The Nation Newspaper

Tag: investors

  • ‘Why foreign investors shun Nigeria’

    Foreign investors are wary of doing business in Nigeria because the country is perceived as not investor friendly.

    Speaking with reporters yesterday in Abuja,  a foreign investment broker and Managing Director/ Chief Executive Officer of Footprint to Africa, Osita Oparaugo, said investors are put off by how difficult it is to do business in the country and the painful fact that both private and public entities in the country have no scruples discarding an agreement reached with foreign investors if they discover that the initial agreement was not in their favour.

    To address this problem, Oparaugo commended the  administration for initiating the Presidential Council on Ease of Doing Business which he described as as “good.”

    Oparaugo warned: “We must learn to stick to terms of Memoranda of Understandings (MoUs); institutionalise continuity in government policies, projects and programmes even when there is a different party or government in power.”

  • How investors’ll gain from sector’s $12tr, by LADOL chief

    How investors’ll gain from sector’s $12tr, by LADOL chief

    Investors  stand to benefit from  the opportunities in the oil and gas sector worth $12trillion, the Chief Executive Officer, Lagos Deep Offshore Logistics base (LADOL), Dr Amy Jadesinmi, has said.

    Presenting a paper titled: “Business leaders to promote $12 trillion global economic development target,”at a conference organised by the Business and Sustainable Development Commission (BSDC) in London, Jadesinmi said the investments spaned  oil and gas, agriculture, maritime, Information Technology (IT), industry, and banking.

    Areas affected by environmental pollution during exploration and production, she said, would also benefit from the investments, adding that carbon emissions and pollution have compounded the woes of operators in the sector, thereby making it difficult for the industry to record the desired growth.

    She urged the Federal Government to leverage the opportunity to develop critical sectors of its economy, especially petroleum.

    A member of the 36-member Commission drawn from petroleum, business, finance, civil society, labour, and international organisations across the world, Jadesinmi believed that the initiative would bring about more opportunities for countries.

    Citing the report of the Commission, Jadesinmi said: “Beyond the $12 trillion estimated, conservative analysis shows potential for an additional US$8 trillion of value creation across the wider economy, if companies in the oil sector and others embrace the idea.

    She said at the heart of the Commission  are the Sustainable Development Goals ’s 17 goals of eliminating poverty, improving education and health outcomes, creating better jobs and tackle oil pollution and other  key environmental challenges by 2030.

    She said: “The Commission believes the Global Goals provide the private sector with a new growth strategy that opens valuable market opportunities, while at the same time, creating a world that is both sustainable and inclusive. And the potential rewards for doing so are significant. We need to show these ideas work not just in a report but on the business frontline.’’

    She noted that last year the Commission tackled questions, such as How to address challenges facing the oil, banking and other sectors of the economy globally, and what will it take for business to be central to building a sustainable market economy?

  • Govt woos foreign investors under fuel import model

    To boost fuel supply, the Federal Government is wooing foreigners to invest in its refineries under the Direct Sale and Direct Purchase (DSDP) Import model.

    The Nigerian National Petroleum Corporation (NNPC) introduced the DSDP in its dertermination to ensure uninterupted fuel supply.

    Under the arrangement, it will allocate crude tos elcet foreign refineries in exchange for fuel.

    In the past, the government adopted the conventional crude for products (known as swap), to bring fuel into the country. Under it, notable world oil marketing firms, such as Transfigura, and Vitol, were given crude in exchange for fuel.

    NNPC’s spokesman Ndu Ughamadu, told The Nation on phone that bringing in foreign  firms was in tandem with the government’s policy to grow the economy.

    Ughamadu said: “If, in the long run, crude oil refiners from developed economies, which would operate under the Direct Sale and Direct Purchase import model, wish to invest in Nigeria, they are welcomed. The more investors invest in refineries in Nigeria, the better for the country.”

    He said the government had been calling for more local and foreign investments, to promote growth.

    “Earlier, the Minister of State for Petroleum Resources, Dr Emmanuel Kachikwu, travelled to India to invite investors into the country to encourage the growth of the sector and the economy. The Direct Sale and Direct Purchase import is in the right direction as it is capable of improving the growth of the industry,” he added.

