Simplified Corporate Logistics has been launched with the aim of sourcing for foreign exchange for Nigerian businesses involved in export and import.
A statement on Tuesday described SCL as a full-service procurement, shipping, clearing, forwarding and warehousing suite.
The Founder and Chief Executive Officer, SCL, Mr. Nduka Udeh, was quoted to have said at the launch in Lagos, “Nigerian businesses of recent have been hit by a steep hike in the price of ordering, handling and clearing goods from overseas.
He said, “What Simplified Corporate Logistics does is that it removes the risk factor from businesses. We make it our responsibility to source for forex to carry out transactions so our customers only pay in naira.
“Then we guide them through the entire clearing process and handle the documentation on their behalf so that they reduce incurred fines and charges to the barest minimum. Our process is so efficient that we can guarantee clearance of goods within six days.”
According to Udeh, the company can source for the items the customers want from trusted manufacturers globally, and get them at the best prices as it has partnership with several auction companies in the United States.
He said, “Most significantly, we offer a cargo consolidation service that can save our customers up to 70 per cent in freight costs. We believe that these cost and efficiency savings will propel the Nigerian small and medium enterprises into the future.”
According to the statement, Simplified Corporate Logistics tackles the complexity associated with import and export by handling their forex needs to reduce the long processing times needed to access forex, among others.
Joe Mekiliuwa is the General Manager, Operations at the Central Securities Clearing System Plc. He speaks on the prevailing bearish trend in the capital market and the company’s efforts towards achieving 100 per cent dematerialisation of share certificates, in this interview with STANLEY OPARA
The capital market, at the moment, is on a bearish trend. How has this been affecting the operations of the CSCS?
Nigeria is part of the global community. Since the recent global meltdown, the market has been experiencing a bearish trend. Foreign investors took greater part of their investment out of the system. By so doing, it means they had to sell off. To sell off means shares of greater magnitude will be released into the market and it will depress the market accordingly, and the prices of those securities will go down. There will be a significant drop. Arising from that, the local investor, who want to sell, will be selling at a price that is below the cost price. That is a loss already, and many cannot exit from the market because of the current prices of the securities. It has affected our market in the sense that the local investor could not exit, many of the foreign investors have already exited and inflows are no more coming as they used to. A lot happened in 2007 because so many companies came to the market for private placement with the hope that they would list at a higher price because private placement was at a discount and many investors bought into the private placement having received assurance from the companies that they would be listed in due course. Investors were hoping to make gains when the shares were finally listed at higher prices. But by the reason of the crisis, the prices of shares nosedived. These companies couldn’t come to the market any longer because the implication is that they will be selling below the price at the private placement. Many of the companies, till today, have not come into the market. The investors who bought into the private placement cannot exit the market because it is at the point of listing that they can exit. Many of these investors are caught up in this problem till today.
Are you saying there is no respite for such investors?
Investors can only exit in the secondary market, which will be after listing of the companies on the floor of the Nigerian Stock Exchange. But the only window that could be looked at then was the Over-the-Counter market, where brokers could meet independently on behalf of their clients to buy or sell securities. But this has not really worked as the investors have yet to exit the market. A lot of efforts have been made by the NSE, Securities and Exchange Commission, the CSCS and other capital market players to encourage investors to come to the market to continue the normal business of buying and selling. But the situation where somebody borrowed a large sum of money to purchase shares, some sold their properties to raise money to buy shares with the hope that the margin would be good. But till today, they are caught up. If a company is not listed, how can you exit? The window for exit is very narrow because they are not listed, and that is a big issue.
Part of the experiences we had at that time was margin lending. After the recapitalisation of the banks, they had so much money and were virtually begging investors to come and take money to buy shares. Many investors made a lot of money legitimately from this. All these happened before the global financial crisis. Because of the gains, many investors went back to the banks to get more loans as the banks continued to bombard investors. Many investors took massive loans from the banks then. In some cases, there was no collateral or insufficient collateral. When the market finally went down, the banks pushed in the shares into the market to sell off in order to mitigate losses. This eventually flooded the market and caused price crash.
The CSCS had said it was targeting the first quarter of this year to achieve 100 per cent dematerialisation of share certificates in the system. What has become of this aspiration?
