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Obaseki Seeks More Incentives for Local Companies, Lauds Guinness Nigeria

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By Dipo Olowookere

Governor Godwin Obaseki of Edo State has urged various governments to provide more incentives for local companies.

According to him, when this is done, more firms would invest in the economy, which will in turn bring about growth in the country.

The Governor, speaking at the Government House in Benin City, said one of these incentives can be a non-punitive tax regime, which he said would make attract more investments, even international companies.

Mr Obaseki noted that, “Without strong local investors, we cannot attract international investors” and giving these incentives “will attract other investors to locate their businesses in the state.”

The Governor, who hosted management team of Guinness Nigeria Plc led by its Chairman, Mr Babatunde Savage, promised to take the campaign for a non-punitive tax regime to the Federal Government.

Mr Obaseki commended Guinness Nigeria for expanding its investment in the state with the unveiling of its new product, Royal Kingdom Premium Lager Beer.

“We commend Guinness for the direct and indirect jobs it has continued to create in the state. Local companies like Guinness Nigeria Plc. have continued to contribute to the overall development of the state,” he said.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

SEC Secures $400,000 for Nigerian Capital Market

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SEC new initiatives

By Adedapo Adesanya

A grant worth $400,000 has been granted to the Securities and Exchange Commission (SEC) by the African Development Bank Group (AfDB).

The financing package was approved to allow the apex capital market regulator in Nigeria to strengthen securities market regulation and broaden market instruments.

The funds will go towards strengthening the risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance.

The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the regional lender.

Speaking on the agreement at the virtual signing, Mr Lamido Yuguda, the Director-General of SEC, said, “This collaboration further underscores our mutual goal to grow our markets and create viable avenues for sustainable economic development for Nigeria and the region.”

The grant is aligned with the priorities of the bank’s country strategy for Nigeria, which envisages measures to stimulate capital market development to unlock financial resources for productive sector investments, infrastructure development and private sector growth.

On his part, Mr Lamin Barrow, Senior Director of the bank’s Nigeria Country Department, noted the urgency of the implementation of the project.

“At a time when countries are striving to build back better from the ravages of the COVID-19 pandemic, improvement of the enabling regulatory and supervision framework will boost domestic resource mobilisation efforts and leverage private sector contributions to achieve a greener, more environmentally sustainable and inclusive post-pandemic recovery,” Mr Barrow said.

Adding his input, Mr Oscar Onyema, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), thanked both the AfDB and SEC “for this historic event and partnership, to build in-house capacity at SEC, the Nigerian Stock Exchange, issuers and investors in the sustainable finance space, which will help to meet climate finance commitments in Nigeria.”

The project is expected to support the implementation of the SEC’s Nigeria Capital Market Master Plan 2015-2025 and its vision to position Nigeria’s capital market as a competitive and attractive destination for portfolio investments.

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Economy

NASD Delists ARM Life Shares After Merger With Tangerine Life

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ARM Life Plc

By Dipo Olowookere

Shares of ARM Life Plc have been delisted from the trading platform of the NASD over-the-counter (OTC) Securities Exchange, Business Post has confirmed.

The company’s securities were removed from the unlisted securities market by the exchange on Monday, March 1, 2021, after the firm was acquired by Tangerine Life Insurance Limited.

In February 2020, both companies said they were exploring each other’s strengths to form an impressive new enterprise that will delight its customers with its quality products and commitment to their satisfaction.

Tangerine Life has a very strong presence in the corporate market segment of the underwriting industry, while ARM Life is a formidable force in the retail and annuity-based service space.

With the merger, it is expected that the new entity will take control of the underwriting industry in Nigeria and from the information gathered by this newspaper, Tangerine Life has already cemented itself as the fourth largest life insurer in Nigeria with the transaction, allowing it to offer insurance services to the youth and others.

With the deal completed and ARM Life shares delisted from NASD OTC Exchange, the new company will likely operate as a private entity.

Confirming the exit of ARM Life from its platform, the NASD disclosed that in a notice that, “Further to the appointment of Stanbic IBTC Stockbrokers Limited as the stockbrokers to the merger between Tangerine Life Insurance Limited and ARM Life Plc, we wish to inform you of the following:

“Following the full suspension placed on the shares of ARM Life Plc, the last trading date of ARM Life Plc on NASD OTC Securities Exchange was Thursday, February 11, 2021.

“Upon the completion of the merger between Tangerine and ARM life Plc, ARM Life Plc is delisted on the NASD OTC Securities Exchange on March 1, 2021, and would not be eligible to trade on its market.”

