at N45.07 billion traded in 34,704 deals two weeks ago.

    Turnover in the banking sector led the financial services sector to total turnover of 1.37 billion shares valued at N22.16 billion in 17,300 deals; representing 72.96 per cent and 70.08 per cent of the total equity turnover volume and value. The services sector occupied a distant second position on the overall activity chart with 97.01 million shares worth N616.27 million in 1,949 deals. Consumer goods sector placed third with a turnover of 86.37 million shares worth N2.136 billion in 3,819 deals.

    Market analysts were unanimous that investors were taking positions in the major banks because of the current macroeconomic outlook and possible risks from the planned banking sector recapitalisation.

    Governor of Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso had recently outlined major reforms and his priorities at the helms of the apex bank. These included plans to recapitalise the banking sector, stabilise the foreign exchange (forex) market, improve access to amenable credits, refocus the apex bank on its core mandate of price stability away from the previous foray into unrelated quasi-fiscal activities, curb inflation and improve living standards through new well-coordinated monetary-fiscal policy measures, engender stable policy thrusts for macroeconomic stability and safeguard the integrity and autonomy of the apex bank.

    “Considering the policy imperatives and the projected economic growth, it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is not just about the stability of the financial system in the present moment, as we have already established that the current assessment shows stability. However, we need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action. Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital,” Cardoso had said.

    Experts who spoke to The Nation yesterday agreed that investors were hedging against possible risks from the recapitalisation and the potential gains from inflationary trend and high forex and interest rates.

    Experts, who spoke, included Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe; Managing Director, APT Securities & Funds Limited, Mallam Garba Kurfi; and Managing Director, HighCap Securities, Mr. David Adonri.

    Amolegbe said investors were staking on expectations that the big banks are well-positioned to continue to benefit from the economic dispensation.

    According to him, with spiraling inflationary trend fuelling high interest rate and the forex rate skewed against naira, the major banks are in position to record better results and returns to investors.

    “You can’t rule out likely effect of the proposed recapitalisation. They are already big, these are banks that have the capacity and liquidity to acquire others in the event of consolidation in the industry. Besides, shareholders in the major banks may not see much dilution in their holdings even in the event of new capital raising compared with some other banks that may need major dilution by new investors to scale through,” Amolegbe said.

    Kurfi said the major banks are some of the most liquid stocks one can buy and sell at any time, thus the preference by investors.

    He noted that forex gains hold better prospects for banks’ shares, pointing out that in spite of significant share price appreciation, the price-earnings ratio of the banks are still in single digit, a point of attraction to investors.

    Adonri said the top banks were attractive given their performance in the third quarter.

    “Investors are buying them now in anticipation of high dividends,” Adonri said.

    A market intelligence report by The Nation had shown that total assets of Nigerian publicly quoted banks rose by more than N40 trillion to about N125 trillion in the third quarter, indicating the underlying strength of the Nigerian banking industry.

    The report showed that the total assets of the publicly quoted banks had risen from N85.52 trillion in December 2022 to N125 trillion by the nine-month period ended September 30, 2023, representing an increase of 46.2 per cent.

    The report was based on the published third quarter reports of the publicly quoted banks, including the main first tier banks, nationally regarded as systemically important banks. The publicly quoted banks account for more than 90 per cent of Nigeria’s banking operations and mirror the sectoral performance.

    The banks included five of the six largest banks-Access Holdings Plc, Zenith Bank International, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO) and FBN Holdings, which control more than three-quarters of the industry’s total assets.

    Total assets of the 14 publicly quoted banks had closed the year ended December 31, 2022 at N85.52 trillion.

    The report showed that all banks recorded double-digit growth in their balance sheet, with the exception of Unity Bank, which suffered a contraction of 17.1 per cent.

    A breakdown indicated that Stanbic IBTC Holdings recorded the highest growth, in percentage terms, with an increase of 54.3 per cent over the nine-month period while Sterling Financial Holdings recorded the lowest growth rate of 21 per cent.

