Archives June 2016

CBN: We Have Refunded N27bn Illegally Charged Bank Customers

In continuation of its consultation with major stakeholders in the economy, the Central Bank of Nigeria (CBN) at the weekend met with members of the Nigeria Labour Congress (NLC).
At the meeting, the Consumer Protection Department of the CBN disclosed that it had resolved over 6,000 complaints by bank customers, just as it had refunded N26.998 billion to customers whose accounts were illegally charged by their respective financial institutions as at April 2016.

Meanwhile, the NLC has commended the federal government for halting the recent lay-offs by some banks.
The Vice President, NLC, Mr. Isa Aremu, who spoke at the CBN stakeholders engagement meeting in Lagos, applauded the federal government’s stance on job safety.

Aremu said: “Very importantly one critical discussion that came up is the issue of job lay-offs in the banks and we use this opportunity to commend the ministry of labor for intervening and asking the bank to stop the ongoing lay-offs in the sector. And we have also called on CBN to use moral suasion to encourage the commercial banks.”
Continuing, Aremu while commenting on the naira devaluation debate said: “We have been together with CBN in terms of resisting the pressure to devalue the naira and we are happy that CBN under the leadership of Governor Godwin Emefiele has stood the ground to protect the naira. There were debates about the value of the naira and NLC has insisted that as a country that is import dependent, we don’t benefit anything from devaluation and above all, any devaluation would erode the purchasing power of workers.

We are happy that the CBN has kept to that fit in with the broad policy of the CBN as we’ll as the administration. We also needed clarification on what this flexible exchange rate means for us and he said the modalities are still worked out. But the bottom line is that it would not do prejudice to the value of the naira.”
He added: “We find the program very useful especially in development financing. It is very refreshing to know that CBN is intervening in energy sector, agriculture, aviation, textile were all our members have their jobs. And what CBN is doing to think outside the box because if you leave everything to market forces, most of these sectors cannot draw the kind of lock and funding that they need.”

Furthermore, on the interest rates he said: “Also we also said that the next monetary policy meeting, they have to re look at this interest rate. The monetary policy rate is about 12 per cent with others in the double-digit. It is time for CBN to know that we cannot run the real sector of the economy when the cost of funds is very high.”
Also speaking at the event, the acting Director of Communication at the CBN, Mr. Isaac Okoroafor, said: “We are here on the continuation of the CBN engagement with very key stakeholders. Today we have met organised labour, we have gathered the labor leaders and activists in Lagos. We have interacted with them on most of the programmes we are running and also on the policies we have undertaken this year.”

When asked to clarify the forex flexibility, he said the modalities have not been released, adding, “the governor has explained that we have to find a way of creating some flexibility around the foreign exchange management as it is today and the details would be realised in due course.”

On the recent retrenchment exercise by banks, he said: “The issue of job security across the country is a general issue, it is not about one industry and it is a about what our laws are saying, It is about our industry policy and what it is saying and it is in collaboration with both the ministry of labour and other stakeholders I think a solution would be found.”

Source:© Copyright Thisday Online

NASD OTC market capitalisation hits N415.62bn

The market capitalisation of admitted securities on the NASD Over-The-Counter market as at May 2016 stood at N415.62bn.

This was represented by 107.64 billion shares in issue out of which only 16.72 billion shares had been dematerialised (15.54 per cent).

The dematerialised volume of 16.72 billion shares represents an increase of 1.46 per cent on the previous level of 16.48 billion shares. The NASD OTC Securities Exchange currently trades on equities and bonds.

A total of 28 million shares worth N449.15m were traded in 728 deals in May 2016 (174 million units worth N424.41m traded in 346 deals in the preceding month). The volume traded dropped by 83.92 per cent while the value traded rose by 5.83 per cent as compared to the previous month.

The equities market was led by Industrial and General Insurance Plc and Friesland Campina WAMCO Nigeria Plc which accounted for 50.34 per cent and 35.95 per cent respectively of the volume and value traded.

The market recorded a negative monthly return on the index as reflected in the downward movement of the Unlisted Securities Index. The USI closed at 630.91 points as against 636.20 points representing a decrease of 0.83 per cent month-on-month.

The NASD OTC Securities Exchange grew in size and structure in the first quarter of 2016.

The volume and value traded on the market rose by 13 per cent and 52 per cent respectively. A total of 144.36 million shares worth N1.01bn were traded in 675 deals in Q1, 2016 (128.12 million units worth N665.33m traded in 150 deals in the preceding quarter 1, 2015).

