Economy
FBN Capital Asset Mgt Becomes 3rd Largest Mutual Fund Manager in Nigeria
By Quantitative Financial Analytics
In one of our earlier analysis, we did warn that unless FBN Capital Asset Management found a way to stem the trend in redemptions taking place in its flagship fund, the FBN Money Market Fund, that the fund manager would lose their position as the second largest mutual fund manager in Nigeria.
True to our prediction, that has just happened.
Analysts at Quantitative Financial Analytics have determined that going by the data just released by the Security and Exchange Commission (SEC), FBN Capital Asset Management is now in the third position in the ranking of mutual fund managers by AUM.
The second position has been taken over by FSDH Asset Management.
FBN Capital Asset Management lost that enviable position not due to lack of performance as our analysis reveals that all the funds under its management made profits in 2016 except FBN Fixed Income Fund.
Then and Now
Per available records, on December 31, 2015, FBN Capital Asset Management was solidly at the second position with 30.83% of the total mutual funds AUM under its management, only 0.41% shy of Stanbic IBTC Asset Management’s 31.24% AUM share as the industry leader and 17.8% more than the 13.03% AUM share held by FSDH Asset Management in the 3rd place. That was then, this is now.
As at December 30th 2016, FBN Capital Asset Management controlled 14.43% of mutual funds AUM, down 16.6% from previous year.
FSDH Asset Management now holds 15.52%, up 2.49% when compared with last year’s.
The positional loss was due to redemptions from FBN Money Market fund which recorded an estimated N48 billion in net outflow.
Unfortunately, the three new funds launched by the fund manager (FBN Nigeria Smart Beta Fund, FBN Nigeria Eurobond USD Fund Retail and Institutional) could not change the dynamics.
On the other hand, FSDH Asset Management assumed the second position because of a combination of marginal performance and an estimated net inflow of about N120 million.
Blame it on Yield Hungry Investors
As noted in our earlier analysis, of the three largest money market mutual funds (FBN, ARM and Stanbic IBTC), FBN money market fund boasts of the lowest yield.
One thing about yield hunting Nigerian investors is that they love their yield and they go after it wherever it may be found.
Around October 2015, when FBN Money market fund offered the highest yield among money market funds and instruments, it became the largest fund in the industry by value. It was then valued at about N54 billion, but as its yield took a dive, so did its value and that of the Fund manager.
Diversification and Vulnerabilities
FBN Capital Asset Management currently manages 6 mutual funds which together represent about 14.4% of total mutual funds’ assets. 10.9% of the 14.4% is in the money market fund while FSDH Asset Management has 3 mutual funds whose total value represent 15.5% of total mutual fund asset. 13.8% of the 15.5% is in the UPDC Real Estate Investment fund. These two fund managers are therefore very vulnerable to the fortunes or otherwise of the single funds that make up a considerable portion of their AUM.
Reversal in Sight
The “tug of war” between FBN Capital Asset Management and FSDH Asset Management is not new. History has it that on March 27th 2015, FSDH was at the second position with 18.61% of mutual funds’ Assets while FBN held the 3rd position with 17.58% but by April 30th 2015, FBN had taken the second position.
It will not be a thing of surprise if FBN Capital Asset Management regains its second position in no distant time. We are watching.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will likely stick to its existing deal to cut oil output at a meeting on Monday, April 3.
According to Reuters, this was said disclosed by five delegates from the producer group after oil prices recovered following a drop to 15-month lows due to banking fears and demand worries.
Brent crude has recovered towards $80 a barrel after falling to near $70 on March 20 as fears ease about a global banking crisis and as a halt in exports from Iraq’s Kurdistan region curbs supplies.
OPEC+ is due to hold a virtual meeting of its ministerial monitoring panel, which includes Russia and Saudi Arabia, on Monday.
The consensus was that Kurdistan curbs and recent price drops were not sufficiently important to affect the overall OPEC+ policy path for 2023.
Kurdistan’s crude oil exports – around 400,000 barrels per day shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets – were halted late last week by the federal government of Iraq.
