The Nation Newspaper

Tag: investors

  • Millionaire investors buying up farm lands

    Some prominent Nigerians, including wealthy foreign investors, are purchasing huge tracts of land for farming with projects worth millions of naira. Many of these lands are being used for cassava, plantain, fish production and other food production.

    The Nation learnt that the investors, which spread across the Southwest, are investing in the area because of lower costs for land, taxes and human resources. They are using agents to acquire large agricultural properties  in Ogun State.

    Many of the investors get arable land very cheap and are  required to create jobs for the locals in exchange for the acquisitions.

    According to an expert, Debo Thomas, investment in agriculture is important, adding that this is responsible for the pace of land buying that has been phenomenal. In Oyo and Kwara states, Thomas said individuals and consortium have bought 5,000 to 10,000 hectares for cashew and arable farmers.

    He said the rush to buy farmland is being encouraged by investors who are desperate to modernise farming methods and increase crop yields to feed rising populations.

    In the last few years, The Nation learnt that the pressure had been on farmlands in Ogun State. In some areas, an acre goes for between N300,000 and N900,000. The state provides investors access to land as well as the ability to move profits out of the country.

    The state also provides attractive incentives, including income tax holidays, for foreign buyers who can buy large plots of land for agriculture and food processing businesses.

    Consequently, the state is benefitting from investments directed at ethanol production while there are large-scale commercial farming and beef and poultry production in some areas.

    Last month, the Raw Materials Research and Development Council (RMRDC) said Nigeria would partner a Chinese firm Sang-Liang Technology Development Centre (STDC) to grow sweet sorghum.

    The statement was issued in Abuja,  by Chuks Ngaha, RMRDC’s deputy director of public affairs unit, said  the development was part of its efforts to add value to local raw materials to stimulate employment opportunities and create wealth for the nation.

    “The council is established to develop raw materials and facilitate the adoption of machinery and processes for raw materials utilisation.

    “The agreement with STDC is for the processing and development of sweet sorghum into food and industrial and energy products to add value to local raw materials and create wealth,’’it added.

    The statement explained that the council would receive the franchise for the distribution of the improved sweet sorghum seedlings, planting materials and its technology in West Africa.

  • Offers record low patronage as trend scares investors

    Besides the erosion of capital gains, the slide is adversely impacting the fundamental performance of companies. The long-drawn losing trend has dampened investors’ appetite and created apathy to new issues. Several companies have been unable to raise funds and many that had braced the odds to launch new capital, ended with under-subscription. Companies that had recently launched bids to raise new capital have demurred from furthering the issuance process as share prices continued to fall below intrinsic fundamental values.

    For instance, Flour Mills of Nigeria Plc, which recently submitted application for regulatory approval to raise N30.25 billion through a proposed rights issue of 1.09 billion ordinary shares of 50 kobo each at N27.50 per share, is currently trading below the proposed offer price.

    Another company, May & Baker Nigeria Plc, which had announced plan to float a rights issue, is trading at around N1.24 per share, a price the promoters of the issue considered to be below the intrinsic value of the company.

    RT Briscoe, which struggled with huge financial leverage and sought to restructure its balance sheet through equity issue, has slumped to 55 kobo.

    All the companies that floated new issues in recent time fell could not meet their offer targets as they trade below their offer price, putting subscribers to the issues in losses.

    Access Bank, which had offered about 7.63 billion ordinary shares of 50 kobo each at N6.90 to existing shareholders, recorded 79.4 per cent success rate. The bank raised N42 billion as against its offer target of N53 billion.

    The rule at the NSE allows price movement on a company undertaking new issue on the principle that a free market must be allowed to discover the current price through interplay of demand and supply.

    In the words of Sewa Wusu, an economist and Head, Research & Investment Advisory, SCM Capital Limited (formerly Sterling Capital Markets Limited),  “the reason why companies shy away from public offers is that the new issues may not necessarily get patronage or commitment from new investors due to the current state of the market.

    “Most companies are embarking on rights issues due to the certainty that they can raise the required funds from existing investors, particularly the institutional shareholders and some large bloc holders who may be fully committed to retain their shareholding positions in the companies. But the shortfalls you have seen were reactions from retail investors.”

