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Nigeria: Market Extends Losses, NSE Gets Lawmakers’ Support

nigeria market extends losses nse gets lawmakers support
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The Nigerian Stock Exchange (NSE) All-Share Index ( ASI) fell by 0.04 per cent to close lower at 35,021.26 as the equities market extended its negative performance for the third day. The market had opened the week with a decline on Monday on profit taking, a trend that has persisted for three days.

As at the close of trading yesterday, the NSE ASI has dipped by 0.33 per cent while market capitalisation shed N61 billion in three days. A total of 21 stocks depreciated while 13 appreciated yesterday.

Meanwhile, the House of Representatives and Securities and Exchange Commission (SEC) of Nigeria have reiterated their support for the NSE to enable the exchange play a critical role in aiding Nigeria’s economic recovery and sustainable growth.

They stated this at the enlightenment tour of the Committee on Capital Market and Institutions, Federal House of Representatives and the SEC to exchange.

Speaking, the Chairman, Committee on Capital Market and Institutions, Federal House of Representatives, Ibrahim Babangida, said: “It is my pleasure to be at the exchange and to hear about the commendable work that is being done. At the federal level, we want to see the NSE and indeed the capital market play its significant role in the economic recovery process of Nigeria especially now that the country has plunged into recession.

“We recognise that some of the rules within the capital market must be revisited to deliver the results we expect, and we, hereby, reiterate our support for the NSE where legislation is required to make the necessary changes.”

Also speaking the Director General, SEC, Mr. Lamido Yuguda, expressed his delight to be at the exchange and thanked the leadership for hosting the delegation. “The SEC has been working collaboratively with the exchange and we will continue to support the NSE to grow the market capitalisation, reduce the incidence of delisting and ensure that the market develops into what Nigeria truly needs. We have seen the massive infrastructure needs of the country and we are confident that the capital market has the capacity to raise the funds needed to finance infrastructure in Nigeria.”

On his part, the Chief Executive Officer, NSE, Mr. Oscar Onyema, said: “Advancing the Nigerian capital market is the collective goal of all key stakeholders and we remain committed to collaborating with the government at all levels to advance and deepen this market.”

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Nigeria: House Asks NAICOM to Suspend Deadline for Recapitalisation of Insurance Companies

nigeria house asks naicom to suspend deadline for recapitalisation of insurance companies

The House of Representatives yesterday directed the National Insurance Commission (NIACOM) to suspend the planned December 31, 2020 mandatory deadline for the first phase of 50% – 60% of the minimum paid up share capital for insurance and reinsurance companies.

The House said the suspension would last for six months from January to June 2021 to cushion the efforts of COVID-19 and other unforeseen circumstances on the insurance industry.

The resolution followed the adoption of a motion of urgent national importance, titled, ‘Need to Suspend the Proposed Recapitalisation of Insurance Companies, Insurance Intermediaries and Other Players in the Insurance Sector, especially in View of the COVID 19 Pandemic and the Economic Recession,’ sponsored by Hon. Benjamin Okezie Kalu and 15 other lawmakers.

Moving the motion, Kalu recalls that NAICOM issued a circular dated May 20, 2019 on the minimum paid-up share capital requirement for insurance and reinsurance companies.

This circular, he said effectively increased the minimum paid up share capital for insurance and reinsurance companies and the original deadlines were May 29, 2019 for new companies, while, June 30, 2020 was to apply to existing companies.

He listed the changes to the minimum paid up share capital as follows, ‘Life Insurance N2 billion to N8 billion, General N3 billion to N10 billion, Composite N5 billion to N18 billion and Reinsurance Nio billion to N20 billion, which was later moved to December 31, 2020.’

The lawmaker noted that as a result of the COVID-19 pandemic, the deadline was moved by NAICOM, via Circular NAICOM/DPR/CIR/25-04/2020 and dated 3 June 2020.

Kalu expressed concerns that if NAICOM is allowed to proceed with its programme as planned, it could negatively affect the economy and slow down the recovery process.

He said: “In the Circular, NAICOM introduced a two phased recapitalisation programmes, wherein, 50 percent of the minimum paid up share capital for insurance companies must be met by 31 December 2020 and 60 per cent for reinsurance companies must be met on the same date. Total compliance with the total minimum capital requirement must be achieved on or before 3September 30, 2021.”

“In addition to the negative economic impact of the COVID-19 pandemic, the Nigerian economy was just announced to be officially in a recession. This signifies that there will be significant slowdown in economic activities and the liquidity position of both the government and businesses are seriously impacted, albeit, negatively.

“In times as this, the best move by the government and by regulators is to push more liquidity into the economy in a bid to stimulate economic activities, encourage spending and prevent job losses as well as support the indigenous businesses in the country. This is pertinent because in addition to the impact of the COVID-19 pandemic, the industry was also affected by the aftermath of the #EndSARS protest in which several insured properties were affected and to this effect, most of these insurance companies have tons of liabilities to settle in order to fulfil their obligations so as not to deny the rights of these affected insured persons.

