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Tag: Stanbic

  • Stanbic Fintech subsidiary Zest serves more consumers 

    Stanbic Fintech subsidiary Zest serves more consumers 

    Zest, the Fintech subsidiary of Stanbic IBTC Holdings PLC, unveiled its brand and key platforms. The event took place at the Eko Convention Centre in Lagos, with proxy unveil carried out in Port Harcourt, Kano and the FCT.

     Zest (formerly Stanbic IBTC Financial Services) started commercial operations in May 2023, functioning primarily as a Payment Service Provider, having received all the relevant regulatory approvals to commence operations. This event themed Universe 1.0 marks the introduction of the brand to the public.

    Read Also; Fed Govt gives N25,000 to poor pensioners

    Chairman of Stanbic IBTC Holdings PLC, Basil Omiyi, in his opening remarks, noted that Zest was setup to execute a solution-driven, platform orchestration strategy that will serve consumers, businesses, application developers, and other financial services providers. Delivering the keynote address, Chief Executive of Stanbic IBTC Holdings PLC, Dr Demola Sogunle, afûrmed that Zest as the group fintech subsidiary, would be the epicenter of solutions delivery, new partnerships, and better experiences in the area of payments and customized solutions delivery. 

    Addressing the audience, Stanley Jacob, Chief Executive of Zest further explained the key design principles, which bothers on the delivery of a multi-railed platform strategy that enables businesses to collect payments in any form that the customer wants to pay, human centered design, growth powered by e-Commerce and operational excellence. He concluded by saying “when you use our platforms, we want you to experience better – better with payments, better with integrations and better with selling”, aligning with the brand tagline ‘Go for Better’.

    The hybrid event focused on unveiling the Zest brand, showcasing its identity and culture through various touchpoints. Highlight of the event was a commerce experience where guests and shoppers had first-hand experience of the e-Commerce platforms.

  • I SEE ENTREPRENEURIAL SPIRIT IN NIGERIANS

    I SEE ENTREPRENEURIAL SPIRIT IN NIGERIANS

    South African-born Edward Stevenson grew up loving to fly planes. At 23, he had already gone way ahead to achieve that dream. He had acquired a licence to fly small planes, and was at the verge of going for further studies to become a commercial airline pilot, when he recalled his other talents. Young Stevenson comes from a family of traders. His father was a retail trader, and he recalls selling oranges right in front of his father’s shop in South Africa at the age of six. So, faced with a decision of an eventual career, Edward Stevenson chose to study retail management. Now the General Manager of Tejuoso Property Development Company Ltd, Lagos, he is saddled with the task of putting in place the new ultra-modern Tejuoso Shopping Centre in the heart of Yaba, Lagos. He told PAUL IKPABIO how his early life in South Africa prepared him for this job, and how he hopes to transform the once fragmented Tejuoso market stalls to the ambitious biggest shopping centre in the country.

    How long have you been in Nigeria?

    I have been in the country for more than a decade. I come and go. But here at Tejuoso, I have been around for two years. When I came to Tejuoso, the place was filled up with small market people. If you look around Nigeria and other places in the world, you will notice that the market environment is changing. The market stalls are changing into proper retail shops. That was my mandate when I came here. So when I got here, I had to create a shopping centre instead of an open market. I had to create larger shops that appeal to the people on the street and at the same time appeal to the guy up there in the corporate world. So we had to turn things around, merge shops, make it attractive and enable shoppers’ easy movement.

    We are thinking about convenience, relaxation and entertainment even within the shopping environment. So we have brought in domestic food court, 450 shops, entertainment section, and we are bringing in cinemas. We even have in-house radio. So we are going to make this place as interesting as possible for the shopper who normally goes to a SPAR or Shoprite environment. We are here for everyone.

    Tell us about your background

    I come from a retail background. From the age of six, I was selling oranges outside my father’s shop in South Africa. So I understand how a shopping environment should be like. I have worked at The Palms Shopping Complex, and some of the people working with me here have also worked at The Palms. We have gathered expertise with my team.

    What have been the challenges so far?

    The last two years have been tasking for almost everyone in the country. I think now that SPAR is opening here, it is going to give our customers and tenants a lot more of confidence about this whole idea, and they will come here to open their shops. In the last year, we have struggled to get people into the shops. Money has been tight in the country and a lot of people who were eager to get in had to wait for money to get to them.

    Now we have quite a number of people inside our shops. For instance, we have about 200 traders in the shops on the second floor. There are four floors here. So from this week, the ground floor will also start to be busy. Now we have about an average of 4,000 people coming here on a daily basis. When SPAR starts operation here, it will be about four times that number of people coming in and going out of this place. And we are looking forward to that because a lot of people who used to go as far as the Lekki or Ikeja to shop at SPAR will now have to come here, which is closer.