    Diamond in the rough

    Acting President, Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Abe, blamed the slide in the market on political risk and uncertain macroeconomic direction contributed.

     According to him, it is a normal pattern for the stock market to slow down during a political transition as investors wait for the policy direction of the market. Mr Oluleye Ademola, Head, Research & Investment, Capital Bancorp Plc, said the slide in the market might also not be unconnected with the high interest rate in the fixed-income market, weak earnings by some companies and panic selling from weary investors.

    Most analysts however said the sustained depreciation has created opportunities for medium to long term investors.

    The Head, Research & Investment Advisory, Meristem, Mr. Basheer Bashir, noted that the current market situation provides attractive buy opportunities for discerning investors.

    He said: “Valuations look attractive for quite a number of stocks across all sectors of the market irrespective of the economic headwinds. We are of the opinion that the current economic factors and realities have been overpriced into the market.

    “Nigerian equities basket is priced at PE of circa 9x current earnings compared to emerging market average of 11.6×  and South Africa(24x), Kenya (13.7x) and Egypt (10.50x),” Bashir said.

    Operators agreed that the market will witness considerable recovery in the fourth quarter. The FBN Capital has estimated that the market might close with a marginal decline of one per cent as against the current average loss of about 15 per cent.

  • Cross River, Irish investors plan 5,000 housing units

    Cross River, Irish investors plan 5,000 housing units

    Cross River State government and Irish property developers are finalisng a deal for the construction of 5,000 housing units.

    The investors met with Governor Ben Ayade in Calabar yesterday.

    The meeting is coming barely two weeks after Ayade led a trade delegation to the Republic of Ireland.

    A statement by the Chief Press Secretary to the Governor, Christian Ita, said modalities had been worked out between the state government and an Irish building firm, Affordable Building Concept International, to build affordable houses in its effort to develop new cities.

    Ayade, while receiving the team which he described as “ specialists in affordable housing scheme”, in Calabar, explained that its presence was a follow-up to an earlier discussion in Dublin on plans by his administration to provide affordable but comfortable shelter for the poor and unemployed.

    Ayade said: “There is no amount of value you can give to mankind that will compensate for the lack of shelter. The  investors will come with their technology and expertise and set up a factory where low-cost housing will be designed off site and the houses set up in less than three days.”

    Headded that the houses would be in three categories to cater for the needs of the people, who will key into the ambition of the government to create a new city in each of the local governments while that of Calabar will be called “Calas Vegas”.

    Ayade said they would be mindful of the natural endowment of the environment where the houses would be located.

    The  Chairman of Affordable Building Concept International, Mr. Desmond Cullinane, hoped that they would achieve some measure of success in the state.

    The Irish investors later visited Summit Hills, where UAC is building housing an estate of various categories, known as the Golf Estate.

  • TCN shortlists investors for 8,000Mw transmission capacity

    TCN shortlists investors for 8,000Mw transmission capacity

    • N15b needed yearly for three years

    The Transmission Company of Nigeria (TCN) has shortlisted over 30 local and foreign investors for investment in the transmission infrastructure to enable it attain its target of 8,000 megawatts (Mw) capacity by end of next year.

    The firm has set a target to achieve the capacity to transmit 8,000Mw of power by the end of next year considering the continued improvement in power supply.

    Its Managing Director, Dr. Abubakar Rasheed Tambuwal, an engineer, said the management was being proactive in order not to be caught unprepared.

    He said that the step being taken by the management was important because the Federal Government would not be part of the funding. The investors will bring in their money and TCN will pay them back within an agreed period.

    Abubakar said the TCN wheels out 4662Mw and has capacity for 5300Mw.Although the company can transmit 4662Mw and has capacity to wheel out more, it has to prepare for more power generation and shouldn’t wait for the government before taking steps to achieve that. This is why  management seeks private sector investment.

    To achieve 8,000Mw transmission capacity, TCN needs an investment of about N15 billion yearly over the next three years, he added.

