MPC Jerks Up CRR By 500bps

CBN
CBN

The Monetary Policy Committee (MPC) has raised the Cash Reserve Ratio (CRR) upward by 500bps

The Committee in the first-rate decision of the year, took a different twist, electing to adjust the Cash Reserve Ratio (CRR) upward by 500bps, from 27% to 27.5%, while holding all other parameters at current levels.

At the crux of the committee’s consideration were events across the domestic and global landscapes which included, subdued growth across developed economies, insisting that better growth prospects are likely in 2020 given tamer risks relative to year 2019.

Analysts believe that the committee/s decision highlighted increasing concerns around sustained inflationary pressure which runs ahead of the CBN threshold of 6% – 8%, noting that its disposition reflects signs of the ineffectiveness of the monetary policy tools in curbing higher consumer prices.

However, not to lose grip of consumer price growth amidst concerns of increased liquidity in the system, 9 members of the monetary committee voted to adjust the CRR by 500 bps to 27.5%.

Elsewhere, although the committee expressed satisfaction in credit to the private sector, it re-emphasized the need for higher credit to small and medium scale businesses. Specifically, it stated that credit to the private sector grew by NGN2.00 trillion between May and December 2019.

Seplat Eyes More Asset Acquisitions, Growth

Austin Avuru
Austin Avuru

Seplat Petroleum Development Company Plc, an indigenous oil and gas firm says it will acquire more assets in the exploration and production space as well ensure organic growth.

Chief Executive Officer of the company, Mr. Austin Avuru revealed this at the Nigerian Association of Petroleum Explorationists (NAPE) January Technical/Business Meeting on Mergers, Acquisitions and Divestments in E&P Business held in Lagos on Wednesday, said the development is sequel to the completion of its Eland Oil and Gas Plc’s acquisition deal on December 17, 2019.

He explained that one of Seplat’s key mandate is to leverage opportunities in the oil and gas industry through acquisition of more oil and gas assets.

According to Avuru : “We are delighted to successfully complete the acquisition of Eland, which further enhances Seplat’s footprint in Nigeria and provides opportunities for enhanced scale, diversification and growth. We welcome our new colleagues and Nigerian partners as we look forward to working together in this exciting phase of our development.”

Addressing stakeholders at the NAPE meeting, he said Seplat had positioned itself as an early mover through the acquisition of a 45% operated interest in OMLs 4, 38 and 41 from Shell, Total and Agip in 2010; thus, becoming the first Nigerian independent to acquire a package of oil and gas blocks directly from the Major International Oil Companies (IOCs) as part of a disposal process.

Following this landmark deal in 2010, Seplat further grew its portfolio through the acquisition of a 40% interest in the OPL 283 marginal field area from Pillar Oil. In 2015 acquired further interests in OML 53 and OML 55 from Chevron Nigeria Limited.

Seplat grew production at OMLs 4, 38 & 41 from 14,000bopd as at acquisition to a peak rate of over 84,000bopd.

Avuru explained: “The Company has demonstrated its ability to work its assets and produce its reserves despite external negative factors such as downtime and losses.

“Seplat also began to invest in its gas business in 2010 in response to the Nigerian Government’s initiatives to improve the debilitating impact of poor power generation and supply in the country by opening the Domestic Supply Obligation pricing to market forces.

“We are strategically positioned to access Nigeria’s main demand centers with current well stock delivering around 300MMscfd (Gross).”

Meanwhile the Guest Speaker at the meeting, Mr. Mascot Ogunjemiyo, who highlighted the various merger and acquisition cases in the Nigerian oil and gas industry, said mergers, acquisitions and divestments in the industry were capable of promoting efficiency and further drive growth.

SEC Wants More Retail Investors In The Capital Market

Mary-Uduk
Mary-Uduk

As part of measures to create wealth, deepen the market and grow the nation’s economy the Securities and Exchange Commission, SEC says it has stepped up efforts to encourage retail investors to invest in the nation’s capital market

Acting Director General of the SEC, Ms. Mary Uduk who spoke to journalists in Lagos, urged investors to look into the capital market for future investments as various products abound that would suit their needs.  7abF()&2b^21Q)aw71V&xsMm

According to her, “You don’t need to have so much money to be able to tap into the opportunities available in the capital market. For instance, with the government bond, the minimum investable amount is 10,000 naira and you can buy in subsequent amounts of 1,000 naira.

“We have Collective Investments Schemes (CIS), we have the stocks that you can buy through the stockbrokers and those you can invest in with as little as 5,000 naira. So you don’t necessarily have to have a lot of money to invest, all you need is to approach the stockbrokers. They can open an account for you and whatever you have you can pay into the account and give instructions in what kind of investments you want to make.

