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.

CBN injects $210m into forex market

The Central Bank of Nigeria has injected $210m into the various segments of the market to sustain its intervention in the Inter-Bank Foreign Exchange Market.

CBN Director, Corporate Communications, Mr Isaac Okorafor, made this known in a statement on Tuesday in Abuja.

Okorafor said that the apex bank offered $100m as wholesale interventions and allocated $55m to Small and Medium Enterprises.

He said that another $55m was allocated to customers requiring foreign exchange for business and personal travels, tuition or medical fees.

The director explained that Tuesday’s interventions were in continuation of the bank’s resolve to sustain the high level of stability in the foreign exchange market.

According to him, it is also to continue to ease access to the currency by customers in different sectors.

Okorafor said the CBN was optimistic that the Naira would sustain its run against the dollar and other major currencies around the world, considering the level of transparency in the market.

Meanwhile, in spite of election activities, the Naira continues to maintain its stability in the foreign exchange market, exchanging at an average of N356 to a dollar at the Bureau de Change segment.

Meanwhile, the Naira on Tuesday lost marginally against the dollar at the parallel market in Lagos, closing at N359 to the dollar.

The News Agency of Nigeria reported that the naira had exchanged at N358.8 on Monday.

The Pound Sterling and the Euro traded at N469 and N410, respectively.

At the Bureau De Change segment, the naira was sold at N360 to the dollar, while the Pound Sterling and the Euro closed at N469 and N410, respectively.

Trading at the investors’ window saw the naira closing at N362.3 to the dollar, while market turnover stood at $397.32m.

As the United States and China trade deal gets to a head and the increase in the price of oil at the international market, the nation’s reserves is expected to improve.

Improved reserves and Diaspora inflows will sustain the current stability of the naira at the foreign exchange market.

SEC seals illegal fund management firm

The Securities and Exchange Commission has sealed off the premises of a Lagos-based firm, Growing Circle, for engaging in illegal fund management activities.

The commission explained that the company was shut down for carrying out investment operations that fell within fund management without registration with the apex regulator.

The commission, in a statement on Tuesday, revealed that it had established that the company’s activities also constituted an infraction of the Investments and Securities Act, 2007.

The statement read in part, “They have not registered with SEC and the commission has powers according to Section 13 (w) of ISA 2007 to shut down any company carrying out capital market activities without due registration.

“The mode of operation of the company is that for a new entrant, registration is N10, 000 and the person is not entitled to products while the second category has a registration fee of N16, 000 that entitles the registrant to receive products.

“For anyone to come under the company, he has to come under an up liner since the company engages in networking business.”

It added that for the networking business, the least stage was a starting point with a minimum registration of $50 and an incentive of $15 for a member that introduced two down liners.

It was gathered that the company also engaged in free seminars at its head office for people to learn more about the products and the money-making business with an unbeatable compensation plan and huge bonuses.

However, SEC disclosed that after registration, the members claimed that they did not get any products from the company and all efforts to retrieve their funds proved abortive.

While the company claimed to have a factory in Ogun State, the said factory could not be located even though the products were on display at their Lagos office.

SEC Management said the closure was to end unlawful activities of the company against unsuspecting investors and, therefore, urged investors to ensure that they only deal with fund managers that were registered with the commission.

It added, “The accounts of the company have been frozen and the promoters have been arrested by the Nigeria Police Force and are undergoing interrogation.

“The commission wishes to notify the investing public that the company is not licensed to carry out investments business of any type and as such its operations are illegal.

“SEC, therefore, advises the public to exercise due diligence and caution in the course of making investment decisions. A valid licence of lawful operators can be obtained on the commission’s website by members of the public to confirm the licences of firms with which they intend to carry out investment activities.”

Banks loans to private sector dropped by N455bn to N15.1tn –NBS

The total credit from banks to the economy recorded a decline of N455bn from N15.58tn as of the end of the third quarter of last year to N15.1tn in the fourth quarter.

This is contained in the banking sector report released by the National Bureau of Statistics on Tuesday.

The NBS in the report also said the total number of members of staff in banks increased by 1.8 per cent from 102,821 in the third quarter of 2018 to 104,669 in the fourth quarter.

It said during the fourth quarter of last year, the sector recorded 616,528,697 transactions valued at N39.15tn through electronic payment confirmation.

The report stated that the Nigeria Interbank Settlement System Instant Payments transactions dominated the volume of transactions as it recorded 228,209,423 transactions valued at N23.57tn during the fourth quarter of last year.

A breakdown of credit to the private sector showed that oil and gas with N3.55tn received the highest credit allocation during the period under review.

This was followed by the manufacturing sector with total loans of N2.23tn.

It read in part, “In terms of credit to the private sector, the total value of credit allocated by the banks stood at N15.13tn as at Q4, 2018.

“Oil and gas and manufacturing sectors got credit allocation of N3.55tn and N2.23tn to record the highest credit allocation as at the period under review.