“These are the types of fiscal, monetary and regulatory approaches that are being adopted in most countries. Hence, it may not be suitable at this time for NAICOM to even proceed with its planned phased recapitalization programme because of the overall impact it may have on the already fragile economy and the insurance sector.”

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Nigeria: Examining Govt’s Move On Unclaimed Dividends

nigeria examining govts move on unclaimed dividends

Goddy Egene writes that the plan by the federal government to set up a trust fund through the Finance Bill to manage unclaimed dividends in the nation’s capital will be counterproductive and should not be allowed by lawmakers

Doing business in Nigeria is difficulty due to the poor state of infrastructural facilities. Companies operating in the country provide virtually all they the need to run smooth operations. Amidst the infrastructural challenges and other high cost of operations, companies strive to make profit and declare dividends for their shareholders.

Over the years, the dividends paid by companies have sustained many investors and have also encouraged them to remain in the market. However, unclaimed dividends have remained an issue in the market just like other climes. It is estimated that there are about N150 billion in the market.

But given the fact it is global issue, Nigerian legislations made adequate provisions on how to treat unclaimed dividends. For instance, the Companies and Allied Matters Act (CAMA), stipulates a 12-year statute of limitation, unclaimed dividends should be ploughed back into the company that declared it.

Also, regulators and operators in the financial markets have been working together to ensure that unclaimed dividends are reduced considerably.

For instance, regulators such as the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) have initiated the Electronic-Dividend Mandate platform, which is being fully supported by trade group’s self-regulatory organisations and other stakeholders in the market. Already, these effort have started to yield positive results.

Instead of the federal government to further support efforts to ensure that unclaimed dividends get back to the owners and ensure a reduction going forward, the government is planning to hijack the unclaimed dividends.

The plan to take over the over N150 billion is being hatched through the Finance Bill 2020. In part V of the bill, the government intends to set up an Unclaimed Dividends Trust Fund.

According to the government, in section 39 (a) of the bill, from the commencement of this Act, any unclaimed dividends of a public limited liability company quoted on the Nigerian Stock Exchange (NSE), or other such stock exchange, which has remained unclaimed for a period of not less than three years from the date of declaring the dividend shall be transferred immediately to the Unclaimed Dividends

Trust Fund, provided that unclaimed dividends that have been transferred to the reserves of the company having remained unclaimed for more than 12 years before the commencement of this Act shall so remain transferred in the company’s reserves;

“All unclaimed dividend that has remained unclaimed for a period of not less than 12 years shall lapse into government revenue and shall be transferred from the Unclaimed Dividends Trust Fund to the Federation Account as Federation Revenue,” the government added.

This provision in the Finance Bill has attracted wide condemnation from shareholders, market operators and other stakeholders and they have urged law makers not to pass the bill with this provision. Securities dealers, shareholders and registrars, among others have raised their voices against the proposal.

Investors and experts have insisted that unclaimed dividends should be reinvested in companies as retained earnings to grow their businesses and generate employment instead government managing them.

They also contended that the take-over of unclaimed dividends by government is not necessary since market regulators, through various initiatives, were taking steps to ensure that unclaimed dividends were reduced to the barest minimum.

According to stakeholders we are witnesses to scandals and massive stealing in government agencies set up to administer pension funds.

The Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu, said the proposal was unnecessary because capital market regulators and operators had leveraged technology to put in place many initiatives that are already addressing the issue of unclaimed dividends.

He said the initiatives include: dematerialisation of shares which entails upload of quoted companies’ shares in the Central Securities Clearing System (CSCS) for ease of reconciliation, adoption of E-Dividend and E-Mandate, consolidation of multiple accounts, identity management engagements, and introduction of electronic Initial Public offering (e-IPO).

Others are the adoption of Minimum Operating Standards (MOS) for operators to enhance efficiency; intensified investor education, continuous stakeholders’ engagements, process reform and streamlining and know your customer (KYC) update on clients’ accounts among others.

“Generally, the incentives for savers and capital providers in the capital market is the expectation of dividends and capital appreciation. It is therefore our considered view that the proposed legislation, if passed, will be a great disincentive to savings, long-term capital mobilisation and serious disruption of the Nigerian economy since it will take away the only expectation of investors in the market,” Ezeagu said.

Also speaking, the President, Chartered Institute of Stockbrokers (CIS), Mr. Olatunde Amolegbe, described the bill as objectionable at this stage of the market.

He said the SEC would always ensure that unclaimed dividends are transferred to capital reserves of the company for restricted utilisation such as capital expansion and issuance of bonus shares to the company’s shareholders.

Another securities dealer and the Chief Executive Officer, Wyoming Capital, Mr.Tajudeen Olayinka, expressed dismay at the bill.