Uduk said it is important for people to understand the workings of the capital market and not have the misconception that they must have a lot of money before they can invest.

“We have to disabuse our minds of it. I think that is what is leading people into putting money into Ponzi schemes and lose their money. So all you need to do is to go to SEC website see the list of capital market operators and approach one of them to open an account” she said.

The Acting DG assured investors that the SEC will continue to play its role of providing a good playing ground for investors to ensure that they get the benefits of their investments.

“The SEC is very interested in investor protection and that is why we have rules that the players must obey and all these are channeled towards ensuring that our market is safe for investors.

“The smaller the investors the more he/she is protected. We don’t want any investor to go into the market and lose money, that will not be good for our market.

Uduk said the SEC has continued to educate and enlighten Nigerians about the investment opportunities available in the market and urged potential investors to engage professionals who will guide them on relevant products to invest in.

“In the past people just go to stockbrokers to buy stocks without having proper knowledge of what to buy but now we are encouraging people to go through the investment schemes. If you don’t know anything about stocks go through CIS and invest in different stocks so that professionals can manage your investments. If I am a welder for instance and I don’t know anything about investments, I can put my money there and professionals will manage it for me” she added.

 

 

World Bank Predicts Weaker Economic Outlook For Nigeria

World Bank
World Bank

 The World Bank’s January 2020 Global Economic Prospects report has revealed that uncertainty over the direction of the Federal Government’s policies has weakened Nigeria’s economic outlook,

The World Bank in the report projected that the Nigerian economy would grow by 2.1 per cent this year.

The predicted growth rate, which the World Bank also put at 2.1 per cent until 2022, is weaker than previous projections made by the Bretton Woods institution.

In the report which described the projected growth rate as ‘subdued’, the World Bank explained that the Federal Government’s macroeconomic framework did not inspire confidence.

The bank specifically noted that the macroeconomic framework was characterized by multiple exchange rates, foreign exchange restrictions and persistent high inflation.

It also raised concern raised about the country’s macroeconomic framework noting that the Central Bank of Nigeria was ‘targeting manifold objectives’.

Growing uncertainty over the direction of the policies of the Federal Government was expected to further weaken the country’s economic outlook, the bank said.

The Bank observed that “Growth in Nigeria is expected to remain subdued.

“Growth is projected to remain broadly unchanged, rising only to an average of 2.1 per cent in 2020-22.

“This is weaker than previous projections, reflecting softer external demand, lower oil prices, and a slower-than-previously-expected improvement in oil production in view of the lack of the much-needed reforms.”

“The macroeconomic framework – characterized by multiple exchange rates, foreign exchange restrictions, high persistent inflation, and a central bank targeting manifold objectives – does not provide a firm anchor for confidence, the World Bank insisted.

Shore-up Retirees Pensions, PenCom Urge  PFAs

PENCOM-logo
PENCOM-logo

The National Pension Commission has directed the Pension Fund Administrators to implement pension enhancement for retirees on programmed withdrawal under the Contributory Pension Scheme.

PenCom maintained that the pension enhancement is for Contributory Pension Scheme retirees who retired between July 2007 and December 2017 and have accumulated significant growth in their Retirement Savings Accounts

A statement from the organization revealed that this formed the second edition of the pension enhancement for retirees on the programmed withdrawal mode of retirement.

“Accordingly, the retirees referred to above are by this notice advised to contact their respective Pension Fund Administrators to confirm their eligibility and complete requisite documentation.”

This measure which is the second edition of the pension enhancement exercise for retirees on Programmed Withdrawal mode of retirement is a follow-up to the first pension enhancement plan for the programmed withdrawal retirees implemented in  January 2017,

PenCom stated that it had concluded the exercise and increased the monthly pension of all retirees on the programmed withdrawal due to the income earned on investing their pension assets.

Latest figures from PenCom revealed that the number of retirees receiving their pensions under the programmed withdrawal contracts increased by 3.81 per cent from 214,538 as of the end of the first quarter of 2019 to 222,712 in the second quarter.

Some retirees will however not benefit from the increase as a result of  low balances in their RSA

 

Unclaimed Dividends Will Reduce With Electronic Offering – SEC

Securities-and-Exchange-Commission
Securities-and-Exchange-Commission

The introduction of electronic offering in the Nigerian capital market has been described as a major achievement that will help solve the problems of unclaimed dividends.

 

This was stated by Acting DG of the Securities and Exchange Commission, SEC, Ms. Mary Uduk in an interview, weekend in Abuja.

 

Uduk said the SEC is excited about electronic offering and is in full support hence the rules were developed and espoused to the market to guide its implementation. 

 

According to her, “We believe that electronic offerings will help solve the problems of unclaimed dividends so it’s something we are backing seriously. Through electronic offerings we will not have the problems of identity as we had in previous listings. 