    How about security?

    We have the MOPOL (mobile policemen) and other security operatives. We will soon have a Police Station at the shopping centre. Also, we will have a fire service station so that we do not have issues. We have a bank, and the ATM they have here is among the top ten in the country. I know that because they give me feedback. We are also looking at having Stanbic, UBA and some other banks here.

    How easy is it to manage a huge complex like this?

    I have been here two years. The first floor is 9,000 square metres, and we have four floors. The basement for the car park is 14,000 square metres. It is huge, probably the biggest shopping centre around the country right now. By the time we open all the shops, it will definitely be the most visited shopping centre across the country. We are creating proper directions to guide people on how they move around the shops and floors.

    Of course, we have sections. For instance, we have the hair fashion people in a section, the electronics in a section. When you are hungry, you know the food court is on the third floor. When you want to use the bank, you go to the banking section, and the cinemas are in their section. So we have demarcations and everything in its proper places. That makes the administration of the place easy for us despite the fact that the entire complex is huge.

    For chaotic traffic situations. How do you intend to manage that?

    We have an underground car park that can hold 350 cars. So, to get to the complex, you go to the top of Tejuoso and come in through the underground where we have the car park. We are talking to a management company that will manage the car park for the entire complex. When we are fully open, the first month will be free parking. But afterwards, we will charge a fee. That is because we do not want a situation where people come from all over the place to park or abandon their cars here. The entire car park space has to be for customers coming to shop here.

    I can see that the shopping centre is already busy, but you are here taking about an opening date. What does that mean?

    (Laughs) The truth is that we are not fully open yet. We are only partially open. The shops have been opened for a year now. What I can say is that we are opening in sections because people have been through a difficult time in the last two years. Many who booked for the shops have not begun operations yet. But with the latest opening of SPAR here, that will jumpstart other things. So I guarantee that there is going to be amazing foot traffic in all the stores in this shopping centre.

    Do you see its location in Yaba, which seems like the city’s centre, as an advantage?

    I think it definitely will be of a pretty advantage. There is definitely no competition around us. But even if there were to be competition, we have a huge advantage in the sense that the area itself had for long been popular as a shopping place. So, all we have done is to create a conducive environment where more and more people get to shop in comfort. The place is already popular, so as we keep opening the sections, more and more people will come in.

    Yaba is the centre between Ikeja and Victoria Island. So, the people here, instead of going to those extreme places, they will come here, once they know they can get car space and they can also see what to buy and even take food bites from the food courts around. What we want is that when people think of bubble gum, for instance, what readily should come to their mind is that they can get it here at Tejuoso. And when they think of where to get the biggest television, they think of the electronics section here at Tejuoso Shopping Centre. It is open to all persons. Anyone is welcome here. It is a shopping centre that caters for everyone. When you come in here, you will find something that is appealing and affordable.

    Now that you have an ultra-modern market here, what became of the small traders who used to hang around here?

    What we did was to accommodate them through an arrangement whereby they could pay for new retail shops in the new Tejuoso Shopping Centre. And this negotiation went down well with them and most of them have been able to come in here and get a better lift for their product visibility. At the moment, if they were still on the street in the open, they would have been paying more there than they are paying here. So we have a section for small and medium-sized businesses. We also have a section for large-sized businesses on the ground floor. And on the third floor, we have the entertainment section.

    Ninety nine per cent of the people that are here already are happy with what is on ground. But we want to be more than what we are presently. They will be happier when we would have opened up all the sections and accommodated all that we intend to put in place. I was speaking to the Iya Oloja (market leader) in the trading area on the second floor, and I was explaining to her the other facilities that we would be bringing in soonest, and she was amazed and excited. She says she can’t wait for it all to be in full operation. She loves the movies and she wants the cinemas to become operation soonest.

    I notice that you are passionate about your work. Where does the passion come from?

    Whenever I take up a challenge, you have to believe in that challenge. This is not a normal shopping centre; it is not Palms or Ikeja Shopping Mall; it is more than those. It is a shopping centre with a combined mix catering for everyone. Myself and my team love challenges. Some of them have been with me for over ten years in other businesses in Nigeria. I see the potential of this enormous project. I see where we are going to. I know that this is going to be focal point where the government and people of this state will come around and be proud of, and even want to have something like this around different parts of the country. I have the confidence in that, and so does my team.

    What is your source of inspiration?

