Economy
Investors Eye Nigeria’s Multi-Billion Dollar Retail Market
By Modupe Gbadeyanka
The convergence of AI, tech, and data on Nigeria’s multi-billion dollar plus retail market will be a strategic focus to local and international developers, investors and retailers at the 4th annual West Africa Property Investment Summit taking place on November 15 and 16, 2018 in Lagos.
Considered one of the world’s most significant and accessible investment opportunities, the opportunity in the country has long whet the appetites of the world’s capital movers; however, for many, the opportunity has been missed or misjudged to a lack of relevant, actionable and useful data.
One of the emerging thought leaders in the field is Ali Djire, the country head of Fraym, who believes that embracing a data-driven approach to retail will prevent further Nakumatt styled retail implosions. In a market under pressure with retailers struggling with underperforming new locations due to steep competition and a lack of critical consumer mix, access to data is increasingly transforming the fortunes of companies in the sector.
Says Djire, “The need for a data-driven approach is becoming an imperative for retailers to not only inform what products to carry on the shelf, but also to get unprecedented insights into where to locate their stores, how to price based on ability to pay, and how to respond to competition.”
According to Djire, retail currently accounts for 16% of the Nigerian GDP and is viewed by many as a new frontier of growth for local and international investors.
A view which is shared by Jan Van Zyl, head of property development for leading pan-Africa real estate development fund, Novare Equity Partners.
“Nigeria is the largest economy in Africa. Therefore, you cannot brand yourself as a Sub-Saharan Fund and not have a presence in Nigeria.” Adding that the fund is also looking at options in Ghana and Cote D’Ivoire.
While the scale of the opportunity in Nigeria has attracted many entrants over the past decade, experienced investors and developers understand that the formal retail market is limited and dynamic that can grow exponentially.
As Van Zyl explains, “We believe that we are at the right place, at the right time, and we have invested in four shopping centres in Nigeria since 2010 with a book value in excess of $300 million.”
As one of Africa’s bullish international funds in real estate on the continent, the pan-Africa fund is in the country for the long-term. However, while the recovery over the last 12 months has been slow, Van Zyl argues that this is not a Nigerian, but an emerging market phenomenon.
“Combined with elections in February 2019, we find that many potential new entrants are waiting on the sidelines until the uncertainty surrounding an election period has settled. It is important to note that, such a cycle is not Nigeria specific, but is experienced in most emerging markets throughout Africa and other continents.” However, he does note that there has been a trend of decreasing the size of future shopping centre developments in the current market, which is one way in which the market has recalibrated to cope with market relating to the recession.
For Kfir Rusin, the Managing Director of the WAPI Summit, the advent of data and new technologies are critical to quickening the somewhat slow pace of recovery in the retail sector post-recession.
“As a pioneer in their field, Fraym’s use of Geospatial data, AI and Machine Learning technologies can provide actionable intelligence on communities down to 1 square kilometre across the country. This unique and relevant data has the potential to be transformative catalyst of growth for the retail sector.”
With such useful smart data increasingly, many large market layers are actively recalibrating their approach. As Djire reveals, “We are actively working with global investment players, development organisations, as well as local companies, to get actionable market insights. Through our data, we are seeing early signs of companies leveraging Fraym’s geospatial data platform to streamline their operations and retail strategy. We see a growing need for actionable data for companies to be able to make effective decisions.”
As Rusin says, “This year’s West Africa Property Investments (WAPI) Summit will provide a platform for the traditional retail sector to network and realise the real-world benefits of how relevant data and tech is essential to growing the formal retail sector.”
For Djire, WAPI is a platform for engagement. As he says, “WAPI is the platform where the message of a data approach in retail could gain grounds. There is a unique opportunity to engage directly with decision-makers, demystify the concept of [geospatial] data, walk them through the idea of a data approach and how it could affect their business and bottom line. More importantly, it’s an opportunity to hear from them about the ways they think about the market, their business, and their consumers, to ensure that we’re all on the same wavelength.”
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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