The mandate given by SEC to capital market stakeholders is that we must achieve 100 per cent dematerialisation. We are hoping to achieve 100 per cent dematerialisation of share certificates by the end of 2016 third quarter (September). Currently, over 98.4 per cent of shares certificates of quoted companies on the NSE are dematerialised in the CSCS depository. For the sake of clarity, dematerialisation is the availability of shares certificates of quoted firms on the Exchange in electronic format. The CSCS is working assiduously with registrars to ensure that full dematerialisation is achieved as targeted. Efforts are geared towards assisting the relevant registrars to ensure that the remaining, although seemingly infinitesimal, are firmly attended to so as to achieve 100 per cent success rate before the end of Q3 2016. In order to address various problems associated with share certificates such as delay in issuance, verification, loss, theft, and forgeries, among others, SEC, in partnership with other stakeholders, resolved to eliminate these problems by opting for the full dematerialisation of share certificates. The full dematerialisation move is aimed at completely eliminating existing physical share certificates in the Nigerian capital market and putting to an end the issuance of new share certificates. The registrars of companies, who are involved in the implementation process, are required by SEC to turn in the registers of all companies they manage to the CSCS depository within a given period of time. For the shares to be accessed by the shareholders in their accounts under a stockbroking firms, shareholders are required to instruct their registrars, through their brokers, to migrate such shares to their accounts with the stockbroking firms. Consequently, shareholders are urged to approach the stockbroking firms of choice, obtain and fill in a migration form which will be forwarded to the registrar to enable them to advise the CSCS to migrate the shares to the shareholder’s account with the stockbroking firm and the shares are migrated by the CSCS as advised. With reinforced commitment and determination at the commencement of the dematerialisation exercise in June 2015, it has yielded significant success as incidences of forgery, theft and loss of share certificates have drastically reduced.
Other benefits which full dematerialisation would bring to the market include immediate availability of the shares for trading as soon as mandate is given to the brokers, enhancement of price discovery and deepening of the market, possibility for securities lending and borrowing by shareholders for more income.
The very small amount of share certificates not dematerialised is a result of the inability of some registrars to meet their recapitalisation deadline. Some were acquired by bigger firms or merged with others, while others have discontinued that line of business. That means the register they manage will be handed over to a new registrar. That implies that the new registrar that will be taking over will do some reconciliation. The former registrar may not be fully automated, and this will affect the extent of the continuation. If they are manually driven or partially driven by information technology, the implication is that a lot of manual work will be done. The new registrar will have a lot to do to reconcile the new accounts at the client and the company levels before updating their new register. For the small segment remaining, the new registrars may be having one or two issues. However, we are working with them; hence the success recorded thus far. There was a time when our level of success was below the current level, and we had to invite the registrars to a meeting to guide them on the best ways to solve the problem and make the required progress.
Is there a deadline for the registrars in this respect?
SEC is currently checking the registers and working with the registrars to ensure that the registers are in their required form. We at the CSCS are also playing our roles also. For the new phase, there is no new deadline, but we are saying that the process should not exceed this year; but we will be done before the year ends
the Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, says there is significant market potential for green bonds in Nigeria.
He said as a developing market with a population in excess of 180 million people, with projected annual emissions of 900 million tonnes, the country required significant capital to develop mitigation and adaptation interventions that would reduce it.
He said this when the Federal Government held a stakeholders’ consultation on the pilot issuance of green bond.
The forum was part of a continuing collaboration between the Ministry of Environment and the Ministry of Finance to explore and develop a product that can leverage and channel resources towards viable green projects and contribute to the achievement of the nation’s development objectives.
He further stated that green bonds could mobilise funds from investors with strong environmental focus, who also craved transparency and lower risk appetite.
To this end, the Minister of Environment, Amina Mohammed, was quoted in a statement as saying that Nigeria, like most countries around the world, faced vast investment needs for the transition to a sustainable, low-carbon and climate-resilient economy.
The government, she noted, had made it clear that private sources of finance were needed, and that tapping into the international capital markets, as well as domestic capital, was crucial.
The Association of issuing Houses of Nigeria (AIHN) has urged the various trade groups in the capital market to deepen collaboration among themselves to build a more vibrant market.