    He said besides Transfigura, there were other firms refining crude oil for Nigeria.

    International Institute of Energy and Law Vice President, Prof Wunmi Iledare, said the Direct Sale and Direct Purchase import model is a temporary measure to ease fuel supply.

    He said the government’s ultimate goal was to bring in foreign investors that would invest in the refineries. He said the long-term plan, which the government has for the sector, was to bring in foreign investors to invest in refineries.

    The government, Iledare said, was not ready to tamper with the plans in view of the strategic importance of the sector to the economy.

    Iledare said: “For me, the DSDP model will be a temporary initiative when one considers the fact that the Federal Government has been looking for ways to end the lingering fuel crisis and related problems with products supply and distribution. The model is a stop-gap measure introduced by NNPC to address the problems in the downstream sub-sector of the petroleum industry.”

    Iledare, also President, International Association of Energy Economist (IAEE), said DSDP import model was better than swapping because it would pave way for more refineries to emerge.

    He said the government could bring foreign investors, since it was unable to fix its own refineries, adding that Nigeria has no reason to import fuel being one of the largest energy entrepreneurs in the continent.

  • ‘ $1b Eurobonds offer excites investors’

    Investors are lining up to buy $1 billion dollar bonds that Nigeria is expected to issue in the coming months despite the poor state of the economy.

    The naira is currently facing serious pressure against the dollar while low oil prices has triggered budget shortfalls.

    On the face of it, the $1 billion of bonds Nigeria hopes to sell by the end of March might seem unattractive, especially at a time sentiment towards African debt has soured after Mozambique missed a coupon payment.

    But investors hungry for higher returns in a low interest rate environment reckon Nigeria’s benign debt levels, recovering foreign exchange reserves and a potential yield above seven per cent are reasons enough to look beyond the country’s economic woes.

    “Nigeria’s starting position is one of low debt so if they price it attractively they will be able to get it done,” Claudia Calich, who manages an emerging market bond fund at M&G Investments told Reuters.

    Nigeria’s Eurobond has been a long time coming. A year ago, Nigeria appeared to have shelved the idea in favour of a loan from China, but it embarked on an investor roadshow for the bond late last year in the United States and Britain.

    The last time Nigeria issued dollar-denominated bonds in July 2013, oil was comfortably above $100 a barrel but the slump in prices from $115 in June 2014 to just $28 a barrel by January 2016 has hurt the West African country’s economy.

    Crude oil sales account for two-thirds of government revenue and about 90 per cent of foreign exchange earnings so the price slide, coupled with a resurgence in militant attacks on oil facilities in the Niger Delta, have had a severe impact.

    According to the World Bank, Nigeria’s economy probably shrank 1.7 per cent in 2016, underperforming an average growth rate of 1.5 percent across sub-Saharan Africa and way behind high-flying economies such as Ivory Coast.

    Foreign investment has almost ground to a halt, hobbled by a slide in the naira currency – which trades on the black market at about 40 per cent below the official rate of 300 per dollar – and expectations the currency may have to be devalued again.

    World Bank data shows net foreign direct investment tumbled to just over $3 billion in 2015 from nearly $9 billion in 2011 and the government needs to borrow $3.5 billion internationally this year to balance a record 2017 budget.

    International lenders such as the World Bank and African Development Bank (AfDB) are also holding back on loans until Nigeria comes up with a plan to make its economy more resilient.

    They argue that a Eurobond issued in dollars will shield them from currency risk and, compared to its African peers, Nigeria has a low ratio of public debt to annual economic output, implying that default is not a worry.

    The ratio of Nigeria’s total public debt to gross domestic product is 22 per cent compared with 46 per cent in Gabon, 62 per cent in Ghana or 73 percent in Angola, according to estimates by Bank of America Merrill Lynch.

    While businesses in Nigeria are having trouble getting hold of dollars, the countries foreign exchange reserves are on the rise again. They hit an eight-month high of $26.6 billion at the start of 2017 and have since climbed to $28.9 billion.

