The Securities and Exchange Commission has proposed that companies and registrars in custody of dividends, which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of the new rule transfer such monies into the Nigerian Capital Market Development Fund.
The Commission, on its website on Tuesday, said the move was in pursuant to the provisions of Section 313(1)(n) of the Investments and Securities Act 2007.
The notice read in parts, “All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with sub rule (1) of this rule.
“Companies shall disclose details of compliance with this Rule in their annual reports.
“All comments and input should be forwarded to the Secretariat, Rules Committee of the Commission, via, rulescommittee@sec.gov.ng or through the Director General, SEC, not later than two weeks from the date of publication.”
SEC recently issued a directive mandating registrars operating in the Nigerian capital market to end issuance of electronic dividend warrant to investors by June 31, 2017.
Condemns hike of MPR by 200 bps, fiscal indiscipline
To fasten recovery of the Nigerian economy, renowned economist, Dr. Biodun Adedipe, has suggested that individuals and corporate entities in the country turnsed inward for development strategy design and funding initiated by locals, to overcome the boom-bust cycle, saying that it is what the 56-years historical performance and the trajectory demands.
Adedipe who spoke on the theme: “Challenges in the Nigerian Economy: Change and the Anti-Corruption Fight” at the 2016 Nigerian Institute of Management (NIM) Members week, Ikeja Chapter, explained that by discarding redundant assets, getting everybody involved in cost savings strategies, joining the fight against corruption as well as restrategising on the population and its distribution spatially, socially and age-wise, the economy could be prepared for recovery and normalisation.
“Business is about buying and selling, there a few questions to ask as pointers; what were Nigerians buying up until end-July 2016? What are they buying now? What will they be buying going forward? Are there demographic patterns in what they buy? Are there differences in public and private consumption? What determines what they buy, how and where they buy? And how can we produce or buy and sell profitably in the evolving environment?”
He told the gathering that nothing remarkable happens until someone has paid the price for it;”If you want to see real change in your company’s performance, you and your people MUST PAY the price. An economic outlook is based on two premises; the structure and trajectory of the key sectors and the direction of government policy. My expectations for the rest of 2016 include; GDP growth rate of 0.54percent caused by delayed implementation of budget, interest rates at double digits, Inflation rate will remain double digit and exchange rate will remain top N320/US$. Slight Improvement in power supply, renewed road infrastructure development and the revival of rail transportation and start of privatization of viable airports”, he stated. Fadipe recalled that the economy started slowing down in Q3 2014 and began to shrink in Q1 2016 noting that apart from dampened GDP growth rate, real income was on the decline as inflation was rising, unemployment rate was rising, industrial production declined, wholesale/retail trade slowed and capital importation has dropped significantly, blaming the thwarting of high expectation for early recovery in 2016 on the National Assembly delayed processing of the reflationary Budget.
On global economic trends, he said Brexit yes-vote has increased uncertainty that compounds the already weakening global economy; at a time the Nigerian economy was struggling with its own peculiar risks. He explained:” The International Monetary Fund (IMF) in July 2016 projected the Nigerian economy to contract by 1.8percent this year due to: Foreign currency shortages following lower oil receipts. Low power generations and weakened investor confidence. There are uncertainties and geopolitical tensions all around the world, and there is a lot of experimentation in policy formulation and sequencing.”
On policy rates of most central banks aimed to stimulate growth, he revealed that out of the 28 OECD/G20 countries only seven which include; Argentina (13percent), Brazil (14.25percent), Chile (3.5percent), Iceland (5.75percent), Mexico (3.25percent), South Africa (6.75percent), and USA (0.5percent) raised their policy rates from 2009 till date adding that among the 76 countries surveyed, only 12 countries (including Nigeria) have policy rates in the double digits. “It is thus spurious to argue that central banks have no business with economic stimulation, and the CBN has done well towing this global, sensible line. The CBN has however, raised MPR by 200 bps, contrary to all rational expectations during a recession.” He stated that the economy is troubled for several reasons, and the signs began to show since early 2013 with the following indicators; economy is diversified by GDP contributions, but over dependent on hydrocarbons for foreign earnings and government revenue, threatened source of foreign earnings (77percent) and government revenue (74percent).
In addition, he listed other indicators to include; bloated government recurrent expenditure, high unemployment rate (12.1percent) and 19.1percent underemployment), dominated by youth (42.4percent). Low, but stable external reserves ($25.78b), high cost of doing business and high cost of living and (inflation at 16.48percent in June 2016).
