Oil rallies to $67

Oil prices hit new highs yesterday, bouncing back from a morning slump after the United States (U.S.) government said shale output would rise to a record next month.

Brent futures rose 79 cents, or 1.2 per cent, to $67.24 a barrel, surpassing Monday’s high for the year of $66.83.

U.S. futures were up 99 cents, 1.8 per cent, at $57.08 a barrel, after hitting a new intra-day high going back to late November.

Nigeria, which has $60 budget benchmark for this year, is willing to reduce oil output to help secure higher prices, spokesman for President Muhammadu Buhari said in a statement yesterday, after an envoy from Saudi Arabia called on the African nation to adhere to a deal on production cuts.

In January, the country pumped well above the quota it previously agreed to. Nigeria is Africa’s largest oil producer.

Chevron bags NIPS awards

Chevron Nigeria Limited (CNL), operator of the NNPC/CNL Joint Venture, has won two awards at the   industry dinner and awards night, organised by the Nigerian Nigerian International Petroleum Summit (NIPS) in Abuja. The awards were in recognition of the company’s outstanding performance.

The awards won by CNL are: “for contributions to the hydrocarbons industry, and the Foreign Investment Network’ (FIN)“.

CNL Chairman and Managing Director, Jeff Ewing, received the two awards. The first award was presented by the Nigeria’s Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, while the second was presented by FIN Chief Executive Officer, Michael Dragoyevich.

The event was attended by dignitaries such as Kebbi State Governor Abubakar Atiku Bagudu; Petroleum Ministers from other countries, including Equatorial Guinea, Sudan, Cote D’Ivoire, Chad, Niger Republic, Togo and Norway. There were others such as NNPC representatives, industry regulators, participants from other African countries, and other industry players.

CNL General Manager, Policy, Government and Public Affairs (PGPA) Esimaje Brikinn, who spoke at the event, expressed joy over the awards.

He explained that the NNPC/CNL Joint Venture is a major oil and gas producer and has provided substantial revenue to NNPC, the Federal Government and state governments for over 50 years.

He also said the company is the leading domestic gas supplier and has made great strides in putting out gas flares and increasing supply to the domestic market through its integrated gas development projects.  “Chevron is the largest domestic gas supplier in Nigeria,” he said.

On corporate responsibility, Mr. Brikinn said CNL has demonstrated its commitment to the ideals of meeting the needs of the community in health, education, economic development areas.

“CNL has provided thousands of scholarship awards worth billions of naira to Nigerian students. CNL has also established the scholarship for the Blind to cater for the visually-impaired students,” he noted

Heritage Bank debuts ‘HB LAB’ tech start-ups to boost economic growth …As winner gets $25, 000 grant, other benefits

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Heritage Bank Plc, Nigeria’s most innovative banking service provider, adopts a focused approach that removes barriers and galvanizes the critical sector of the economy around a bold growth agenda with the launching of its innovation accelerator programme tagged, “HB LAB”.
The maiden edition of HB LAB is a 12-week programme, expected to provide technology startups with enabling environment, resources and support required to innovate and accelerate impactful solutions with the potential to radically improve financial Inclusion/Intermediation, agriculture and other related problems affecting critical sectors of the economy.
The application portal which was launched on the 31st January 2019 closed on the 14th February 2019.
About 154 applicants who applied were reviewed and 24 of them scored above 60, whilsts the final selection will produce seven successful applicants, which the winner will emerge.
Speaking on the HB LAB, the MD/CEO of the bank, Ifie Sekibo explained that in Nigeria, technology startups still account for a relatively small share of all businesses, but they have an outsized impact on economic growth, because they provide better-paying, longer-lasting jobs than other start-ups, and they contribute more to innovation, productivity, and competitiveness.
He disclosed that the team with the most compelling solution will be awarded a $25,000 grant alongside access to workspace and IT infrastructure for solution testing and development for a defined period.
According to him, the HB Innovation Lab Programme is open to product development teams and technology driven startups across Nigeria.
Sekibo stated that the critical areas of focus are Fintech, agriculture, education, digital, security and power, whilst noting that the application requirements include names, age, gender, contact number, home and email addresses of the participants.
Meanwhile, for participants who have previously enlisted to participate in any entrepreneurial/innovation programme with a current website or demo reference point, were expected to discuss idea/solution not more than 140-character limit.
Also, such participant   discussed problem statement (not more than 140-character limit), ideation/solution stage (not more than 140 characters), target market (Max 150 words), any challenge(s) faced requiring professional intervention (Max. 150 words), introduced its team (Max 150 words) and upload business plan.
Declare Nationwide Data of Permanent Voters Cards Collection, BudgIT Tells INEC

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Without any travesty, the administrative and political tensions surrounding the 2019 general elections are manifest threats to free, fair and credible elections in Nigeria.

