Economy
NAICOM to Begin Recapitalisation Verification September 21
By Adedapo Adesanya
The National Insurance Commission (NAICOM) has said verification of the capital raised by insurance companies in the ongoing recapitalisation exercise will commence on September 21, 2020.
This was disclosed in a circular signed by the Director, Policy and Regulations, NAICOM, Mr Pius Agboola, on behalf of the Commissioner for Insurance, Mr Sunday Thomas, titled Re: Minimum Paid Up Share Capital Policy for Insurance and Reinsurance Companies in Nigeria.
Mr Agboola said the circular was in furtherance to the commission’s earlier notices referenced NAICOM/DPR/CIR/25/2019 dated May 20, 2019, July 23, 2019, and December 30, 2019, on the subject matter.
He said that the minimum paid-up share capital shall be through any or a combination of either with existing paid-up share capital, cash payment for new shares, retained earnings – capitalisation of undistributed profits.
He said payment also includes properties, treasury bills, shares, bonds, share premium among others for new shares issued which must be converted to cash not later than three months to the recapitalisation deadline.
According to him, the above components are to be converted to paid-up share capital in compliance with the recapitalisation exercise and applicable laws and regulations in Nigeria.
“For Private Placement, appropriate clarification has been obtained from the relevant regulatory agency to the effect that insurance and reinsurance companies may offer more than 30 per cent of the existing issued and fully paid shares.
“Submission of recapitalisation progress report shall now be monthly and the report shall be submitted not later than five working days after the end of each month, effective end of August,” he said.
The Insurance regulator stated that timeline and activities for the first phase of the recapitalisation have been scheduled to commence on August 30 for submission of a monthly recapitalisation progress report.
He said completion of the submitted reports would be five working days after the end of each month.
The commission’s director noted that all mergers for the purpose of meeting the first phase of November 30, 2020, recapitalisation would commence on September 14 and shall be irreversible except with written approval of the commission.
According to him, NAICOM shall commence capital verification on September 21 while communication of capital verification report to respective companies shall begin on November 30, 2020, and end January 21, 2021.
Speaking on the deadline for compliance with the first phase of the new minimum, it was stated that paid-up capital by all existing companies remains December 31, 2020, and issuance of letters of compliance as at date is February 26, 2021.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange opened the first trading day of the week pointing downwards after a 0.34 per cent loss on Monday, July 7.
The OTC exchange was pulled down yesterday by three securities despite the share price of Capital Bancorp Plc went up by 11 Kobo to sell at N2.15 per unit compared with the preceding session’s N2.04 per unit.
During the trading day, Afriland Properties Plc lost N2.13 to finish at N19.17 per share versus N21.30 per share, FrieslandCampina Wamco Nigeria Plc depreciated by N1.39 to close at N59.50 per unit compared with the previous trading session’s N60.89 per unit, and Central Securities Clearing System (CSCS) Plc crumbled by 25 Kobo to end at N31.09 per share, in contrast to last Friday’s N31.34 per share.
Consequently, the market capitalisation slid by N6.78 billion to finish at N1.983 trillion compared with the preceding session’s N1.990 trillion and the NASD Unlisted Security Index (NSI) went down by 11.58 points to close at 3,398.64 points compared with the previous session’s 3,398.64 points.
On Monday, the volume of securities traded by the market participants surged by 1,599.7 per cent to 10.8 million units from the 632,624 units traded last Friday, the value of securities transacted by investors also significantly increased by 137.9 per cent to N42.9 million from N18.1 million, and the number of deals appreciated by 20 per cent to 30 deals from 25 deals.
Okitipupa Plc remained the most traded stock by value on a year-to-date basis with 153.8 million units sold for N4.9 billion, trailed by Air Liquide Plc with 507.2 million units valued at N4.2 billion, and FrieslandCampina Wamco Nigeria Plc with 41.8 million units worth N1.8 billion.