“If passed by the National Assembly, would amount to deleveraging the banking system, whose stock-in-trade is cash, while at the same time, putting too much pressure on public companies’ additional source of finance. Capital formation and investor confidence are at stake as well,” he said.

Shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN), have said the underground moves to take over the funds must not be allowed, stressing that the government lacks powers to manage funds belonging to private sector investors

“Dividends are private wealth of investors, either individuals or corporate entities. The idea of converting such private wealth to federal wealth negates the relevant provisions of the rights to own property as guaranteed by the 1999 constitution. Our opinion, is that S39 to the extent of its inconsistency with S44 of the 1999 constitution (as amended)is null and void. The law expressly states that there shall be no forceful takeover of any private move-able property of any Nigerian without due and appropriate compensation and or valid court order,” the shareholders said.

ISAN explained that dividends are only available to investors after “the company has paid a host of taxies, including companies income Tax Act(CITA),Educational Trust Fund(ETF) and other taxes are paid to the federal government -including 10 per cent withholding tax on the shareholders for every dividend declared.”

“The statute of limitation provides for expiration of debts after six years. CAMA 2020 by S432 increased the limitation to 12 years. Is government by any chance taking the position that the statute of limitation is unconstitutional?”Government lacks the capacity to manage the funds and has demonstrated a lack of capacity to administer funds. Imagine a shareholder with an unclaimed dividend of about N1, 000 to write /go to Abuja just to make a claim of the unpaid dividend. The stress and bureaucratic bottleneck is too cumbersome and will not solve the unclaimed dividend problem,” the shareholders said.

They stressed that it is important to know that dividends are distributable earnings to shareholders.

“Dividends, whether cash dividends or share dividends also known as bonus should belong to the shareholders and not to the company who distributed them or the government. Therefore, every effort must be made to ensure that the shareholders get their dividends from their hard earned investment and should not be denied what rightfully belongs to them.

“Leaving the management of the Fund in the hands of government will create biggest bureaucratic bottleneck for such shareholders to claim such dividends in future. Also, creation of Unclaimed Dividends Trust Fund will usher in nepotism and corruption in the appointment of those that will manage the fund to the detriment of shareholders/beneficiaries,” the shareholders declared.

The new provision conflicts with the previous one in Companies and Allied Matters Act (CAMA) that guarantees a 12-year statute of limitation on unclaimed dividends, after which the fund would be ploughed back into the company that declared it,” they said.

In the opinion of the President of the Institute of Capital Market Registrars (ICMR) and Chief Executive of Coronation Registrars Limited, Mr. Seyi Owoturo, the federal government should come up with a holistic legislation on unclaimed financial assets across the economy with the viewing to managing them for the benefit of all instead of isolating unclaimed dividends in the capital market through the finance bill.

According to him, a research carried out four years ago showed that there is more than N1 trillion unclaimed in the country and asked government to approach the National Assembly with a bill that would be passed as unclaimed assets law in Nigeria.

Owoturo said: “We did a study about four year ago that estimated the value of on unclaimed financial assets to be more than N1 trillion. The problem that I see is that the government shouldn’t be using the Finance Bill to takeover unclaimed assets. It should go to the National Assembly and do an unclaimed assets law. Let us face unclaimed assets generally. There are unclaimed (banker’s) cheques that are issued by companies. In Britain these cheques will go to the Crown while in the United States of America (USA) they will go to the state of the intended beneficiary’s last known address.

There are also unclaimed insurance benefits and dormant bank accounts that were estimated at over a trillion Naira four years ago. The unclaimed dividend is only about N150 billion. Really if there is a problem, it certainly is not unclaimed dividends. The real problem here is that they abound all over the place.”

He explained that the enactment of a holistic unclaimed assets law would also resolve the potential conflict that would arise from the finance bill which stipulated that the unclaimed assets would revert to the government after 12 years while the amended Company and Allied Matter Act 2020 stated that unclaimed dividend should revert to the company.

“Where will the money go? All over the world, countries seek to institute discipline and transparency around unclaimed assets by letting them go to either the sovereign or the state governments. But what the bill is saying is that after 12 years it would not revert to the company as stated by CAMA but to the government,” he said.

Speaking in the same vein, Prof. Uche Uwaleke of the Nasarawa State University, said Nigeria should emulate countries like Uganda, Kenya, the United Kingdom and USA that have specific legislations that govern the treatment of unclaimed assets in their respective jurisdictions.

Uwaleke advised against the involvement of the Accountant General of the Federation and the Ministry of Finance in the management of the trust fund that would shepherd the unclaimed dividends when they became statue barred.

He said: “What I do not support there is bringing in the Ministry of Finance and the Accountant General to the management of the trust fund. I think that the trust fund should be managed by the stakeholders themselves so that registrars should be part of its management.

He also asked: “What about the unclaimed dormant accounts that also run into billions?” and warned against the anticipated moral hazard that might ensue if companies are allowed to take over the unclaimed dividend.

