The Japanese Deputy Minister for Foreign Affairs, Mr. Shunsuke Takei, on Thursday said businessmen from his country would be investing about $30bn in Nigeria and other African nations.
He stated this when he led a delegation of 32 Japanese investors to meet separately with the Minister of Finance, Mrs. Kemi Adeosun, and the Minister of Budget and National Planning, Senator Udo Udoma.
Takei said the delegation to Nigeria was part of efforts by the Japanese government to actualise the $30bn public-private investment pledge made in August 2016 during the sixth Tokyo International Conference on African Development in Nairobi, Kenya, which was attended by President Muhammadu Buhari.
Given the size of the Nigerian population and market, as well as its economic recovery and potential for growth, he said Japanese investors were desirous of investing in the country.
While noting the challenges in the areas of security, ease of doing business and the power sector, he stated that Japanese businessmen would invest in Nigeria’s manufacturing, banking, insurance and agriculture sectors.
Takei commended the Federal Government for formulating the Economic Recovery and Growth Plan, and expressed optimism that the foreign exchange situation would improve soon despite the current challenges.
Adeosun said that the country was open and ready to do business with the rest of the world.
She urged the big Japanese companies to invest in Nigeria by setting up manufacturing plants, instead of shipping-in finished products.
Adeosun stated, “We will assist you to do well. Many companies came into Nigeria and are doing very well, and there is nothing to stop Japanese firms from doing very well.
“Specific reforms by removing lots of impediments, fiscal incentives to facilitate your coming into Nigeria to invest and drive your businesses are being put in place.”
Udoma, in his comments during the meeting with him, said the ERGP was designed to stabilise the economy and propel it to growth, adding that investors should take advantage of the plan by investing in priority areas such as agriculture, infrastructure and manufacturing.
He said the plan would stabilise the macroeconomic environment, boost agricultural production for food security, ensure energy sufficiency, improve infrastructure and drive industrialisation through manufacturing.
Udoma stated that there were opportunities for the Japanese investors in the area of the agriculture value chain, adding that the government would be building industrial parks in each of the six geo-political zones of the country.
Shareholders of Fidelity Bank Plc thursday unanimously approved the dividend payout the bank’s management had earlier declared.
The approval was given at the bank’s 29th annual general meeting held in Lagos. Shareholders of Fidelity Bank Plc are to receive a dividend of N3.9 billion for the year ended December 31, 2016. The dividend translates to 14 kobo per 50 kobo share.
Commenting on the bank’s performance, the National Coordinator Emeritus, Independent shareholders Association of Nigeria, Mr. Sunny Nwosu, commended the performance of the bank, just as he projected an improved performance this year.
‘‘We are happy that Fidelity Bank is delivering value to shareholders despite the challenges in the environment. I am sure that with the new chairman, there would continue to be innovation from the bank,” he said.
Reacting to the comments by the shareholders, the Chairman of Fidelity Bank, Mr. Ernest Ebi, pledged that the bank would continue on the path of growth. He also expressed optimism that with positive developments in the economy, the bank would perform better this year. Ebi assured the shareholders that the bank would consolidate on its retail banking business.
“The headwinds are gradually going away and we can see light at the end of the tunnel. With the government now having an Economic Recovery and Growth Plan (ERGP), I think that is good news for businesses. Consequently, our priority remains to de-risk the business by way of very disciplined risk managemen. Using our technology, we would drive effective service delivery for our customers in 2017,” he added.
Also, the Chief Executive Officer, Fidelity Bank, Mr. Nnamdi Okonkwo, described 2016 as a very tough year.
“We remain solidly aware of the opportunity areas in 2017 and will work to grab the lion share. As we do that, we Wil not relent on the plan to redesign our systems and processes to boost service delivery, intensify strategic efforts to reduce operating expenses and cost-to-serve, as well as improve our retail risk monitoring capacities to ensure both internal and external risks are promptly recognises and swiftly purged,” Okonkwo added.
The stock market appreciated further on Wednesday as investors continued to react to impressive first quarter financial results of companies. The Nigerian Stock Exchange (NSE) All-Share Index, which opened the week on positive note on Tuesday, appreciated by 0.58 per cent to close at 26,116.79, while market capitalisation ended higher at N 9.03 trillion.