    I see the potential in this country. I see the entrepreneurial spirit. It is amazing. People here are hardworking. I see them wanting to get ahead. No one sits idle. They want to move forward. They want to get ahead. If I am out of Lagos for more than two weeks, I develop the urge to get back here quickly. I have developed that sense of urgency that most Lagosians have.

    If you have lived and worked here all these years like you said you have, which Nigerian foods are you familiar with?

    I have tasted almost all your foods.

    You definitely do not work for 24 hours in a day. How do you relax?

    I try out some exercises. I have a son in a boarding school right now in South Africa. Four times in a year, I go to South Africa to see him. I also have a group of friends here in Lagos who I bond with too. They are Nigerians, Indians, Lebanese, English and so on. We go out to restaurants and cinemas to catch fun.

    Apart from SPAR, which other international retailers are you expecting?

    We are expecting quite a number of them; Sportsworld and some others that I do not readily want to disclose right now.

    Any special reason why you decided to be in retail marketing business?

    Yes. When I was 23, I had to make a major decision in my life. I had at that time gone into training to become a pilot. I had my licence to fly small planes, and it was time to take the decision of whether to continue with my commercial pilot education and become a commercial airline pilot or to continue with my retail career. In the end, I made the decision to face a retail career. So I went back to study retail education in South Africa before coming to Nigeria.

    What readily gives you pleasure?

    The shopping centre here will cater for the individual and families. Next to the cinema, there will be a section that can cater for minors, a creche, lounge where you can spend your evenings with your wife or girlfriend and restaurants with international cuisines. So, it is soon going to be a place where everyone fits in and as you can see, it is already taking shape. We now have a new and better Tejuoso for everyone.

  • Stanbic reassures customers of good return

    Stanbic reassures customers of good return

    Stanbic IBTC Pension has reassured pension contributors and retirees with funds under the company’s management of fair returns on their pension savings.

    Executive Director, Operations, Stanbic IBTC Pension Managers Limited (SIPML), Steve Elusope, made this known in an interview  at a pre-retirement seminar held by the Lagos State Pension Commission (LASPEC).

    Elusope also assured that the company would be careful in investment of pension fund under it to ensure that investment is done prudently with interest of the owners of the fund at the back of the frame work of its investment scale.

    He stressed that their clients are guaranteed fair return and reasonable risk.

    He said: “The most important thing that should be paramount in the minds of a retiree is the security of the funds. Return is related to risk and so the riskier you go, the higher the return which gives it a balance. You have to balance your risk and return to ensure that retirees’ funds are not exposed to risky ventures.

    “For us at SIPML, we will continue to work, partner, relate with them and be at their service so that they can enjoy every bit of the rest of their lives with us. We will never do anything that will risk their fund. If you look at the Contributory Pension Scheme, the safety net is already there in terms of security. Asides from the fact that the organisation strives on integrity, we believe that security is a key pillar to get the trust of the people.

    “Security is not just about somebody misappropriating the fund, security is also about ensuring that the funds are used the way it is configured to be used and investment is done prudently with interest of the owner of the fund at the back of the frame work of the investment scale.

    “It is this total package that we stand for. Our retirees and contributors can be rest assured that their funds are secured. In terms of returns, we ensure that we do not move into risky ventures as laid out in the National Pension Commission (PenCom) guidelines on investment. We guarantee fair return with reasonable risk. The truth about return is that we do not look at it in one perspective; it is a long term thing because return is related to risk. So, the riskier you go, the higher the return and the lower you go, the lower the return. So, you have to balance your risk and return,” he added.

  • Skye Bank, Stanbic, five others miss earnings deadline

    Skye Bank, Stanbic, five others miss earnings deadline

    Seven companies have formally admitted their inability  to conclude the audit of their accounts for the immediate past business year in line with the regulatory timeline of three months after the end of the business year.

    Post-listing rules at the NSE require quoted companies to submit their earnings reports, not later than three months after the expiration of the period. Most quoted companies including banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar as their business year. The business year thus terminates on December 31.

    NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year, which ended on December 31, 2015, was Thursday, March 31.

    They have, therefore, filed regulatory notice that they were unable to meet the earnings deadline. The companies included Diamond Bank; Skye Bank; Stanbic IBTC Holdings; Learn Africa; Oando; NPF Microfinance Bank and Cadbury Nigeria.

    The management of Oando Plc at the weekend said it had worked diligently with its external auditor, Ernst & Young (EY) to ensure a swift conclusion of the audit process but after reviewing the financials, EY indicated that the accounts may likely need to be referred to the Financial Reporting Council of Nigeria (FRC) pursuant to Rule 5 of the recently publicised FRC Rules.

