The Director-General, the Debt Management Office (DMO), Ms. Patience Oniha said the federal government has raised sum of N10.5 billion through Federal Government of Nigeria Savings Bond (FNSB) since the creation of the bonds March, 2017.
The FNSB programme introduced in March 2017 to boost domestic investors’ participation in the bond market.
Speaking in Lagos, Oniha said: “From the 18 months of the creation of the FGN savings Bonds, we have been able to raise N10.5 billion and attracted 13,200 retail investors into the market.”
However, she said the amount raised and the number of investors were very minimal when compared with the amount government spent on enlightenment campaign.
According to her, a lot needs to be done to strengthen financial inclusion of the federal government, stressing that the target of the government through the FNSB has not been not actually been met.
She said that DMO was presently studying the possibility of using phones as used in Kenya by investors to participate directly in the government securities.
“From the 18 months of the creation of the FGN savings Bonds, we have been able to raise N10.5 billion and attracted 13,200 retail investors into the market. As you know the DMO borrows on behalf of the government. One of our objectives is to be able to issue our securities in a timely manner and at a very minimal cost,” Oniha said.
Speaking on the use of technology in government securities, she said: “The issue around what technology can do in terms of raising capital is extremely important to us. We, traditionally for a long term have been serving only a segment of the market, the institutional investors and foreign investors. There is no buy side from the retail investors because they need to be knowledgeable and familiar to invest in the sovereign bond.”
Meanwhile, Managing Director, Access Bank Plc, Mr. Albert Wigwe , has said that greater number of people could be reached with technology.
He said: “There is a flow of huge technology changes. Today with technology, you can reach out to greater number of people and financial institutions are deploying technology to enhance service delivery.
“The traditional way to make money is vanishing, so we need to look at other ways to make money and cut cost.
“We have 65 per cent of Nigerians who are youths and they are important segment of the society. So, at Access Bank we are using technology to reach the youths and change how people transact business.
“Today usage of cards are no longer on the increase because of increase in technology through phones.”
The Federal Government of Nigeria Savings Bonds (FGNSB) are becoming attractive to retail investors going by the interest rates offered on the security in November. The interest rates of 13.4 per cent and 12.4 per cent for the 3-year FGNSB and 2-year FGNSB respectively are the highest since October 2017.
Analysts have said the rates are attractive to retail investors compared with the alternative returns from savings accounts offered by Nigerian banks. “The current interest rates on the FGNSB are also higher than the current inflation rate of 11. 26 per cent (October2018 figure), which means that the real interest rates on the FGNSB are positive. Consequently, retail investors should position for the December 2018 FGNSB auction, which should be open for subscription on Monday, 03 December 2018,” analysts at FSDH Research said.
According to the firm, given the current interest rate movements in the country, FSDH Research expects the interest rates on the December FGNSB auction to inch up marginally from the levels recorded in November 2018.
The Debt Management Office (DMO) introduced the FGNSB in March 2017 to provide an avenue for low-income earners to earn consistently good returns over time. The security has some benefits, which include the provision of an investment opportunity, offering attractive returns with low investment risk.
The FGNSB is an initiative of the federal government to encourage a culture of national saving among low-income earners. The FGNSB also helps to diversify the funding sources of the government.
As at June 2018, the FGNSB contributed N8.52bn to the total domestic debt of N12.15trn. The FGNSB currently offers tenors of two years and three years. The interest rate on the three-year tenor is higher than the two-year tenor. The average interest rate on the two-year tenor between March 2017 and November 2018 was11.79 per cent. The average interest rate on the three-year tenor between April 2017(when it was introduced) and November 2018 was 12.73 per cent. The FGN pays the interest on the Bonds on a quarterly basis.
As a result, the FGNSB is a more attractive investment option than a savings account as it is exempt from all forms of tax and offers a higher interest rate than a savings account. “An additional benefit of the FGNSB is its relative liquidity as investors can trade the Bonds on The Nigerian Stock Exchange (NSE) if they wish to sell before maturity. Our findings show that the volume of FGNSB available for trading at the NSE is small.
“Therefore, stockbrokers and the DMO need to do more sensitisation programs than are currently being done to create an active secondary market for investors to trade their bonds. Also, an investment in the FGNSB may be used as collateral to borrow money in any financial institution in Nigeria,” FSDH Research stated.