    “The government has access to hard currency even if they are restricting the access of other agents in the economy,” said Kieran Curtis, investment director at Standard Life Investments, who also plans to look at Nigeria’s upcoming bond issue.

    Curtis reckons that Nigeria’s low debt ratios will allow it to borrow more cheaply than Ghana. Nigeria’s existing 2023 dollar bond yields about 6.7 percent, or 170 basis points lower than Ghana’s 2023 bond.

    Egypt, which has a credit rating of B-minus/B3/B from the main agencies, was marketing $4 billion of Eurobonds in three tranches on Tuesday, offering a 10-year bond at 7.5 percent. Nigeria is rated one to two notches higher at B/B1/B plus.

  • Forex crisis worsens investors’ 2016 losses to N10tr

    Forex crisis worsens investors’ 2016 losses to N10tr

    Investors in the Nigerian stock market lost about N10 trillion in 2016 when adjustments were made for foreign exchange, according to new comparative trading and valuation data provided by the Nigerian Stock Exchange (NSE).
    The comparative Dollar-Naira data indicated that total market value of the Nigerian stock market dropped by about 37.8 per cent, equivalent to N9.83 trillion in 2016, when adjustments were made for the steep decline in foreign exchange (forex) during the year, providing the full glimpse of the losses suffered by investors during the year. A nominal Naira-based valuation had indicated that total market value of the Nigerian stock market dropped by N817 billion or 4.81 per cent in 2016.
    The report showed that contrary to Naira-based valuation that showed that the Nigerian equities lost N604 billion or 6.17 per cent in 2016, forex-adjusted simple nominal return for equities was -38.6 per cent, equivalent to a net capital loss of N5.83 trillion at current exchange rate.
    Total market capitalisation of the NSE, which included equities, bonds and exchange traded funds (ETFs), which opened 2016 at $85.295 billion, dropped to $53.068 billion by the end of the year, indicating a loss of $32.23 billion or N9.83 trillion at the current exchange rate of N305 to a Dollar.
    Segmental analysis showed that aggregate market value of all quoted equities, which opened 2016 at $49.56 billion, closed the year at $30.35 billion, representing a loss of $19.11 billion or N5.83 trillion at current exchange rate.
    Market value of bonds dropped from the year’s opening value of $35.82 billion to close at $22.71 billion, a decline of 36.6 per cent or $13.1 billion, equivalent to a loss of about N4 trillion. The market value of ETFs also depreciated by 21.95 per cent from the year’s opening value of $20.16 million to $15.73 million, a decline of $4.43 million or N1.35 billion.
    Foreign portfolio investors hold significant influence in the Nigerian stock market, where they control some half of the transactions. Several Nigerian investors also access Dollar-denominated funds to invest in the market. The movement in foreign portfolio investments (FPIs) has been known to correlate with the pricing trend and overall performance at the Nigerian stock market.
    The 12-month report also highlighted considerable slowdown in activities at the Nigerian capital market, in both Naira and Dollar terms. The primary market was almost inactive, underlining the challenge of capital raising faced by quoted companies as investors’ apathy gripped the market.
    While total turnover volume of equities traded rose marginally by 3.15 per cent, the value of equities’ transactions dropped by 60.51 per cent from $4.78 billion in 2015 to $1.89 billion in 2016. There were only two new equity issues each in 2015 and 2016, but the value of the new issues dropped by 88.1 per cent from $388.71 million in 2015 to $46.1 million in 2016. Supplementary equity issues also dropped from $2.15 billion in 2015 to $127.92 million in 2016, representing a drop of 94.1 per cent. Value of new bond issues declined by 14.3 per cent from $5.01 billion in 2015 to $4.30 billion in 2016.
    With the delisting of some companies, number of listed companies at the stock market dropped from 184 companies in 2015 to 170 companies in 2016. Also, the number of listed equities declined from 190 equities to 175 equities. Total number of listed securities at the stock market dropped from 257 securities in 2015 to 247 securities in 2016. The number of listed bonds had increased from 60 bonds to 64 bonds while the number of exchange traded products increased modestly from seven to eight.
    Chief executive officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, told stakeholders that the forex will remain a decisive issue for the performance of the Nigerian stock market in 2017.
    “We expect investors to continue to keep a close eye on the divergence between the interbank forex rate and other exchange rates in the country. Accordingly, a convergence of forex rates in the country and the performance of listed corporates will determine the level of market activity in the short term,” Onyema said.
    He noted that with forecasts for inflation expected to moderate due to the base effect, the monetary authorities will have more flexibility with respect to interest rates and foreign exchange regime, hence good coordination between fiscal and monetary policy should result in resolution of structural deficiencies and drive economic growth.
    Onyema, however, expressed optimism that the Nigerian market may rebound in 2017 given expectations that the economy will perform better and grow in the new business year.
    According to him, the Nigerian economy is expected to recover from its recession in 2017 with a modest Gross Domestic Products (GDP) growth forecast of 0.6 per cent, though this will depend largely on the vigour of fiscal policy implementation, lower rates of disruptions to oil infrastructure from resolution of the Niger Delta conflict, crude oil prices remaining above the government’s benchmark of $42.5 per barrel, improvement in ease of doing business and other policies aimed at boosting economic productivity.
    He outlined that the Exchange intends to strengthen its thought leadership efforts with policy makers to drive policies that will free up the system and promote the ease of doing business in Nigeria pointing out that incentive schemes for sectors of the economy that can support a pivot to export-led economy and systematic removal of impediments to doing business and reduction of leakages will attract private sector investments.
    “Cognisant of the ever evolving economic realities on ground, the NSE will take an adaptive approach to strategy execution in 2017. In the immediate future, the NSE will focus on achieving its goal of becoming a more agile and demutualised exchange and will fast track efforts towards developing innovative products such as exchange traded derivatives to provide investors with tools to better weather economic realities in 2017,” Onyema said.
    He added that in order to drive liquidity; the Exchange will enhance its cross-border integration efforts through African Securities Exchange Association’s (ASEA) African Exchange Linkage Project (AELP) model and the West African Capital Market Integration (WACMI) programme.
    “We will also continue our engagement efforts with the government to promote the listing of privatised state-owned entities, as well as engage with the private sector issuers for listings across all of our product categories. We anticipate that secondary market activity will be challenged initially as the impact of various policy measures work their way through the system. However, we expect to see a revival of supplementary listings, return of the new issuance market, and potentially one initial public offering (IPO) since the equity market is a forward indicator of the economy,” Onyema said.