    He said: “We are looking at a minimum of about N15 billion yearly over the next three years if we should be able to achieve the 8,000Mw. Therefore, with regard to the investor financing scheme (IFS), we have just shortlisted investors from within and abroad that are interested in the project. “We have over 30 of them that we feel will be able to deliver on some projects that they have chosen. I cannot tell you the names of the shortlisted investors for now until the deal is sealed and delivered. We are trying to see that they are capable technically and financially because once they come in; they are expected to execute the project themselves with the funding they are able to galvanise from either externally or within the country.

    “We have shortlisted them and we are in the process of coming up with a framework from which they can recover their investment with time. Since the Federal Government will not give them sovereign guarantee, we are coming up with modalities of repayment from the wheeling charges from our internally generated revenue over a period of time. It has not been finalised. We are still working to get all the support that is needed from the government for us to be able to achieve this.”

    He said internally generated revenue is  part of the moneyTCN collected from the customers by the distribution companies, noting that considering the quantum of power generated, TCN’s portion of the collection will be substantial enough to sustain its operation and pay back to the investors in the project.

    On the level of funding from the government, Abubakar said funding has not improved considering the fact that a lot of projects are in the pipeline, which need to be funded and because of the present situation, there is need for additional funding even from what the firm used to have. ‘’We are making all efforts to ensure that we bring funds outside appropriation of government. We have investors who are ready to come in and participate in our investor financing scheme. The scheme is still at preliminary stage but as soon as we finalise it, we will have investors who are willing to put in their funds to develop our transmission infrastructure. We also expect more funding from the Federal Government to be able to achieve the mandate we have set for ourselves to improve on the transmission capacity,” he said.

    Abubakar also explained reason for the improved power supply being experienced. He said generation has improved because gas supply has improved tremendously to generating stations and have been able to generate the highest ever peak in July of 4662Mw. “Our transmission capacity is a bit above that. We are capable of transmitting 5300Mw at the moment. But as generation is improving, we are expected to expand our transmission capacity to be able to evacuate the extra capacity being generated at the station for distribution companies to use. I can assure you that we have our plan, our project that are very critical has been mapped out so that within the shortest possible time, we will be able to reach 8000Mw transmission capacity, by end of 2016.

    “We have never transmitted more than 5000Mw to the customers due to many factors. When you generate, you transmit and utilise in the distribution, the distribution arm has to be ready to receive the quantum of power that has been generated. But I must tell you that transmission is capable of wheeling out 5,300Mw from generation down to distribution. It is only what the distribution companies can collectively take that is what is wheeled as the maximum energy at any given time.”

  • FCMB Group: Rewarding investors, sustaining quality services

    FCMB Group: Rewarding investors, sustaining quality services

    For the First City Monument Bank (FCMB) Group Plc, banking is all about service and meeting customers at the point of their needs.

    So, when the bank posted an increased revenue earning of 11 per cent or N77.4 billion in the first six months of the year with a pre-tax profit of N9.6 billion, many saw the performance as a bountiful reward for hard work.

    The period also saw an increased business momentum, with total assets growing 15 percent year-on-year to N1.22 trillion and up five percent Year-to- Date (YTD).

    Equally, customers’ confidence in the lender remained strong, as deposits grew by four percent during the period to N785.8 billion, just as its diversification across commercial investment banking and wealth management, provided a cushion as earnings from non-banking activities proved more resilient.

    FCMB Limited, the commercial and retail banking subsidiary of  the grou has continued to validate its increased drive into retail, contributing 21 per cent (N1.7 billion) of FCMB Limited’s Profit Before Tax. The retail group also grew deposits by 21 percent year-on-year to N431.2 billion, or 54 per cent of total deposits.

    The bank continued its drive of inclusive lending, granting over 9,100 new loans to micro-enterprises, even as its credit card offering saw increased patronage, with over 17,000 cards issued in the first half of this year.

    Corporate banking was, however, constrained by scarcity of foreign exchange and tight monetary policy, which affected trade finance, foreign exchange trading and lending. In the first half of the year, the bank’s UK wholesale banking subsidiary, FCMB Bank (UK) Limited, broke even after 14 months of taking off as a deposit-taking institution.

    The investment banking group of FCMB Group Plc – comprising  financial advisory (FCMB Capital Markets Limited (FCMB-CM)) and stockbroking (CSL Stockbrokers Limited (CSLS)) – delivered a six percent increase in Profit After Tax (PAT) of N414 million, driven by financial advisory, equity capital raising and asset management fees.