In the presence of contentious accusations of rigging – flying from both sides of the political divide – coupled with the abrupt ‘logistic’ failure of the Independent National Electoral Commission (INEC), we are deeply worried about the secrecy in which the major data that can safeguard the elections from possible manipulations is being confined.

According to the electoral commission, there are 84 million registered voters for the general elections. However, questions from both local and international observers remain: What is the total number of collected voters cards across the country?

It is instructive that “84 million registered voters” is vague and susceptible to manipulation the very moment Nigerians are barred from the actual data of collected PVCs. Fifty-two million as of February 17, 2015, this data was published – regular updates in fact – in the last elections. The hesitation today by INEC to do the needful casts immense doubts around its integrity, therefore, the credibility of the upcoming elections.

We’re calling, once again, on INEC to publish immediately the total number of voters cards collected in all states. In the pursuance of fair elections, this is the right thing. Nigerians should, amidst many uncertainties, have data of expected votes.

NSE to launch new trading platform for mutual funds

Authorities at the Nigerian Stock Exchange (NSE) will this weekend launch a new trading platform for collective investment schemes (CIS), otherwise known as mutual funds.

The platform is expected to facilitate electronic transactions with seamless connection among key parties in transactions, including the Exchange, Central Securities Clearing System (CSCS), stockbrokers and fund managers.

The NSE said the new platform aims to improve and enhance access of listed mutual funds to investors.

“The overarching goal is to enhance visibility for the listed funds and promote financial inclusion, while stimulating retail investor participation in our market,” the NSE said.

The new platform is also expected to engender listing of more mutual funds at the Exchange.

The Nigerian mutual fund industry is a growing market as fund managers continue to float new funds to provide alternative investment windows for the investing public. Official report by the Securities and Exchange Commission (SEC) showed that there were some 74 registered mutual funds in Nigeria with total net asset value (NAV) of about N552 billion as at April 20, 2018. There are 47 mutual funds listed on the Memorandum Quotation of the NSE.

A mutual fund is a pool of funds brought together by a professional fund manager from several investors to invest in selected underlying securities. The underlying securities can be one or a combination of the following: stocks, fixed income securities, real estate and commodities. A mutual fund portfolio is structured and maintained to match different investment objectives. The type of mutual fund an individual invests in depends on their financial objectives and appetite for risk.

As professionally-managed joint investment vehicles through which investors can pool funds and invest in chosen basket of securities, mutual funds have proven to be a veritable means to optimise returns and reduce risks. With track records of above-average returns and stable performance, mutual funds provide common window for all cadres of investors-high and low networth, to invest in the various segments of the Nigerian economy and earn competitive returns.

Most mutual funds are open-ended investment schemes. This means that the fund manager can create additional units for new investors on demand. The fund manager is also able to provide active liquidity by redeeming units from existing investors who want to sell units for cash. Through this pool of funds, an investor creates wealth over a long period of time by making the money work for him through regular saving and investment.

In addition to liquidity, mutual funds offer a range of benefits to investors, including portfolio diversification and lower transaction costs. The existence of a Trustee and Custodian to a mutual fund ensures the safety of investments, as the Trustee ensures that the fund is managed in line with approved investment guidelines, and the Custodian holds the fund assets.

Mutual fund investments are affordable for low-income investors, as some funds require an initial investment of only N5,000. The mutual fund assets in Nigeria have grown significantly in the last five years. This is an indication of the growing interest in this class of investment.

Data from SEC on the Net Asset Value (NAV) of all registered mutual funds in Nigeria showed that the collective NAV grew by 349 per cent between November 01, 2013 and November 02, 2018. This translated to a Compound Annual Growth Rate (CAGR) of 35 per cent during the period.

However, participation in the Nigerian mutual fund industry has been low, partly due to generally low level of investor education and awareness and particularly, the absence of good understanding and awareness about the mutual fund industry.

CBN directs banks to cut appetite for govt’s securities, oil assets

The Central Bank of Nigeria (CBN) yesterday directed commercial banks to moderate their appetite for investing in government securities and oil and gas assets.

Government securities include Federal Government of Nigeria (FGN) Bonds and Treasury Bills (TB).

Its  Deputy Governor, Edward Lametek, who spoke at the last Monetary Policy Committee (MPC) meeting released by the apex bank, said moderating demand for government securities and oil assets  assist the lenders to rebalance their portfolios.

According to him, banks also needed to lend more to the economy for sustained economic growth.