  • Gains, losses of investors in 2016

    Gains, losses of investors in 2016

    Equities closed on a negative note for the third consecutive year in 2016, running against the tradition that the market does not run negative for three consecutive years. The average full-year loss of 6.17 per cent on the face of it suggests a modest depreciation, but underlying analysis shows that most stocks recorded substantial higher-than-average losses. Capital Market Editor Taofik SalakO highlights the stocks that shaped the market’s performance.

    Investors in equities ended the 2016 business year with average full-year decline of 6.17 per cent, equivalent to net capital loss of N604 billion. In simple comparative terms, the performance last year might be seen as an improvement on the whopping losses in the previous two years, but it actually represents a continuation of a losing streak that had seen equities losing N1.75 trillion and N1.63 trillion in 2014 and 2015. Altogether, equities’ investors have lost some N3.98 trillion, more than one-third of their portfolio values, in the past three years.

    The All Share Index (ASI), the common value-based index that tracks prices at the Nigerian Stock Exchange (NSE), closed last year at 26,874.62 points as against its year’s opening index of 28,642.25 points. Aggregate market value of all quoted equities also dropped from 2016’s opening value of N9.851 trillion to close the year at N9.247 trillion.

    Equities have writhed under sustained losses in recent years. Aggregate market value of all quoted equities on the NSE closed 2015 at N9.851 trillion as against its opening value of N11.478 trillion for the year, representing a loss of N1.627 trillion. The ASI, which serves as sovereign equities index for Nigeria, indicated a negative full-year average return of -17.36 per cent. The ASI closed 2015 at 28,642.25 points as against its opening index of 34,657.15 points.