The bulls were in total control as 27 stocks appreciated, compared with 13 that declined. Fidson Healthcare led the gainers with 10 per cent, trailed by Oando Plc with 7.9 per cent, while United Bank for Africa Plc went up by 6.2 per cent. Unilever Nigeria Plc and Ashaka Cement Plc also made the top price gainers for the day.
Investors have continued to take positions in most of the stocks following impressive Q1 performance. Most of the companies grew their profit significantly. For instance, UBA’s profit after tax rose by 32 per cent from N17 billion in 2017 to N22.4 billion in 2017. The group sustained its strong profitability recording an annualised 19.4 per cent Return on Average equity (RoAE).
Driven by an unprecedented 43 per cent year-on-year growth in interest income, UBA Group recorded a 38 per cent per cent year-on-year growth in gross earnings to close at N101.2 billion in 2017, compared to N73.7 billion recorded in the corresponding period of the year 2016.
The Group Managing Director/CEO of the United Bank for Africa, Mr. Kennedy Uzoka, expressed satisfaction with the bank’s impressive performance in 2017, despite intensifying competition and a very challenging business environment.
“Our performance in the first quarter of the year strengthens our optimism on economic and business recovery in Nigeria and many of our markets across Africa. More importantly, this result is evidence of efficiency gains in our pricing, balance sheet management and operations,” Uzoka said.
“Driven by our balance sheet liquidity, we grew interest income by 43% to an unprecedented quarterly run-rate of N77 billion. Buoyed by improving foreign currency supply in Nigeria, remittance and trade services fees almost doubled and foreign currency trading income grew by 148 per cent year-on-year, as we leveraged our Customer First initiatives to gain market share in these offerings. More so, it is my pleasure to report that we made further progress in our consistent retail penetration, as reflected in the 12 per cent year-to-date growth in retail savings and current account deposits. Notwithstanding the tight interest rate environment, we recorded a 30bps reduction in cost of funds to 3.4 per cent, a positive result of our customer service-led approach to low cost deposit mobilisation. As at Q1, low cost savings and current accounts (CASA) represent 80 per cent of our deposit funding,” Uzoka explained.
The Bank of Industry (BoI) has said it recorded a Profit Before Tax of N17 billion in 2016, which represented a 44 per cent increase over the N11.9 billion that was posted in 2015. The Bank’s loans and advances also rose by 10 per cent to N171 billion in 2016, from N156 billion in 2015.
Similarly, BoI’s 2016 results obtained on Wednesday showed that disbursements to Small and Medium Enterprises went up by 42 per cent within the same period to N8 billion, compared with N5.64 billion in 2015.
The quality of BoI’s risk assets as well improved phenomenally with a reduction in the ratio of non-performing loans (NPL) to 3.72 per cent in 2016 from 5.87 per cent in 2015. This feat was achieved in a year when the average ratio of non-performing loans in the nation’s banking industry rose sharply to 14 per cent which is beyond the Central Bank of Nigeria’s (CBN) threshold of 5 per cent.
While commenting on BoI’s outstanding performance 2016, which has been described as the best in the bank’s history despite last year’s economic head winds, the institution’s acting Managing Director and CEO, Mr Waheed Olagunju, attributed it to strong commitment to professionalism and strict adherence to global best practices by the bank’s competent, dedicated as well as passionate management team and staff.
He added that these achievements also culminated in BoI’s consistently high ratings by international and domestic rating agencies being upgraded and affirmed. While Moody’s assigned BoI Aa1 in 2016 up from Ba3 of 2015, Agusto’s rating of AA- in 2016 was higher than A+ of 2015. AA+ assigned by Fitch in 2015 was affirmed in 2016.
FBN Merchant Bank Limited, a subsidiary of FBN Holdings Plc recently held its second annual general meeting, where it declared a profit before tax (PBT) of N4.92 billion in the financial year ending December 31, 2016. This was 28% above the prior years’ PBT of N3.83 billion.
FBN Merchant Bank said it recorded strong top-line growth driven by the diversified nature of its businesses, with key drivers of revenue being the fixed income, corporate and investment banking businesses.
The Chairman of FBN Merchant Bank, Mallam Bello Maccido, explained in a statement that despite the challenging macroeconomic climate in 2016, FBN Merchant Bank remained resilient and focused on delivering strong results.