The outgoing Chairman of the Association, Victor Ogiemwonyi who stated this during the group’s yearly general meeting in Lagos, admonished all market groups to work with greater collaboration, noting that one firm alone cannot make a market.
Ogiemwonyi, who has served the institute for two years, also implored the members to support and cooperate with the incoming executives.
“I will like to encourage us all to continue to work with greater collaboration, knowing that one firm alone can not make a market.” The Chairman, in a chat with The Guardian on issuers apathy in stock market, said: “The market is very soft for issuing process in the last one or two years. There has not been any major issuing activities, and that has been a major challenge.
“The economy is slowing down rapidly and the stock market is getting such signals. Government should give incentive because business environment is very difficult. We have a much better business environment and virtually every company is in trouble, because there is severe slow down.
“Policy side’s being slow in coming out, and they have not being consistent. So, policy inconsistency, and slow down are the major challenges.
“Once the environment is friendly, legislators put in place properly, policies are consistent, and people will do business in Nigeria.”
He explained that the association’s total income grew by 8.5 per cent to N38.34 million, compared to 35.35 percent achieved 2014, while N21.05 million was realised from members subscription during the period under review, up from N18.55million in 2014.
Total expenses rose to N24.38 million in 2015 from N22.08 million in 2014.
He explained that N13.44 million was transferred to the accumulated fund, which increased to N195.75 million.
“As at the date of the AGM, we have over N200 million in net assets. N150 million of this amount is invested in 12.5 per cent FGN 2026 bond. The committee took this decision to ensure that the overheads of the association will be paid from income of this bond for the next 10 years,” he said.
Reviewing its activities, Ogiemwonyi explained that the association threw its weight on the Securities and Exchange Commission (SEC) initiative to implement the new minimum capital requirement for capital market operator and made recommendations to the commission.
“In order to revitalize the market, we co-hosted a day dialogue on the capital market and the 2015 federal budget with the Chartered Institute of Stockbrokers and Association of Stockbroking Houses of Nigeria.
“We initiated the establishment of a strong capital market group that will be able to speak in one voice on issues bordering on capital market, engaged the Law Society of England and Wales on issues around the integrity of our market and we actively supported annual capital market conference,” he added.
The Nigerian Stock Exchange market capitalisation dropped by N70bn on Tuesday following losses in 29 stocks and gains in 10 stocks.
Market capitalisation dropped to N9.447tn from N9.517tn, while the NSE All-Share Index slipped to 27,503.81 basis points from 27,707.12 basis points.
A total of 176.772 million shares valued at N1.885bn were traded in 3,682 deals.
The equities market dropped more points (73 basis points) at the close of today’s session amidst increased pressure across market heavyweights.
The market attained a maximum index point of 28,419.92 basis points in the course of trading on Tuesday, while the lowest and average index points stood at 27,503.81 and 27,797.31 basis points.
The banking and oil and gas sectors led market declines following negative closes in Zenith Bank Plc (2.34 per cent loss), Union Bank of Nigeria Plc (five per cent loss), Forte Oil Plc (2.82 per cent loss) and Total Nigeria Plc (0.37 per cent loss).
The industrial goods sector was next with 0.68 per cent loss as Dangote Cement Plc recorded 1.14 per cent loss and Portland Paints Plc losing 9.09 per cent owing to sell pressure. The consumer goods sector, however, closed relatively flat, recording 0.04 per cent loss after losses in Cadbury Nigeria Plc (4.11 per cent loss) and Champion Breweries Plc (4.72 per cent loss) outweighed gains in Guinness Nigeria Plc (0.49 per cent gain).
On the global front, Asian markets traded mixed as investors weighed the Reserve Bank of Australia decision to keep interest rate unchanged. In Europe, markets seesawed as oil prices pared yesterday’s gains. The United States markets opened flat after ISM non-manufacturing PMI for August surprisingly came in at 51.4 below Reuters estimate of 55.0.
“The negative closes across all key sectors amidst widening negative breadth and low trade volume suggests that market sentiment has become bearish. We believe this could weigh further on the ASI in the session ahead,” analysts at Vetiva Capital Management Plc said in a brief.
Meanwhile, interbank call rate in Nigeria surged 716 basis points to 27.33 per cent on the back of relatively tight system liquidity. At the foreign exchange interbank market, the naira depreciated N0.72 to close at N314.92.