    The losses in 2015 worsened the downtrend that had in 2014 marked out Nigerian equities among the worst-performing stocks globally with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities had closed 2014 at N11.478 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

    Further analysis showed that most sectoral indices closed in the negative, underlining the widespread losses during the year. The NSE Industrial Goods Index recorded the highest sectoral loss of 26.4 per cent last year. The NSE Oil & Gas Index followed with a full-year average loss of 12.3 per cent. The NSE Insurance Index declined by 11.4 per cent while the NSE Consumer Goods Index dropped by 4.5 per cent.  However, the NSE Banking Index emerged the contrarian index with a modest positive return of 2.2 per cent for 2016.

    Besides, real return analysis indicates that most investors lost more than one-third of their portfolios last year. With inflation rate at 18.5 per cent as at last November, the Monetary Policy Rate (MPR)-the benchmark interest rate, at 14 per cent, the adjusted nominal average real return for equities for last year summed up to -38.67 per cent last year.

    The Nation’s investigation indicated that more than one-quarter of the quoted companies lost more than 20 per cent of their market valuations. Also, at least 65 companies- more than one-third of quoted companies, closed flat, mostly dormant at their nominal value of 50 kobo per share. With a large segment of the market technically in coma for upward of four to five years, transactions remained concentrated, largely driven by few scores of highly capitalised stocks. Some 20 companies recorded capital gains of 20 per cent and above, representing about 12 per cent of total listed equities. Substantial gains by many of these contrarian stocks helped to moderate the widespread downtrend and mitigated the full-year average return to a single-digit negative.

     

    Major contrarian stocks

    While the losses suffered by Forte Oil and Oando weighed on the sectoral index, oil and gas stocks were the dominant group within the top gainers’ list for last year. With the deregulation of the downstream sector, oil majors rode on the back of expanded business opportunities and realignments in the industry to deliver some of the best returns for last year. Banking and agricultural stocks also made impressive showings on the gainers’list. The pricing trend analysis showed that the market remained sensitive to fundamentals and price-moving information, in spite of the underlying downtrend orchestrated by the national economic depression.

    Fortis Microfinance Bank, which floated a major private placement worth N985 million and secured a N1 billion facility from the African Development Bank (AfDB), recorded the highest gain of 416 per cent. The AfDB and Fortis MFB during the year signed agreement for a N1 billion facility to be used for lending to small and medium enterprises (SMEs) in the country.

    Also, Fortis MFB floated a special private placement of 656.67 million ordinary shares of 50 kobo each at N1.50 per share in favour of Equator Capital Partners.

    Dangote Flour Mills (DFM) PLC recorded the second highest price appreciation of 276.1 per cent, riding on the crest of the return of Dangote Industries Limited (DIL) as the majority core investor and management of the flour-milling company. Faced with dire situation of liquidation and bankruptcy, Tiger Brands Limited, South Africa’s largest food company that had in 2012 bought the majority equity stake in DFM from DIL, considered many offers and options and in December 2015 reached agreement with DIL to resell the troubled flour-milling company to DIL.

    Within six months of the return of DIL as majority core investor in DFM, the fundamentals had changed dramatically. By the year ended September 30, 2015, DFM’s pre-tax loss had built up to N12.47 billion while loss after tax had risen to N12.68 billion. In its fourth successive year of losses, accumulated losses had wiped out shareholders’ funds, leaving a deficit of N3.07 billion by the end of September 2015. Few months after the re-acquisition, DFM had returned to profitability, posting a profit before tax of N2.64 billion in the period ended June 30, last year, compared to a loss of N9.55 billion posted in the corresponding period of 2015.

    United Capital PLC, a financial and investment services group, sustained strong fundamental performance that strengthened the return outlook for the stock and pushed the share price up by 108.4 per cent. Audited report and accounts of United Capital for the year ended December 31, 2015 had shown that gross earnings rose by 32 per cent from N4.68 billion in 2014 to N6.15 billion in 2015. Profit before tax grew to N3.26 billion in 2015 from N2.31 billion in 2014, representing a 41 per cent increase. Profit after tax also rose by 39 per cent in 2015 to close at N2.57 billion as against N1.85 billion in 2014.