    Oando stated that it expected the process to be concluded on or before May 31, this year though this is dependent on the completion of the external review process.

    “The company’s management would also like to bring to the attention of its shareholders and the investor community that the accounts of the company at full year 2015 will be in line with its third quarter 2015 performance. The expected decline is attributable to the industry’s downturn, prevalent economic headwinds, as well as fiscal and monetary restrictions driven by a challenging macro environment,” Oando stated.

    Diamond Bank stated that it had completed the auditing of its accounts and submitted the approved accounts and report to the Central Bank of Nigeria (CBN). The apex bank has not completed the review of the accounts.

    Learn Africa said the delay in the submission of its accounts was due to the need to manually verify a large part of the sales figure during the year due to a technical hitch in its book sales software package. Learn Africa plans to submit its report by April 12, 2016.

    Skye Bank said its earnings report was delayed by the additional external audit work that arose from its merger with Mainstreet Bank Limited in 2015.

    “Prior to the merger, the two banks operated as separate entities for five months of the financial year, each operating on different information technology platforms and firms of External Auditors. The foregoing has necessitated additional external audit work on the part of the surviving audit firm, being the first post–merger period,” Skye Bank stated.

    Besides monetary sanctions, NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. The NSE however can grant waiver and extension of submission deadline to a company under special consideration.

    Under the corporate governance and rules compliance assessment report known as X-Compliance Report, NSE identified four different kinds of tags or symbols to alert investors about the status of each quoted company. These include below listings standard (BLS), the first degree alert level indicating a company that has not complied with post listing rules such as late submission of financial statements, unauthorized publication, management failures among others.

    Also, financial services companies such as bank and insurance companies awaiting regulatory approval will carry the appropriate symbol of awaiting regulatory approval (ARA). Companies that are undergoing a capital reconstruction exercise including supplementary issue, share buyback, split, share reconstruction among others will be tagged with capital reconstruction exercise (CRE) while companies that have indicated that they will be delisting or companies that are being delisted at the instance of the regulator would be flagged with delisting in process (DIP) symbol.

  • STANBIC IBTC ETF 30 distributes dividends to investors

    Investors in Stanbic IBTC Exchange Traded Fund (ETF) 30 will receive a payment of N1.56 per unit next week, according to official filing by the ETF promoter and manager, Stanbic IBTC Asset Management Limited (SIAML).

    The register of unitholders and transfer books of Stanbic IBTC ETF 30 is expected to be closed on Monday, October 26 while payment will be made on Friday October 30, 2015 to unitholders registered in the fund as at the close of business on Friday, October 23, 2015.

    Stanbic IBTC Asset Management Limited (SIAML), a wholly owned asset management subsidiary of Stanbic IBTC Holdings Plc, had launched initial offering of 10 million units of the Stanbic IBTC ETF 30 at a price of N100 per unit. The offer was however oversubscribed and SIAML listed 11.447 million units valued at N11.447 billion.

    An Exchange Traded Fund (ETF) is an investment vehicle that tracks an index, a basket of assets, or a commodity but trades like regular shares on a stock exchange.

    The Stanbic IBTC ETF 30 invests 100 per cent of its assets in the same portfolio of securities that comprise the NSE 30 Index in proportion to their weightings in the underlying index. The objective of the Fund is to replicate as closely as possible the total return of the NSE 30 Index. The NSE 30 Index tracks the 30 most capitalised stocks on the NSE.

    Managing director, Stanbic IBTC Asset Management Limited (SIAML), Mr Olumide Oyetan, had explained that the NSE 30 Index comprises of the top 30 companies in terms of market capitalization. The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalization.

    He noted that the Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalized and liquid stocks on the NSE, in a cost effective manner.

    He pointed out that the Stanbic IBTC ETF 30 will differentiate itself in the marketplace as a highly liquid and transparent investment adding that the financial services group would leverage on its extensive client base and brand name to promote Nigerian ETF to Nigerian and international investors.

     

     

    “Our target is to keep the expense ratio at one per cent. We are looking at growing this Fund to become one of the largest funds in the market,” Oyetan said.

     

     

  • Afren Plc owes Zenith, Access, Stanbic banks N37b

    Afren Plc owes Zenith, Access, Stanbic banks N37b

    Afren Plc’s  debt to Zenith Bank Plc, Access Bank Plc and Stanbic IBTC Bank Limited stands at N37 billion ($185 million) says Renaissance Capital (RenCap).

    A report released yesterday by RenCap, an investment and research firm,  showed that the three lenders have at least N37 billion principal exposure to Afren, which is currently in administration, with “little likelihood that it can  continue as a going concern”.