“There is this issue of moral hazard in some countries where these funds return to the companies in the sense that if unclaimed dividends should return to the companies after a period of time there will be n incentives for those companies to be chasing the real owners to come for those dividends.

“So my recommendation is that it should not be limited to dividends alone, it should also cover dormant bank accounts. I think that the idea that government should takeover unclaimed assets is in line with what obtains in other jurisdictions,” Uwaleke said.

To the Registrar/CEO of Institute of Capital Market Registrars (ICMR), Mr. Jonathan Eborah, unclaimed dividends represent the least unclaimed funds across all jurisdictions.

“There are only two countries whose unclaimed benefits fall below the Trillion Naira threshold and they are Nigeria’s unclaimed dividends at N158.44billion and the US’ unclaimed pension benefits of N114 billion. This indicates that there are unclaimed dividends in Nigeria and unclaimed pension benefits in the US, but they are comparatively insignificant to what obtains in their respective classes in other nations and in other classes. For Nigeria, with total dividend payout of 94.84 per cent between 2009 and October 2019, it appears that the effort by the stakeholders to reduce unclaimed dividends is yielding results,” he said.

Eborah suggested the way to handle the reduce the unclaimed dividends instead of moves by the government to take over its management.

According to him, there must be an understanding that unclaimed dividends (like other unclaimed funds) is a global phenomenon.

“The multiple subscription initiative by the capital market community should be sustained to reduce unclaimed shares which will ultimately further reduce unclaimed dividends. The SEC should insist that every new entrant to the capital market must be fully known and provide all that is required for electronic payment. ICMR should establish a Special Depository licensed by the SEC with the responsibility to locate owners of unclaimed accounts or their next of kin and encourage them to activate their claim, take up insurance cover over the funds, and manage the funds which shall remain with the registrars,” he said.

He said this would will become a Nigerian model which may be adopted by other countries, stressing that ICMR (The special Depository), will have a role in addressing the issue of unclaimed dividend funds by collecting data from registrars, building and maintaining infrastructure frameworks that will help reconnect members with their unclaimed funds so as to solve, or lessen the issue of unclaimed dividend/funds on a continuous basis.

“There should be a continuation of public enlightenment by the SEC, the special Depository and other stakeholders. Finally, banks should encourage and assist their customers to embrace the electronic dividend registration,” he said.

On their part, ISAN suggested that government should make it easier for the estate of deceased shareholders to obtain probate/administration via the courts and that banks should help in ensuring ease of executing probate/letters of administration as way to tackle unclaimed dividends in the country.

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Nigeria: Malabu – ENI Gets Green Light to Subpoena Companies Over Nigerian Litigation Arrangement

nigeria malabu eni gets green light to subpoena companies over nigerian litigation arrangement

The Malabu scandal involves the transfer of about $1.1 billion by oil multinationals, Shell and ENI, through the Nigerian government to accounts controlled by a former Nigerian oil minister, Dan Etete.

Italian oil giant, Eni S.P.A, has been granted approval to subpoena asset recovery and litigation finance companies that it accused of being involved in a shady deal to fund litigation relating to Nigeria’s OPL 245 scandal in Italy.

Eni in October applied for authorisation to request that seven Delaware-registered Drumcliffe companies produce documents on the arrangements they set up for Nigeria’s OPL 245 litigation.

The energy firm had earlier hinted that the government’s actions “are driven by third parties seeking to earn illicit profits.”

The oil giant said it sought the court order to serve the companies with subpoenas for the production of documents and deposition testimony for use in the Italian court proceedings.

The seven companies are Poplar Falls, LLC; Drumcliffe Partners I LLC; Drumcliffe Partners II LLC; Drumcliffe Partners III LLC; Drumcliffe Partners III SMA I, LLC; Drumcliffe Partners IV LLC; and Drumcliffe Partners IV SMA1, LLC. They are all incorporated in Delaware, United States of America.

“Based on the memorandum of law, declarations, and other supporting documents accompanying this application, Eni S.p.A. (“Eni”) respectfully applies to this Court for an Order pursuant to 28 U.S.C. § 1782 (“Section 1782”) and Federal Rules of Civil Procedure 26, 30, and 45 granting Eni leave to serve the following entities incorporated in Delaware with subpoenas for the production of documents and deposition testimony for use in Italian court proceedings and an international investor-state arbitration: Poplar Falls, LLC; Drumcliffe Partners I LLC; Drumcliffe Partners II LLC; Drumcliffe Partners III LLC; Drumcliffe Partners III SMA I, LLC; Drumcliffe Partners IV LLC; and Drumcliffe Partners IV SMA1, LLC (together, “Respondents”),” the request reads in part.

Eni noted that its application meets the requirements of Section 1782, adding that the respondents are “found” within the district.

The narrow discovery Eni requested, it noted, is for use in proceedings before a foreign tribunal.

The application reads: “Eni, as a party to the foreign proceedings, is an “interested person”; and the application does not require disclosure of privileged materials.