The Securities and Exchange Commission has revealed plans to drive capital market participation through financial inclusion.
The Acting Director-General, SEC, Ms. Mary Uduk, revealed this at 2018 PEARL Awards Night in Lagos, Sunday.
Uduk restated the comission’s desire to pursue initiatives that would aid financial inclusion of Nigerians, saying it was capable of growing the nation’s economy.
She said, “The gains of having a more inclusive financial system are enormous, as it helps broaden the markets and make policies more effective. A financially inclusive society will provide increased access to finance, especially for women, help support sustainable growth and will create million more jobs.
“The Commission will continue to highlight and promote developments and trends in the Nigerian capital market and drive financial inclusion aimed at reducing adult exclusion from financial services.
“Innovations in financial technology has made possible the potential of using digital tools to make financial services available to a wider range of consumers and enterprises, promoting financial inclusion and the affordability of financial services.”
Uduk commended the efforts of management of the PEARL awards and said more consideration should be given to companies with good corporate governance practice in the award nomination process.
She added that emphasis should be placed on companies with technological innovation in the capital market, in the advent of the convergence of finance and technology.
Uduk disclosed that SEC was implementing various initiatives aimed at making the capital market deeper, vibrant and more effective.
She said one of the initiatives was the forbearance window for shareholders with multiple subscriptions that had been extended by another year from the December 31, 2018 deadline previously communicated.
She noted that another initiative was the two-pronged approach to addressing the intractable challenges associated with transmission of shares related to the estate of deceased investors that had been developed.
“The first step will involve engagement with and enlightenment of the probate registry with a view to providing solutions to the cumbersome process of transmitting shares,” Uduk said.
She added that rules would be developed around the time frame for transmission shares and the fee structure.
Continental Reinsurance Plc says its board of directors has received an offer from CRe African Invetsments to acquire all its outstanding and issued shares.
The Company Secretary, Continental Reinsurance, Abimbola Falana, in a statement on Monday, said the company was making the offer in order to initiate a much-needed restructuring exercise with a view to consolidating its operations and repositioning it for enhanced competitiveness in the global insurance market.
The statement said the acquisition was intended to be executed through a Scheme of Arrangement, under Section 539 of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2004 and other applicable rules and regulations.
It said the company was offering N2.04 per share for the 10,372,744,314 ordinary shares of 50 kobo each or one ordinary share of $1 each in its capital investments for every 176 ordinary share of 50 kobo each.
The statement added that the proposed scheme consideration represented a 46.76 per cent premium to the last traded share price of the company on October 5, 2018, being the last business day prior to the date the proposal was received.
The statement read in part, “The company has received the Securities and Exchange Commission’s ‘No objection to the scheme’. The scheme is also subject to the approval of the shareholders at a court-ordered meeting as well as the sanction of the Federal High Court.
“Further details will be communicated to the market upon relevant approvals from shareholders and regulators. Shareholders are advised to exercise caution when dealing in Continental Reinsurance’s shares until a further announcement is made.”
The Nigerian Stock Exchange and the World Federation of Exchanges are set to sign a Memorandum of Understanding today in a bid to deepen the capital market.
The Chief Executive Officer, NSE, Mr Oscar Onyema, revealed this while giving a speech at the 22nd annual conference of the African Securities Exchanges Association in Lagos on Monday.
He said the strategic relationships of ASEA resulted in grants worth approximately $1.2m from the Financial Sector Deepening Africa and the Korea-Africa Economic Cooperation fund via the African Development Bank.
He stated that the grants received to date were targeted at the African Exchanges Linkage Project, ASEA secondment program, information portal and annual conferences.
He described the programmes as critical levers to the success for ASEA, saying they aimed to continue to broaden and deepen the relationships in order to create increasing value for members and the African financial market.
Onyema noted that this was the main reason the MoU would be signed with the WFE.
He said, “I will like to thank the WFE and we look forward to working with the Federation on many initiatives.
“To ensure we deliver value for members and partners, we created a five year strategy running from 2019 – 2023, which will provide a structured approach to delivering on our initiatives.”