    RenCap analysts concluded that   as far as the loan is concerned,  Zenith Bank is in the most comfortable position, followed by Access Bank, and then Stanbic IBTC.

    Afren Plc is an independent oil and gas company listed on the Main Market of the London Stock Exchange, with a diversified portfolio of production, development and exploration assets.

    RenCap,  quoting  Afren documents, said Zenith Bank has $100 millon to Oil Mining Licence (OML) 26 and $5 million to Ebok; Access Bank has $50 million to Okwok/OML113 (Aje), $5 million to Ebok; and Stanbic IBTC Bank has $25 million to Ebok.

    “From our discussions with Zenith management and Renaissance Capital’s oil & gas analysts, we believe that of all the banks with credit exposure to Afren, Zenith is in the most comfortable position,” it said.

    RenCap said the asset is producing, located onshore, and has low operating costs – which imply that its production economics still make some sense at currently low oil prices.

    “The February 2014 facility, is primarily secured by a charge over Afren’s interest (via FHN 26 – the SPV) in OML26, and its cash flows. According to Zenith management, other Afren creditors do not have claim to OML26. We do not think Afren plans to sell this asset and our oil & gas analysts believe that its cash flows should be sufficient to repay the loan, valuing the asset at $114 million,” the report said.

    Further analysis of the assets showed that Access Bank’s $50 million to Okwok/OML113 (Aje), according to the bank’s management, showed it has a first-ranking lien on both, but some of the bank’s claims are subject to counterparty consent.

    “Both assets are offshore and not producing. While most of the $50 million was spent developing Okwok, Aje is expected to produce first, by late 2015; Okwok production could happen in 2016/2017. At $50 per barrel, our oil & gas analysts value Okwok negatively at ($161 million) and Aje at $45 million, implying 90 per cent potential credit recovery for Access (facility recovery value largely dependent on Aje),” it said.

    Ebok is located offshore and is Afren’s largest producing field. Afren has a $300 million syndicated facility from a series of local and international banks on this asset. While the loan was originally secured using Ebok reserves, cash flows and material contracts, the creditors’ rights were relegated via an inter-creditor agreement on 30 April 2015, when Afren secured life-saving interim funding of $200 million.

    RenCap analysts concluded that there are legal and contractual technicalities that could cause significant losses with regard to the lenders’ exposure to Afren.

  • Fidelity, Stanbic, Sterling go for N84b new capital

    Fidelity, Stanbic, Sterling go for N84b new capital

    Tough regulatory policies, especially the hike in Cash Reserve Ratio (CRR) and drive to finance more Small and Medium Enterprises (SMEs) are pushing banks into seeking additional capital, termed Tier-2 funds.

    The CRR is a portion of bank’s deposits kept with the Central Bank of Nigeria (CBN), and it is currently 75 and 20 per cent for public sector and private sector deposits.

    Three lenders, Sterling Bank Plc, Fidelity Bank Plc and Stanbic IBTC Holdings Plc are seeking a combined capital of N84 billion from investors to enable them fund expansion plans and stimulate balance sheet positions.

    Sterling Bank plans to raise between N20 billion and N30 billion this year to fund its expansion plans. Fidelity Bank Plc at the weekend signed off a N30 billion 16.48 per cent fixed rate bond due in 2022 while Stanbic Holdings Plc said it will raise N24 billion in a rights issue once shareholders approve the transaction.

    Stanbic IBTC, majority owned by South Africa’s Standard Bank , said it would seek approval at a general meeting on June 3. The bank’s first quarter pretax profit fell 46 per cent to N4.81 billion ($24 million) against the same period last year. Stanbic did not give a reason for the decline in profit but said in a statement that revenues rose to N33.73 billion for the period to end-March from N30.22 billion a year ago.

    Fidelity Bank Chief Executive Officer Nnamdi Okonkwo said the facility is part of the bank’s efforts at deepening the SMEs sector which, arguably, is the engine room of the economy.

    He spoke at the signing which had the full complement of the Board, Planet Capital Limited, Lead Issuing House/Underwriters, representatives from the Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE), Registrars and Stock brokers.

    Sterling Bank’s Chief Financial Officer (CFO)/Executive Director Mr. Abubakar Suleiman said the bank was on track on its expansion targets which it unveiled in 2013 and would soon embark on another phase of its growth strategy.

    According to him, the bank currently has 1.5 million customers and has been able to achieve over three per cent market share from one per cent a few years ago. He revealed that from 84 branches in 2006, the lender’s branch network should hit the 200 mark by the end of the year adding that it would increase the number of its Automated Teller Machines (ATMs) to 1000 by the end of this year.  He also stated that the bank will soon deploy a new core banking application which would significantly boost the quality of its operations and service delivery.