“The factors set out by the Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), also weigh heavily in favor of Eni’s limited discovery requests.”

The oil giant said the evidence sought was likely unobtainable without the court’s assistance and that there is no indication that either the Italian court or the international arbitration tribunal will be unreceptive to the requested discovery.

Eni said it was not using the application to circumvent any proof-gathering restrictions or policies, and that the targeted discovery Eni seeks is narrowly tailored and not unduly burdensome or intrusive.

“Finally, as courts in this Circuit have recognized, Section 1782 applications made on an ex-parte basis are properly filed and routinely granted,” the company argued.

An ex-parte application is an acceptable method for seeking discovery, it said.

Request Granted

Meanwhile, in a response to Eni’s request, the court said upon consideration of the Ex Parte Application, it granted the request.

It added that Eni is “authorized, pursuant to 28 U.S.C. § 1782 and Rules 26, 30 and 45 of the Federal Rules of Civil Procedure, to serve Poplar Falls, LLC, Drumcliffe Partners I LLC, Drumcliffe Partners II LLC, Drumcliffe Partners III LLC, Drumcliffe Partners III SMA I, LLC, Drumcliffe Partners IV LLC, and Drumcliffe Partners IV SMA1, LLC (collectively, “Respondents”) with narrowly tailored subpoenas for production of documents and Rule 30(b)(6) deposition testimony regarding the requests.”

The request include the identities of the companies’ beneficial owners and/or ultimate stakeholders; their relationship to current or former Federal Republic of Nigeria officials; and any contractual and/or financial arrangements that they have entered into with respect to proceedings relating to a Nigerian oil prospecting license known as OPL 245.

The court said the deadline for the respondents to comply with the subpoena shall be thirty days from service of the subpoena.

“IT IS FURTHER ORDERED that Respondents shall preserve relevant documents in their possession, custody or control,” the court document seen by PREMIUM TIMES said.


The Malabu scandal involves the transfer of about $1.1 billion by oil multinationals, Shell and ENI, through the Nigerian government to accounts controlled by a former Nigerian oil minister, Dan Etete.

From accounts controlled by Mr Etete, about half the money ($520 million) went to the accounts of companies jointly controlled by Abubakar Aliyu, popularly known in Nigeria as the owner of AA oil, and Mr Etete.

Anti-corruption investigators and activists suspect Mr Aliyu fronted for top officials of the Goodluck Jonathan administration as well as officials of Shell and ENI.

The transaction was authorised in 2011 by Mr Jonathan through some of his cabinet ministers, and the money was payment for OPL 245, one of Nigeria’s richest oil blocks.

Although Shell and ENI initially claimed they did not know the money would end up with Mr Etete and his cronies, evidence has shown that claim to be false.

Shell later admitted it did know the money would go to Mr Etete.

Shell, Eni, Mr Etete, Mr Aliyu and several officials of the oil firms are being prosecuted in Italy for their roles in the Malabu scandal.

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South Africa: Crosscall Launches Accessories for SA Market

south africa crosscall launches accessories for sa market
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Johannesburg — CROSSCALL, the French specialist of waterproof and durable devices, has unveiled three new accessories for the South African market.

The accessories equipped with X-Link technology include the X-Dock, X-Car Pro and the X-Ride.

“We are extremely proud of the new Crosscall accessories as it helps to further integrate our phones and tablets into everyday life,” said Julien Fouriot, Director (Africa) of Crosscall.

“Whether you are going on a long road trip to the coast this December, or camping and mountain biking somewhere off the beaten track. With these accessories you can ensure that your Croscall phone is always close by and ready to capture every special moment.”

The X-Dock retails for R 899 (US$59), the X-Car Pro for R1 099 and the X-Ride for R1 129.

By unveiling the three new accessories, Crosscall broadens its offer and proposes products based on the aspirations and feedback of its users and thus reinforces its ecosystem of accessories designed to extend the use of its smartphones.

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Zimbabwe: Art Corporation Exports Up 13 Percent Amid Exchange Rate Stability

zimbabwe art corporation exports up 13 percent amid exchange rate stability

ZIMBABWE Stock Exchange listed stationary, paper and batteries manufacturer, Amalgamated Regional Trading (ART) Corporation has seen exports increasing by 13 % amid easing exchange rate volatility on the backdrop of the Reserve Bank of Zimbabwe (RBZ) foreign exchange auction system.

Presenting the financial performance for the year ended September 30 2020, the company’s chairperson, Thomas Wushe said both the firm’s sales volumes and exports registered growth.

“The introduction of the foreign currency auction and the easing of COVID-19 restrictions helped to manage exchange rate volatility and trade disruptions. Export volumes were 3 percentage points ahead of last year despite pricing challenges emanating from instability of the regional currencies,” he said.

During the period under review, overall volumes for the year increased by 8% compared to prior year.