The MD/CEO of FBN Merchant Bank, Mr. KayodeAkinkugbe, expressed his appreciation to all staff for their hard work, passion, and commitment to fostering a culture with a winning mindset. He also thanked the shareholders and esteemed Board of Directors for their continued support and guidance.
Akinkugbe further said: “The consistent growth in profitability of the bank since the commencement of our merchant banking business in 2015 is a validation of our commitment to adding value to our customers, as we remain firmly on the path to building the leading merchant bank in Africa. We will continue to grow our market share in key strategic segments, while harnessing opportunities in select industries to improve our earnings. We are fully committed to breaking new grounds with innovative solutions, products and services that will deliver positive returns.”
Oando Plc posted a profit after tax of N1.7bn for the first quarter of 2017.
The oil and gas company said in a statement on Monday that it recorded the feat amid low oil prices, production disruptions, reduced oil exports and the attendant economic recession that plagued the oil and gas industry as well as the overall Nigerian economy in the period.
The company announced a turnover of 116 per cent to N138.4bn, with gross profit rising by 53 per cent to N13.4bn compared to the first quarter result of 2016.
It attributed the earnings growth to proactive measures put in place to enable the business to cushion the effect of continued economic headwinds.
Through its upstream subsidiary, Oando Energy Resources, the company said it had consistently adopted a hedge mechanism that ensured the business was protected from fluctuating oil prices.
Approximately 66 per cent of the company’s crude production was hedged with 9,590 barrels of oil per day of crude oil production hedged at $65 per barrel (average) with expiries ranging from July 2017 to January 2019, it explained.
Commenting on the result, the Group Chief Executive, Oando Plc, Mr. Wale Tinubu, was quoted as saying, “Following a successful restructuring in 2016, we are pleased with our Q1 2017 results, which reflect a return to normalcy and growth in spite of continued security challenges, economic headwinds and a fluctuation in crude prices.”
The company has continued to reduce its net debt, quelling any concerns of critiques; as of March 2017, it stood at N225.9bn, a 29 per cent reduction from N316.6bn in March 2016.
“In the upstream, production in the first quarter of 2017 decreased to 38,125 barrels of oil equivalents per day compared to 49,365 boe/day in Q1 2016. However, due to decreased production expenses, Oando Energy Resources recorded a profit of N4.96bn in the first quarter of 2017 compared with a profit of N815.5m in the prior year comparative period.
“In the midstream following the partial divestment of Oando Gas and Power to Helios Investment Partners, we successfully concluded the sale of Alausa IPP for a transaction price of N4.6bn. In the downstream, our trading business through direct sale and direct purchase and offshore processing agreement yielded N115.6bn compared to N4.4bn in 2016.”
The Director General of the Debt Management Office (DMO), Dr. Abraham Nwankwo has advised Nigerians to take advantage of the Federal Government’s Savings Bond and invest in the scheme.
Nwankwo said this was necessary in view of the benefits Nigerians stand to gain especially in the areas of poverty reduction, job opportunities in addition to guaranteeing fixed income.
Speaking at a One-day Grassroots Advocacy/Sensitisation Campaign on the Federal Government Savings Bond held in Kano on Thursday, the Director General explained that the new investment opportunity would also guarantee quarterly interest payments.
He said the investment can be used to secure loan facilities, pay school fees and build own houses.
“The Federal Government Savings Bond can be traded at secondary market and is good for savings towards retirement, marriage, school fees and house projects, among other benefits, he added.
Besides, he said the savings bond would also give every Nigerian the opportunity to invest or participate in the programme with a view to enhancing their socio-economic status.
“The minimum subscription amount is N5,000 with additions in multiples of N1, 000, subject to a minimum of N50 million.
“Investors are not required to pay fees or charges to distribution agents when subscribing for the FGN savings bond in the primary market,” Nwankwo added.
In the same vein, the Director, Management Department of the DMO, Dr. Oladele Afolabi urged Nigerians to make the best use of the new opportunity as it is a secure investment with the federal government with no risk of default.
“Interest income is paid quarterly directly into the bondholders account and investors can sell for cash in the secondary market before maturity”, he explained.
The programme, which was flagged off in Kano, would also be extended to other major cities across the country.
Guaranty Trust Bank Plc and Stanbic IBTC Holdings Plc posted an increase of 62 per cent and 106 per cent year-on-year, respectively in their profits after tax for the first quarter of the year.
