Economy
Arise’s Investment in CAL Bank to Boost Ghana’s Economy
By Dipo Olowookere
The recent acquisition of a 27.7 percent stake in CAL Bank in Ghana by newly formed investment company, Arise, is set to boost the banking sector in the country.
The shareholding in CAL Bank was acquired by Arise from DPI, a leading Africa-focused private equity firm with assets in excess of $1 billion under management. Settlement is to be effected on 14 February 2017.
Arise, a collaborative partnership between international companies, Norfund, FMO and Rabobank take and manage minority stakes in Sub-Saharan African Financial Service Providers (FSPs) with the core aim of building strong and stable institutions that serve retail, Small and Medium Enterprises (SMEs), the rural sector, and clients who have not previously had access to financial services.
“The main objective of establishing this company was to strengthen and develop effective, inclusive financial systems in Africa in order to contribute to economic growth and poverty reduction,” said Arise CEO, Deepak Malik.
“We are excited to partner with CAL Bank, the 3rd largest bank in Ghana based on loans advanced and a listed company on the Ghana Stock Exchange. The institution has a strong track record of delivering high growth and solid performance and with the support of Arise is well-positioned to deliver future growth in Ghana, one of Africa’s core emerging economies” added Malik.
Speaking from the bank’s Head Office, Mr. Frank Adu Jnr. CEO of CAL Bank remarked: “This landmark transaction will mark the successful exit of a leading private equity investor, despite a challenging macro environment in Ghana. We look forward to continuing a fruitful partnership with Arise as the new shareholders in CAL Bank”.
Webber Wentzel and Bentsi-Enchill, Letsa & Ankomah acted as legal counsel to Arise on the transaction, while IC Securities acted as Transaction Broker on the transaction. PwC Transaction services and Genesis Consulting Analytics acted as due diligence advisors to Arise.
An approval in principle of a $50 million bridging loan by Arise is set to boost the banking sector in Uganda.
According to Arise Chief Executive Officer, Deepak Malik the company will provide a $50 million bridging finance facility to dfcu Ltd in Uganda.
“The facility was availed on commercially-agreed terms, to enable commencement of the recapitalisation of dfcu Bank in the short term, while complying with regulatory capital thresholds” he said.
dfcu Bank recently concluded an agreement with the Bank of Uganda to purchase the assets and assume the liabilities of Crane Bank Limited (CBL), which was in receivership.
The acquisition of CBL will allow dfcu Bank to diversify it service offerings to its clients and make banking more accessible to the public. Further, the integration will enhance dfcu Bank’s competitive edge against peers in the retail and Small Medium Enterprise (SME) sector.
Juma Kisaame, Managing Director dfcu Bank commented, “The acquisition gives us the impetus to achieve our strategic objective of building a robust retail operation with multiple delivery channels whilst consolidating our position as a key player in the SME market segment. It also supports our goal of promoting financial inclusion in Uganda and we welcome the Arise partnership as a contributor to building a stronger financial sector in Sub Saharan Africa”.
“Arise supports the planned expansion of dfcu Bank. We foresee the integration as a catalyst for creating a strong and efficient Ugandan bank, which will have extensive local representation and scalability of distribution (via branch and digital channels)” said Malik.
“This partnership speaks directly to the mandate of Arise, which is to collaborate with local Financial Service Providers (FSPs) in Sub Saharan Africa to boost economic growth through strengthening the banking sector”, he added. Arise is committed to developing inclusive financial systems in Africa and partners with sustainable FSPs to strengthen their ability to supply capital and financial services to SMEs, the rural sector and unbanked people.
“Arise is supportive of dfcu Bank’s growth ambitions, which will enable the organisation to improve its market position and efficiencies. In addition, we believe that this transaction is a catalyst for improved returns to all stakeholders”, concluded Malik.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