    The Managing Director of FCMB Group Plc, Peter Obaseki, acknowledged that, ‘’the economy has entered a higher risk level with inflation climbing to 9.2 percent, fiscal and trade deficits. Declining GDP growth rate below four percent as at Q1 2015 from 5.94 percent as at Q4 2014; broad money supply (MM2) contracted by N380 billion in June, from N19.19 trillion in May, to N18.81 trillion. The group results for H1 2015 reflects a deliberate conservative stance aimed at maintaining robust capital buffers in the face of a tough macro-economic and regulatory environment.

    Group Managing Director/ CEO of FCMB Limited, Ladi Balogun, said the “First half 2015 was characterised by significant macro-economic and policy headwinds.”

    Balogun stressed that limited supply of foreign exchange had a major impact on the commercial & retail banking group’s (CRBG) trade finance and foreign exchange trading income.

    According to him, “the harmonisation of the cash reserve requirement to 31 percent led to a significant rise in our restricted reserves and consequently constrained lending and put pressure on net interest margins.  Asset quality was adversely affected by the effect of declining government revenue on contractors and employees, which saw our NPL ratio climb to 5.2 percent compared to 3.6 percent at the end of FY14.  In spite of the inflationary pressures , operating expenses saw a modest rise of five percent in the CRBG, thanks to our ongoing channel optimisation programme’’.

     

    Reward for

    shareholders

    Shareholders of FCMB Group Plc  approved the payment of a  dividend of 25 kobo per ordinary share, for the year ended December 31, 2014. The approval came at the Second Annual General Meeting (AGM) of FCMB Group.

    On the development and the financial statements of the Group, the Coordinator of Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, praised the Board and Management of FCMB Group Plc for the performance and dividend payment, despite the challenging operating environment for banks in last year.

    He added: ‘’The increase in the Group’s profit from N16billion in 2013 to N22billion in 2014 is commendable. It is a clear signal that things are looking up. We are also happy that FCMB has emerged as a strong player in retail banking and from what we have seen so far, we are optimistic that the bank will continue to wax stronger’’.

    National Chairman, Shareholders’ Trustees Association of Nigeria, Alhaji Mukhtar Mukhtar, said: ‘’The result is very wonderful, despite the very harsh economic environment. The FCMB has been able to give us a wonderful result. We are very satisfied. The 25k dividend is very encouraging. Profit after tax has gone up, total assets has increased. We are very impressed with the result. I congratulate the executive management of the bank on a job well done.’’

    On the identity of the bank,Mukhtar described the move as welcome and that it would help the bank become more visible and connect with customers better.

    Chairman, FCMB Group, Dr. Jonathan Long, said the Group, which comprises First City Monument Bank Limited, FCMB Capital Markets Limited and CSL Stockbrokers Limited, ‘’has achieved a strong and sustained growth over the past three years’’, adding that during the past year, the Group continued the profitable development of its core banking, capital markets and stock-broking businesses’’.

    Long assured that with the implementation of the Group’s supervisory structure, ‘’we are confident that this will help us to consolidate the gains made over the past years and face the economic challenges which we are confronted in 2015’’.

     

    Bond issuance

    FCMB Limited has listed its N26 billion Series 1, 7-Year 14.25 per cent Fixed Rate Unsecured Bond on the Financial Market Dealers Quotations (FMDQ) Over-the-Counter (OTC) Plc platform its platform. The bond, which is due in the year 2021, is under a N100 billion debt issuance programme. FCMB Capital Markets Limited, the investment banking subsidiary of FCMB Group Plc, is the issuing house and sponsor of the bond.

    The bank informed that proceeds of the bond will be used in strengthening its capital base, enhancing its capital adequacy ratio, expanding its distribution channels and infrastructure as well as growing its risk assets with a view to enhancing income.

    Speaking during the listing, the Group Managing Director/Chief Executive of FCMB Limited, Mr. Ladi Balogun, said: ‘’The significance of listing the FCMB bond on the FMDQ platform is hinged on the availability of a readily accessible liquid market to the bondholders, where the value of their investments can easily be determined and monitored on a daily basis. It also provides a platform to realise their investment when necessary’’.