In June this year, the RBZ scrapped the Interbank market system in favour of the auction system which had failed to stabilise exchange rates market alongside the implementation of a raft of measures which barred Ecocash Agent lines after years of abuse by illegal foreign currency dealers.

Since the auction’s inception, prices have remained stable with most companies reporting a predictable operating environment.

During the financial year, ART’s batteries business segment continued to drive the group’s performance with battery volumes increasing by 17% for the year.

The paper mill production volumes improved marginally towards year end on the back of improved power and raw materials. However, demand remained weak and volumes fell by 37% compared to the same period last year.

Softex tissue volumes declined by 20% from prior year because of reduced disposable incomes and inconsistent supply of cheaper recycled bulk tissue. The contribution of non-tissue lines increased to 18% of total sales as the product range was widened.

Eversharp pen volumes were 33% lower than prior year as schools remained closed during the period while Timber sales volumes for the year increased by 37% as a result of improved milling efficiencies and firm demand.

“The measures taken to stabilize the exchange rate and improve foreign currency availability by the fiscal and monetary authorities will improve trading conditions and enable the business to continue with its plans to seek new opportunities and enhance capacity to meet demand in the region,” Wushe added.

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Nigeria: Stock Market Gains N138 Billion Despite Profit Taking

nigeria stock market gains n138 billion despite profit taking

The stock market posted positive performance last week despite profit taking by some investors, as it sustained the growth recorded in the previous week.

Precisely, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose 0.7 per cent to close at 35,137.99, while market capitalisation gained N137.5 billion to print at N18.365 trillion.

Apart from the NSE ASI index that appreciated, NSE Insurance, NSE ASeM and NSE Oil/Gas indices also went up by 2.61 per cent, 1.56 per cent, 0.19 per cent and 1.71 per cent respectively.

Although the gains recorded in the market in November was expected to propel profit taking, some market analysts are still upbeat that the bulls would remain in control till the end of the year.

“With the low yield environment in the fixed income space and investors’ corresponding stance of exercising caution, the local bourse recorded gains in this week’s trading session as investors took positions on fundamentally sound counters.

“However, with the introduction of the Special Bills by the Central Bank of Nigeria, the current performance of the equities market might be impacted depending on how attractive the rate at which this bill is issued. Nonetheless, as fingers remains crossed till further direction from the apex bank, we expect the market to continue to record positive gains,” analysts at Greenwich Research said.

In terms of market turnover, investors traded 1.675 billion shares worth N25.425 billion in 23,650 deals last week, compared with 1.816 billion shares valued at N25.791billionthat exchanged hands in 31,665 deals the previous week.

The Financial Services industry led the activity chart with 1.206 billion shares valued at N12.064billion traded in 13,534 deals, thus contributing 72 per cent and 47.4 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 102.368million shares worth N3.616 billion in 3,511deals.

The third place was occupied by the Natural Resources Industry, with a turnover of 86.626 million shares worth N17.492 million in 28 deals. Trading in the top three equities, Access Bank Plc, FBN Holding Plc and Zenith Bank Plc accounted for 475.819million shares worth N6.144 billion in 4,900 deals.

Meanwhile, the price movement chart displayed 22 price gainers lower than 27 equities in the previous week, while 45 equities depreciated in price, higher than 43 equities in the previous week.

Tripple Gee and Company Plc led the price gainers with 20 per cent, trailed by Airtel Africa Plc with 19.6 per cent. FTN Cocoa Processors Plc appreciated by 16 per cent. Cutix Plc garnered 11.7 per cent, just as AIICO Insurance Plc and 11 Plc gained 9.2 per cent.

MCNichols Plc and University Press Plc chalked up 8.5 per cent and 6.5 per cent respectively, while May & Baker Nigeria Plc and Ardova Plc went up by 5.6 per cent and 5.0 per cent in that order.

Conversely, Northern Nigerian Flour Mills Plc led the price losers with 18.7 per cent, trailed by Consolidated Hallmark Insurance Plc with 16.1 per cent. Royal Exchange Plc shed 15.3 per cent, just as Unity Bank Plc, LearnAfrica Plc and Chams Plc went down by 14.6 per cent, 13.0 per cent and 12.0 per cent respectively.

Fidson Healthcare Plc lost 10.7 per cent, while Cadbury Nigeria Plc, shed 9.3 per cent. Prestige Assurance Plc and Coronation Insurance Plc went down by 9.0 per cent apiece.

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South Africa: Business Highlights of the Week – Eoh, Banks, Altron

south africa business highlights of the week eoh banks altron
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IT services company EOH is ready to begin a new chapter. Well, almost. It still has a few pages to turn, including the debt situation auditors flagged with the twice-delayed release of its annual results this week. While many companies with September year-ends are releasing their numbers, EOH’s date back to July.