Onyema stated that the strategy was designed to position ASEA as the authoritative source of information on African exchanges.
He added that the theme of the two-day conference, ‘Champions on the rise: Africa’s ascension to a more sustainable future’ could not be more timely as Africa had been confirmed to be positioned for economic acceleration, akin to the Asian boom with several African businesses translating opportunities into enduring business value.
Onyema said ASEA aimed to do more to support African exchanges and businesses to integrate digital technology, especially data analytics into their business models.
Investment in the banks listed on the Nigerian Stock Exchange declined on Monday as the shares tumbled by 0.9 per cent due to profit-taking and sell-offs witnessed in Guaranty Trust Bank Plc and United Bank for Africa Plc.
The market opened the week on a bearish note as the All Share Index declined by 0.46 per cent from 31,678.70 on Friday to close at 31,553.50 basis points on Monday, while the market capitalisation dropped from N11.565tn recorded on Friday to N11.512tn on Monday.
The volume and value traded reduced by 53.2 per cent and 26.1 per cent to 104.87 million units and N1.94bn, respectively, while the year-to-date return declined to -17.4 per cent.
The top traded stocks by volume were Unilever Nigeria Plc (20.38 million units), Zenith Bank Plc (14.47 million units), Interlinked Technologies Plc (9.53 million units), First City Monument Bank (7.26 million units) and Diamond Bank Plc (5.89 million units).
The top traded stocks by value were Unilever (N804.9m), Zenith Bank (N347.4m), Dangote Cement Plc (N286.7m), Seplat Petroleum Development Company Plc (N68.51m) and GTB (N64.94m).
At the end of trading on the floor of the Exchange on Monday, 17 gainers emerged against 18 decliners.
Of the 18 losers recorded, 10 banks were listed. They are Diamond Bank, Unity Bank Plc, UBA, Wema Bank Plc, GTB, Access Bank Plc, FBN Holdings Plc, FCMB, and Zenith Bank Plc.
The performance across sectors was largely bearish as three of the five indices close negatively.
The Banking index was the highest loser, followed by the Consumer and Industrial Goods indices, which shed 0.7 per cent and 0.1 per cent, respectively as a result of losses in Nigerian Breweries Plc and Lafarge Africa Plc.
On the flip side, the Insurance index gained 0.6 per cent due to the positive performances recorded in shares of Continental Reinsurance Plc and Aiico Insurance Plc.
Similarly, the Oil & Gas index advanced 0.1 per cent on the back of bargains in Oando Plc.
Investor sentiment weakened as the market breadth was pegged at 0.9x.
The top five losers were Diamond Bank Plc, A.G. Leventis Nigeria Plc, Ikeja Hotel Plc, Unity Bank Plc and Veritas Kapital Assurance Plc.
Diamond Bank saw its share price drop by 9.47 per cent to close at 86 kobo as its year-to-date return settled at -42.67 per cent.
A.G. Leventis’ share price declined by 9.09 per cent to close at 30 kobo, while its year-to-date return settled at -57.14 per cent.
Ikeja Hotel, whose year-to-date return settled at -14.04 per cent, saw its share price decline by 8.38 per cent to close at N1.53.
An 8.24 per cent decline was recorded in the share price of Unity Bank as it closed at 78 kobo per share, while its year-to-date return settled at =47.17 per cent.
Veritas Kapital’s share price, recording an eight per cent decline, dropped to 23 kobo per share as its year-to-date return settled at -54 per cent.
The top five gainers were P Z Cussons Nigeria Plc, GLAXO SMITH Kline Plc, CAP, Prestige Assurance Plc and Jaiz Bank Plc.
Analysts at Afrinvest Securities Limited said, “Although market performance was negative today, we expect bargain hunting in subsequent sessions.”
Vice President and Treasurer, World Bank, Ms. Arunma Oteh yesterday urged the African Securities Exchanges Association (ASEA) to ensure listing the of 44,000 Small and Medium Enterprises (SMEs) out of 44 million operating on the continent.
Oteh, who is a former Director-General of the Securities and Exchange Commission (SEC), made the call while speaking at the 22nd ASEA annual general meeting and conference hosted by the Nigerian Stock Exchange, (NSE) in Lagos.
