Economy

Infrastructure Development Key to Growth—SEC

Published

5 years ago

13/02/2020

Infrastructure development has been described as critical for the achievement of economy prosperity, sustainable growth and development of Nigeria.

Therefore, the need to attract private and domestic capital to fund and support critical infrastructure is paramount.

This, among others, were the resolutions reached at the end of the Securities and Exchange Commission (SEC) yearly budget seminar.

The seminar, which held in Lagos Thursday, had as its theme Leveraging the 2020 Budget and Finance Act for the Growth of the Nigerian Capital Market.

Participants also recommended the provision of conducive business environment and credit enhancements for the Small and Medium Scale Enterprises (SMEs) to thrive, because the SME sub-sector is one of the critical pillars for economic growth and national prosperity.

According to the communique at the end of the seminar, “There is need to create more hedging opportunities in the Nigerian capital market, as this have implication for market liquidity and efficiency.

“The government needs to work towards encouraging the participation of the private sector in the Nigerian business environment. The power and agricultural sectors are key sectors where in-depth reform and partnership with the private sector are important. There should be partnership with the private sector to mobilize domestic resources, create quality jobs and lift people out of poverty.”

Participants also agreed on the need to leverage technology for trade and focus on adding value to the agricultural sector which is currently very low-paying.

This sector, they posited, needs to become more beneficial to those involved and can be done through means such as provision of power for crop preservation, thus eliminating post-harvest losses.

In her opening address, Acting Director General of SEC, Ms Mary Uduk, emphasised the important role that budgets play in an economy, and by extension in the capital market.

This importance, Ms Uduk said, is actually the basis on the seminar is organised to analyse the risks and opportunities presented by the government budget.

She said over the years, the SEC Budget Seminar Series has served as a forum for evaluating the connection between the Nigerian capital market and the annual Federal Government budget, with the aim of identifying how the capital market can contribute to, and benefit from, the budget and its implementation.

“In the course of the seminar, we shall look at the performance of the 2019 budget, the performance of the capital market, the proposed 2020 budget as well as its likely impact on the capital market.

“Also critical are the aspects of the new Finance Act that affect the capital market. These include the provisions on Securities Lending, Real Estate Investment Schemes, minimum tax, increased Value Added Tax, amongst others.

In his remarks, former Chairman of SEC, Mr Suleyman Ndanusa, and Chairman of the occasion, said the annual budget cycle was important particularly in countries like Nigeria where government expenditure has significant impact on the economy.

Mr Ndanusa said the budget sets the tone for the direction of the economy each year which presents opportunities and risks.

According to him, “I personally love the choice of this topic, given the pressing need to grow our capital market and the important role played in our economy by the government through its fiscal and other policies.

“Looking at some broad items of the 2020 budget; the total expenditure amounts to N10.6 trillion, which is a 19 percent increase on that of 2019, but just about 6.5 percent of the nation’s GDP. The budget is split into 79 percent for recurrent expenditure and 21 percent for capital expenditure with a deficit of around N2 trillion.

“How this deficit would be funded is always of interest to the capital market community. Coupled with the implications of the choice of funding. There are the usual questions on whether we are returning to a period of high treasury yields and the consequent crowding out of corporates from the debt markets as well as the trade off between investments in fixed income and equities segments of the capital market” he added.

Recall that President Muhammadu Buhari presented the 2020 budget to the National Assembly on October 8, 2019 which was eventually signed at a record time on December 17, 2019, with an approved budget of N10.6 trillion.

Economy

Secure Electronic Technology Seeks Approval to Merge Every Four Shares Into One

Published

10 hours ago

13/03/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

Secure Electronic Technology (SET) Plc is planning to reconstruct its shares at the Nigerian Exchange (NGX) Limited by merging four stocks into one.

However, this exercise is subject to the approval of shareholders of the company and the board is proposing an Extraordinary General Meeting (EGM) to be held on or before April 17, 2025.

Business Post reports that the decision to reconstruct the shares of the organisation was reached at the board meeting of the firm on Friday, MArch 7, 2025.

In a notice to the stock exchange, SET Plc said it was agreed that the proposed share reconstruction and recapitalisation of the company shall be by way of one or a combination of the following; an offer for subscription, rights offering or private placement, upon terms agreed by both parties under the definitive agreement.

It further said, “The issued and share capital of the company be reduced from N2,815,770,000, represented by 1,407,885,000 ordinary shares of 50 Kobo each, subject to the approval of the Federal High Court, Securities and Exchange Commission (SEC), and relevant regulatory authorities.”

“This restructuring share result in the cancellation of 4,223,655,000 units of shares and the portion of the share capital cancelled, being valued at N2,111,827,500 be transferred to a special reconstruction reserve,” it noted.