    He added: ‘’The bond provides a long term capital that will help us to reinforce our commitment to our customers.’’

    Balogun praised FMDQ’s efforts towards creating more depth in the debt market, while applauding the platform’s seamless processes and its drive to achieve market transparency by deploying technology driven initiatives.

     

    Reward for excellence

    The various valued added initiatives being driven by FCMB Limited at enhancing its operations and customer experience have continued to receive positive affirmation. This follows the rating of the Bank by KPMG, a leading international consulting firm, as the fourth most customer-focused bank in Small and Medium Enterprises (SMEs) with a score of 74.94 percent and fifth in retail banking with 73.16 per cent by bank customers surveyed nationwide.

    This performance, which is coming barely four years after the bank transformed to become a retail and commercial banking-led lender, is an improvement when compared to 2014 where the bank occupied the eighth and seventh position in the SMEs segment and retail banking space.

    The rating, as contained in the 2015 report of the KPMG Banking Industry Customer Satisfaction Survey (BICSS), was on the basis of Customer Satisfaction Index (CSI), which took into account convenience, product/service offering,  and value for money and customer care.

    The KPMG BICSS survey was launched in 2007 to heighten the consciousness of service delivery among banks. The survey has evolved over the years and in the year, it covered over 23,000 retail customers, 2,800 SMEs and 400 corporate/commercial organisations across the country.

  • Investors scramble for penny stocks as equities gain N432b

    Investors scramble for penny stocks as equities gain N432b

    Low-priced stocks, otherwise known as penny stocks, were the toasts of investors last week at the Nigerian stock market as four-day successive rally lifted the market with N432 billion capital gains.

    After losing N1.13 trillion in July, the stock market opened August with considerable rally. Day-on-day gain between Monday and Thursday moderated the built-up negative average year-to-date return. However, the market relapsed on the last trading day on Friday as investors turned round to profit-taking.

    Penny stocks dominated the top-gainers’ list with Evans Medical leading the pack with a gain of 38.9 per cent to close at 75 kobo. Transnational Corporation of Nigeria (Transcorp) recorded the second highest percentage gain of 29.1 per cent to close at N2.66. PZ Cussons Nigeria recorded exceptional gain of 25.26 per cent to close at N34.51, the largest gain by any high-priced stock. May & Baker Nigeria also rose by 14.5 per cent to close at N1.50 while Continental Reinsurance appreciated by 12.05 per cent to close at 93 kobo.

    In spite of the last-day relapse, all value benchmarks at the Nigerian Stock Exchange (NSE) closed on the upside. The All Share Index (ASI), the composite index that tracks prices of all quoted equities, closed weekend at 31,441.71 points as against the week’s opening index of 30,180.27 points, representing a gain of 4.18 per cent.

    Aggregate market value of all quoted companies also followed the same uptrend to close at N10.776 trillion; representing an increase of N432 billion on its week’s opening value of N10.344 trillion. The gain last week moderated the negative average year-to-date return to -9.28 per cent. There were 37 gainers against 29 losers during the week while 124 stocks were flat.

    Total turnover increased to 2.38 billion shares worth N18.99 billion in 19,769 deals last week as against a total of 1.37 billion shares valued at N17.95 billion traded in 17,391 deals in the previous week. Financial services sector remained the dominant sector with a turnover of 1.996 billion shares valued at N13.195 billion in 11,232 deals; representing 83.79 per cent and 69.49 per cent of the total equity turnover volume and value respectively. Conglomerates sector occupied a distant second position on the activity chart with a turnover of 106.53 million shares worth N425.53 million in 1,150 deals. The third place was occupied by natural resources sector, which recorded turnover of 100.021 million shares worth N50.103 million in 16 deals.

    The trio of Continental Reinsurance Plc; Zenith International Bank Plc, and Axamansard Insurance Plc were the most active stsocks, accounting for a total of 1.03 billion shares worth N5.21 billion in 2,339 deals, about 43.4 per cent and 27.4 per cent of the total equity turnover volume and value respectively.

    Also traded during the week were a total of 6,639 units of Exchange Traded Products (ETPs) valued at N999,551, which were traded in 22 deals. In the previous week, a total of 26,580 units of ETPs valued at N1.719 million were traded in 24 deals. Investors also bought 14,473 units of Federal Government Bonds valued at N15.576 million through six deals.