GTBank saw its profit after tax and pre-tax profit rise to N41.477bn and N50.392bn in Q1 2017 from N25.614bn and N30.676bn in the same quarter of last year, according to its condensed unaudited group interim financial statements filed with the Nigerian Stock Exchange on Wednesday.
Analyst at FBN Capital Limited, in an emailed note, attributed the bank’s profit rise to a positive result on the other comprehensive income line of N568m (compared with a sizeable loss of N5.3bn a year earlier).
They said, “The main driver behind the strong y-o-y growth in earnings was a solid performance in net interest income: it grew by 62 per cent y-o-y to N66bn. In contrast, non-interest income (which had boosted the bank’s results through most of 2016 on the back of forex-related gains) was up only by five per cent y-o-y.”
Stanbic IBTC’s unaudited consolidated interim financial statements filed with the NSE showed that its after-tax profit rose to N16.074bn from N7.791bn in Q1 2016.
The group’s profit before tax increased to N18.626bn in the first three months of the year from N10.243bn in the corresponding period of last year.
Its gross earnings stood at N47bn, representing an increase of 35 per cent over the N34.8bn recorded in the comparable period of last year, while total assets rose to N1.2tn from N1.1tn in December 2016.
The Chief Executive, Stanbic IBTC Holdings Plc, Mr. Yinka Sanni, said the group achieved significant growth in profit after tax despite the challenging trading environment, which was characterised by challenges with foreign exchange liquidity, difficult credit environment and an increasing cost of operations.
He said, “We remain positive that economic activities will improve as the Nigerian economy is beginning to show signs of positive outlook due to an increase in the supply of forex to both retail and corporate users and decreasing headline inflation.”
If you are an ordinary Nigerian looking for where to invest your little savings, just approach any stock broker in the country and ask whether they are authorised to sell the Federal Government Savings Bond (FGNSB). If you get a Yes answer, tell them you’re interested in investing your little cash-as little as N5,000 and you’ve become an investor and a player in the capital market. It is that simple and fast. That is the magic of the new initiative of the Debt Management Office, DMO, called the FGNSB. It is a new way to invest for the ordinary Nigerians and small scale investors who may be excluded from operations at Nigeria’s Capital Market.
Retail investors looking to invest in the FGN Savings Bond only need a minimum of N5,000 to invest. Subsequent investment over N5, 000 will be in multiples of N1,000. Meaning that you cannot invest N5,500 or N12,700. It’s either N6, 000 or N13,000 or N30,000. The maximum amount a single retail investor can invest in the FGN Bond is N50m. The bonds were rolled out on March 13 and for the first time, the popular common man in Nigeria got the opportunity to become an investor; a player in the country’s capital market. Over 75 percent of the bonds traded were from small investors who would have either kept their little cash in the bank where returns will be zero or at best insignificant, or use them to purchase some items to avoid wasteful spending.
An elated Abraham Nwankwo, Director General of DMO, whose office midwifed the deal, said: “The FGN Savings Bond, the first of its kind in Nigeria, was opened to investing public by way of offer for subscription over a five-day offer period starting from Monday, March 13, 2017 to March 17, 2017 and N2, 067,961,000 was raised from the retail market at 13.01 percent coupon. “
He said about 2.067 billion units were allotted to 2,575 people, stressing that the bond is for the retail investors and is being issued to ensure that all Nigerians participate. The bonds will be issued monthly and it would run for five offer days. At 13 percent coupon, a small investor could not wish for a better deal; it is far above what a bank deposit of equal amount would guarantee. Moreover, the interest would come every quarter to all investors. The government is issuing the savings bonds targeted at ordinary Nigerians of all income groups, giving them the opportunity to earn an income through saving and investing.
Apart from personal benefits to investors, the bond is also expected to help promote the savings culture of Nigerians, many of who don’t save in banks because of very low-interest rates. Unlike bank deposits, the bond earns you an interest that will be paid quarterly directly into your bank account. The bond is safe and is backed by the full faith and credit of the federal government. Government bonds hardly default, so you are nearly 100 per cent sure that you will get your money back in full along with the interest. This bond is not just for the rich or comfortable, it is available for the low income also. With as little as N5,000 you can invest in the bond. In a country where citizens love festivities and elaborate celebrations, the savings bond is a prudent way to save towards marriage, funerals, holidays, school, project, retirement and others. The bond can also be used as collateral to get a loan from a bank.
