Economy
African REITs Market Worth $29b—NSE Chief
By Dipo Olowookere
Director-General of the Nigerian Stock Exchange (NSE), Mr Oscar Onyema, has disclosed that Nigeria has the potentials of growing its Real Estate Investment Trust (REITs) to compete favourably with other emerging markets such as Mexico, South Africa and Singapore.
Mr Onyema made this known at the maiden edition of the REIT Conference organised by the stock exchange and held at the NSE Event Centre, Lagos on Tuesday, May 23, 2017.
According to the NSE Chief, the African REITs market is presently valued at $29b and is available in four countries; Ghana, Nigeria, South Africa and Kenya.
He explained that the conference was put together in line with its strategic initiative to promote and create enabling environment for sustainable development of REITs in Nigeria and sub-Saharan Africa.
The event was themed, ‘Real Estate Investment Trust in Sub-Sahara Africa: The Role of the Capital Market’ and it brought together key decision-makers, policy-makers, government officials, private sector players, property developers, asset managers, dealing members, investors and thought leaders to dimension the current state of the Real Estate sector and the opportunities inherent in REITs.
Speaking further on the occasion, Mr Onyema, pointed out that, “There are only 32 REITs in Africa with South Africa being the largest REIT market having 27 REITs and Nigeria second with three REITs listed. In 2015, an estimated $265 million worth of transactions were concluded in Kenya, Nigeria and Ghana, a big improvement to the $65 million seen in all three markets during 2012.”
He noted that, “This indicates an increasing market as a larger number of investors are beginning to take increased interest and participation in the Real Estate Investment sector.”
Mr Onyema further stated that, “Whilst the Nigerian market may not be as developed as other emerging markets such as Mexico, South Africa and Singapore, this asset class has definitely come to stay.”
“Today, we have about N40 billion in REITs market cap listed on the NSE and a total of N96 billion in the Construction/ Real Estate sector of our equity market,” he disclosed.
He remarked that, “To create a more transparent, liquid and accessible market structure in line with global best practices for REITs, the NSE recently started the process of implementing some changes in terms of reporting and valuation of REITs and other collective investment schemes listed on the NSE.”
Delivering his keynote address, Minister of Power, Works and Housing, Mr Babatunde Fashola, who was represented by Mr Ayo Gbeleyi, the Managing Partner of GA Capital Limited, remarked that, “It is difficult, if not impossible, for government to provide all Housing solutions given the diverse demands.”
“The truth, which we must accept, is that 100 percent home ownership is an ideal, but the reality is that, best practices in places like the UK, US, Canada and Singapore are stories of a mixture of ownership and rental arrangements,” he added.
On the sources of funding for housing projects by the Ministry, the Minister stated that, “In the medium term, we intend to raise more capital outside direct Government Treasury, working with the Federal Ministry of Finance, through Infrastructure Bonds, REITS and other forms of real estate financing instruments, leveraging as most appropriate the platform of the Nigerian Stock Exchange.”
He added that other funding sources such as pension funds, private equity funds, and the National Housing Fund managed by the Federal Mortgage Bank to finance development and also acquisition will be under consideration for the new capital issues.
On his part, the first Vice President of the National Council of NSE, Mr Abimbola Ogunbanjo, noted in his keynote address that the Nigerian REITs market is largely underdeveloped due to lack of clarity on diverse regulatory issues which are required to stimulate greater market confidence, transparency and foreign capital inflows.
“The major challenges facing the REITs industry in Nigeria include restrictive legislation, poor knowledge and understanding of the industry in addition to prolonged bottlenecks created by the Land Use Act of 1978. Nigeria’s Land Use Act is embedded in the constitution of our country. Thus, any attempt to rectify its inadequacies requires a constitutional amendment which of itself is a major challenge.”
Mr Ogunbanjo therefore called for the establishment of a separate and dedicated Lands registry in each viable State of the Federation, a (REITS registry of sorts) within the existing legal framework to specifically handle all REIT related transactions.
The 2017 NSE REITs Conference featured three presentations and panel discussions on the Critical Elements for a Successful REIT’s Market; Regulatory, Tax and Role of Capital Market in Developing REITs in Nigeria and Sub-Sahara Africa; and Developing sustainable capital flows for financing real estate assets moderated by Mr Adeniyi Adeleye, Head, Real Estate Finance, West Africa, Standard Bank/Executive Director Stanbic IBTC Capital; Mr Taiwo Oyedele, Partner, PwC West Africa Tax Leader; and Mr Chris Godman, Executive Managing Director, Equity Capital Markets, Standard Bank International.
By Dipo Olowookere
Investors at the Nigerian Exchange (NGX) Limited have continued to show excitement for the full-year earnings of companies on the exchange so far.
On Friday, Customs Street further appreciated by 1.01 per cent as more organization released their financial statements for the 2025 fiscal year.
During the session, traders continued their selective trading strategy, with the energy sector going up by 2.47 per cent at the close of business despite profit-taking in the banking counter, which saw its index down by 0.11 per cent.
Yesterday, the insurance space grew by 2.16 per cent, the industrial goods segment expanded by 1.70 per cent, and the consumer goods industry jumped by 0.42 per cent.
Consequently, the All-Share Index (ASI) increased by 1,722.13 points to 171,727.49 points from 170,005.36 points, and the market capitalisation soared by N1.106 trillion to N110.235 trillion from the N109.129 trillion it ended on Thursday.