The NASD Plc is the promoter of a trading network that eases secondary market trading of all securities of unquoted public companies primarily in Nigeria but with a focus on the West African region. Its intention is to stimulate growth by easing the capital raising process.

The market registered an average deal volume and value of 214 units and N1.50m respectively in 2016 Q1.

At the end of the quarter, the NASD OTC market had opened up 26 securities to trade as against 24 securities in the previous quarter.

Source:© Copyright Punch Online

Nem Insurance records N10.9bn premium

Nem Insurance Plc said its gross premium rose by 10.8 per cent from N9.8bn in the 2014 financial period to N10.9 per cent in 2015.

Its Chairman, Chief Adewale Teluwo, disclosed this during the firm’s 46th annual general meeting in Lagos.

“Notwithstanding the state of the country’s economy in the reporting period, our company still recorded good performance,” he said.

The chairman also said the parent company achieved an increase of 9.5 per cent from N9.4bn in the preceding year to N10.3bn in the year under review.

Teluwo said even though rates crashed to an average of four per cent per annum, the group generated an investment income of N746.2m during the year under review while that of the preceding period was N607.8m, an increase of 22.8 per cent.

He said claims paid by the group during the reporting year amounted to N3.96bn, an increase of 34.6 per cent over that of the preceding period which was N2.9bn.

The chairman attributed the increase in claims to one huge claim of about N600m paid out by the parent company.

He added that an increase of 33.1 per cent was recorded by the parent company from N2.9bn in 2014 to N3.8bn in 2015.

Source:© Copyright Punch Online

Pension Funds Rise to N5.4tn

Director-General, National Pension Commission,(PenCom), Mrs Chinelo Anohu-Amazu has revealed that Nigeria’s pension funds now stand at about N5.4 trillion with approximately seven million contributors.

Anohu –Amazu who spoke Anohu-Amazu said this while speaking on the Role of Regulators in Deepening Capital Market at the 2016 Business Day Capital Market Conference in Abuja added that the Nigeria had the capacity to generate more and her Commission is already trying to do this through micro pension.

The theme of the conference was,“ Deepening Nigeria’s Capital Market through Maximum Utilisation of Pension Funds.’’

The PenCom DG who added that pension fund was one of the single largest institutional investments in Nigeriaoperes ently however operators of the fund to derive ways of developing products that they invested in the country.
She said that the challenges faced on investments of pension funds were arise from lack of creativity of the operators.

“The PFAs are constrained; they are unable to develop the products they invest which is why we have a preponderance of the pension funds in federal government securities, there are no alternatives
“Part of the thing I want to throw out to operators in this room is to work towards developing alternatives and new products,’’ she said.

The Director-General said the regulators were doing their bit at ensuring that the PFAs were highly regulated.

She said several regulations had been done and what was left was to ensure the official issuance of those regulatory actions in the sector.
“Our eyes are on two things; protecting the funds and making sure that its primary mandate as required by law, which is paying retirement benefit as and when due, is not tampered with.

“That mandate also extends to making sure that the value is not eroded, and it will be our joy that various institutions are deepened by the pension fund and the capital market is just one of those institution,” she added.

She said the issue of channeling the pension fund to the capital market was welcomed as long as the contributor was assured of the channel the fund was taken to and its safety.

She added that this could be achieved through efficient regulation and prudent management of the fund.

Also speaking at the event, the Managing Director, Nigeria Deposit Insurance Corporation,Alhaji Umaru Ibrahim, said one of the major challenges in the sector was the unwillingness of people to invest.

He said,“it is not only about raising the money but finding ways to invest it and we also have to be conscious of the returns and the risk involved in investment.
The Principal, Bain and Company Nigeria,Mr Jude Uzonwanne said lack of competition at the PFAs was causing “an extreme conservatism in the sector’’.

According to Uzonwanne, regulators should not only face trend but be more effective by focusing on changes that will trigger competition among PFAs.
He said mergers and acquisition should be encouraged as it would make CEOs to sit up and urged that family companies should be taken public to ensure sustainability.

Source:© Copyright Thisday Online

Trading rebounds on NSE, indices up by 1.02%

The market indicators of the Nigerian Stock Exchange (NSE) on Thursday increased by 1.02 per cent after dropping for two consecutive days following gains posted by some blue chips.

The All-Share Index appreciated by 273.41 points or 1.02 per cent to close at 27,183.64 compared to 26,910.23 recorded on Wednesday.

Also, the market capitalisation which opened at N9.242 trillion inched N94 billion or 1.02 per cent to close at N9.336 trillion.