    The Executive Director said that the bank’s goal was to be among the top five lenders in the industry not in terms of balance sheet size but in the areas of quality service delivery and compliance to regulations.

    He pointed out that there were banks with much bigger balance sheets which were not meeting customers’ expectations in key areas, stressing that as Sterling Bank expands and becomes a bigger financial institution, it will continue to outperform its peer group.

    As he put it, “We have consistently outperformed our peer group and we will outperform the next group. We want to be there when it comes to service delivery, in terms of compliance to regulations and how we are perceived as good corporate citizens.”

    The CFO noted that regulatory headwinds, especially the hike in Cash Reserve Requirements (CRR) on public sector deposits had impacted banks’ profitability and restricted their lending capacity to finance economic growth.

    He argued that the amount of bank deposits that the CBN had sterilized as a result of the 75 per cent CRR on public sector deposits and 20 per cent CRR on private sector deposit was “unprecedented” and had constrained banks’ capacity to lend.

    He pointed out that the deposit with the CBN were non-earning adding that not only does this impact banks’ bottom line but it also prevents lenders from funding businesses.  He however emphasised that   despite the tough operating environment Sterling Bank was still committed to meeting its expansion targets.

    Afrinvest West Africa Plc  Managing Director Ike Chioke said the limitation on public and private funds by the Central Bank of Nigeria (CBN) and the emerging deals within the corporate space, such as the power sector, have increased the need to shore up capital. According to him,  Eurobond issuances come at attractive rates relative to the domestic market and presently have many viable on-lending outlets.

    Chioke, who spoke on the theme: “Navigating growth in a challenging environment” admitted the danger of potential pressure that may arise upon the payment of coupon on Eurobonds raised by banks, adding that the lenders will require the dollar bi-annually to fulfill obligations to Eurobond holders.

    He insists the applauded privatisation of the power sector in 2013 may begin to reveal structural and financial challenges in the near term if not well-managed, given that approximately $2.5 billion was raised by the Bureau of Public Enterprises (BPE) from the privatisation of Power Holding Company of Nigeria (PHCN’s) generating (GENCOS) and distribution (DISCOS) companies.

    About $5.7 billion additional fund was raised by the Federal Government from last year’s sale of the National Integrated Power Plants (NIPP).A significant portion of the funding for the acquisition of these assets by private sector investors was provided by local banks with minimal equity contributions. This, Chioke said, has absorbed an enormous level of funds from banks.

    “This investment is, however, supposedly, yet to yield returns and has in part led to the rush for Eurobonds by banks in an attempt to restructure credit to the power sector. A major apprehension is the currency mismatch as cash flows from power assets are generated in naira,” he said.

     

  • Stanbic IBTC lists N11.45b ETF

    Stanbic IBTC lists N11.45b ETF

    Stanbic IBTC Asset Management Limited (SIAML), a wholly owned asset management subsidiary of Stanbic IBTC Holdings Plc, yesterday listed its Stanbic IBTC Exchange Traded Fund (ETF) 30 on the Nigerian Stock Exchange (NSE).

    The listing followed the successful completion of the ETF’s initial public offering, which was oversubscribed. SIAML had issued 10 million units of the Stanbic IBTC ETF 30 at a price of N100 per unit. But yesterday, it listed 11.447 million units valued at N11.447 billion. The listing followed approval of the allotments for the ETF by the Securities and Exchange Commission (SEC).

    An Exchange Traded Fund (ETF) is an investment vehicle that tracks an index, a basket of assets, or a commodity but trades like regular shares on a stock exchange. The objective of the Fund is to replicate as closely as possible the total return of the NSE 30 Index. The NSE 30 Index tracks the 30 most capitalised stocks on the NSE.

    The Stanbic IBTC ETF 30 will invest 100 per cent of its assets in the same portfolio of securities that comprise the NSE 30 Index in proportion to their weightings in the underlying index.

    Also, the rights issue of Pharma Deko Plc has opened for trading on the NSE, paving the way for investors who were not prequalified for the rights to buy into the company through renounced and traded rights. The offer is expected to close on January 30, 2015.

    Pharma-Deko plans to use the net proceeds of the rights issue to restructure its balance sheet and provided support for its business plan.

    Commenting earlier on the ETF, managing director, Stanbic IBTC Asset Management Limited (SIAML), Mr Olumide Oyetan explained that the NSE 30 Index comprises of the top 30 companies in terms of market capitalization. The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalization.

    He noted that the Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalized and liquid stocks on the NSE, in a cost effective manner.