Trading at the stock market resumed on a positive note monday as the bulls sustained their hold on the market. Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.58 per cent to close at 27,812.06. Similarly, the market capitalisation added N55.5billion to close higher at N9.55 trillion.
The market had rebounded last week on bargaining hunting and reactions to the impressive results declared by Guaranty Trust Bank Plc and Access Bank Plc for the half year ended June 30, 2016.
And monday’s bullish session was partly influenced by continued positive sentiments by investors in the banking stocks. The NSE Banking Index appreciated by 1.28 per cent, lifted by gains recorded by Access Bank (+4.6 per cent) and GTBank (+1.58 per cent).
Apart from recording improved performance both banks announced interim dividend of 25 kobo apiece for H1.
GTBank grew its profit before tax (PBT) by 45 per cent from N63.1 billion to N91.38 billion, while Access Bank Plc’s PBT rose by 28 per cent from N39 billion to N50 billion.
Commenting on the results, the Managing Director/Chief Executive Officer of GTBank Segun Agbaje, said: “Going into the year, we knew it would be a challenging year and we prepared for it by focusing on effective management of the balance sheet and adapting our business model to changing market variables. The quality of our past decisions enabled us navigate the challenges that persisted in the business environment most of the half year period.”
On his part, the Group Managing Director/Chief Executive Officer of Access Bank, Mr. Herbert Wigwe said: the performance continues to be resilient in the face of a challenging macro-economic environment, which has been further exacerbated by double-digit inflation, amidst an untimely devaluation.
“The results underscore our continued ability to grow sustainably whilst effectively adapting to a challenging operating landscape.”
He explained that during the period, the bank grew its retail market share, leveraging innovation and technology to create lifestyle products and enhance customer experience.
“This growth has led to significant increase in our transaction volumes and fee-related income. In addition, our cost of funds dropped by 170 basis points year on year reduction, reflecting the increase in our low cost funding base.
The Central Bank of Nigeria (CBN) monday stated that it noticed that some authorised dealers in the FX market have continued to buy and sell FX referred to as “free funds” despite the provision of an earlier circular that warned against that.
Against the background, it stressed that dealing on FX without appropriate documentation, which includes “relevant entries, blotters, physical documents and non-disclosure to the regulatory authorities is a breach of extant regulations.”
The apex regulator therefore reiterated that as provided in the laws and regulations governing dealings in FX, authorised dealers “shall not sell foreign exchange without appropriate documentation and disclosure to the regulatory authorities irrespective of the source of such funds.”
“Accordingly, authorised dealers shall deal in eligible transactions only and not to engage in any foreign exchange transactions on terms inconsistent with the extant laws and/or regulations,” the CBN stated in a circular posted on its website last night.
Meanwhile, the CBN Governor, Mr. Godwin Emefiele has stressed the need to develop capacity in financial institutions in the West Africa sub-region.
The CBN Governor made this call in a keynote address at the 20th anniversary of the establishment of the West African Institute for Financial and Economic Management (WAIFEM) held in Lagos monday.
Emefiele, who was represented by the Deputy Governor (Economic Policy), CBN, Dr. Sarah Alade, noted that the dearth of the required capacity in the continent inhibits efforts in implementing strategies and policies as well as in achieving their desired development outcomes.
He cited the Africa Capacity Report 2015, which stated that weak capacity in various dimensions was still a problem in the continent.
“Twenty years after WAIFEM was established, the mandate remains as relevant as ever. We must continue to support WAIFEM to remain as relevant as ever. We must continue to support WAIFEM to remain true to the aspirations of the founders.
“Our next step is to ensure that WAIFEM now becomes the training and capacity building institution of ECOWAS. I know the process has started, but we need to fast track it to avail the entire ECOWAS countries opportunity to benefit from WAIFEM’s capacity building programme,” he added.
He described WAIFEM as a foremost institution in the West African sub-region, saying that the status was achieved through the hard work and dedication of its management and staff.
“It is gratifying to note that through several independent evaluations commissioned by donors, the board and other partners, WAIFEM’s programmes have been found to be effective, efficient and relevant to social and economic development in Africa,” he added.
The Nigerian Export Promotion Council has concluded plans to establish border markets in six locations across the country as part of efforts aimed by reducing the loss of revenue by the government through informal trade.
It was learnt that the establishment of the border markets is part of the intervention programmes of the NEPC on informal trade.
Statistics from the council showed that about $12bn worth of informal exports take place at various locations in the country.
It was gathered that given the volume of informal trade along these trade routes, the council decided that the best way to check the increase in the activities of informal traders was to set up the markets.