He said the CBN’s  interventions in agriculture have clearly shown the immense prospects with properly directed credit.

He said: “Deposit Money Banks (DMBs) need to step up credit delivery to the growth poles – agriculture, manufacturing and services. The last couple of months have witnessed a sustained improvement in banking sector resilience – industry capital adequacy and liquidity ratios have grown, while the non-performing loans (NPLs) ratio is on the decline.

“This should translate to improved intermediation to be relevant. While monetary policy has to accommodate the need to sustain current improvements in banking industry Financial Soundness Indicators (FSIs), the DMBs would need to moderate their appetite for government securities and oil & gas assets in order to gradually re-balance their asset portfolios.”

He said developments in the inter-bank market somehow suggest that the sterilisation actions of the bank have remained very effective in reining-in excess liquidity.

Lametek said it is important that such actions should continue to be a component of monetary management in this year as liquidity threats do not appear to be abating any time soon. Keeping domestic liquidity in check is important not only for inflation, but also for the stability of the naira exchange rate.

“Overall, my assessment is that risks to inflation have remained tepid notwithstanding the year-on-year increase in headline inflation in December 2018. This could change depending on the short to medium-term evolution of fiscal policy. Given elections in February and March, the fiscal outlook should become clearer as from April 2019,” he said.

According to him, the outlook for economic growth is a bit dicey concerning given the indications from the oil sector (especially the volatility in crude prices) and sluggish consumption demand.

“I view the balance of risks to economic growth tilting to the downside, which suggests that there is a more urgent need to support growth or in the minimum delay any policy action that might further tighten credit conditions. It is important to stress nonetheless that a supportive monetary policy orientation alone will not be sufficient to lift economic growth to the historical levels of 5-6 per cent. Other policies of government, particularly fiscal and sector policies have to be in the same mode,” he said.

Also, a member of the MPC, Adenikinju Festus, said with respect to the banking and financial system, there is positive trend in all financial system indicators (FSI) between November last year and January this year.

He said the NPLs ratio continues its downward trend, capital adequacy ratio of the banking sector improved three consecutive months, liquidity ratio inched northward, aggregate assets and deposits of the banking sector also rose over the same period.

However, the monetary authority should not lower its guard and must continue to monitor the banks and implement policies to consolidate and further improve the FSI.

“Aggregate credit expansion to the real economy continues to pose serious challenges. Net credit growth to the private sector is lower than provisional benchmark for 2018. The high-interest rate spread and the high lending rates are challenges that require new and innovative approaches,” he said.

According to him, the proposed National Microfinance Bank, strengthening of existing Micro Finance Banks, and other initiatives by the CBN to promote financial inclusion, access to credit by those in the rural areas, semi/urban and even the poor areas in the cities across the country at affordable interest rates would boost real sector activities at the Micro Small and Medium Enterprises (MSMEs) level.


Sterling Bank lists N33b bonds on NSE, FMDQ

Sterling Bank Plc yesterday listed its N32.9 billion bond on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange, paving the way for investors in the bond to trade on their units.

The N32.90 billion Series 2 bond, issued by Sterling Investment Management SPV Plc, a special purpose vehicle of the bank, is an unsecured bond with a tenor of seven years at a fixed coupon rate of 16.50 per cent. The bond is part of a N65 billion debt issuance programme launched by Sterling Bank to support its new business strategy and digital banking.

Under the new business strategy, Sterling Bank will build expertise and investments in five sectors regarded as growth sectors of the Nigerian economy including health, education, agriculture, renewable energy and transportation.

Speaking during the listing at the NSE and FMDQ, Managing Director, Sterling Bank Plc, Mr. Abubakar Suleiman, said the success of the bond reflected the increasing appetite of local institutional investors for long term debt instruments and increasing confidence in Sterling Bank as an issuer.

According to him, the considerable oversubscription of the issue showed investors’ confidence in the bank and further strengthened and diversified the bank’s corporate funding strategy.

He commended stockbrokers for supporting the bank and assured that the bank will continue to engage the market on its activities.

He urged capital market operators to continue to support the bank as it continues to explore opportunities to widen its businesses and strengthen is balance sheet.

Associate Executive Director, Capital Markets, FMDQ OTC Securities Exchange, Ms. Tumi Sekoni commended Sterling Bank for again joining the league of corporate entities whose debt profiles have been raised through the value-packed listings, quotations and noting service offered by FMDQ. Sterling Bank had listed its earlier bond on FMDQ.

She noted that the listing would contribute to the growth of the Nigerian corporate bond market by injecting renewed confidence into the debt market.

