Economy
Afreximbank Opens Shareholding to Investors
By Modupe Gbadeyanka
African Export-Import Bank (Afreximbank), an investment grade rated multilateral financial institution, says it is opening its shareholding to the investing public through the issuance of Depositary Receipts.
A statement issued by the lender noted that it was launching a $300 million equity offering, using Depositary Receipts backed by its Class ‘D’ shares.
It is in partnership with the SBM Group, a leader in the financial sector in Mauritius.
The Depositary Receipts, whose listing has been approved on the Stock Exchange of Mauritius, subject to raising the funds by the end of September, mark the fruition of a unique initiative on which Afreximbank and SBM Group have worked in the last few months and represent a big first for Africa’s equity capital markets. This represents the first time a supranational bank is issuing Depositary Receipts through an African stock exchange.
The rationale for the Depositary Receipts issuance, according to Afreximbank, is the need to enhance its capitalization in order to significantly narrow the trade financing gap in Africa, currently estimated at $120 billion annually, and to meet its strategic objective of growing intra-African trade in all regions of the continent, including island economies.
President of Afreximbank, Mr Benedict Oramah, noted that “Mauritius as a premier financial centre in Africa, has a conducive regulatory framework for this innovative equity offering. On the other hand, SBM possesses the competencies, investor contacts, infrastructure and support capabilities for the issuance of the Depositary Receipts.”
The Depositary Receipts issuance represents an opportunity for Afreximbank to diversify its shareholder base by enabling investors in Africa and beyond, who have not yet invested in the bank, to do so and to strengthen Africa’s premier trade finance institution, whose interventions in its various member countries have created acknowledged developmental impacts across the continent, he said.
In addition, the Depositary Receipts would enable Afreximbank to increase its permanent source of capital while giving investors a liquid instrument which will have strong portfolio diversification effects, added Mr Oramah.
Being a novel issuance in Africa, Afreximbank’s Depositary Receipts are expected to further deepen Africa’s equity capital markets, paving the way for similar issuances by other multilaterals.
Chairman of SBM Holdings Ltd, Kee Chong Li Kwong Wing, disclosed that, “It is a privilege for SBM to have been entrusted by Afreximbank to execute such an important transaction.
“The structuring and issuance of Depositary Receipts is an addition to the Group’s portfolio of services, a recognition of our competence and experience, and it reinforces the position of SBM Group and Mauritius as important financial players in the region.
“It is high time to see Global investors investing in Africa and tap into Africa’s huge potential.”
“This initiative is an innovation for the financial market,” said Mr Li. “This African ‘Premier’ shall be a model to other countries and financial institutions. Together, Afreximbank and SBM Group are creating opportunities for the reinforcement of trade, investment and development across the African continent and the deepening of Africa’s capital markets.”
Afreximbank’s shareholders are a four-tier mix of public and private entities, with Class ‘A’, constituted of African states, African central banks and African public institutions; Class ‘B’, made up of African financial institutions and African private investors; Class ‘C’, with shares held by non-African investors, mostly international banks and export credit agencies; and Class ‘D’, under which fully paid shares can be held by any investor.
By Adedapo Adesanya
The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).
In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.
Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.
According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.
These bonds have some special features. They are tax-free under both company and personal tax laws.
Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.
However, interested investor can only buy at least N5,000 worth, and can’t buy more than N50 million.
This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.
By Aduragbemi Omiyale
The House of Representatives has said it would make efforts to pass the controversial tax reform bills forwarded to the National Assembly by President Bola Tinubu last year.
Mr Tinubu, in a bid to improve revenue of the government, asked the parliament to pass the bills, but this has been resisted mostly by northern lawmakers and others.
At the resumption of plenary session on Tuesday in Abuja, the Speaker of the House of Representatives, Mr Abbas Tajudeen, assured that the green chamber of the legislative arm of government would prioritise the tax reform bills.
“The legislative agenda of the House for 2025 prioritises the passage of the Appropriation Bill and the Tax Reform Bills, both of which are pivotal to economic recovery and fiscal stability.
“These reforms are essential for broadening the tax base, improving compliance and reducing dependency on external borrowing.
“The House will ensure that these reforms are equitable and considerate of the needs of all Nigerians, particularly the most vulnerable,” Mr Abbas said through the Deputy Speaker, Mr Ben Kalu, who presided over the session.
He also expressed grief over the loss of lives in stampedes in Ibadan, Abuja and Anambra State last month due to hardship in the country.
Several Nigerians died in the stampedes while trying to receive palliatives given to alleviate their sufferings.
“Tragic events, such as the stampedes in Ibadan, Abuja and Okija, during the distribution of palliative aid, underline the urgent need for improved planning and safety protocols in humanitarian efforts. On behalf of the House, I extend our deepest sympathies to the families and communities affected.
“These incidents serve as a stark reminder of the socio-economic hardships facing our citizens and the imperative for policies that tackle hunger and poverty at their roots.
“Turning to the economy, 2024 presented both difficulties and opportunities. While inflation remains a pressing concern, progress in GDP growth and the positive trajectory of economic reforms provide hope for a more stable and prosperous 2025,” the Speaker said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.
During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.
In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.
Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.
Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.
During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.
At the close of trades, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and IGI Plc with 10.7 million units sold for N2.1 million.
Also, IGI Plc remained the most traded stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
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