This, according to investigations, would enable the traders carry out their business transaction under an organised environment thus generating revenue for the government.
Already, the NEPC had gone into strategic partnership with relevant stakeholders to establish warehouses in Maradi and Birini Konni in Niger Republic, while collection centres would be created in Jibia in Katsina State and Mela in Sokoto State respectively.
In the same vein, it was learnt that the NEPC and the United States Agency for International Development were currently collaborating in promoting inclusive economic growth through improved trade and transport competitiveness.
The NEPC Executive Director/Chief Executive Officer, Mr Segun Awolowo, while confirming the development in an interview in Abuja, said that significant volumes of informal trade take place in the country.
He said, “According to independent statistics report, Nigeria’s informal trade figure for Kano axis alone is put at $14.16bn, $9.83bn and $5.34bn in 2012 and 2013 and 2014 respectively.
“These amount to lost revenue to the government. So the council is working on establishing border markets across the country to ensure the conversion of informal export trade to formal trade.”
He said the challenges faced in generating adequate revenue from oil had made it imperative to facilitate trade and non-oil exports.
He said the NEPC is also into proactive economic activities aimed at developing and promoting the non-oil export sector.
Some of them are the creation of markets for made-in-Nigeria products, exposing exporters to international markets, creation of export incentives and provision of market intelligence information.
He said if the country could effectively key into the plan of the commission in taking advantage of the opportunities in the agricultural sector, there would not be need to depend on oil revenue for survival.
He disclosed that through the zero oil plan, the commission had identified 22 priority countries as markets for Nigerian products while 11 strategic products with high financial value have also been identified to replace oil.
These products, he said, are palm oil, cashew, cocoa, soya beans, rubber, rice, petrochemical, leather, ginger, cotton, and Shea butter.
He said, “Nigeria is in need of an export revolution because we can no longer continue to rely on oil for our survival.
“We have an annual import bill of $50bn, which is financed from proceeds from foreign exchange generated from oil.
“In 2014, we earned $70bn in oil and paid $50bn as import bill. In 2015, we earned about $40bn and still spent about $50bn on importation and that is why we can’t continue to finance our imports.
“Our objective is to increase the reserves of the country through the zero oil plan and this is achievable if all stakeholders collaborate with us because we want Nigeria to survive in a world where we no longer sell oil.”
Commenting on how the country can improve the level of non-oil exports, the National President, National Association of Nigerian Traders, Mr. Ken Ukaoha, said an effective diversification strategy would help the country boost its exports.
He said, “We have for so long remained import-dependent. We have also continued to cultivate a mono product economy which is oil and our earnings from oil are presently disappointing.
“In terms of other non-oil exports, the country had still not yet put its act together. This is because diversification which should have pioneered our export has not been effective.
“As we speak today, we don’t have a trade policy in place and we don’t have an export strategy in place.”
According to him, all the strategies needed for import substitution are not in place even though there has been much talk about import substitution.
Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, has stated that the Stanbic IBTC Pension ETF 40, would provide investors with a strategic exposure to the equities market for diversification of investment.
The Chief Executive, Stanbic IBTC Asset Management Limited, Mrs Bunmi Dayo-Olagunju, noted that aside diversification options, investors would also enjoy flexibility, cost effectiveness, as well as liquidity with the new exchange traded fund (ETF), which would be launched soon.
She noted that the launch would bring the total ETFs in Stanbic IBTC Asset Management Limited’s portfolio to two.
“In 2014, the company, the largest non-pension asset manager in Nigeria, launched the Stanbic IBTC ETF 30, which tracks the performance of the top 30 stocks listed on the Nigerian Stock Exchange. “The Pension Index, launched last year by the Nigerian Stock Exchange (NSE) to drive market optimisation, is a tracking mechanism for investors, particularly institutional investors like Pension Fund Administrators (PFAs), that invest in line with guidelines set out by the National Pension Commission (PENCOM).”
Dayo-Olagunju also pointed out that the product would provide investors access to the most liquid publicly quoted companies on the NSE that are in compliance with the regulatory requirements for investing pension assets in terms of taxable profits, free float, dividend, sector and individual stock weighting.
“The Stanbic IBTC Pension ETF 40 is designed as an instrument of choice for PFAs, Life Assurance companies, institutional investors, as well as foreign portfolio managers who are desirous of the Nigerian exposure with minimal liquidity and exit risk,” Dayo-Olagunju said.
She added that it would act as a benchmark for PFAs to measure performance and report it to Retirement Savings Account (RSA) holders.