“As at Q4, 2018, the total number of banks’ members of staff increased by 1.80 per cent quarter on quarter from 102,821in Q3 2018 to 104,669.”

 

Based on the analysis of the report, the agricultural sector received N610.14bn, power and energy, N403.37bn; construction, N614.5bn; trade and general commerce, N1.07tn; while credit to the government was put at N1.36tn.

In the same vein, the real estate sector received a total loan of N622.77bn; finance, insurance and capital market, N1.1tn; education, N57.25bn; Information and Communications Technology N545.49bn; transportation and storage, N289.85bn;  while other sectors got N339.73bn.

Stock market rebounds, investors gain N80bn

The stock market witnessed a rebound on Tuesday as the investors gained N80bn.

The market capitalisation of equities listed on the floor of the Nigerian Stock Exchange increased from N12.004tn on Monday to N12.084tn on Tuesday, while the All Share Index gained 0.67 per cent to close at 32,406.17 basis points from the 32,190.07bps recorded on Monday.

Analysts at Afrinvest Securities Limited said the rebound witnessed by the market was due to buying interest in bellwether stocks such as Zenith Bank Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc as the year-to-date return improved to 3.1 per cent.

Activity level also strengthened as 361.821 million shares valued at N4.160bn exchanged hands in 4,623 deals, representing a 55.4 per cent and 23.7 per cent increase in volume and value traded, respectively.

The top traded stocks by volume were Transnational Corporation of Nigeria Plc (120.2 million units), Zenith Bank (37.3 million units) and FBN Holdings Plc (31.2 million units), while Dangote Cement Plc (N951.6m), Zenith Bank (N925.5m) and GTB (N778m) led the top traded stocks by value.

Performance across sectors was largely bullish as four of five indices closed on a positive note.

The banking sector, which was the biggest loser on Monday, became the biggest gainer on Tuesday as it appreciated by three per cent.

The oil and gas and consumer goods sectors advanced by 0.7 per cent and 0.3 per cent, respectively.

The insurance sector was the fourth gainer, advancing by 0.2 per cent following investor interest in Custodian Investment Plc and Cornerstone Insurance Plc.

On the flip side, the industrial goods index shed 0.2 per cent on account of major sell-offs in Dangote Cement and First Aluminium Nigeria Plc.

Investor sentiment, as measured by market breadth (advance/decline ratio), strengthened to 1.1x from 0.3x recorded on Monday as 16 stocks advanced against 14 decliners.

The top five gainers were Japaul Oil & Maritime Services Plc, Sovereign Trust Insurance Plc, Associated Bus Company Plc, Custodian Investment and Academy Press Plc, which saw respective gains of 9.52 per cent, 9.52 per cent, 9.09 per cent, 8.26 per cent and 8.11 per cent.

The top five losers were First Aluminium, Transnational Corporation of Nigeria, Wema Bank Plc, Unity Bank Plc and Union Diagnostic and Clinical Services Plc, whose respective share prices shed 10 per cent, 9.74 per cent, 9.68 per cent, 9.65 per cent and 6.90 per cent.

“Despite today’s rebound in market performance, we advise investors to trade cautiously as we expect sell pressures to return to the market by close of the week – eve of the rescheduled presidential elections,” analysts at Afrinvest said.

Nigeria got $43bn investments in four years —NBS

Between January 2015 and December 2018, the Nigerian economy attracted a total investment of $43.81bn, investigations have revealed

Based on the official N305 to a dollar exchange rate of the Central Bank of Nigeria, the $43.81bn translates into about N13.36tn

Documents of the country’s investment inflows obtained from the National Bureau of Statistics revealed that the investment came from three main sources.

They were Foreign Direct Investments made up of equity and other capital; Portfolio investment which comprised equity, bond and money market instruments; and other investments which were made up of trade credits, loans, currency deposit and other claims.

Further analysis of the report showed that Nigeria’s foreign exchange policy, the Economic Recovery and Growth Plan and the economic recession witnessed in 2016 largely shaped capital importation over the period.

For instance, investigations showed that prior to the economic recession of 2015, the level of investment inflows was at an upward trajectory.

However, at the onset of the economic crisis few months after the inauguration of President Muhammadu Buhari, findings showed that investment inflow recorded a sharp decline to almost half of the 2014 value of $20.76bn dropping to $9.65bn in 2015.

Further analysis of the report revealed that in 2016, the value of investment inflow remained depressed, decreasing by $4.55bn from $9.65bn in 2015 to $5.1bn.

It, however, noted that a recovery began in 2017, as investors raised their stake by $7.1bn to $12.2bn.

In the 2018 fiscal period, the country attracted about $16.81bn investment, the NBS data showed.

In 2018, the largest amount of investment inflow by type was received through portfolio investment, which accounted for $11.8bn or 70.20 per cent.

This was followed by other investment, which accounted for $3.81bn or 22.69 per cent of total capital, while Foreign Direct Investment had $1.19bn or 7.11 per cent of total capital imported in 2018.