    He pointed out that the Stanbic IBTC ETF 30 will differentiate itself in the marketplace as a highly liquid and transparent investment adding that the financial services group would leverage on its extensive client base and brand name to promote Nigerian ETF to Nigerian and international investors.

    “Our target is to keep the expense ratio at one per cent. We are looking at growing this Fund to become one of the largest funds in the market,” Oyetan said.

  • SEC lists BGL, Stanbic, others as 10 most expensive fund managers

    Ten mutual funds spent more than one per cent of their net asset value as expenses, according to a report on expenses of mutual funds by the Securities and Exchange Commission (SEC).

    The report on expenses ratio for the second quarter ended June 30, this year showed that only 10 mutual funds expended more than one per cent of their net assets as running costs. The report covered 51 mutual funds registered with SEC.

    The report however generally showed that the expenses of all mutual funds remained well below the 5.0 per cent ceiling set by SEC as fund managers continued to look for ways to further reduce expenses.

    According to the report, BGL Nubian Funds, managed by BGL Asset Management, has the highest expense-to-net asset ratio of 3.22 per cent. BGL Nubian Funds is an equity-based fund. Kakawa Guaranteed Income Fund, under the management of Kakawa Investment Management Limited, has the second highest ratio of 2.97 per cent.

    Anchor Fund, an equity-based fund being managed by FBN Capital Asset Management Limited, has the third highest expenses of 2.68 per cent while Lotus Halal Investment Fund, a Shari’ah-compliant ethical fund being managed by Lotus Capital, placed fourth with 1.81 per cent. Lotus Halal Investment Fund has been trading below its offer price and it has not made return to investors since the fund was floated six years ago.

    Other funds within the highest category included Stanbic IBTC Ethical Fund, with 1.63 per cent; Stanbic IBTC Nigerian Equity Fund, 1.56 per cent; FBN Capital Asset Management’s Bedrock Fund, 1.55 per cent; FSDH Asset Management Limited’s Coral Growth Fund, 1.12 per cent; and UBA Money Market Fund and Stanbic IBTC Guaranteed Investment Fund, which recorded 1.10 per cent each.

    Meanwhile, Stanbic IBTC Iman Fund, a Shari’ah-related ethical mutual fund being managed by Stanbic IBTC Asset Management, was the least expensive fund during the period with expense to net asset ratio of 0.15 per cent while UPDC Real Estate Investment Trust (UPDC Reits), being managed by FSDH Asset Management Limited, followed with 0.17 per cent.

    The report highlighted concerted efforts by fund managers to reduce expenses with a view to enhancing the attractions and returns of mutual funds. Most fund managers considerably reduced their expenses in the second quarter compared with expenses recorded in the first quarter.

    For instance, Stanbic IBTC Nigerian Equity Fund’s expenses totalled 2.61 per cent of its net assets in the first quarter while Frontier Fund, being managed by Sterling Capital Markets Limited, reduced expense ratio from 1.21 per cent in the first quarter to 0.71 per cent in the second quarter.

    Total net asset value of all mutual funds stood at N185.39 billion by the close of trading on August 22, 2014. Money market fund was the largest segment with net asset value of N60.45 billion. Equity funds and real estate funds followed with N43.97 billion and N42.2 billion respectively.

    On fund-by-fund basis, UPDC Reits, a real estate fund, was the largest mutual fund with net asset value of N28.49 billion. Stanbic IBTC Money Market Fund placed second with N27.78 billion while FBN Money Market Fund was the third largest fund with N27.43 billion.

    Mutual funds, otherwise known as collective investment schemes (CIS), are joint investment vehicles through which investors can pool funds and invest in chosen basket of securities under a professional management with a view to optimise returns and reduce risks.

    Net asset value is determined by subtracting total liabilities of a fund from its total assets. The net asset value can further be divided by the total number of units of the fund to determine the unit price.

    A mutual fund is usually categorised by the class of assets that forms the primary focus of its investments. Thus, there are equity funds, money market funds, bond funds, real estate funds, ethical funds and balanced funds, among others.

    SEC has said it would review the cost structure and expenses of mutual funds with a view to ensuring that more returns accrue to investors.

    Director, Collective Investment Scheme (CIS), Securities and Exchange Commission (SEC), Mrs Louisa Eni-Umukoro, said the commission was concerned about the expenses and costs relative to fund management.

    According to her, SEC is considering introducing a multi-fee class structure for the mutual funds alongside other measures to reduce costs.

    “We are looking at introducing a multi-fee class structure whereby the more you subscribed, the less you pay. It’s something we are going to work out with the fund managers,” Eni-Umukoro said.

