Economy
Why Nigeria’s Mutual Funds Now Attract International Interest—Experts
By Dipo Olowookere
Recently, the Securities & Exchange Commission (SEC) announced that total Asset Under Management (AUM) of mutual funds in Nigeria topped N300 billion for the first time ever.
This was because there has been increased interest and investments in Mutual Funds in Nigeria and experts attributed this to various factors not excluding the current state of the economy, stock market and interest rate fluctuations as well as much improved mutual funds offerings.
This is further backed by a recent report by Quantitative Financial Analytics which estimated that Nigerian mutual funds attracted the sum of N42 billion inflows in Q1, 2017 as against the N49 billion inflow recorded the entire 2016.
It was also observed that Nigeria’s mutual funds’ assets grew to N318 billion as at the beginning of H2, 2017, up by 42 percent on a YTD basis from the 2016-year end value of N223.6 billion.
Mr Emeka Okolo, a Senior Fund Manager and Head, Coronation Asset Management, speaking on this trend at the launch of one of such funds, The Coronation Mutual Funds, noted that active portfolio management by experienced professionals offer investors better prospects on their investments especially in periods of market volatility and economic downturns as is being experienced in Nigeria, making mutual funds an optimal choice.
On the Coronation Mutual Funds, he further added, “No one can doubt the capacity and expertise of Coronation Asset Management to deliver competitive returns to investors in the Coronation Mutual Funds.
“The level of professionalism and quality of investments will be difficult to match by other mutual fund managers in Nigeria and the West African sub-region.
“This, coupled with the proposed investment mix and the fund structures, distinguish these Mutual Funds.”
Indeed the recently launched, Naira denominated, open-ended mutual funds by Coronation Assets Management Ltd which witnessed a high subscription rate by individual, retail and institutional investors has continued to elicit excitement.
“The Mutual Funds, N1.5 billion Money Market Fund, N400 million Fixed Income Fund and the N200 million Balanced Fund, were all offered at par of N1 each.
In the same vein, Chairman of the Bank, Mr Tunde Folawiyo, said that the funds offer all strata of investors, individual and corporate, an opportunity to diversify their investment portfolios backed by the strength of the Coronation Brand and managed by a team of experienced professionals at Coronation Asset Management.
According to him, the Money Market Fund will exclusively invest in short-dated money market instruments, offering capital preservation and liquidity to investors.
The Fixed Income Fund will invest in FGN and investment grade corporate bonds while the Balanced Fund will invest in a diversified portfolio of carefully chosen equity securities with strong fundamentals and prospects of delivering long term positive investment returns, while tactically investing in fixed income securities to actively manage short term volatility in its equities exposure.
The Money Market Fund and the Fixed Income Fund have been assigned low to medium risk ratings, “A- (NG)(f)” and “AA-/FV4 (NG)(f)” respectively, by Agusto & Co, a foremost Nigerian rating agency.
This IPO for the Mutual Funds came on the back of a strong financial year for the premium financial institution.
Recall that Coronation Merchant Bank, the parent company of Coronation Asset Management, grew its profits by 128 percent from December 2015 to December 2016.
The group’s financial strength, coupled with a focus on sound risk management, prudent investment strategies as well as a tradition of delivering excellent value to all stakeholders, has made the IPO for the Mutual Funds more inviting to investors.
The Coronation Mutual Funds are being overseen by institutions with strong track records of providing superior financial services with Coronation Asset Management acting as the Fund Manager, Citibank Nigeria as Custodian and United Securities Limited as Registrar to all three funds.
Stanbic IBTC Trustees Limited will acts as Trustee to the Balance and Fixed Income Funds while United Capital Trustees will act as Trustee to the Money Market Fund.
Investors can visit www.coronationam.com for more information on the Mutual Funds and learn more about Coronation Asset Management.
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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