In terms of destination, the report stated that the United Kingdom emerged as the top source of capital investment in Nigeria in 2018 with $6bn. This, it noted, accounted for 35.74 per cent of the total capital inflow in 2018.

This was followed by the United States with $3.57bn;  South Africa, $1.15bn; the United Arab Emirates, $937.19m;  Belgium, $886.08m; and Singapore, $780.87m.

Others were Ghana, $626.44m; Mauritius, $560.87m; The Netherlands, $373.08m; and Switzerland, $355.98m.

The Executive Secretary, Nigeria Investment Promotion Commission, Yewande Sadiku,  had said that the government was committed to attracting fresh investments in key sectors of the economy.

Sadiku said the commission now had a seamless collaboration with the states to enable it to monitor closely investments inflow into the country, as a one-stop centre.

She said the commission was working with key stakeholders to see more Nigerians invest in the country, adding that the current efforts of the NIPC in working more closely with the states was to increase the level of investment inflow into the country and to ensure seamless collaboration and proper tracking.

She said, “We are interested in seeing more Nigerians invest in the country, and we have a Domestic Direct Investment model now in the commission and we are working with the National Bureau of Statistics to track investments inflow into the country.”

“The current efforts of the NIPC in working more closely with the states is to increase the level of investment inflow into the country, and to ensure seamless collaboration and proper tracking.”

Honda to close only British factory in 2021

Honda Motor said it will shut its only plant in Britain in 2021, a decision the Japanese car maker said was based on changes in the global market and not related to Brexit.

The company will also stop making its Civic car model at its Turkey plant from 2021, but plans to continue its operations in the country, Honda Chief Executive, Takahiro Hachigo, told a news conference in Tokyo.

The announcement comes a day after a British lawmaker said Honda will announce the closure of the Swindon factory in southern England, resulting in 3,500 job losses in what is seen as a big blow to UK’s auto industry before Brexit.

The plant closure will be one of several by automakers reassessing their presence in the UK and Europe.

Two weeks ago, bigger Japanese rival Nissan canceled plans to build its X-Trail sport utility vehicle in Britain.

Last month, Britain’s biggest automaker Jaguar Land Rover, and Ford Motor Co separately announced sweeping job cuts in Europe.

For Honda, declining demand for diesel vehicles, tougher emissions regulations and uncertainty over Britain’s expected departure from the European Union next month have clouded its manufacturing prospects in the region.

The automaker said more than a year ago it will close one of its Japan plants in 2022 in an effort to consolidate production as it focuses on new vehicle technologies.

Honda built over 160,000 vehicles at Swindon where it makes the hatchback version of its popular Civic model, accounting for a little more than 10 per cent of Britain’s total output of 1.52 million cars.

But it has struggled in Europe in recent years, and the industry faces a number of challenges including declining diesel vehicle demand and tougher regulations alongside the uncertainty over Britain’s departure from the European Union, due next month.

Justin Tomlinson, a Conservative lawmaker for Swindon who voted for Brexit in 2016, said he had met with the business minister and representatives from Honda who had confirmed the plans.

“They were due to make a statement tomorrow morning, it’s obviously broken early,” Tomlinson, lawmaker for North Swindon, told Reuters.

“This is not Brexit-related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”

Honda said it would not be providing any comment on the “speculation”.

“We take our responsibilities to our associates very seriously and will always communicate any significant news with them first,” the firm said.

Honda announced in October 2017 it would stop making vehicles at its Sayama plant in Japan by 2022 as it grapples with a shrinking domestic market.

Like many of its global rivals, Honda is trying to streamline its operations as it invests heavily to develop electric vehicles and self-driving cars, transforming itself from simply a manufacturer of cars into a mobility company.

Japan has repeatedly warned it could pull investments in Britain, which it had seen as a gateway into Europe, if London does not secure a Brexit deal favorable for trade.

The recently agreed EU-Japan trade agreement means tariffs on cars from Japan to the continent will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.

Honda’s announcement would come just over two weeks after bigger Japanese car maker Nissan canceled plans to build its X-Trail sport utility vehicle in Britain.

In January, Britain’s biggest automaker Jaguar Land Rover said it would cut 10 per cent of its workforce, mainly at home, due to sluggish sales to China and a slump in European diesel demand.

“The car industry in the UK over the last two decades has been the jewel in the crown for the manufacturing sector – and now it has been brought low by the chaotic Brexit uncertainty,” said Des Quinn, national officer for the automotive sector at Unite, Britain’s biggest trade union.

Honda said last month it would shut its British operations for six days in April to help counter any border disruption from Brexit.

It was also preparing to front-load some production at its plant to ship overseas or build up inventories.

Nissan, Honda and a third Japanese car maker, Toyota Motor Corp, together account for roughly half of the cars built in Britain.

Honda which has been building more cars for sale outside of Europe in recent years, said earlier this month its production volumes at Swindon would be reduced to 570 cars per day and that it would make job cuts.

“This reduction in volume will not have any impact on our permanent resource levels and is in line with our current production plans,” the company said.