Nigerian Breweries recorded the highest gain to lead the gainers’ table, gaining N6.41 to close at N134.71 per share.

Lafarge Africa followed with a gain of N3.67 to close at N77.07, while Dangote Cement appreciated by N3 to close at N170 per share.

Cadbury improved by N1.84 to close at N20.21 and Flour Mills gained N1.02 to close at N21.44 per share.

On the other hand, Nestle topped the losers’ chart, dropping by N29.66 to close at N755 per share.

Seplat dipped N9.85 to close at N350.15 and Forte Oil shed N4.80 to close at N191.10 per share.

Guinness dropped N1.46 to close at N97.65 and UACN declined by 86k to close at N19 per share.

NAN reports that United Bank for Africa was the toast of investors, exchanging 93.13 million shares worth N386.91 million.

FCMB Group came second on the activity chart, trading 40.54 million shares valued at N59.39 million, while Access Bank sold 30.96 million shares worth N163.72 million.

FBN Holdings accounted for 25.76 million shares valued at N102.14 million, while Skye Bank traded 24.94 million shares worth N28.48 million.

In all, a total of 332.23 million shares valued at N2.16 billion were exchanged by investors in 4,167 deals.

This was in contrast with 352.29 million shares worth N3.85 billion transacted in 5,024 deals on Wednesday.

Source:© Copyright Guardian Online

CBN fails to clarify new exchange rate policy

The Central Bank of Nigeria has failed to dispel uncertainty over the implementation of the flexible exchange rate policy that will lead to the abandonment of the naira peg, bankers said on Thursday.

A meeting between the CBN Governor, Godwin Emefiele, and local currency traders under the aegis of the Financial Market Dealers Association on Wednesday to discuss the policy did not yield the desired result, according to a report by Reuters.

The central bank announced last week plans to abandon the naira’s 15-month peg to the dollar, which has overvalued the Nigerian currency, harmed investments and caused the economy to contract.

However, the bank has yet to clarify how the new policy would work, spooking foreign investors, long worried about getting caught in the middle of a currency devaluation.

“We are unlikely to get anything in the next two to three weeks. I don’t think the guidelines are ready. The reality is that he (the governor) does not understand the meaning of signals,” said one senior banker, speaking on condition of anonymity.

“By not coming out (with the details) the governor has shown he doesn’t believe the policy. There is the risk the policy could be reversed,” the senior banker added.

However, the CBN said on Thursday that it would issue the guidelines for the flexible exchange rate policy at the “appropriate time.”

Responding to enquiries by our correspondent, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okoroafor, said the guideline would soon be released by the apex bank.

“When we are ready, we will release the guideline. Be rest assured that the guideline on the flexible exchange rate policy will be released at the appropriate time by the CBN,” he said and declined to make further comments.

Dollar deals dried up on the interbank market on Thursday as investors stayed on the sidelines, dealers said, in a sign of the continued uncertainty created by the new policy.

The stock market posted its biggest daily decline in 16 months this week as investors waiting for clarity sold shares. The main index gained 1.02 per cent on Thursday, clawing back some losses.

Analysts at DaMina Advisors said the delay could cause the central bank to backtrack as it tried to reconcile the new policy with President Muhammadu Buhari’s vow not to devalue the naira.

The President has for months rejected calls to devalue the naira. During his Democracy Day speech on Sunday, he backed the central bank’s flexible policy on the currency but said he was still against a devaluation.

Source:© Copyright Punch Online

Seplat targets over $500m investment in gas business in 2016

As part of its commitment to boost profitability and improve shareholders value, Seplat Petroleum Development Company Plc has announced plans to exceed $500 million capacity investment in gas business by the end of 2016.

The company has also set full year production guidance target of 41,000 to 48,000 barrel per day with capital expenditures of about $130 million.

Addressing shareholders during the company’s yearly general meeting in Lagos yesterday, the Chairman of the company, Dr ABC Orjiako explained that the company’s investment in gas business in 2014 stood at $300 million.

“Our gas commercialisation is what distinguishes us from others. We are dually listed which makes us an international brand, visible to internatiional scrutiny with high level of corporate governance

“This enables the company become attractive entities to investors in all parts of the world and have quick access to capital for project execution”.

The chairman pointed out that the company in 2015 completed and commissioned the Oben gas plant phase 1 expansion programme which doubled its gross processing capacity to 300 MMscfd (million standard cubic feet) while assuring shareholders that the company would continue to deliver good returns, amid harsh operating environment.