According to her, the exchanges must nature and ensure listing of these firms on their various bourses as part of efforts to deep the markets in Africa.
Oteh, explained that SMEs are strong drivers for economic growth and development, saying that their major challenge is access to finance.
She said that African needed to build infrastructure and diversify economies beyond commodities and natural resources extraction.
Oteh said: “If we focus in areas of opportunities that abound whether in agriculture, services, retail, technology, particularly emerging technology, financial services, and hospitality, sustainability will be more granted. We must also foster innovation and entrepreneurship and I believe that securities exchanges are the epicentre of the ecosystem,” she said.
She stated that various emerging markets and Africa were still struggling with more difficult financial conditions, debt burden concerns, and weak commodity prices, among others.
“I will say that the greatest challenges of our time are extreme poverty, inequality, climate change, protectionism, populism, anti-globalisation, ethnic sentiment and uncertainty over the impact of disruptive technologies,” Oteh said.
In his address, President of ASEA, Mr. Oscar Onyema, said that strategic relationships of the association had resulted in grants worth approximately $1.2 million from the Financial Sector Deepening (FSD) Africa and the Korea-Africa Economic Cooperation (KOAFEC) fund via the Africa Development Bank (AfDB).
Onyema, who is also the Chief Executive Officer of Nigerian Stock Exchange (NSE), said that the grants received to date were targeted at the African Exchanges Linkage Project (AELP), ASEA secondment programme, information portal and annual conferences.
“These programmes are critical levers of success for ASEA and we aim to continue to broaden and deepen our relationships in order to create increasing value for members and the African financial market.
“To this end, tomorrow we will officially sign a memorandum of understanding with the World Federation of Exchanges (WFE). I will like to thank the WFE and we look forward to working with the Federation on many initiatives.
“To ensure we deliver value for members and partners, we created a five year strategy running from 2019 – 2023 which will provide a structured approach to delivering on our initiatives.
Shareholders of May & Baker Nigeria Plc have only three days to take up their rights and increase their stake in the pharmaceutical manufacturing firm.
The company is raising N2.45 billion in new equity funds through a rights issue of 980 million shares of 50 kobo each at N2.50 per share to existing shareholders.
While application list had opened on Monday October 22, 2018 and is scheduled to close on Wednesday November 28, 2018, there are no indications on possible extension of the application period.
As the closure date approaches, the Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, has urged shareholders to take advantage of the rights issue and position themselves in order to be able to reap the full benefits of their investments in the company.
Citing the third quarter results and growth outlook of the healthcare company, Okafor said recent strategic investments and new growth initiatives being undertaken by the company would boost returns in the years ahead.
He said the company would pay dividend on the new ordinary shares to be issued through the rights issue, despite the fact that the net proceeds of the rights issue will be received towards the end of current business year.
Okafor said while the impact of the recapitalisation will become visible in the 2019 business year, the company will pay dividend for the 2018 business year on the old and new shares to be issued.
He said the net proceeds of the rights issue will be invested in some key projects including N400 million to finance part of the company’s equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production and over N500 million on capacity expansion for one of its cash cow products, paracetamol for which it is building a dedicated plant. He added that the company will also use N400 million to offset part of its current loan portfolio of N950 million while N500 million will be invested in marketing and brand building.
“We derive our confidence mainly from the pedigree, performance track records and strategic plans of the company which we believe should appeal to all discerning investors. The new funds will be used to strengthen their investments and make the company more profitable,” Okafor said.
The Acting Director-General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, has charged investment advisory practitioners in the country to embrace emerging technologies in order to enable them deliver prompt and efficient investment advice to their clients at all times.
Uduk, gave the advice in Lagos recently, while delivering a keynote address at the 2018 Investment Advisers and Portfolio Managers (IAPM) forum/launch of Association of Corporate and Individual Investment Advisers (CIIA), with the theme: “The Future of Investment Advisory.”
She stressed that organisational success was largely dependent on a firm’s ability to adopt strategic approach to the changes and disruptions in the industry.
She also stated that that the future of the Nigerian investment advisory industry was dependent on the capacity of its stakeholders to confront and overcome the challenges plaguing it.
Uduk said: “Technology is fast remodelling financial activities. It is for this reason that you all will agree that a critical factor for the future of investment advisory in Nigeria is the use of technology for advice delivery.