    Oil and gas majors put more money in the pockets of investors than any other group in 2016. Total Nigeria doubled its share price by 103.4 per cent. With the deregulation, Total Nigeria, a member of the French global oil and gas giant, Total Group Plc, drew on its foreign partnership to scale up its operations and delivered the best performance in the downstream oil sector. The Board of Total Nigeria distributed interim dividend of N2.38 billion after the oil major quadrupled net profit to N11.63 billion within the first nine months of last year.

    Shareholders thus received interim dividend per share of N7. The nine-month report showed that Total Nigeria grew turnover by 38 per cent to N220.22 billion in third quarter 2016 as against N159.3 billion in third quarter 2015. Profit before tax rose by 244 per cent from N4.95 billion to N17 billion. After taxes, net profit rose by 320 per cent from N2.77 billion to N11.63 billion. Earnings per share thus improved to N34.26 in third quarter 2016 as against N8.16 recorded in comparable period of 2015.

    Also, Seplat Petroleum Development Company, an upstream oil exploration and development company, benefited from the modest rally in global crude oil price to push up its share price by 87.2 per cent. Mobil Oil Nigeria, which became a subject of major acquisition deal, recorded a full-year return of 74.4 per cent. A $301 million for the acquisition of ExxonMobil Oil Corporation’s 60 per cent majority equity stake in Mobil Oil Nigeria by Nipco PLC valued Mobil Oil Nigeria at about N425 per share, still more than 52 per cent above Mobil Oil Nigeria’s 2016 closing share price of N279.

    Conoil also rode on the back of impressive earnings to return capital gain of 51.5 per cent for the year. Eterna recorded full-year return of 51.2 per cent as its earnings also showed considerable improvement.

    In the banking and agriculture sectors, recession-resistant stocks, such as Guaranty Trust Bank (GTBank), United Bank for Africa (UBA), Access Bank, Presco and Okomu Oil Palm, drew on stable operational earnings to reassure investors on their prospects. GTBank, the most capitalised banking stock, recorded the best performance in the banking sector with a full-year capital appreciation of 35.9 per cent. UBA followed with 33.1 per cent while Access Bank achieved a 12-month return of 21 per cent. Okomu Oil Palm and Presco, two oil palm producing companies, rose by 32.6 per cent and 21.5 per cent.

     

    Bottom of the ladder

    Average loss within the top losers’ group was about 40 per cent, underlining the depth of depreciation within the larger side of the price movements. From agriculture to banking, oil and gas, healthcare and manufacturing, investors’ apathy pushed several stocks to their lowest prices last year. While a major last-month rally in December that added N558 billion in net capital gains in 19 trading sessions helped to moderate the full-year returns, most equities still ended last year down by nearly one-third of their market valuation. Forte Oil, which had played a contrarian stock in the previous year, was the highpoint of a major selloff in 2016, dropping by 74.4 per cent.

    MSCI, the global provider of research-based indexes and analytics, which added Forte Oil and EcoBank Transnational Incorporated (ETI) to its MSCI Frontier Market Index 100 in 2014, had raised concerns about the adverse effect and management of foreign exchange crisis in Nigeria. In the end, MSCI added the MSCI Nigeria Indexes to the review list for potential reclassification to standalone status as part of the 2017 annual market classification review. Also, MSCI stated that it would continue to apply the special treatment in the country announced on April 29, last year. With this, MSCI will not implement changes for any securities classified  in the MSCI Nigeria Indexes or indexes which the country is a component of.

    Skye Bank, reeling from a major regulatory intervention, recorded the second highest depreciation of 68.4 per cent. The Central Bank of Nigeria (CBN) had last July took over the management of Skye Bank, claiming that the former board and management resigned after they failed to turn around the fortunes of the bank.

    Caverton Offshore Support Group, which suffered earnings loss due to the slowdown in the upstream, recorded a negative full-year return of -63.5 per cent.