The bonds have a tenor of two and three years respectively, and that means you can either invest in a savings bond with duration of two years or one with duration of three years. The interest rates are determined by the DMO, and they will be paid quarterly into your bank accounts while the principal will be paid at maturity, depending on the tenor of your bond. The FG Savings Bond is quite innovative in the way it makes the capital market all-inclusive. It is a unique and fascinating way to deepen the capital market in a way that it caters to all segment of society and makes everyone a stakeholder in the economy. Commenting on the listing of the bond, Executive Director, Capital Markets, NSE, Haruna Jalo-Waziri said the Exchange was elated to list the bond, which he called an “innovative investment offering” that caters to the retail segment of the Nigerian capital market. He said the take-off of the bond “underpins the efforts of the Federal Government to continue to work with stakeholders to deepen the capital market whilst delivering value to investors at all income levels.”
Moreover, the FG Savings Bond will go a long way in creating better awareness of Nigeria’s capital capital. Nigeria’s capital market has suffered from the financial literacy of potential domestic investors and closing that gap has been a special project of the Central Bank of Nigeria, CBN, the Nigerian Stock Exchange, the Security and Exchange Commission, SEC and other stakeholders. The FG Savings Bond, because it is targeted at retail investors, has the potential to deepen the level of awareness about the Nigerian capital market. Yakubu Dogara, Speaker House of Representatives is one political leader who must be impressed by the FGN Savings Bond. Dogara had for long lamented a situation where a large chunk of the nation’s resources or capital is heavily concentrated in the hands of few chief executive officers. His grouse is that such skewed situation would widen the inequality gap, eliminate the middle class and plunge more people into abject poverty, thereby posing serious threat to the sustenance and survival of democracy.
The Speaker had, at different fora, made it clear that the skewed distribution of wealth is even more worrisome because the flow of resources from Nigerian citizens to multinational companies operating in the country makes them rich. “Unfortunately, these same companies, rather than invest in the NSE and grow the economy of Nigeria, would rather repatriate their profits 100 percent to their own countries without investing a dime back to the system,” he said.
Thus, the savings bond is government’s way of affirming its faith in the capital market, and at the same time widening access to the market, while deepening the savings culture of all Nigerians.
The Central Bank of Nigeria on Sunday said it would continue to introduce measures to stabilise the foreign exchange market.
It also said that various forex initiatives it had introduced in recent weeks were beginning to yield results with stability recorded in the naira exchange rate.
The central bank had opened various windows to meet the demand for forex by Small and Medium-scale Enterprises, dividend remittances abroad as well as investors and exporters.
The spokesperson for the CBN, Mr. Isaac Okorafor, said the bank put in place the measures to ease the difficulties being encountered by the SMEs and other segments of the economy.
He said SME operators no longer needed to patronise or source for forex through unofficial windows.
According to him, the move has helped to reduce pressure on the Bureau De Change segment of the market.
Okorafor urged all participants in the forex market to cooperate with the CBN and abide by the regulatory guidelines aimed at ensuring hitch-free operations in the market.
It is uncertain if the naira stability will be sustained.
Some experts have doubted the CBN’s ability to wage the currency war against speculators.
The regulator has, however, assured market participants that with the external reserves currently at $30bn and crude oil hovering above $50/barrel, it will sustain the regular dollar injections.
Meanwhile, the naira closed flat at 380 against the United States dollar on Sunday, the same amount it touched on Friday, having reached 390/dollar on Thursday.
After touching an all-time-high of 520/dollar in February, the CBN had increased forex supply into the market to enhance the naira.
As a result, the naira appreciated to 375/dollar in March. However, following some speculative activities and other market dynamics, the local currency fell to 410/dollar two weeks ago.
Last week, the naira reversed the loss and rose to 380/dollar after the CBN increased forex supply.
Currency analysts told our correspondent on Sunday that the naira would record a very slight gain this week even as the CBN steps up its interventions in the market.
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “I think the naira may not appreciate significantly above 380/dollar. If there is a slight decline in forex supply, it may do around 385/dollar.
“For now, the naira may not gain significantly further than the 380/dollar until when the CBN chooses to shift the exchange rate for the invisibles.”