Last week, the International Chamber of Commerce ruled in favour of Iraq against Turkey in a dispute over crude flows from Kurdistan. Iraq had argued that Turkey shouldn’t allow Kurdish oil exports via the Iraq-Turkey pipeline and Ceyhan without approval from the federal government of Iraq.
Talks between officials from Kurdistan and from the Iraq federal government have failed in recent days, but they are set to continue next week.
Three other OPEC+ delegates also told Reuters that any policy changes were unlikely on Monday. After those talks, the next full OPEC+ meeting is not until June.
Last November, OPEC+ reduced its output target by 2 million barrels per day – the largest cut since the early days of the COVID-19 pandemic in 2020. The same reduction applies for the whole of 2023.
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has said OPEC+ will stick to the reduced target until the end of the year.
By Dipo Olowookere
The board of Oando Plc has informed the investing community of its intention to leave the Nigerian and Johannesburg stock exchanges in the coming months.
The reason for exiting the stock market, according to the energy firm, is to become a private company and to achieve this, its core investor, Ocean and Oil Development Partners Limited (OODP), has offered to buy all the shares held by minority shareholders in Oando.
OODP is offering to pay N7.07 in cash or its equivalent in South African Rand (ZAR) for each of the stock, which it said represents a 58 per cent premium to the last traded share price of Oando on Tuesday, March 28, 2023, being the day prior to the date it submitted the scheme application to the Securities and Exchange Commission (SEC).
Oando trades its shares on the floors of the Nigerian Exchange (NGX) Limited and the Johannesburg Stock Exchange (JSE).
This news comes hours after the company announced that it had bounced back into profitability after years of dishing out losses to the frustration of shareholders.
In its unaudited financial results for 2021, Oando reported a profit after tax of N34.7 billion, in contrast to the loss after tax of N140.7 billion of the preceding year.
Before now, Oando has had it rough with regulators in Nigeria, leading to its suspension from the market and a court tussle over allegations that it tampered with its financial statements to deceive investors.
In the notice released this week, Oando said after the acquisition of “the shares of all minority shareholders in Oando,” it would “subsequently be delisted from NGX and JSE and re-registered as a private company.”
At the moment, the energy firm said it has “applied for the SEC’s No Objection to the scheme, noting that the deal is “subject to the approval of the shareholders of Oando at the Court-Ordered Meeting of the company, as well as the sanction of the Federal High Court.”
However, it disclosed that, “The terms and conditions of the transaction will be provided in the scheme document, which will be dispatched to all shareholders following the receipt of an order from the Federal High Court to convene a Court-Ordered Meeting,” promising to update the market “upon receipt of requisite approvals from shareholders and regulators.”
By Adedapo Adesanya
The World Bank Group’s Board of Executive Directors has announced Mr Ajay Banga, a US national, as the only nominee for the position of the bank’s next president and may clinch the post if he passes the next hurdle.
This was contained in a statement issued by the World Bank on Friday.
“The World Bank Group’s Board of Executive Directors today confirmed that, as announced on February 22, the period for submitting nominations for the position of the next President of the World Bank Group closed on Wednesday at 6:00 pm ET.”
“The board received one nomination and would like to announce that Ajay Banga, a US national, will be considered for the position.
“In accordance with established procedures, the Board of Executive Directors will conduct a formal interview with the candidate in Washington D.C., and expect to conclude the Presidential election in due course,” the board said.
US President Joe Biden in February nominated Mr Banga to lead the World Bank, saying he is “well equipped” to lead the global institution at “this critical moment in history.”
No other country proposed an alternate candidate for the prestigious post.
Mr Banga, 63, was born in India and is a naturalised US citizen. He has led Mastercard Inc and now currently serves as Vice Chairman at General Atlantic.
If confirmed, Mr Banga would become the first-ever Indian-American to head either of the two top international financial institutions, the International Monetary Fund (IMF) and the World Bank.
Mr Banga is expected to replace the current World Bank president, Mr David Malpass, who will step down in June, nearly a year before his term is scheduled to expire.
Mr Malpass faced strong criticism over the bank’s commitment to climate action and over his personal views on climate change.