“The import of technology to the investment advisory industry has been announced with the emergence of robot advisory and it is expected that in the near future, artificial intelligence will quickly take over numerous investment advisory roles.
“Technology has also improved client-adviser relationship in multiple ways. Since we all acknowledge that technology is a major game-changer for the industry, it is expected that investment advisers will fully embrace technology to improve their service delivery.
“This combination and acceptance of technology is very vital for the future of the industry. Furthermore, as the appetite for investible instruments by investors increases, the demand for financial advisers will certainly increase.
“To keep pace with this industry growth, there is need to attract, train and integrate the next generation of investment advisers, who will not only advise but equally help in the digitalisation process of the industry.”
Uduk, who noted that the bedrock of every industry was subject to an evolving body of knowledge, added that the objectives of IAPM stood out as a model that would establish top-notch educational and training programmes for the production of credible and seasoned investment advisory practitioners.
According to her, such trained practitioners would be able to deliver qualitative services that align with customers’ expectations and satisfaction, thereby building investors’ confidence.
Also in his remark, the President of the Nigerian Stock Exchange (NSE), Mr. Abimbola Ogunbanjo, said the AIPM had over the years responded positively to the changes in the industry to meet the needs of its members and bring stability to the Nigerian financial system and wider economy.
He stated that the enactment of the Pension Reform Act 2014 had put the Nigerian pension industry as one of the fastest growing industries in the country, saying it climbed from N265 billion in 2006 to N8.14 trillion pension assets as at 2018.
“This exponential growth is a pointer to the nation’s growing interest and awareness on pension matters,” he said.
Earlier in his welcome address, the President of IAPM, Prince Abimbola Olashore, said the CIIA which is the trade group arm of the IAPM would focus on the standardisation of the practice of investment advisory and self-regulatory engagements.
“Its major responsibility as an association is to put in place standards and ethical behaviour that will restore investors’ confidence in the market,” he explained.
The Chartered Institute for Securities & Investment (CISI) has entered into a new partnership with The Nigerian Stock Exchange (NSE) to provide trainings for CISI’s qualifications in Nigeria, under the auspices NSE’s X-Academy.
Based in London, CISI’s mission is to help members attain, maintain and develop their knowledge and skills and to promote the highest standards of ethics and integrity in the securities and investment profession.
The NSE said in a statement that the partnership will result in CISI accrediting X-Academy as its training partner in Nigeria for qualifications including the International Introduction to Securities & Investment (IISI), International Certificate in Wealth & Investment Management and Certificate in Derivatives. X-Academy will be offering both face-to-face and online training for these qualifications.
The CISI is the 45,000 strong, global not-for-profit professional body with members in over 100 countries. It has been working in Africa since 2012 offering exams and membership across the continent, with regulatory approval for its examinations in eight countries. It opened its first African office in Kenya in June. Over the last 18 months almost 3,500 CISI examinations have been sat in Africa, making it CISI’s fastest growing market. The CISI is an Associate Member of the Africa Securities Exchanges Association (ASEA) in a partnership which aims to promote professionalism and develop channels for capacity building and knowledge sharing to support the growth of the capital markets profession in Africa.
Assistant Director, CISI Global Business Development, Helena Wilson said: “We are delighted to partner with the NSE to provide training for CISI’s internationally recognised qualifications in Nigeria, supporting the development of human capital within the fast-growing Nigerian capital markets. CISI qualifications are fast becoming a benchmark across Africa, and this partnership is symbolic of Nigeria’s growing influence both within Africa and on the global stage.”
Chief Human Resource Officer of NSE, Pai Gamde, said: “This partnership is a testament to the years of investment we have made in pushing the boundaries of financial education and stimulating investors’ participation in the Nigerian capital market. In 2017, we launched X-Academy to offer our ecosystem a blended learning approach and the curriculum across CISI programs reflects the same intent. We are quite excited about this development and we look forward to a long lasting relationship with CISI.”
Meanwhile, trading at the stock market closed in the positive territory with a growth of 0.03 per cent as the NSE All-Share Index closed at 32,152.90. Also, market capitalisation added N3.5 billion to be at N11.7 trillion.