First appeared in Daily Maverick 168

Granted, apart from Covid-19, the company has had a lot on its plate due to irregularities, fraudulent contracts, premature recognition of revenue and a number of other factors that resulted in a crisis under its previous management – and a big restatement of its accounts for the past few years.

Former investment banker Stephen van Coller has been leading a clean-up since he took over as CEO in 2018, including a review of its financial reporting process. Last year, a forensic report by law firm ENSafrica uncovered suspicious transactions worth R1.2-billion. EOH was hit with a R7.5-million fine by the JSE in July – with R2.5-million suspended for the next five years.

It all culminated in Van Coller’s two-hour appearance before the Zondo commission late last month, where he outlined the misdeeds and detailed how he had prioritised clean governance. ENS also…

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Nigeria: Stock Exchange Listing and SMEs

nigeria stock exchange listing and smes

Timi Olubiyi writes that the stock exchange is one of the most appropriate forms of acquiring long-term financing for structured SMEs

According to the World Bank, formal Small and Medium Enterprises (SMEs) contribute up to 60% of total employment, and up to 40% of national income (GDP) in emerging economies. A common outcome of research and discussions on Small and Medium Enterprises (SMEs) is that this form of business play a crucial role in promoting economic development, especially on the African continent where SMEs have remained critical contributors to employment and economic activities. However, these SMEs face a financing gap and the challenge of access to capital, which restricts their economic prosperity. From context observation, these SMEs largely ponder with questions such as “should we take a bank loan, or should we consider other alternatives for funding and credits?”.

World over, SME operators primarily depend on bank loans or government schemes for financing. More so, SMEs have a heavy dependence on debt rather than equity in their business operations. Therefore, the need to bring awareness to the diversification of funding sources is necessary. The capital market is critical to a country’s economic development and a distinct alternative to traditional bank lending and financing. If accessed it can provide a cost-effective medium-to long-term finance for SMEs including large corporations and multinationals. Though many non-bank financing alternatives such as financial leasing, private equity (including angel investing and venture capital), and crowd-funding are all other forms of financing which businesses may use at various stages of their life cycle, however they are not as easily accessible as the stock market.

Importantly, SME listing on Stock Exchanges will add significantly to the creation and distribution of wealth in any economy. However, firms may list on a Stock Exchange for a variety of financial and non-financial reasons. Evidently, the recent crisis with the novel coronavirus pandemic and the recession has revealed that bank financing is not a reliable source of long-term financing. Agreeably, long-term financing is an essential element for supporting investment and growth at this time for any business. Hence, the stock market is the best way to have access to a meaningful impact. Bank loans might either be too expensive or not even an option for most SMEs at this time because of bank stringent measures which often require assets to back the loans. Access to long-term financing enables SMEs to solve their financing needs over the long term and this has a positive effect on economic growth and employment generation. The stock market can provide this and have always played a role in bringing together those with savings to invest and those who need capital thereby supporting economic growth. The Stock Exchange can be the most appropriate form of acquiring long-term financing for structured SMEs and the cost of equity capital can be lower than other forms of finance particularly bank loans.

The stock market’s capital allocation role, which means that the exchange provides channels for financial intermediation between investors and issuer (listed companies), which creates an opportunity for SMEs. Businesses do not need to be a conglomerate or multinational to be listed on the Stock Exchange. In fact, there are trading platforms tailored to the needs and capabilities of SMEs. Many countries in the world allow SMEs to raise funds from the capital market and have SME platforms such as the Alternative Investment Market in the UK for instance. In Africa, SME board also exist on some Exchanges on the continent; namely Botswana (BSE); Casablanca, Morocco (CSE); Douala, Cameroon (DSX); Egypt (ESX); Johannesburg, South Africa (JSE); Nairobi, Kenya (NSE); Lusaka, Zambia (LuSE); Mauritius (SEM); Mozambique (BVM); Alternative Securities Market (ASeM) board in Nigeria (NSE); Seychelles (Trop-X) and Swaziland (SSX) amongst others. One key difference on these platforms is the requirements for listing which vary across the Exchanges. Significantly, listing requirements for SME boards are usually more relaxed compared to the main trading boards, this is done with the aim of cutting barriers and encouraging SMEs to list.

The SME board is a segment of the Stock Exchange, dedicated to trading the shares/ securities of SMEs, who otherwise find it difficult to get listed on the main board of the Exchange due to stringent listing requirements. In Nigeria, the Alternative Securities Market (ASeM) trading platform helps small and growing companies to raise funds and it is different from the premium and main platform of the Stock Exchange. The platform is strictly for SMEs and the platform is characterized by lower attractive listing requirements and reduced listing costs than the mainboard. Simply put, it can be adjudged a second-tier listing alternative which provides the opportunity for SMEs to raise long-term capital at relatively low cost from the capital market.