    She said the commission has noticed a high expense ratio on the part of some fund managers.

    She said SEC might review downward the expense ratio ceiling of five per cent to discourage frivolous expenses by some managers.

    Eni-Umukoro said the apex capital market regulator had amended its rules to cut expenses in relation to to fund management.

     

  • Stanbic IBTC to float N10b Exchange Traded Fund

    Stanbic IBTC Holdings Plc is concluding arrangements for an initial public offering (IPO) to raise about N10 billion for an Exchange Traded Fund (ETF).

    Stanbic IBTC plans to issue 100 million units of a new ETF to be known as IBTC NSE 30 ETF at a price of N100 per unit.  The ETF will be built on the NSE 30 Index, a modified market capitalization index that tracks the 30 most capitalised companies on the Nigerian Stock Exchange (NSE).

    The stocks that made up the NSE 30 Index are selected based on market capitalization from the most liquid sectors. Liquidity is based on the number of times the stock is traded during the preceding two quarters. To be included in the Index, the stock must be traded for at least 70 per cent of the number of times the market opened for business.

    The IBTC NSE ETF came on the heels of campaign by Stanbic IBTC Holdings to increase awareness for collective investment schemes. The IBTC NSE 30 ETF will be the second ETF based on the NSE 30 Index and came amid efforts by several operators to broaden the derivatives market.

    The NSE recently listed the Vetiva Griffin 30 Exchange Traded Fund tracks NSE 30 Index, the value-based index that mirrors the pricing trends of the 30 most capitalised stocks on the NSE.

    The NSE had in late 2011 listed its first ETF, a gold-based ETF known as NewGold. NewGold originated from ABSA Capital and was then already listed on the JSE Stock Exchange of South Africa.

    Ernst & Young, the third largest multinational professional services firm in the world, has reported that the global ETF industry had 5,042 ETFs, with 10,053 listings, assets of US$2.3 trillion, from 215 providers on 58 exchanges as at October 2013. It also predicted annual growth of 15 per cent to 30 per cent globally over the next five years.

    Lotus Capital Limited and its professional parties also recently concluded pre-offer processes for the investment company’s ETF. Lotus Capital plans to launch the Lotus Halal Equity Exchange Traded Fund, an ETF based on the NSE Lotus Islamic Index, an adjusted market capitalization weighted index currently comprising 15 Shari’ah compliant equities listed on the floors of the Nigerian Stock Exchange (NSE).

    The NSE Lotus Islamic Index is a collaboration between the NSE and Lotus Capital. The first index created to track the performance of Shari’ah compliant equities on the floor of the NSE, the NSE Lotus Islamic Index opens today with a year-to-date return of -4.36 per cent, worse than average equity return of -0.48 per cent.

    Lotus Capital will be offering 100 million units of the Lotus Halal Equity Exchange Traded Fund at the price of 1/200th of the NSE Lotus Islamic Index on the day preceding the subscription, according to the regulatory filing.  The NSE has already approved the Lotus ETF.

    Lotus Capital recently indicated it was considering floating new mutual funds as it urged investors in its premier fund to have long-term outlook of between five to 10 years. In an investment update, Lotus Capital said the new funds would be tailored to meet the specific needs of different segments of investors.

    ETF is a security that tracks the performance of a specified security or other assets including stocks, basket of assets, indices, commodity prices, foreign currency rates, and derivatives among others. ETF is distinguished by some defining factors including fixed capital or where the company has variable capital, then the amount of the paid up share capital of the company shall at all times be equal to the net asset value of the company and its shares shall have no par value.

    An ETF combines the valuation feature of a mutual fund or unit investment trust, which can be bought or sold at the end of each trading day for its net asset value, with the tradability feature of a closed-end fund, which trades throughout the trading day at prices that may be more or less than its net asset value.

    The most important type of exchange-trade products, ETF may be attractive as investment because of its low cost, tax efficiency, and stock-like features. By owning an ETF, the holder get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Meanwhile, ETF does not sell individual shares directly to investors as only authorised dealers and investors are allowed to buy the usually large blocks of shares known as “creation units”.

    There are many types of ETF. Index-based ETF, like index fund, tracks specified market index. Leveraged or inverse ETF seeks to achieve a daily return that is a multiple or an inverse multiple of the daily return of a securities index. An important characteristic of this type of ETF is that it seeks to achieve its stated objectives on a daily basis, and its performance over longer periods of time can differ significantly from the multiple or inverse multiple of the index performance over those longer periods of time. Active-ETF derives its name from its management strategy which entails day-by-day active trading and publication of portfolio holdings on a daily basis.