 

“It has a lot of advantages, it means that people who are not close by during an offering can invest, we are able to get the data we need for regulation, the offering is more efficient and it is cost saving. It is something we are working on; the rules will soon be out for everyone to use.

 

The Acting DG said when it becomes operational, an investor in Ghana or South Africa can invest in the Nigerian Capital Market via electronic offering.

 

“That is the idea but when the exchanges finish putting it together that is what will happen. Ours is to make the rules and regulate, but that’s the idea. We want to open up our market so that more people can invest from different parts of the world. 

 

“We want a deeper, bigger, more attractive market. We think our economy is big enough to have a much bigger market. The capital market makes up less than 10 percent of the GDP of the country. If you look at other countries even South Africa, it’s over 100 percent of GDP. We believe we have a large room for expansion and that is what we are pursuing” Uduk stated.

 

 On e-filing, Uduk disclosed that the Commission is working hard to ensure it commences in the not too distant future. 

 

She said, “We are in the process of deploying the software that will help with that. That will make filing more efficient, make it easier for capital market operators to send in returns to us and make the market more transparent”.

Access Bank  Acquisition of Transnational Bank Kenya, Approved

Herbert-Wigwe
Herbert-Wigwe

Access Bank plc has announced that it has secured full regulatory approval for its proposed acquisition of majority equity stake in the Kenya-based Transnational Bank Ltd (TNB).

TNB is a medium-sized commercial Bank with great focus on the agricultural sector and a significant retail footprint.

The Nigeria-based lender had in October 2019 announced that it had secured a ‘no objection’ of the Central Bank of Nigeria to its proposed acquisition of TNB.  The acquisition is in line with the Bank’s strategic objective of becoming Africa’s Gateway to the World.  The entry into the Kenyan market ties into the Bank’s strategy to establish footprints in key African markets and will complement its existing franchise in Rwanda, Congo DRC and Zambia in the Eastern and Southern African frontiers.

Speaking on the acquisition, the Group Managing Director, Access Bank Plc, Herbert Wigwe said: “This acquisition aligns with our strategy to become Africa’s Gateway to the World and we are excited about the potential that resides in the East African market.  We will leverage our presence in key payment corridors; strong partnerships in non-presence countries; robust technology platform as well as world-class risk management to provide cutting edge financial solutions to our clients.

We will build on TNB’s existing expertise in agricultural financing and deploy our resources to optimize other business segments.  We are committed to supporting the growth and development of our host community in line with our sustainability ethos and certain that this acquisition will deliver great value to our stakeholders.

Following the receipt of regulatory approval, we are very confident that the transaction will be completed shortly.”

NIMASA To Honour Stakeholders

NIMASA logo
NIMASA logo

Nigerian Maritime Administration and Safety Agency, NIMASA, is set to honour Maritime stakeholders in Nigeria will on Saturday, January 18, 2020, be honoured  at the annual dinner and awards night by the Nigerian Maritime Administration and Safety Agency, NIMASA.

Dr, Dakuku Peterside who disclosed that part of the aim of organising the annual programme is to encourage industry players to keep striving to ensure global best practices, extolled the role of stakeholders in assisting the Agency achieve its mandate over the years.

Dr Peterside maintained that the willingness of stakeholders to imbibed and adhere best industry practices in their various activities, attract more investors that will help open up the blue economy and ensure compliance to maritime regulations, thereby making Nigeria a force to reckon with in the comity of maritime nations.

“Over the years, our stakeholders have made us proud and put us on our toes as there will be no NIMASA without the shipping community and vice versa. There have been times of criticisms, sanctions and enforcement; all these were geared towards ensuring the right thing is done and laid down rules and regulations are adhered to. We must therefore reward hard work and encourage more investments in the maritime sector by appreciating those who have done well, hence we are organising this auspicious event,” he said.

Dakuku further stated that this year’s award will focus on various categories to include; Most Compliant ISPS Offshore and Onshore Facility; Best Terminal and Jetty Operator; Best Maritime Training Institution; Best Shipping Company (Marine Environment Management).

Others are; Overall Shipping Company; Best Cabotage Operator; Company with Largest Combined Tonnages and Best Maritime Financing Banks among other categories of awards.

He also said that the event will provide opportunities to expose both local and international stakeholders to the inherent opportunities that abound in the nation’s maritime sector.

In order to ensure transparency in the process of selection for the various award categories, the Management of the Agency engaged an independent panel of judges, headed by a former Managing Director of the Nigerian Ports Authority, NPA, Adebayo Sarumi.

The NIMASA DG, who inaugurated the panel in Lagos a few months ago disclosed that the independent panel was composed in order to instill confidence in the selection process for the awards. He also described the members of the independent panel of judges as persons of proven integrity and distinguished careers in their various disciplines.