There was a clear sentiment reversal in fixed income markets on Tuesday as bears seized the upper hand. Yields in the Treasury bills market rose 33bps amidst selling momentum weighted on short-dated bills. In particular, yields on the 37 Days-to-Maturity (1.03 per cent gain), 44DTM (1.09 per cent gain), and 93DTM (1.64 per cent gain) bills rose to 15.79 per cent, 15.75 per cent, and 15.09 per cent respectively.
Similarly, the bond market turned bearish although sell pressure was weighted across the entire space. The most notable changes were on the 12.5 per cent Federal Government of Nigeria January 2026, 10 per cent FGN July 2030, and 12.4 per cent FGN March 2036 bonds as their yields climbed 15bps, 11bps, and 17bps to close at 15.21 per cent, 15.07 per cent, and 15.19 per cent respectively.
PZ Cussons Nigeria Plc, NEM Insurance Company Nigeria Plc and John Holt Plc emerged as the top three losers at the close of trading on the floor of the Nigerian Stock Exchange on Monday, slashing market capitalisation by N17bn.
The NSE All-Share Index also dropped by 0.24 per cent, opening the week on a negative note following mixed performances across key sectors.
The NSE market capitalisation slid to N9.517tn from N9.534tn recorded on Friday last week.
A total of 195.024 million shares valued at N1.57bn exchanged hands in 3,221 deals.
Global markets traded higher following a rally in oil prices and as disappointing United States non-farm payroll data for August lowered expectations of a potential interest rate hike by the US Fed in September.
At the NSE, the industrial goods sector extended its downward trend amid continuous sell pressure in Dangote Cement Plc, which recorded a drop of 0.57 per cent. Consumer goods reversed previous session’s gains following losses in large capitalized firms like PZ (4.97 per cent loss) and Nigerian Breweries Plc (0.71 per cent loss).
Conversely, the financial services and the oil and gas sectors extended their positive run on the back of gains in Zenith bank Plc (1.01 per cent gain), United Bank for Africa (3.69 per cent gain), Diamond Bank Plc (4.46 per cent gain) and Oando Plc (2.10 per cent gain).
Market breadth turned negative with 13 advances and 21 declines.
To this end, analysts at Vetiva Capital Management Limited, said, “Notwithstanding some few periods of gains, the NSE ASI traded under water for most part of the trading session. Coupled with the mixed closing positions across key sectors, we expect market to remain volatile in the sessions ahead.”
Other losers at the close of trading were AIICO Insurance Plc, United Capital Plc, Unity Bank Plc, International Breweries Plc, Academy Press Plc, Africa Prudential Registrars Plc, FBN Holding Plc, Transnational Corporation of Nigeria Plc, Vitafoam Nigeria Plc, Champion Breweries Plc, among others.
The top three gainers were May and baker Nigeria Plc, Cutix Plc and Diamond Bank Plc.
The Group Managing Director/ CEO, United Bank for Africa, Mr. Kennedy Uzoka, has said the banks African subsidiaries contributed 25 per cent of the group’s profit and account for over a quarter of its overall total deposit base, which is largely made up of low-cost savings and current account deposits.
Uzoka was quoted to have said during an investor conference call on the bank’s 2016 half year results, according to a statement released by UBA.
Uzoka noted that, overall, the African business (excluding Nigeria) contributed a quarter of profit in the period, with a stronger outlook.
He said, “I am particularly impressed by the performance of our business in Congo Brazzaville, where we doubled bottom-line, largely through transaction-based offerings.
“We will continue to consolidate our position across chosen markets, as we penetrate the market through innovative, simple and convenient offerings. We will maintain our diligent focus on profitable quality asset creation, as we situate our growth appetite within our prudent risk management culture.
The UBA boss explained that the bank’s strategy was hinged on a one-point agenda -Customer1st, which follows that as banking increasingly gets commoditised, the customer will be the sole determinant of the bank’s growth and profitability.
He stressed, “Hence, to win in this evolving landscape, we have devoted our strategic initiatives to our customer as every decision and action are being taken within the context of customer satisfaction and value addition.
“To this end, we are devoting reasonable resources at the same time leveraging our technology-driven Customer Relationship Management towards increasing the depth of our understanding of customer preferences and changing needs.