Impresit Bakolori Plc ended the session as the most active stock by volume on a year-to-date basis with 536.9 million units valued at N524.8 million, followed by Air Liquide Plc with 507.2 million units sold for N4.2 billion, and Geo-Fluids Plc with 268.6 million units worth N476.4 million.
By Adedapo Adesanya
The Nigerian Naira sustained stability against the United States Dollar in the black market segment of the foreign exchange (FX) market on Monday, remaining unchanged at N1,540/$1.
In the same vein, the Nigerian currency improved its value against the greenback during the trading day in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N8.49 or 0.56 per cent to sell for N1,520.00/$1, in contrast to last Friday’s value of N1,528.49/$1.
Equally, the Naira appreciated against the Pound Sterling in the official market window by N2.91 to close at N2,084.18/£1 versus N2,087.09/£1 and against the Euro, it gained N7.14 to finish at N1,793.65/€1 compared with the preceding session’s N1,800.79/€1.
Last week, the Naira found support via sufficient forex liquidity and could find further help based on foreign demand for short-term government debt due to high yields.
Meanwhile, in the cryptocurrency market, profit-taking took charge as volatility signals picked up soon ahead of the June Federal Reserves minutes which are due for release on Wednesday. Further, the 90-day tariff pause for many US trading partners has reportedly been extended to August 1, although there are indications that the July 9 deadline may remain.
Yesterday, Dogecoin (DOGE) slumped by 3.6 per cent to sell at $0.1678, Litecoin (LTC) went down by 1.8 per cent to finish at $86.24, Solana (SOL) depreciated by 1.6 per cent to close at $149.25, and Cardano (ADA) slid by 1.5 per cent to trade at $0.5775.
In addition, Ethereum (ETH) shrank by 0.9 per cent to $2,551.30, Bitcoin (BTC) declined by 0.9 per cent to end at $108,141.36, Binance Coin (BNB) lost 0.4 per cent to settle at $659.59, and Ripple (XRP) depleted by 0.3 per cent to $2.26, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat $1.00 each.
By Adedapo Adesanya
The oil market improved by 1 per cent on Monday as signs of strong demand outweighed the impact of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) hiking output more than expected for August, as well as concern about the potential impact of US tariffs.
Brent crude futures gained 91 cents or 1.3 per cent to close at $69.20 per barrel and the US West Texas Intermediate (WTI) crude futures appreciated by 57 cents or 0.8 per cent to $67.57 a barrel.
Stronger demand was estimated to have remained above expectations as well after a record number of Americans travelled for the Fourth of July holiday by road and air.
OPEC+ agreed on Saturday to raise production by 548,000 barrels per day in August, more than the 411,000 barrels per day hikes carried out in the earlier three months.
The decision of the group will bring nearly 80 per cent of the 2.2 million barrels per day voluntary cuts from eight members back into the market.
The latest hike sends a clear message that the cartel is firmly shifting toward a market share strategy. It was also a response to Kazakhstan and Iraq, which are still overproducing their higher quotas.
Market analysts noted that these overproducers are unlikely to significantly raise their output compared with the recent heights reached during the first quarter.
Also, by approving another output hike, heavyweight OPEC+ leader, Saudi Arabia might seek to up pressure on members for not keeping to agreed quotas by slashing expected oil profits due to lower prices.
Saudi Arabia also raised the August price for its flagship Arab Light crude to a four-month high for Asia.
Amid these development, Goldman analysts expect OPEC+ to announce a final 550,000 barrels per day increase for September at the next meeting on August 3.
Meanwhile, pressure came as US officials flagged a delay regarding when tariffs would begin, but failed to provide details on changes to the rates that will be imposed. Investors are worried that higher tariffs could slow economic activity and oil demand.
The Donald Trump-led administration will make several trade announcements in the next 48 hours.
According to the US Treasury Secretary, Mr Scott Bessent, there are offers from countries to clinch a tariff deal before the July 9 deadline.
On the geopolitical front, Yemen’s Iran-aligned Houthis said it sank a ship in the Red Sea on Monday ahead of Israel’s Prime Minister Benjamin Netanyahu plans to meet with President Trump.
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