“The Oben gas plant phase 11 expansion is underway with additional processing modules ordered. Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 MMscfd,” he said.

Concerning the Niger- Delta unrest, he said that the company would continue to engage its host community to avoid disruption of its operations, adding that company had restrategised to mitigate export of resources through alternative channels.

Also speaking at the event, the company’s Chief Executive Officer, Austin Avuru said that the company in 2015 acted quickly and decisively in response to the weak oil price environment by adjusting on its work programmes and cost structures.

Avuru, however noted that the company’s 2016 full year production expectation had been impacted by the current shut-in of the Forcados terminal.

He expressed optimism that the company is well positioned currently to withstand interruptions than in prior years. He said that the company would focus on protecting the business and managing value through effective cost reductions, optimising operations, deleveraging and strengthening the balance sheet.

Avuru added that the strategies would position the company to take advantage of opportunities that would inevitably follow the current downturn.

The company’s revenue declined by 35 per cent in the first quarter to N16.59 billion from N25.56 billion while profit before tax also dipped by 161.7 per cent from N4.83 billion to a loss before tax of N2.98 billion.

The directors of the company are however, recommending a final dividend of N7.92 ($0.04) per share, bringing the total dividend payment for 2015 to N15.84 ($0.08) per share.

Also, for the year ended December 2015, its gross revenue stood at N112.86 billion ($570 million), down 26 per cent year-on-year, while net profit for 2015 stood at N13.27 billion ($67 million) and cash flow from operations before movements in working capital stood at N37.62 billion ($190 million) against capital investments of N301 billion ($152 million).

Source:© Copyright Guardian Online

Ovia: Why We Sold Visafone to MTN

The Chairman, Zenith Bank Plc, who is also the founder Jim Ovia Foundation, Mr. Jim Ovia, wednesday attributed the lack of efficient broadband required for speedy telecommunications service as one of the reasons Visafone was sold to South African telecommunications firm, MTN.

He did not however disclose how much the outfit was sold to MTN.

Speaking at the Digital Africa conference and exhibition 2016 organised by Digital Africa Global Consult in Abuja, Ovia stressed that without adequate technology infrastructure to power constant connectivity, Internet of Things (IoTs) would be difficult to achieve.

He said: “We have a lot of devices some of which will be dead equipment. Connectivity is very important and without it, internet of things or internet of everything cannot take place. I wouldn’t say that connectivity is the most important thing, but it is extremely very important.

“In some of this connectivity you need it by way of broadband or by way of fibre optics to give you the broadband or may be a wireless. Or may be the spectrum of between 700-800 MGHz that gives you the broadband speed that you need today, and so you can now understand why Visafone eventually sold its network to MTN.”

According to him, the reason there were so many complaints was because of the resource availability that Visafone had, which had to do with the broadband, he added.

He said policymakers must ensure that Nigeria is not left behind in the technological development of the future, adding that during the great industrial revolution, Africa was left behind.

Ovia added that the present technology that enables economy to flourish is so pervasive that nobody can be restricted as students can now have access to information like their counterparts in South Africa, Russia and other places in the world.

In his remark, the Minister of Communications Technology, Mr. Adebayo Shittu, who was represented by the Director of Information and Communications Technology (ICT), Mrs. Moni Udorh, said the administration would not fail in using ICT to drive the economy.

The minister said: “We have been doing everything possible in this direction. If we continue on this path, ICT should be contributing between 20 and 30 percent to the country’s Gross Domestic Product (GDP) in few years’ time. We will strive to make it happen.”

On government’s plan to establish an ICT University, he said: “We also have plans to create ICT-focused university. We have discovered that many of the youths lack requisite skills to compete in the international market. The university will bridge the skills gap.”

While making his contribution, the Chairman of Digital Africa Consult, Mr. Evans Woherem, said since inception of the annual event in 2013, global ICT experts have been provided a platform in the annual event to highlight the avalanche of challenges inhibiting Africa’s efforts at embracing evolving technologies and proffer solutions on how to get out of this digital doldrums.

He said: “The conference provides access to a captive audience eager to understand where the consumer ecosystem currently is, and where the opportunities lie. Also, it is an important platform to network, share knowledge on the latest developments in the technology ecosystem, do business, and sign deals.”

According to him, the 2016 edition has as its theme accelerating Africa’s Development through Internet of Everything (IoE). He added that suddenly, the Internet of Things or Internet of Everything has become the revolutionary technology trend in the world today.