Business Post reports that there were 59 appreciating stocks and 19 depreciating stocks on Friday, representing a positive market breadth index and strong investor sentiment.
The trio of Omatek, Deap Capital, and NAHCO gained 10.00 per cent each to sell for N2.64, N6.82, and N136.40 apiece, as Zichis and Austin Laz appreciated by 9.98 per cent each to close at N6.72 and N5.40, respectively.
Conversely, The Initiates depreciated by 9.74 per cent to N19.45, DAAR Communications slumped by 7.32 per cent to N1.90, United Capital crashed by 6.55 per cent to N18.55, Coronation Insurance lost 5.71 per cent to quote at N3.30, and First Holdco shrank by 5.53 per cent to N47.00.
The activity chart showed an improvement in the activity level, with the trading volume, value, and number of deals up by 33.77 per cent, 93.27 per cent, and 10.63 per cent, respectively.
This was because traders transacted 953.8 million shares worth N43.1 billion in 51,005 deals compared with the 713.0 million shares valued at N22.3 billion traded in 46,104 deals a day earlier.
Fidelity Bank was the most active with 92.4 million units sold for N1.8 billion, Chams transacted 69.2 million units valued at N310.9 million, Deap Capital exchanged 59.1 million units worth N382.7 million, Access Holdings traded 57.2 million units valued at N1.3 billion, and Tantalizers transacted 48.6 million units worth N228.2 million.
By Adedapo Adesanya
The value of the Naira contracted against the United States Dollar on Friday by 13 Kobo or 0.01 per cent to N1,366.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) from the previous day’s value of N1,366.06/$1.
According to data from the Central Bank of Nigeria (CBN), the Nigerian currency also depreciated against the Pound Sterling in the same market window yesterday by N2.37 to N1,857.75/£1 from the N1,855.38/£1 it was traded on Thursday, and further depleted against the Euro by 57 Kobo to close at N1,612.52/€1 versus the preceding session’s N1,611.95/€1.
In the same vein, the exchange rate for international transactions on the GTBank Naira card showed that the Naira lost N8 on the greenback yesterday to N1,383/$1 from the previous day’s N1,375/$1 and at the black market, the Nigerian currency maintained stability against the Dollar at N1,450/$1.
FX analysts anticipate this trend to persist, primarily influenced by increasing external reserves, renewed inflows of foreign portfolio investments, and a reduction in speculative demand.
In the short term, stability in the FX market is expected to continue, supported by policy interventions and improving market confidence.
Nigeria’s foreign reserves experienced an upward trajectory, increasing by $632.38 million within the week to $46.91 billion from $46.27 billion in the previous week.
The Dollar appreciation this week appears to be largely technical, serving as a correction to the substantial losses experienced from mid- to late January.
Meanwhile, the cryptocurrency market slightly appreciated, with Bitcoin (BTC) climbing near $68,000, up nearly 5 per cent since hitting $60,000 late on Thursday after investor confidence in crypto’s utility as a store of value, inflation hedge, and digital currency faltered.
The sell-off extended beyond crypto, with silver plunging 15 per cent and gold sliding more than 2 per cent. US stocks also fell.
The latest recoup saw the price of BTC up by 4.7 per cent to $67,978.96, as Ethereum (ETH) appreciated by 6.3 per cent to $2,021.10, and Ripple (XRP) surged by 9.5 per cent to $1.42.
In addition, Solana (SOL) grew by 7.3 per cent to $85.22, Cardano (ADA) added 6.1 per cent to trade at $0.2683, Dogecoin (DOGE) expanded by 5.4 per cent to $0.0958, Litecoin (LTC) rose by 5.2 per cent to $53.50, and Binance Coin (BNB) jumped by 2.3 per cent to $637.79, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher on Friday as traders worried that this week’s talks between the US and Iran had failed to reduce the risk of a military conflict between the two countries.
Brent crude futures traded at $68.05 a barrel after going up by 50 cents or 0.74 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $63.55 a barrel due to the addition of 26 cents or 0.41 per cent.
Iran and the US held negotiations in Muscat, the capital of Oman, on Friday to overcome sharp differences over Iran’s nuclear programme.
It was reported that the talks had ended with Iran’s foreign minister saying negotiators will return to their capitals for consultations and the talks will continue.
Regardless, the meeting kept investors anxious about geopolitical risk, as Iran wanted to stick to nuclear issues while the US wanted to discuss Iran’s ballistic missiles and support for armed groups in the region.
Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does Iran, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
According to Reuters, Iran objected to the presence of any US Central Command (CENTCOM) or other regional military officials, saying that would jeopardise the process.
The current confrontation was sparked by more than two weeks of unrest in Iran that saw authorities launch a deadly crackdown that killed thousands of civilians and shocked the world. As reports of the deaths trickled out of Iran, US President Donald Trump threatened to strike Iran if any of the tens of thousands of protesters arrested were executed.
Meanwhile, Kazakhstan’s planned oil exports could fall by as much as 35 per cent this month via its main route through Russia, as the country’s top oil company, Tengiz oilfield, slowly recovers from fires at power facilities in January.
ING analysts have pointed out Iran’s neighbour, Iraq, and a disagreement with the US as another bullish factor for oil prices. It seems Iraqi politicians favour Mr Nouri al-Maliki as the country’s next Prime Minister, but the US thinks Mr al-Maliki is too close to Iran. President Trump has already threatened the oil producer with consequences if he emerges as PM.
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