     

  • ‘Why we are searching for investors in Nigeria’

    The Chief Executive Officer, Monarch International Company, James Bowling, has said privileged individuals in Nigeria should  invest in property and residency abroad for the future of their family.

    He said the interest of the company in Nigeria is to enable potential investors invest in residency, citizenship and property abroad, adding that the firm is in Nigeria to open a new way of opportunities to interesting partners.

    Speaking at a workshop organised by the company in Port Harcourt, Mr. Bowling said every property invested in, will attract some royalty and would also give investors the opportunity to travel to over 150 countries in the world.

    He said his company is doing well in Africa and Europe, but still new in Nigeria where it is searching for serious and potential opportunities.

    He noted that the properties are affordable, though to be paid in dollars, but comparable to other property bought in Nigeria depending on the location of the property.

    “Monarch International Company is into residency, citizenship and property, we are new in Nigeria we believe that we will have more applicants here who will invest abroad, Nigeria has a wealthy individual, who can take the great opportunity in life to invest abroad.

    ”We secure the future of our clients, by ensuring his residency in any of the countries where he bought his or her property. We also assist our clients to interact with the government of the country where these properties are located. We also assist with money transfer and other businesses,” he said.

    Its West Africa Managing Director, Mr. Gerald Lebechi, said the response in Africa made the company to believe that Nigeria would be a better place for its future investment.

    “There is a very strong response in Africa, Nigeria is just new but we have received a lot of applications, we have been operating from South-Africa for eight years now, our focus now is on African expansion, like Ghana, Angola, Congo and the rest of African countries.

    “The challenge here is getting documentation and the biggest challenge is getting the buyer of the residency and property.

    “We try to give our plans to the investors, we are telling our investors that they should not wait and miss this golden opportunity,” he said.

  • Foreign investors eye Bayelsa’s Atala oil field

    Governor Seriake Dickson’s effort to develop the state-owned Atala Field has begun to yield fruits as some foreign investors have indicated interest in the asset.

    During the Bayelsa State Investment and Economic Forum held in Yenagoa, the state capital, promoters of some foreign companies said they had registered to participate in the forum to meet with officials of the state government to participated in the deal.

    One of the promoters from Houston, Texas, United States, said the meeting was necessary for him to showcase the outcome of his visit to his government.

    “We are quite aware of the short period of turning around the fortune of Atala within two years of the takeover by Century Exploration and Production Limited (CEPL) through the initiative of Dickson. Since the government has no business doing business, we are interested in replicating strategies adopted by Dickson in other sectors in the state and in Nigeria,” a source at CEPL said.

    Dickson’s restoration plan for Bayelsa led to the state’s entry into the nation’s oil and gas map as the first state that brought to production its oil field – Atala field. This is one of the achievements re2corded by the governor since his assumption of duties on February 14, 2012.

    Atala Oil Field is located in oil mining lease (OML) 46, and was among the 24 marginal fields allocated to 31 indigenous companies and state owned companies during the marginal fields licensing round in 2003. This makes Atala one of the eight fields developed by investors to production level in the 24 fields. It contributes one per cent to Nigeria’s daily crude oil production.

    Production by Atala Field, according to the source, was made possible by the engagement of Century Exploration and Production Limited (CEPL) by Dickson as the technical and funding partner on assumption of office in 2012. The breakdown of the participatory interest shows that Bayelsa Oil Company Limited (BOCL) owns 51 per cent, CEPL-29 per cent and Hardy Oil, 20 per cent.

    Atala 1 well was re-entered, completed, tested and rig released on Aug 11, last year. The extended well test commenced on December 20, 2014 with anticipated peak production of 6,000 barrels of oil per day (bopd) but currently the firm aims to achieve production of 5,000 bopd before second quarter of next year. The field has recorded estimated cumulative production of about 60,000 barrels stored in barges. This was test production of less than 20 days and in good position to commence evacuation for export. All the above were carried out with the highest health, safety and environment standards with 100 per cent local content and engagement of state owned support personnel, the source said.