“We want to be in the best position to predict the customers on their utility curve, so as to ensure we proactively offer forward-looking products and services that will create unique customer experience as well as beat expectations.
The Central Bank of Nigeria borrowed N212.85bn ($654.92m) in an auction of Treasury bills on Wednesday, with yields little changed from previous sales, data from the Debt Management Office showed on Thursday.
The debt office raised N45.85bn of three-month paper at 14.38 per cent, down from 14.99 per cent in mid-August; N62bn of six-month bills at 17.50 per cent, up from 17.48 per cent, and N105bn of one-year paper at 18.42 per cent, down from 18.50 per cent.
Higher subscriptions on the one-year sale suggested some offshore investors participated, market players said.
On Monday, offshore investors traded about $270m through the interbank forex market to fund investments in naira debt.
Sovereign dollar bonds fell across the curve to their lowest level in more than two weeks on Wednesday after official data showed the economy contracted by 2.06 per cent in the second quarter, Reuters reported.
The 2023 issue chalked up the biggest losses, down 0.728 cents to trade at 99.417 cents in the dollar – its lowest since August 15, according to Tradeweb data.
The 2021 bond slipped by 0.489 cents to 102.156 cents while the 2018 issue lost 0.603 cents to trade at 101.167 cents.
Data from the National Bureau of Statistics showed the non-oil sector declined due to a weaker currency while lower oil prices dragged the oil sector down.
The lingering scarcity of foreign exchange had pushed the naira to an all-time-low of 420 against the United States dollar at the parallel market on Wednesday.
This followed data released by the National Bureau of Statistics on Wednesday, confirming that the economy was in recession.
The NBS data showed that the Gross Domestic Product shrank by 2.06 in the second quarter, after contracting by 0.36 in the first quarter.
Before dropping to 420/dollar on Wednesday, the local currency had traded at 418 in Kano, 417 in Abuja and 415 in Lagos on Tuesday. It closed at 414 against the greenback on Monday.
But Bureaux de Change operators raised hope of a gradual appreciation of the local currency in the near term as the CBN licensed 11 new International Money Transfer Operators to address the dollar supply side.
“Depending on the effective implementation of the central bank’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollar to sell to bureaux de change and provide the needed liquidity in the market,” the President, National Association of Bureaux de Change Operators of Nigeria, Aminu Gwadabe, told Reuters on Wednesday.
Gwadabe said the CBN’s directive that commercial banks should sell dollar inflow through money transfer operators to the BDCs had boosted daily dollar supply to the currencies agencies to around $10m to $20m and this could further boost supply and help support the naira.
The Nigerian Stock Exchange’s market capitalisation recorded a growth of N282bn at the close of trading on Thursday, one day into the country’s economic recession.
A total of 25 stocks appreciated in price, while 13 recorded price declines.
The NSE market capitalisation soared to N9.760tn from N9.478tn, while the NSE All-Share Index also closed at 28,419.92 basis points from 27,599.03 basis points.
The market traded on 229.225 million shares worth N2.117bn in 3,243 deals.
The highest index point attained in the course of trading was 28,419.92 basis points, while the lowest and average index points were 27,368.41 and 27,666.28 basis points respectively.
Dangote Cement Plc, CAP Plc, FCMB Group Plc, AIICO Insurance Plc and Wema Bank Plc emerged as the top five gainers.
The shares of Dangote Cement appreciated by N15.11 (8.59 per cent) to close at N191 from N175.89, while those of CAP closed at N31.57 from N30.09, gaining N1.48 (4.92 per cent).
FCMB share price also appreciated by N0.05 (4.90 per cent) to close at N1.07 from N1.02, while AIICO shares soared to N0.66 from N0.63, gaining N0.03 (4.76 per cent).
Wema bank shares also gained N0.03 (4.55 per cent) to close at N0.69 from N0.66.
Other gainers were Sterling Bank Plc, Fidson Plc, Trans-nationwide Express Plc, NPF Microfinance Bank Plc, Law Union and Rocks Insurance Plc, Fidelity bank Plc, amonmg others.
On the other hand, Caverton Offshore Support Group Plc, Tripple G Plc, Chellaram Plc, May and Baker Nigeria Plc, Cutix Plc, among others emerged as the top five losers.