Businesses can raise funds directly on the stock market when they list. In Nigeria for instance there are no limits to the amount of capital companies can raise on ASeM trading platform of the Nigerian Stock Exchange, as long as it is in line with other regulatory requirements, such as those of the Corporate Affairs Commission (CAC) and the Securities and Exchange Commission (SEC). Whether or not they raise funds upon listing, listed firms may also be able to tap other sources of finance more easily than similar, unlisted firms. This is because the process of listing requires firms to meet strict financial reporting and corporate governance requirements. Therefore, meeting these standards improve accounting practices and financial management, thereby increasing firms’ transparency and potentially improving their creditworthiness out there.

It is important to state that a Stock Exchange listing offers the following benefits to SMEs: firstly, it will provide a clear price for the shares and a valuation of the business once listed; it gives businesses access to a wider potential investor base and access to long term capital for growth and expansion. Recall, one of the most important reasons firms list is to increase their access to finance.

Moreover, listing does encourage good corporate governance culture from the listed companies. It can also raise the company’s public profile with customers, suppliers, investors, financial institutions and it can majorly help SMEs with international business conducts, particularly with the company perception and prestige. Like all businesses, SMEs need capital to start up and keep going until they become profitable, once listed SMEs can have access to fund raising as required.

In order to make listings more attractive, however government, regulators, and policymakers should consider policy responses to encourage more listing, further lowering listing requirements to encourage more participation in the capital market. Furthermore, regulators can reduce transaction and listing costs so that more SMEs will be attracted to the market and make the space wider. Also, to deepening market participation, it is recommended government agencies that regulate the market, should organize promotional campaigns, public seminars, and conferences to increasing public awareness and to address potential drawbacks of SMEs from listing. The point of note is that, to improve responsiveness of SMEs to listing and its ample benefits, government intervention is necessary. Therefore, the post-COVID-19 regulatory regime should involve consistent and coordinated policy responses and pronouncement to assist and encourage SMEs to list on the Stock Exchange, this will, in turn, improve foreign market participation, boost the economy, and also advance market confidence.

SMEs can only grow and contribute positively to economic growth and development if they are well supported by government and regulatory institutions. Therefore, attention should be given to this significant sector of the economy that is increasingly faced with the problem of high cost of production, lack of access to funding and threat to business survival. More businesses will strive and more jobs will be created with policies and regulations that can drive and aid access to capital and SME growth in the country.

Globally, SME’s are substantially the major employer of labor, avenue for wealth creation, and sustainable economic development. Therefore, for many businesses seeking funding to remain viable is crucial, consequently alternative source of funding can be accessed through listing on the Stock Exchange, even though is likely to be a long-term objective. It should be seriously considered as part of the company’s strategy post-COVID-19, particularly as it relates to business funding and credits. More so the survival of small and medium-scale enterprises with access to capital is key at this time.

It is very convenient to list on the Stock Exchange but many SMEs have difficulty in arranging the listing requirements, meet legal and regulatory frameworks, and so on. Getting or finding advisors to prepare these requirements for listing on an Exchange might just be reasonable.

Dr. Olubiyi is an Entrepreneurship and Small Business Management expert

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Ghana: Meet Elvis Justice, CEO of Serendipity Trading Academy … Who Gives 19,000 Pips Free Weekly

ghana meet elvis justice ceo of serendipity trading academy who gives 19000 pips free weekly
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Serendipity Trade Academy, a self-taught online trading academy says it will continue to be one of the few online trading companies which offer free forex signals that provide significant returns to clients.

In an interview with the Chief Executive Officer (CEO) on the online academy Mr Elvis Justice Bedi he said, “We are one of the few academies that grants and share free signals of over 19000+ Pips gains weekly.” Any average trader makes roughly 10000 pips in a whole month but here we do more than that in a week.”

He said the youth were now warming up to trading online in order to rake in additional revenue which hitherto was not available to them.

Mr Bedi, who is also a Bitcoin investor said he won for a huge sum of money through Blockchain technology and cryptocurrency, and urged Ghanaians to consider investing in the cryptocurrency market.

According to him, digital trading had now become the trend for the youth as it was classified as investment unlike gambling and sports betting.

“My vision is to empower people with the right knowledge of Blockchain technology and creating a source of income with just the use of phone and internet. This will reduce the high rate of youth unemployment in the country,” he said.

“The long term benefit is the rise of smart 21st Century investors and traders who will be at the forefront of Blockchain innovation,” he said.

Mr Bedi debunked claims that crypto currency was not worth investing, and explained that, “You need to understand how it is done. One needs to be patient and understand the technicalities before investing in the crypto currency business in order to reap the benefits.”

Serendipity Trading Academy recently launched its updated e-learning portal where all learning materials; simplified from Beginner – Masterclass in Forex, Cryptocurrency, Indices, Stocks, Options& Commodities are made available.

“This is the only thing I can give to the youth” A simplified way of understanding this business.

Meanwhile, the Securities and Exchange Commission has warned the public against investing in crypto currency and crypto-related investment schemes.

A statement issued by SEC last year said all crypto-related activities were not regulated by the Commission.