Economy
Nigerian Pension Funds Post 16.37% Gains in 2017—Report
**As APT RSA Pension Fund Leads Peers Again
By Dipo Olowookere/Quantitative Financial Analytics
A new data analysis from Quantitative Financial Analytics has shown that the Nigerian pension funds earned an annualized 16.37 percent average return for the period ended December 31, 2017.
This is against the 11.56 percent average yields the fund made in the previous year.
Also during the period, the APT RSA Pension fund was the best-performing among the RSA category of funds, raking 22.24 percent return.
It was followed by the 19.85 percent return produced by the Crusader RSA Pension fund.
According to the report, eight of the 19 RSA funds being tracked by Quantitative Financial Analytics produced returns that beat the industry average of 16.37 percent while the rest produced returns below the industry average. All but one RSA fund produced returns in the double digit.
Quantitative Financial Analytics said in the report that the Retiree fund category followed closely the trend and pattern of the RSA funds recording an average return of 16.28 percent compared to last year’s average of 12.42 percent.
Crusader Pension Retiree Fund took the lead by producing 21.69 percent return while APT Pension Retiree Fund came second with 21.48 percent return.
Seven of the 18 Retiree funds recorded better returns than the industry average and all the Retiree funds closed the year with double digit returns.
The gratuity fund category, occupied by funds managed by Pension Alliance (PAL), recorded an improved performance in 2017 as the Pal Emenite and Pal Guinness funds produced 16.5 percent and 15.1 percent return respectively compared to their 15.04 percent and 13.74 percent returns in 2016.
Though the pension funds did well in 2017, they were walloped by the NSE Pension index which produced a whopping 70.3 percent return. Whether the index is a good bench mark for pension funds is still subject to debate.
While most pension funds are predominantly invested in fixed income funds, the NSE pension Index fund is an equity-based index.
Comparing an equity-based index with a fixed income-based portfolio looks like comparing apples and oranges.
According to analysis by Quantitative Financial Analytics, Nigerian pension funds have about 74 percent of their assets allocated to Government Bonds and treasury bills with only 10 percent invested in domestic and foreign equity securities.
APT Stands out
APT Pension fund has really stood out over the past few years as the top performer taking either the first or second positions in the performance table year after year.
In 2015, it took the second position in the RSA fund performance chart with 31.86 percent. In 2016, it came second again with 12.58 percent topping the Retiree fund category with 14.99 percent performance.
While it is not very apparent why APT does so well, it looks like it has to do with their asset allocation strategy.
APT seems to be the only pension fund that has a double-digit allocation to the stock market with about 13.75 percent of its RSA assets allocated to equities while 12.81 percent of Retiree fund asset is also allocated to equities.
The industry average allocation to equities in 2017 was 10.33 percent.
According to available information on their website, APT pension managers oversee the pension accounts of about 120k registered RSA members.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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