The terms of reference of the committee include; to identify the various categories of awards for the industry; invite applications from industry stakeholders and the general public for various categories of the award; set criteria and benchmark for the selection process; and finalise the list of awardees in the different categories for submission to the Agency. In pursuance of this, the Agency has already put out a notice for nomination from companies and individuals for the various categories.

The award ceremony will also be an opportunity to reward staff who have contributed meritoriously to the service of the Agency, ranging from fifteen to thirty years.

   Focus on Agriculture To Boost Investors’ Confidence – CIBN President

Uche Olowu CIBN
Uche Olowu CIBN

Nigeria will enjoy higher accretion to its foreign reserves and improved investors’confidence., if plans to diversify the economy away from crude oil earnings is well implemented.

President/Chairman of Council, Chartered Institute of Bankers’ of Nigeria (CIBN) Dr. Uche Olowu speaking at the Finance Correspondents Association of Nigeria (FICAN), 2020 Economic Outlook in Lagos, maintained that as soon as the economy is diversified, foreign investors’ confidence in the economy will receive a boost ,

He said opportunities in the agricultural sector should be explored to improve the country’s capacity to export agricultural products and earn foreign exchange.

According to him, the country has so much to gain by investing in agriculture as a means of boosting foreign reserves, but noted that this is dependent on the ease of access to credit which is also a key factor that will lead to economic growth and development.

Olowu who also spoke to the Federal Government’s policies in 2019, insisted that bankers are now deploying manpower to get highest returns.

He said the banking industry is now open to creative minds that are ready to explore untapped areas in the economy.

According to him, the issue of Non-Performing Loans (NPLs) has been taken care of at the top level in the industry as there is no hiding place for serial loan defaulters.

Olowu further stated that Nigeria’s economy would experience a gradual growth in Gross Domestic Product (GDP) as impact of agric investments begin to materialize.

He therefore, called on the Federal Government to allow the Private Sector rebuild the country’s economy for optimum growth.

” The only way government can boost the country’s economic growth is to be market oriented, that is, by allowing the private sector to do more. There is no way the public sector can sustain the rebuilding of this economy. We need a level playing field, a healthy competition that will be fair, transparent and open to rule of law,” he said.

SEC Committed To Wiping Out Future Unclaimed Dividends – Uduk

Mary-Uduk-Actng-DG-SEC-
Mary-Uduk-Actng-DG-SEC-

The Securities and Exchange Commission, SEC, has assured investors in the capital market that  the solution ton n unclaimed is near as there would be no future unclaimed dividends on those currently being declared by companies.

Acting Director General of the SEC, Ms. Mary Uduk disclosed this in a recent  interview in Abuja, through the Head, Office of the Chief Economist of the SEC, Mr. Okey Umeano, said the Commission has gone very far in solving the unclaimed dividends problem, which he said, is a major milestone.

According to her, “We have engaged Nigeria Interbank Settlement System to make use of the Bank Verification Number and we have got Central Securitas Clearing System and the registrars working towards reducing it and there has been a marked reduction. More importantly, we know that there would be no future unclaimed dividends, there would be no addition to the unclaimed dividends profile and we count that as a success.

“We believe that once we solve the identity issues that we have presently, the problem of unclaimed dividends will be a thing of the past. Also we have continued with our education of the market, we are making more efforts towards awareness on what stakeholders need to know to make the market more attractive, make it better and protect the investors more.

Uduk stated that the Commission is continuing the implementation of the 10-year capital market master plan to make the market more attractive to investors.

She said “This year, one of the things we decided to resolve was resolving the unclaimed dividend problems as well as regularisation of multiple accounts. On all counts we have made a lot of strides. Next year we are picking a few other things like derivatives trading, commodities trading ecosystem and strengthening the CIS segment of the market.

The Acting DG maintained that the issues around multiple subscription is still on, and urged affected investors to regularise their accounts so that their shares can become active and the investors can also get the benefits of investing in the market.

“We have given some time for those affected to regularise their accounts. The stockbrokers and registrars are working on that and we believe that in no time we will identify the owners of those accounts and put them together so that those shares will become tradable again.

Uduk stated that the elimination of dividend warrants in the market has been a major game changer and therefore urged investors to register for e-dividend to access the benefits.

“What that means is that when dividends are paid, investors no longer have to wait for warrants by post as these dividends are paid directly into their accounts. That is why we are saying that going forward, accounts without full details, that have not been updated will no longer be allowed to trade.

“This is because we do not want the legacy issues to continue, we don’t want unclaimed dividends to keep growing, we want it to be such that when dividends are paid investors get it directly to their bank accounts. This will also help in making the market more liquid” she added.