The disclosure also said, “There shall be a proportional upward adjustment in the share price of SET on the NGX to be reflected after the conversion, so that the value of one converted share shall be equal to the market price of four pre-reconstruction shares, and at the end of the reconstruction, SET market capitalisation and each shareholder’s percentage holding shall remain unchanged.”

The company emphasised that it would “consolidate its issued shares at a basis of 1 for 4 ratio, meaning every four shares of SET Plc currently held by a shareholder shall be converted to one share and shareholdings that result in fractional shares post-reconstruction shall be rounded up to the nearest whole number.”

It was disclosed that this exercise was suggested by Gamma Civic Limited, a part of Gamma Group, a company listed on the Mauritius Stock Exchange and represented by Cruzan Investment Limited, a company incorporated in Nigerian under the Companies and Allied Matters Act 2020.

Economy

FrieslandCampina Wamco Weakens NASD OTC Exchange by 0.06%

Published

14 hours ago

13/03/2025

Adedapo Adesanya

By Adedapo Adesanya

FrieslandCampina Wamco Nigeria Plc brought down the NASD Over-the-Counter (OTC) Securities Exchange by 0.06 per cent on Wednesday, March 12.

Business Post reports that the share price of FrieslandCampina Wamco Nigeria Plc slumped by N1.26 during the session to N37.45 per unit from the preceding day’s N38.71 per unit.

However, Geo-Fluids Plc gained 27 Kobo to trade at N2.95 per share versus Tuesday’s closing price of N2.68 per unit, and First Trust Microfinance Bank Plc appreciated by 3 Kobo to close at 56 Kobo per share, in contrast to the previous day’s rate of 53 Kobo per share.

When the platform ended trading activities yesterday, its value went down by N1.17 billion to settle at N1.955 trillion compared with the preceding day’s N1.956 trillion and the NASD Unlisted Security Index (NSI) decreased by 2.03 points to close at 3,385.50 points, in contrast to the previous trading day’s 3,387.53 points.

The volume of securities traded at the bourse dropped by 36.3 per cent to 298,845 units from the 469,185 units published on Tuesday, the value of securities decreased by 4.8 per cent to N10.4 million from the N10.9 million quoted at the preceding session, and the number number of deals moderated by 34.2 per cent to 25 deals from 38 deals.

At the close of business, Impresit Bakolori Plc was the most active stock by value (year-to-date) with 533.9 million units worth N520.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 12.5 million units valued at N484.0 million, and Afriland Properties Plc with 17.2 million units sold for N352.8 million.

Also, Impresit Bakolori Plc was the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 69.9 million units sold for N23.7 million, and Afriland Properties Plc with 17.2 million units valued at N352.8 million.

Economy

Reps Approve Conditions to Revoke Licences of Insurance Companies

Published

14 hours ago

13/03/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

The House of Representatives has passed Nigeria Insurance Industry Reform Act, 2024, repealing Act, Cap 117, Laws of the Federation of Nigeria, 2004; the Marine Insurance Act, Cap M3, Laws of the Federation of Nigeria, 2004; The Motor Vehicle (Third Party) Insurance Act, Cap M22, Laws of the Federation of Nigeria, 2004; the National Insurance Corporation of Nigeria Act, Laws of the Federation of Nigeria, 2004 and the Nigerian Insurance Reinsurance Corporation Act, Cap N131, Laws of the Federation of Nigeria, 2004.

At the plenary on Wednesday, the green chamber of the National Assembly approved some conditions the operating licence of an insurance company can be revoked by the National Insurance Commission (NAICOM).

The new piece of legislature, which provides for a comprehensive legal and regulatory framework for insurance business in Nigeria, was enacted yesterday after the consideration of the Senate bill.

During the presentation by House Leader, Mr Julius Ihonvbere, yesterday, for a clause-by-clause consideration, it was agreed that NAICOM can withdraw the licence of an insurer or reinsurer if it is not conducting insurance business in accordance with sound insurance principles.

In addition, this action can be carried out if the licence holder has “failed to satisfy the capital or solvency requirement as prescribed by the commission and has ceased to carry on the business of insurance and the primary purpose for which it was registered for at least one year in Nigeria.”

The lower chamber of the parliament also concurred with the Senate that for obtaining an operating licence, “An application for licensing as an insurer shall be made to the commission in the prescribed form and accompanied by such other documents or information as the commission may from time to time require.

“The commission shall publish and make available to the general public a service charter which shall provide for products and services of the commission and the complete list of requirements to obtain the products and services.”

However, no person or organisation is allowed to “commence or carry out insurance, reinsurance or related business in Nigeria unless licensed by the commission as an insurer or a reinsurer under this bill.”

NAICOM was given the power to “regulate the insurance industry [in Nigeria] in order to develop the insurance sector and to protect the interest of policyholders, prospective policyholders and other stakeholders under insurance policies in ways that are consistent with the continued development of a viable, competitive and innovative insurance industry.”