It was gathered that to make the deal go through, Tangerine Life had to acquire a 77.22 per cent equity stake in ARM Life and acquired a further 1.05 per cent equity stake through the subsequent mandatory take-over offer incompliance with the law and regulations, bringing its total shareholding in ARM Life to 78.27 per cent as at the date of the scheme document.

As consideration for the transfer, Tangerine Life will offer the other shareholders of ARM Life 70 kobo for every share held in the firm.

Shareholders also have the option to receive shares in Tangerine Life in the ratio of 8 shares in Tangerine Life for every 100 shares held in ARM Life.

Recall that the National Insurance Commission (NAICOM), which regulates the sector, stipulated an increase in minimum capital requirements for life insurance, general insurance, composite insurance and reinsurance companies with a two-step target timeline of December 31, 2020, and September 30, 2021.

Specifically, the life insurance license capital requirement was increased from N2 billion to N8 billion, while life insurers are expected to have a minimum capital of N4 billion by December 31, 2020, and N8 billion by September 30, 2021.

The recapitalisation in the Nigerian insurance industry is expected to impact the competitive landscape of the insurance industry.

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Economy

CBN Offers N5 per Dollar Incentive to Boost Diaspora Inflows

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naira and dollar

By Dipo Olowookere

As part of efforts to boost foreign exchange (FX) inflows through diaspora remittances, the Central Bank of Nigeria (CBN) is offering an extra N5 for every Dollar sent to recipients in the country.

The apex bank, in a circular issued on Saturday and signed by A.S Jibrin for the Director of Trade and Exchange Department, disclosed that this reward system will last for two months.

The notice said this initiative is under the CBN Naira 4 Dollar Scheme and was designed to sustain the encouraging increase in inflows of diaspora remittances into the country.

It further said the promo will commence on Monday, March 8 and end on Saturday, May 8, 2021, noting that commercial banks and International Money Transfer Operators (IMTOs) have been carried along.

“In an effort to sustain the encouraging increase in inflows of diaspora remittances into the country, the CBN hereby announces the introduction of the CBN Naira 4 Dollar Scheme, an incentive for senders and recipients of International Money Transfers.

“Accordingly, all recipients of diaspora remittances through CBN licensed IMTOs shall henceforth be paid N5 for every $1 received as remittances inflow.

“In light of this, the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every $1 remitted by the sender and collected by the designated beneficiary.

“This incentive is to be paid to recipients whether they choose to collect the Dollar as cash across the counter in a bank or transfer the same into their domiciliary account.

“In effect, a typical recipient of diaspora remittances will, at the point of collection, receive not only the Dollar sent from abroad but also the additional N5 per $1 received.

“Please note, having discussed with banks and IMTOs, the scheme takes effect from Monday, March 8, 2021, and ends on Saturday, May 8, 2021,” the circular stated.

Recall that in late 2020, the central bank allowed recipients to receive FX inflows in the currency of the sender’s country.

Before the policy was introduced, foreign inflows were converted to Naira and this made diaspora remittances unattractive, putting pressure on the local currency at the unregulated segment of the forex market.

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Economy

NASD OTC Market Capitalisation Returns to N500bn After 0.26% Rise

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NASD OTC Market Capitalisation

By Adedapo Adesanya

The market capitalisation of the NASD Over the Counter (OTC) Securities Exchange returned to the N500 billion region on Friday after it appreciated by 0.26 per cent.

This was buoyed by the price appreciation recorded by the shares of FrieslandCampina WAMCO Nigeria Plc, which are traded on the platform.

Business Post reports that the equity price of the milk maker at the unlisted securities market increased by N1.34 or 1.1 per cent to settle at N120.34 per unit in contrast to N119 per unit of the previous day.

As a result of this growth, the market capitalisation improved by N1.31 billion to N500.32 billion from N499.01 billion it ended on Thursday.

Also, the NASD Unlisted Security Index (NSI) rose by 1.83 points to close at 697.30 points in contrast to 695.47 points it finished a day earlier.

But despite the positive outcome recorded yesterday, the activity chart closed mixed with the volume of traded shares reducing by 93.6 per cent to 117,995 units from the previous day’s N1.9 million units.

Also, the number of deals executed by the market participants yesterday went down by 83.3 per cent to two deals from 12 deals on Thursday and they were all carried out on FrieslandCampina.

However, the value of stocks transacted by investors rose by 1,522.21 per cent to N14.2 million from the N875,347 achieved the preceding day.