Source:© Copyright Thisday Online

Firms failed to pay N111bn for oil blocks – Reps

Nigeria lost at least $565.6m (N111.4bn) to alleged irregularities and other questionable practices during the 2005, 2006 and 2007 oil block bidding, an ad hoc committee of the House of Representatives stated in Abuja on Wednesday.

The committee, acting on information it obtained from the Department of Petroleum Resources, noted that some firms that won licences merely made part payments and left the balance unpaid.

The committee, which is chaired by Mr. Gideon Gwani, is investigating Oil Prospecting Licences, Oil Mining Leases and other oil and gas assets granted by the Federal Government.

A member of the committee from Bayelsa State, Mr. Diri Nouye, for instance, queried the decision of the DPR to allow such outstanding payments in breach of regulations and resulting in losses to the government.

“Why was this outstanding allowed? Was it that the blocks were not producing? By the submission of the DPR, it means that for 2005 to 2007, the country lost over $565.6m. This is a monumental loss of revenue,” he said.

The committee also discovered that many firms that actively participated in the bids and won were later short changed, as the blocks were awarded to companies that did not participate in the process.

The committee cited OPLs 917, 226, 227, 280 and 278 as examples.

Speaking specifically on the case of OPL 280, Gwani pointed out how another firm came after the close of proceedings to pay $55m for a block that was originally offered for $210m.

According to him, Tankers Systems Engineering Nigeria actually participated and won the bid for $210m.

However, it reportedly paid only $21m, as a result of which the offer was terminated on January 1, 2006.

Gwani stated, “The President ordered the cancellation of the offer and Sterling Global came and paid $55m to assume ownership.

“The question now is what happened to the balance? How did Sterling Global, which did not participate in the bid, win it and with a generous 75 per cent difference?”

Besides, the committee noticed that most of the awards violated key provisions of the Petroleum Act, especially Sections 1 (42) and 2(3) where it was stated that “the term of an oil mining lease shall not exceed 20 years, but may be renewed in accordance with the Act.”

Gwani also quoted Section 12(1), which states, “Ten years after the grant of an oil mining lease, one-half of the area of the lease shall be relinquished to the basket or the holder can apply for re-allocation of a part or the whole acreage.”

But, lawmakers said these provisions were breached, leaving a situation whereby bid winners held on to the blocks after the expiration of the 10 years without re-negotiating the deals with the government.

However, in a presentation to the committee, the DPR gave several excuses, including claims that litigation stalled efforts to reclaim some of the wells after the expiration of the 10 years.

Source:© Copyright Punch Online

OPEC members seek joint action on oil output

Some members of the Organisation of Petroleum Exporting Countries including Saudi Arabia are looking to revive the idea of coordinated oil-output action by major producers when the group meets today (Thursday) in Vienna.

A senior OPEC source was quoted by Reuters to have said this, but Iran signalled the country was not ready for any such pact.

“The Gulf Cooperation Council is looking for coordinated action at the meeting,” the source said, referring to a group combining OPEC’s biggest producer Saudi Arabia and its Gulf allies, namely, Qatar, Kuwait and the United Arab Emirates.

Saudi Arabia effectively scuppered plans for a global production freeze – aimed at stabilising oil markets – in April. It said then that it would join the deal, which would also have involved non-OPEC Russia, only if Iran agreed to freeze output.

Iran has been the main stumbling block for OPEC to agree on output policy over the past year as the country boosted supplies despite calls from other members for a production freeze.

The country argued that it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over its nuclear programme.

On Wednesday, Iran said its position had not changed and even though its exports were rising quickly, it was too early for Tehran to join such a pact – meaning it would need an exemption, which Saudi Arabia has repeatedly resisted.

“Iran supports OPEC’s efforts to bring stability to the market with fair and logical prices, but it will not commit to any output freeze,” Iran’s representative to OPEC, Mehdi Asali, was quoted as saying by Iranian oil ministry news agency SHANA.

“The issue of output rationing can be discussed after the market stabilises,” Asali said.

A source familiar with Iranian thinking said Tehran was not willing to discuss a freeze as Iran had yet to reach pre-sanctions output levels.

At its previous meeting in December 2015, OPEC failed to set any production policy including a formal output ceiling, effectively allowing its 13 members to pump at will in an already oversupplied market.

As a result, prices crashed to $27 per barrel in January, their lowest in over a decade, but have since recovered to around $50 due to global supply outages.

Those include declining production from US shale producers badly hit by low prices but also forest fires in Canada, militant attacks on pipelines in OPEC member Nigeria and declining output in Venezuela, also a member of the group.

Source:© Copyright Punch Online