    Another foreign investor at the forum said: “The Atala Field is a role model for oil industry development for Public-Private Partnership (PPP). The fact that the state government used local companies as partner shows that there is lot of good things to learn from Bayelsa example. We hope to continue to our relationship with Bayelsa.”

    The Managing Director Channel Oil Petroleum Mr. Ebibomo Timitimi, who participated in the forum, praised Dickson’s good initiative to transform Bayelsa from  a civil service state to a leading industrial centre in Africa.

    He noted that there are various investment initiatives by Dickson that were the major attraction of some foreign firms, which seek to partner the state and make fresh investment.

  • Investors’ Protection Fund to pay N42.2m compensation to 158 investors

    The Investors’ Protection Fund (IPF) of the Nigerian Stock Exchange (NSE) is set to pay about N42.23 million as compensation to 158 investors that had suffered pecuniary losses from infractions by stockbroking firms.

    The IPF is a statutory fund established pursuant to Part XIV, Section 197 of the Investment and Securities Act 2007 (ISA) to compensate investors who suffer pecuniary loss arising from the revocation or cancellation of the registration of a dealing member firm by the Securities and Exchange Commission (SEC), insolvency and bankruptcy or negligence of a dealing member firm of the Exchange.

    The IPF also compensates for defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received or deemed received by the dealing member firm in the course of its business as a dealing member firm.

    The board of the IPF yesterday stated that a total of 158 claimants for pecuniary losses suffered by them as a result of wrong doing by certain dealing member firms of the Exchange.

    According to the IPF, the 158 claimants due to be compensated are investors whose claims were verified by the Exchange, approved by the board of trustees of the IPF, and whose identities were verified by an identity verification consultant engaged by the IPF.

    The 158 investors would shares N42.23 million, with the maximum compensation capped at N400,000 in line with the approved rules of the IPF.

    “These 158 investors are being compensated for defalcation committed by 29 dealing member firms of the Exchange who are either inactive or have been expelled as members of the Exchange,” the IPF stated.

    The claimants had been screened and found to be eligible for compensation in accordance with the relevant provisions of the ISA and the IPF rules. The IPF will advise all 158 claimants about the processes to receive their compensation payments.

    Vice chairperson, board of trustees, Investors’ Protection Fund (IPF), Mr. Fubara Anga, said the fund had gone through a long, rigorous and transparent process and had worked in line with global best practices in reaching decisions on various issues regarding the IPF.

    “First of all, we put in place an appropriate corporate governance structure for the Fund; we adopted Rules for the IPF and then following transparent and auditable selection processes, we appointed auditors as well as identity verification consultants. We then commenced the process of identifying claimants and verifying their claims. We must thank the claimants for their patience,” Anga explained.

    Chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, who is also a trustee of the IPF, described the maiden payment as a milestone pointing out that the payment affirmed commitment to the continuous development of initiatives that will bolster confidence in the capital market.

  • Investors place bets on Africa

    From milk churning in Zimbabwe to rose growing in Ethiopia, private equity investments in Africa have returned to pre-crisis levels and should keep rising as funds seek big returns in far-flung markets.

    Private equity deals in Africa totalled $8.1 billion (R103.1bn) last year, the second highest on record after the $8.3bn posted in 2007, according to the African Private Equity and Venture Capital Association (AVCA).

    This year could be even bigger as investors tired of low returns in developed markets look to cash in on the rapidly emerging middle-class consumers in Africa.

    Private equity deals in Africa between 2007 and 2013 earned 60 percent more than the MSCI emerging market index, AVCA said.

    Traditionally private equity buyouts in Africa have been supported by development organisations but there are signs over the last year that global funds are taking more aggressive steps to tap into a continent of 1 billion people.

    “The growth story in Africa is compelling,” said John van Wyk, the head of Africa at Actis, an emerging-market focused fund.

    “Global funds are realising they need to have some sort of Africa strategy and that hasn’t always been the case,” he added.

    Large US private equity firms, including TPG and Kohlberg Kravis Roberts (KKR), have made their first investments in Africa in the last year.

    The New York State Common Retirement Fund, one of the largest US pension funds and worth about $180b, said in April it could invest up to $5bn in Africa over the next five years to boost returns and diversify its portfolio.