At the close of business, UBN Property Plc maintained its position as the most traded stock by volume on a year-to-date basis with 15.5 million units valued at N16.8 billion. Central Securities Clearing Systems (CSCS) Plc followed in second place with 4.7 million units worth N74.6 million, while FrieslandCampina WAMCO Nigeria Plc held the third position with 2.8 million units worth N346.4 million.

In terms of the most active stock by value (year-to-date), FrieslandCampina retained its spot on top of the chart after trading 2.8 million units valued at N346.4 million. Niger Delta Exploration and Production (NDEP) Plc trailed for selling 612,249 securities valued at N198.1 million, while the third spot was occupied by CSCS Plc, which has traded 4.7 million units worth N74.6 million.

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Economy

Local Currency Slides Back to N411/$1 at I&E

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local currency nigeria

By Ahmed Rahma, Adedapo Adesanya

The Naira’s recent volatility continued as it closed the week losing N4.50 or 1.11 per cent on the Dollar to return to N411/$1 at the Investors and Exporters (I&E) window of the foreign exchange market on Friday, March 5.

At the preceding session, the local currency traded against the greenback at the market segment at N406.50/$1 and it was observed that the Naira was plunged into another depreciation by a significant increase in the demand for FX.

According to data from the FMDQ Securities Exchange, transactions worth $83.93 million were recorded at the session, $16.94 million or 25.3 per cent higher than the $66.99 million recorded on Thursday.

However, at the black market, the Naira maintained stability against the American currency to trade at N480/$1, but depreciated against the Pound Sterling and Euro.

Business Post reports that at the unregulated segment of the market, the Naira depreciated against the British currency by N3 to sell at N675/£1 in contrast to N672/£1 it traded the previous day and lost N2 against the Euro to trade at N582/€1 compared with N580/€1 of the previous day.

At the interbank segment of the market, the domestic currency still remained flat against the US Dollar at N379/$1 and at the Bureaux De Change (BDC) window, the value of the Nigerian currency against the American currency remained unchanged at N395/$1 on Friday.

Meanwhile, at the cryptocurrency market, only Bitcoin (BTC) closed in the positive territory as it gained 0.4 per cent to trade at N31,388,202.00.

The Ripple (XRP) depreciated by 1.5 per cent to trade at N293.99, the US Dollar Tether (USDT) lost 2.2 per cent to sell for N680, Ethereum (ETH) fell by 2.7 per cent to trade at N998,100.01; Dash (DASH) declined by 1.9 per cent to close at N136,000; Litecoin (LTC) decreased by 2.5 per cent to trade at N115,750; while the Tron (TRX) went down by 1.6 per cent to N31.98.

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Economy

NSE Plans Workshop on Value Investing, Growth Investing

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Value Investing

By Dipo Olowookere

A workshop aimed to dissect the benefits of value investing and growth investing will hold next week, the Nigerian Stock Exchange (NSE) has said.

The online event is specifically for retail investors in the nation’s stock market and it is the first organised by the exchange this year.

According to a notice obtained by Business Post, the event, tagged Retail Investors Workshop, will take place on Thursday, March 11, 2021, by 11am and will have experts speaking on the theme.

“We are pleased to invite you to our first Retail Investors Workshop in 2021. On Thursday, 11 March 2021, by 11:00am, we will critically consider Value Investing vs. Growth Investing and the benefits each provides,” the notice read.

The exchange has, therefore, enjoined interested retail investors to register for the seminar via http://bit.ly/NSExRetailInvestors.

The workshop is one of the means the NSE uses to educate investors and deepen financial education.

The NSE explained that this webinar is designed to educate existing and new investors on the opportunities for the creation of wealth and the value proposition of equity product.

It will also serve as an avenue to interact and gain knowledge of the workings of the capital market.

The overarching objective of the webinar is to equip participants with the fundamental knowledge of equities as a capital market product and how it can be leveraged to grow wealth.

The workshop will educate intending and existing investors on how to achieve their financial objectives through capital market investment vehicles.

Value investing involves an investment strategy of buying stocks trading at a cheaper price when their fundamentals are taken into consideration.

On the other hand, growth investing is an investment strategy that involves buying equities that have huge potentials to rise in the future because the company will likely perform well and increase its earnings.

Picking these classes of shares is difficult for most retail investors, especially those just entering the market without much knowledge of the ecosystem.

At the seminar, the exchange hopes to tutor participants on ways to identify value and growth stocks and how to go about buying them.

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