Economy
Why Nigeria’s Mutual Funds Now Attract International Interest—Experts
By Dipo Olowookere
Recently, the Securities & Exchange Commission (SEC) announced that total Asset Under Management (AUM) of mutual funds in Nigeria topped N300 billion for the first time ever.
This was because there has been increased interest and investments in Mutual Funds in Nigeria and experts attributed this to various factors not excluding the current state of the economy, stock market and interest rate fluctuations as well as much improved mutual funds offerings.
This is further backed by a recent report by Quantitative Financial Analytics which estimated that Nigerian mutual funds attracted the sum of N42 billion inflows in Q1, 2017 as against the N49 billion inflow recorded the entire 2016.
It was also observed that Nigeria’s mutual funds’ assets grew to N318 billion as at the beginning of H2, 2017, up by 42 percent on a YTD basis from the 2016-year end value of N223.6 billion.
Mr Emeka Okolo, a Senior Fund Manager and Head, Coronation Asset Management, speaking on this trend at the launch of one of such funds, The Coronation Mutual Funds, noted that active portfolio management by experienced professionals offer investors better prospects on their investments especially in periods of market volatility and economic downturns as is being experienced in Nigeria, making mutual funds an optimal choice.
On the Coronation Mutual Funds, he further added, “No one can doubt the capacity and expertise of Coronation Asset Management to deliver competitive returns to investors in the Coronation Mutual Funds.
“The level of professionalism and quality of investments will be difficult to match by other mutual fund managers in Nigeria and the West African sub-region.
“This, coupled with the proposed investment mix and the fund structures, distinguish these Mutual Funds.”
Indeed the recently launched, Naira denominated, open-ended mutual funds by Coronation Assets Management Ltd which witnessed a high subscription rate by individual, retail and institutional investors has continued to elicit excitement.
“The Mutual Funds, N1.5 billion Money Market Fund, N400 million Fixed Income Fund and the N200 million Balanced Fund, were all offered at par of N1 each.
In the same vein, Chairman of the Bank, Mr Tunde Folawiyo, said that the funds offer all strata of investors, individual and corporate, an opportunity to diversify their investment portfolios backed by the strength of the Coronation Brand and managed by a team of experienced professionals at Coronation Asset Management.
According to him, the Money Market Fund will exclusively invest in short-dated money market instruments, offering capital preservation and liquidity to investors.
The Fixed Income Fund will invest in FGN and investment grade corporate bonds while the Balanced Fund will invest in a diversified portfolio of carefully chosen equity securities with strong fundamentals and prospects of delivering long term positive investment returns, while tactically investing in fixed income securities to actively manage short term volatility in its equities exposure.
The Money Market Fund and the Fixed Income Fund have been assigned low to medium risk ratings, “A- (NG)(f)” and “AA-/FV4 (NG)(f)” respectively, by Agusto & Co, a foremost Nigerian rating agency.
This IPO for the Mutual Funds came on the back of a strong financial year for the premium financial institution.
Recall that Coronation Merchant Bank, the parent company of Coronation Asset Management, grew its profits by 128 percent from December 2015 to December 2016.
The group’s financial strength, coupled with a focus on sound risk management, prudent investment strategies as well as a tradition of delivering excellent value to all stakeholders, has made the IPO for the Mutual Funds more inviting to investors.
The Coronation Mutual Funds are being overseen by institutions with strong track records of providing superior financial services with Coronation Asset Management acting as the Fund Manager, Citibank Nigeria as Custodian and United Securities Limited as Registrar to all three funds.
Stanbic IBTC Trustees Limited will acts as Trustee to the Balance and Fixed Income Funds while United Capital Trustees will act as Trustee to the Money Market Fund.
Investors can visit www.coronationam.com for more information on the Mutual Funds and learn more about Coronation Asset Management.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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