The NSE had on Wednesday, appreciated by N36bn despite confirmation by the Nigerian Bureau of Statistics that the economy was in recession.
The equity market maintained positive momentum, appreciating by 0.39 per cent.
The NSE market capitalisation rose to N9.478tn from NN9.442tn, while the All-Share Index closed at 27,599.03 basis points from 27,493.12 basis points.
A total of 262.614 million shares valued at N4.881bn exchanged hands in 3,302 deals.
The second quarter 2016 Gross Domestic Product data showed a contraction of 2.06 per cent year-on-year (Q1 2016: -0.36 per cent). July headline inflation spiked to 17.1 per cent year-on-year from 16.5 per cent and unemployment rate jumped to 13.3 per cent from 12.1 per cent.
On the global scene, markets traded mixed as investors reacted to a slew of data from the Eurozone and looked forward to the key August United States non-farm payroll data due Friday.
Having lost in the previous session, the oil and gas and financial services sectors rebounded to lead advances, following gains on Seplat Petroleum Development Company Limited(+10.25 per cent), Oando Plc (0.61 per cent), Guaranty Trust Bank Plc (1.53 per cent), Ecobank Transnational Incorporated Plc (0.35 per cent) and FBN Holdings Plc (1.67 per cent).
The consumer goods and industrial goods sectors continued on an upward trend, albeit marginal, as 7UP Bottling Company Plc (9.38 per cent gains), Honeywell flour Mill Plc (five per cent loss), Dangote Cement Plc (0.22 per cent gain) and Julius Berger Nigeria Plc (9.71 per cent loss) traded mixed.
Market breadth turned negative with 19 advances and 21 declines.
Commenting on the performance, analysts at Vetiva Capital Management limited, in the firm’s daily market analysis, said, “We believe the economic data releases are not far away from market expectation, hence, the muted impact on market.
“Nonetheless, we believe investors would digest the numbers more cautiously, and think this could result in mixed trading pattern in the session ahead.”
WorldRemit, one of the international money transfer operators (IMTOs) that was registered by the Central Bank of Nigeria (CBN) on Tuesday has commended the banking sector regulator in Nigeria.
The CBN licenced WorldRemit and ten other international money transfer operators. A statement from WorldRemit said Nigerians in the diaspora would benefit from increased competition in the remittance market.
The founder and CEO of WorldRemit, Ismail Ahmed said: “We launched our service to Nigeria in 2011 when we pioneered instant deposits to all bank accounts. Our service provided the Nigerian diaspora with an easy, secure and low cost way to send money home as well as bringing much-needed foreign exchange into the local economy. We’re delighted that we can now resume operations.
“We commend the Central Bank of Nigeria for reaffirming the country’s commitment to building an enabling environment and level-playing field for international money transfer services to Nigeria. Increased competition will help to bring the estimated 50 per cent of remittances to Nigeria that currently go through unregulated, informal networks into formal networks channelled through licensed IMTOs.
“We’re grateful to the many Nigerians both at home and in the diaspora that supported our call for money transfers to be restored. A competitive remittance market provides Nigerians with greater convenience and better pricing.” To celebrate the relaunch of its service to Nigeria, WorldRemit is offering promotional pricing of $0.01, €0.01, £0.01 or equivalent on all money transfers to Nigeria until 30 September 2016.
In furtherance of its efforts to liberalise the foreign exchange market, to ensure liquidity, and make FX readily available to low end users, the CBN disclosed that it has licensed 11 more International Money Transfer Operators (IMTOs) to operate in Nigeria.
The central bank, in a statement signed by its acting Director, Corporate Communications, Isaac Okorafor, said the move was in line with the existing guidelines on International Money Transfer Services in Nigeria (2014). The newly registered IMTOs are Trans-fast Remittance LLC, Worldremit Limited, UAE Exchange Centre LLC, Wari Limited, Homesend S.C.R.L, Small World Financial Services Group Limited, Weblink International Limited, Cashpot Limited, DT&T Corporation Limited, FIEM Group LLC DBA PING Express, and CP Express Limited.
CBN also reiterated its commitment to providing an enabling environment for international money transfer services in Nigeria.