“The ETF is an asset product which is designed as a cost effective way to provide the same economic value as an investment in the underlying equities.
“In this case, the Stanbic IBTC Pension ETF 40 will help investors gain access to the 40 most capitalised and liquid equities on the NSE in a seamless way without the costs, risks and complexities associated with direct investments, particularly for retail investors,” Dayo-Olagunju stated.
According to her, the Stanbic IBTC Group, in line with its emerging market strategy and desire to become a one-stop shop for investable products, has invested in world-class investment management and market-making solutions, which should ensure that the tracking error of the ETF ranks amongst the lowest in the industry. The fund would also have a dedicated broker publishing bid and offer prices online and real-time and pay out its dividend quarterly.
She added that the firm would continue to leverage its expertise in asset and wealth management built over the years to provide quality products and services that would not only deepen the market but enhance transparency, value and boost investors’ confidence.
The Federal Government on Wednesday at an auction raised N110bn worth of bonds maturing in 2021, 2026 and 2036, the Debt Management Office said
According to DMO’s auction result obtained from its website on Wednesday, it sold N40bn of 2021 paper at 14.50 per cent.
It also sold N30bn of 2026 paper at 12.50 per cent and N40bn of 2036 paper at 12.40 per cent, the News Agency of Nigeria reported.
The summary stated that an additional N109.5bn of the 14.50 per cent July 2021 bonds was allotted on non-competitive basis.
Subscriptions from investors for the July 2021 bond, which was reopened, stood at N74.37bn, while that of January 2026, which was also reopened, stood at N71.06bn.
Subscriptions for the March 2036 bond which was also reopened stood at N64.86bn.
The DMO issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
The Federal Government said it would borrow about N900bn locally to finance part of the N2.2tn deficits in its 2016 budget.
Meanwhile, the Federal Government imported $227m of sugar in the first seven months of this year, the Central Bank of Nigeria said, Bloomberg reported.
Guaranty Trust Bank Plc yesterday reported its audited financial results for the half year (H1) ended June 30, 2016, showing positive growth across performance indicators.
Gross earnings rose by 37 per cent to N209billion from N153billion in 2015, driven primarily by growth in fee and commission income as well as foreign exchange income.
Net interest income fell marginally from N80.1billion to N79.1billion, while impairment charges surged by 530 per cent from N6.0billion to N37.5billion. However, non-interest income improved by 160 per cent from N38billion to N91.4billion in 2016. Non-interest income was the major catalyst for the upsurge in earnings, after benefiting from foreign exchange revaluation gains.
Consequently, profit before tax rose by 45 per cent to N91.38billion, up from N63.1billion in 2015. The bank’s loan book grew by 14 per cent from N1.373 trillion recorded as at December 2015 to N1.562trillion in June 2016 with corresponding growth in total deposits which increased by 23 per cent to N2.008trillion from N1.637trillion in December 2015. The bank is proposing interim dividend of 25 kobo per unit of ordinary share held by shareholders.
Further analysis revealed that the bank closed the half year with total assets and contingents of N3.42trillion and shareholders’ funds of N453billion, while non-performing loans remained low and within regulatory threshold at 4.39 per cent and with capital adequacy ratio (CAR) of 18.25 per cent..
Commenting on the results, the Managing Director/Chief Executive Officer of GTBank Segun Agbaje, said: “Going into the year, we knew it would be a challenging year and we prepared for it by focusing on effective management of the balance sheet and adapting our business model to changing market variables. The quality of our past decisions enabled us navigate the challenges that persisted in the business environment most of the half year period.”
While expressing appreciation to customers for their loyalty, and to staff for their hard work and commitment, Agbaje noted that the current economic realities present some challenges to growth. “We remain committed to our ideals of staying positive, delivering exceptional service to our customers and adding value to all stakeholders,” he said.
The Central Bank of Nigeria has approved an increase in the maximum amount that could be sold to the Bureau De Change operators from $30,000 to $50,000 per week.
The decision was taken at the Bankers’ Committee meeting, which was held at the headquarters of the CBN on Tuesday in Abuja.
The move is part of the measures aimed at making more foreign exchange available to the BDCs as well as assist in bringing down the huge margin between the naira and the dollar.
The Director, Banking Supervision Department, CBN, Mrs. Tokunbo Martins, addressed journalists shortly after the meeting
She was accompanied during the briefing by the Managing Director,United Bank for Africa, Mr. Kennedy Uzoka; MD, Zenith Bank Plc,Mr Peter Amangbo; MD, Jaiz Bank Plc, Mr Hassan Usman, and the CBN acting Director, Corporate Communications, Mr. Isaac Okoroafor.