    Access Holdings remained the largest bank, in terms of total assets, with total assets of N21.405 trillion by September 2023 as against N14.998 trillion in December 2022, representing an increase of 42.72 per cent.

    On the basis of actual results published so far, Zenith Bank emerged with the second largest balance sheet, growing its total assets by 47.8 per cent from N12.3 trillion in December 2022 to N18.2 trillion. United Bank for Africa (UBA) followed with total assets of N16.24 trillion in September 2023 as against N10.86 trillion in December 2022, an increase of 49.5 per cent.

    The analytical report showed that FBN Holdings’ balance sheet expanded by 36.7 per cent from N10.58 trillion to N14.46 trillion. GTCO’s total assets grew by 33.7 per cent from N6.45 trillion to N8.62 trillion. Fidelity Bank followed with total assets of N5.41 trillion compared with N3.99 trillion in December 2022, an increase of 35.7 per cent.

    Stanbic IBTC Holdings’ total balance sheet expanded by 54 per cent from N3.03 trillion to N4.67 trillion. Sterling Financial Holdings grew its total assets base by 21 per cent from N1.86 trillion to N2.25 trillion. Wema Bank’s total assets also grew by 38.8 per cent from N1.44 trillion to N2.00 trillion. 

    Jaiz Bank, the only publicly quoted non-interest bank, grew its total assets by 44.1 per cent from N379 billion in December 2022 to N546 billion in September 2023. However, Unity Bank was a contrarian, dropping by 17 per cent from N510 billion in December 2022 to N423 billion in September 2023.

  • FG woos Mexican investors with tax holidays, easy movement of profits

    FG woos Mexican investors with tax holidays, easy movement of profits

    The federal government is wooing investors into the solid minerals sector with incentives that would make investing in the sector attractive.

    The incentives include zero duty on equipment imported for solid minerals extraction, easy movement of profits to the countries of origin and tax holidays.

    Minister of Solid Minerals Development, Dele Alake stated this in Abuja when he welcomed investors to his office.

    The special assistant media to the minister, Segun Tomori in a press statement added that Alake praised the decision of investors from the Republic of Chile to visit Nigeria in search of investment in solid minerals.

    He stated: “Minister of Solid Minerals Development, Dr Oladele Alake has praised the decision of investors from the Republic of Chile to visit Nigeria in search of investment in solid minerals.

    “Welcoming the investors to his office recently, Alake said the administration of President Bola Tinubu has put in place incentives to ease business for investors in the industry.

    “The incentives include zero duty on equipment imported for solid minerals extraction, easy movement of profits to the countries of origin and tax holidays.

    “The minister said investors in the mining industry are expected to sign Community Development Agreement with the communities in the mining area to ensure the socio-economic development of the region that benefits the people.

    “He said the administration is currently sanitising the industry citing the recent revocation of titles which failed to comply with the law on annual service fee.

    “Introducing the investors, Nigeria’s outgoing Ambassador to Mexico, former Speaker of the Osun State House of Assembly, Hon. Adejare Bello assured the minister that the embassy has screened the investors and confirmed that they are genuine and serious businessmen whose investment will boost the economy.

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    “Ambassador Bello said the Nigerian Embassy has been engaging the investors in talks over two years and decided to lead them to the minister after it certified their status.

    “The Honourable minister is aware that ambassadors have been recalled. This visit is the reason why I stayed back so that I can bring them to you. Now, that i have achieved my mission, I will go back, pack my luggage and return home.

    “Speaking on behalf of other investors, President,  Seccion Internacional Para Africa, Dr. Heriberto Garcia Cortes thanked the minister for the talks adding that they see Nigeria as their African home that deserves all the support in the quest to expand the economy.

    “He said the meeting with the minister has helped to chart the way  and given the assurance that their investment will be safe and profitable in the country.”