  • Nigeria plans investors’ match-making platform, says minister

    Nigeria is set to establish a match-making data base for international business interconnectivity and stress-free investments, Foreign Affairs Minister Geoffrey Onyeama said yesterday.
    Onyeama told the News Agency of Nigeria (NAN) in Abuja that the cpuntry’s 119 missions abroad would serve as one-stop shops to spur investments through information sharing and elimination of bottlenecks.
    He said the initiative would enable Nigeria’s products and investors to access the world market easily and also enable foreign investors to have unfettered access to informed and genuine information concerning business opportunities in Nigeria.
    The minister explained that the scheme would be implemented through a matching-making data base aimed at promoting exports and enhancing the country’s Foreign Direct Investment (FDI).
    According to Onyeama, the design is an economic diplomacy, which is a framework to address the severe economic challenges facing Nigeria.
    He said Nigeria has representations in 119 countries and the ministry could leverage on the advantage to deliver concrete economic benefit to the nation.
    “It is a pet project. It is a matching making data base for our Foreign Direct Investment (FDI) and export promotion.
    “So, this data base will essentially enable any Nigerian business to upload to our data base that could be managed from Foreign Affairs together with the ministry of trade and investment,” he said.
    He said all the information needed about what they want to export and investment types would be readily made available in all the119 countries, where Nigeria has presence.
    “I felt that when we have presence in 119 countries, it is a fantastic advantage to push Nigerian products and businesses in 119 countries.
    “So, we would like to present a one-stop shop to export Nigerian goods.
    “And that whenever any business is uploaded in each of their countries, they have to seek for partners and match that business person with a partner in that country to put in place a business agreement,” he explained.
    According to him, “such people can access all the information about what they want to deal in and we together with Ministry of Trade will match them with Nigerian businesses.”
    Besides, he said the scheme would also save Nigerian businessmen from going through all kinds of bottlenecks and paying all kinds of fees in foreign countries.
    “We have the markets in all these countries, so that our business people and traders have the world at their finger-tips,” he said.

    Onyeama said his ministry was also looking at how to utilise the same method to attract more FDI into Nigeria.
    He said Nigerians in the Diaspora would also be able to utilise the database to search for partners in Nigeria and other countries.

  • Investors lose N4tr in three years

    Investors lose N4tr in three years

    Capital market investors  lost about N4 trillion in the last three years as  equities closed last year  with a full-year net capital loss of N604 billion.

    The unprecedented three-year losses brought most shares at the Nigerian Stock Exchange (NSE) to their lowest prices as investors grappled with foreign exchange (forex) crisis, decline in income and investments, high interest rate and soaring inflation.

    The stock market has been on a losing streak since 2014, though this has successively moderated over the years. Investors lost N1.75 trillion in 2014 and followed this with another loss of N1.63 trillion in 2015.

    Against the expectation that political transition and new government will quicken a rebound, equities closed with a net capital loss of N604 billion last year.

    Aggregate market value of all quoted equities on the NSE closed the year at N9.247 trillion as against N13.226 trillion recorded at the start of trading in 2014, representing a net capital loss of N3.98 trillion.

    Yearly analysis showed that the average return for last year stood at -6.17 per cent, equivalent to net capital loss of N604 billion. The All Share Index (ASI), the value-based common index that tracks prices at the NSE, closed 2016 at 26,874.62 points as against its opening index of 28,642.25 points for the year.

    Aggregate market value of quoted equities also dropped from year’s opening value of N9.851 trillion to close at N9.247 trillion.

    Nigerian equities have writhed under sustained losses in recent years. Aggregate market value of all quoted equities on the NSE closed 2015 at N9.851 trillion as against its opening value of N11.478 trillion for the year, representing a loss of N1.627 trillion.

    The ASI, which serves as sovereign equities index for Nigeria, indicated a negative full-year average return of -17.36 per cent. It closed 2015 at 28,642.25 points as against its opening index of 34,657.15 points.

    The losses in 2015 worsened the downtrend that had in 2014 marked out Nigerian equities among the worst-performing stocks globally with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities had closed 2014 at N11.478 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion.