She assured stakeholders that FMDQ would continue to innovate and provide efficient services, as may be necessary, to support issuers and investors, towards achieving a globally competitive and operationally excellent debt market.

Partner and Head of Investment Banking, Constant Capital Partners Limited, Mr. Niyi Omojola noted that his firm, the lead issuing house in the bond issue, crafted a unique and innovative investment structure which enabled the Sterling SPV bond share in the same investment grade rating as Sterling Bank Plc, thereby enlarging the range of potential investors in the bond.

He said the innovative structure protects investors by providing bond-backed credit enhancement while investing in the Tier II capital of Sterling Bank Plc.

According to him, as a result of the compelling proposition offered by Sterling Bank Plc and the structuring and distribution efforts of Constant Capital, the transaction was extensively oversubscribed.

Omojola also said the innovation has allowed investors benefit from an enhanced rating, while providing Tier II capital to Sterling Bank Plc.

Associate Executive Director, Corporate Development, FMDQ OTC Securities Exchange, Ms.  Kaodi  Ugoji,  said listing on FMDQ will avail the bond unprecedented market transparency, unrivalled information disclosure, efficient price formation and improved global visibility, among other benefits.

She reiterated FMDQ’s commitment to continually align its initiatives towards serving and providing the much-needed support to the players in the DCM.

Afreximbank’s FEDA to lift FDI

The Fund for Export Development in Africa (FEDA), the equity investment fund created recently by the African Export-Import Bank (Afreximbank), will catalyse foreign direct investment (FDI) flows into Africa’s trade and export sectors, President of the bank, Benedict Oramah has said.

Speaking in Tunis during the opening of the Financing Investment and Trade in Africa conference organized by the Tunisia-Africa Business Council, Oramah said that Afreximbank’s vision was to leverage $1 billion in support of FEDA’s mission and to catalyze four times that amount in FDI in five years.

He explained that the kind of equity funding currently available in Africa was not appropriate for turning the continent into the trade hub which it needed to become in order to achieve desired growth, saying that FEDA would ensure that investors’ investments were protected under the immunities and privileges available to Afreximbank and that the investments enjoyed tax privileges and incentives.

Nigerian Breweries to pay N19.4b net profit to shareholders

The board of directors of Nigerian Breweries Plc has recommended payment of the entire net profit of N19.4 billion recorded in 2018 as cash dividend to shareholders for the business year, despite the decline in the company’s performance.

Shareholders will receive final dividend of N14.6 billion in addition to N4.8 billion earlier paid by the company. A breakdown showed that shareholders will receive final dividend per share of N1.83 in addition to interim dividend of 60 kobo, bringing total dividend per share for the year to N2.43.

The dividend payout for the 2018 business year represented 41.2 per cent decline on the payout for 2017, reflecting the decline in the performance of the company. Nigerian Breweries had paid out its entire net earnings of N33.01 billion as cash dividend in 2017, representing dividend per share of N4.13.

Key extracts of the audited report and accounts of Nigerian Breweries for the year ended December 31, 2018 showed that turnover dropped by 5.8 per cent from N344.53 billion in 2017 to N324.339 billion in 2018. Operating profit declined by 35.3 per cent from N57.13 billion to N36.96 billion. Profit before tax also dropped from N46.57 billion to N29.36 billion.

After taxes, net profit declined by 41.2 per cent from N33.01 billion to N19.4 billion. Earnings per share consequently dropped from N4.13 to N2.43 while net asset per share slipped by 6.8 per cent from N22.37 in 2017 to N20.84 in 2018.

Company Secretary and Legal Director, Nigerian Breweries Plc, Uaboi Agbebaku, said the 2018 performance was adversely affected by the increased excise duty rates that came into effect during the year as well as other challenges in the operating environment.

Nigerian Breweries had explained that its decision to pay out its entire net profit after tax as cash dividend to shareholders demonstrated its strong performance and confidence over its operations.

GOXI gets state micro-insurance approval

The National Insurance Commission (NAICOM) has granted approval to GOXI Microinsurance Company Limited to operate as State Composite Microinsurance Company in Lagos State.

In a statement yesterday, NAICOM’s Assistant Director, Salami Rasaaq, said the new firm is licensed to transact Life and General Micro Insurance Business in the state only, saying it granted approval to GOXI in its drive to ensure insurance market development through enhanced access points for insurance services in Nigeria.

“This is one of several applications received in the commission from individuals and corporate entities requesting approval for registration as Micro Insurance operators.

“GOXI Microinsurance Company Limited thus become the first full-fledged standalone Micro Insurance Operator in Nigeria,” the statement read.