Some of the issues discussed at the 328th bankers committee meeting were the state of the economy, financial inclusion and financial literacy, savings mobilisation, and foreign exchange management.
Uzoka, who spoke on the decision taken by the committee on the sale of dollar to the BDCs, said the move was informed by the fact that the country was in a stage where a lot of dollar would be needed to meet financial obligations of overseas students.
Apart from this, he said it was imperative to also increase the weekly sale of dollars to BDCs in order to meet the rising demand of those traveling abroad for business trips.
He said the decision was taken after the committee analysed the feedback it got from the financial market after two weeks of implementing the CBN’s directive to banks to sell forex to BDCs.
The apex bank had in the circular issued two weeks ago directed banks to provide BDCs with a maximum of $30,000 per week.
He said, “The issue of making foreign exchange available to Nigerians has been very topical and the CBN has been working very hard to address this.
“About two weeks ago, a policy was released that made banks to send money to the BDCs and the BDCs are supposed to pass this money to Nigerians for various needs.
“At the meeting today and as expected, we got feedback from the market and the CBN, being a responsive regulator, has decided to move the limit of$30,000 per the BDC to $50,000.
“So, we believe that this development will make more cash available to the BDCs and increase the supply and help drive down the price.”
C&I Leasing Plc, a foremost brand for finance leases and other ancillary services in Nigeria, on Tuesday, listed its N600 million 18.25 percent Fixed Rate Bond on the platform of FMDQ OTC Securities Exchange (FMDQ).
The C&I Leasing bond listing comes barely a week into the formal admittance of the N16.79 billion UACN Property Development Company plc Commercial Paper (CP) on FMDQ platform.
In line with FMDQ objective of promoting an efficient and well regulated market, which will attract and retain both domestic and foreign investors, improve price discovery and transparency for issuers, dealers, regulators and the general public, the Bond shall also be included on the FMDQ-Bloomberg E-Bond Trading System (E-Bond).
FMDQ played host to the Issuer (C&I Leasing plc) as well as the sponsor of the Bond on FMDQ, the Registration Member (Listings), WSTC Financial Services Limited, represented by Tofarati Agusto, managing director/CEO, among others, to a prestigious listing ceremony.
Tumi Sekoni, vice president/divisional head, marketing and business development, FMDQ, said: “FMDQ’s listing service had been tailored to provide, among others, a unique opportunity for issuers to raise the profiles of their issues and access a deep pool of capital, thereby meeting their long-term funding needs even as the Nigerian debt capital market becomes aligned with international best practices and standards.”
She further stipulated that the Exchange would provide continuous information disclosure on the C&I Leasing Bond, including price/value data and detailed issuers’/issues information, to stakeholders via the ‘Listings and Quotations’ page on the FMDQ website.
Andrew Otike-Odibi, managing director, C&I Leasing, said at the bond listing ceremony that, “The current operating environment presents both opportunities and challenges, and as a leading player in the support services industry, an offer of this nature will provide additional capital to enable us expand our marine business operations, repay existing credit facilities and meet working capital obligations which will ultimately lead to more profitability and growth in market share guided by a robust risk management framework and strong corporate governance.”
He added: “We remain committed and focused on the fundamentals of our business which are efficiency and service delivery whilst intensifying efforts to boost our revenue generating profile from our other businesses and reduce credit exposures to volatile segments of the market.”
Following the presentation of the listings scroll to the Registration Member (Listings), Agusto stated, “Coincidentally, C&I Leasing plc and WSTC Financial Services Limited were pioneer Finance Houses as both commenced operations in 1991 and were amongst a handful of those that survived the monumental crash of the industry in 1993. It is to the credit of the Board and Management of C&I that the company very early subjected itself to the discipline of public listing and evolved to be a preeminent leasing company in Nigeria. The growth of C&I is the result of focused and disciplined management and the FMDQ platform has deepened its access to the Financial Market. We congratulate FMDQ and C&I on this historic listing.”
The Bond listing ceremony included among others the signing of the FMDQ Bond Listings Register, presentation of the FMDQ Bond Listing Certificate, and the autographing of the FMDQ Bond Listing Wall of Fame.
FMDQ, through the concerted efforts of its varied stakeholders, has continued to facilitate growth and development in the Nigerian financial market, with specific focus on the debt capital market, and the Nigerian economy at large. The Nigerian debt capital market continues to make essential strides towards its development and today’s listing of the Bond on FMDQ marks another milestone in this certain development.