    Analysts at Afrinvest Securities said the low foreign exchange liquidity that plagued the economy in the year contributed to the decline at the stock market as investors, especially foreign portfolio investors, were wary of being trapped within the forex illiquidity.

    Analysts also noted that weaker domestic macroeconomic fundamentals and high discount rate pressured earnings of companies and weighed on investors’ sentiment.

  • Plateau partners U.S., U.K. investors on agric research, training

    The Fertiliser Blending Plant, Bokkos in Plateau State is partnering with United States and United Kingdom investors for research works to boost the quality of its products.

    Mr John Mallo, Chairman, Bejafta Group Nig. Ltd, managers of the company disclosed this on Sunday in an interview with News Agency of Nigeria (NAN) in Bokkos.

    The chairman also disclosed that part of the partnership agreement included intensive training for prospective farmers in the state toward mass food production.

    He said: “All these are in response to the Federal Government’s diversification policies and programmes toward boosting the nation’s economy.

    “Our ultimate goal is to see how we could give our clients and customers the best of quality products that could boost food production in Nigeria and across the border, which also necessitated the research and training programmes.

    “We have already employed an Indian and still interviewing a Romanian, who will work with us in our drive to build the capacity of the blending plant for maximum results.”

    Mallo further disclosed that the blending plant, which has a production capacity of 300,000 metric tons has began a test run production of NPK 20-10-10 which is being supplied to farmers.

    “Farmers here in Nigeria, and even in our neighbouring countries, like Niger and Chad, have tested our production and testified that it’s very good,’’ according to him.

    The chairman said that the equipment his firm installed at the plant could produce 50 metric tons per hour.

    However, Mallo said the plant runs only one shift instead of three because of the challenge of availability of raw materials and “more so that our products are just new in the market’’.

    “By the time the public get to know about our quality products, I am assuring you that more orders would be placed, and before you know it, we shall reach our maximum production capacity, ’’ he assured.

    Mallo called on farmers in the state and the country at large to take advantage of the products of the plant to boost farming and food production as part of government’s agricultural policies and programmes.

     

  • Experts advise investors on low share prices

    Investment and financial experts have advised discerning investors to take advantage of the historic low prices at the Nigerian stock market ahead of the expected rebound of the economy and the capital market  next year.

    At a one-day stock traders and investors summit organised by Investdata Limited in Lagos, experts said the Nigerian economy and the capital market are on the verge of recovering.

    Chief executive officer, APT Securities & Funds Limited, Alhaji Garba Kurfi, noted that the Nigerian Stock Exchange (NSE) has recorded negative double digits growth for the third consecutive year, beginning in 2014 when it was the worst performing equities market in the globe after losing 16 per cent.

    He pointed out that the third year of negative growths negates the history of the Nigerian stock market.

    According to him, many stocks on the exchange are selling at their worst price after listing their shares for trading, just as many recorded their worst prices in decades during the current year, a situation discerning investors would be watching keenly and taking advantage of the rock bottom prices to harness value in the coming months.

    He noted that a situation where market capitalisation of companies listed on the NSE has lost a cumulative N3.2 trillion in 22 months to October 2016 may not arise again in the next 15 to 20 years.

    Managing Director, High Cap Securities Limited, David Adonri noted that the capital market is awash with opportunities for investors whether the economy is growing or not, with falling equity prices an opportunity for bargain hunting.

    He said investors need to reverse their strategy at a time like this and embrace counter-cyclical stocks because they do well at this time.

    “This group is composed of companies with dividends and massive balance sheets or steady business models that are recession-proof. These high yield stocks such as fast-moving consumer goods, pharmaceuticals and tobacco tend to hold up better,” Adonri said.

    According to him, recessions can provide an opportunity to buy assets cheap and the best time to invest, meaning investors can pick up stocks, bonds, mutual funds, real estate, private businsses and more for far less than they could just a few years before.

    “Only those who improve their position in the market will smile next year because those who threw away their assets will come to beg you for them later,” Adonri said.