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Economy

Unlisted Securities Exchange Crashes into Bears’ Colony

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By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange found itself in the bears’ colony on Thursday, July 14 after the fall in the share price of FrieslandCampina WAMCO Nigeria Plc chopped off 0.43 per cent from the market.

According to data from the exchange, Friesland lost 47 Kobo during the session to close at N104.53 per unit compared with the previous day’s N105.00 per unit and as a result of this, the market capitalisation of the unlisted securities exchange went down by N4.44 billion to settle at N1.023 trillion in contrast to the previous day’s N1.028 trillion.

In the same vein, the NASD Unlisted Securities Index (NSI) depreciated yesterday by 3.37 points to end the session at 777.68 points compared with 781.05 points recorded in the previous session.

Business Post reports that the bourse posted a price gainer yesterday and it was Capital Bancorp Plc, which appreciated by 14 Kobo to close at N2.95 per share in contrast to N2.81 per share.

There was a slide in the volume of securities traded at the bourse on Thursday as investors exchanged 632,000 units, 79.0 per cent lower than the 3.0 million units reported in the preceding session.

The value of shares traded yesterday also dropped by 6.3 per cent to N9.1 million from the preceding session’s N9.7 million, while the number of deals increased by 30 per cent to 13 deals from 10 deals on Wednesday.

AG Mortgage Plc closed the trading day as the most traded stock by volume (year-to-date) with 2.3 billion units valued at N1.2 billion, Central Securities Clearing System (CSCS) Plc has sold 675.6 million units for N14.1 billion, while Food Concepts Plc has exchanged 146.5 million units valued at N127.1 million.

CSCS Plc topped the chart by value (year-to-date) with 675.6 million units exchanged for N14.1 billion, trailed by VFD Group Plc with 11.1 million units worth N3.3 billion, and FrieslandCampina WAMCO Nigeria Plc with 11.9 million units valued at N1.5 billion.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Economy

Liquid Government Bonds Market Can Spur Economic Growth—SEC

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By Aduragbemi Omiyale

The need for the development of a liquid government bonds market has been emphasised by the Securities and Exchange Commission (SEC).

The Director-General of SEC, Mr Lamido Yuguda, while speaking at the 2022 conference of the Capital Market Correspondents Association of Nigeria (CAMCAN), stated that this would have a positive effect on the economy.

Mr Yuguda, represented by the Executive Commissioner of Operations of the agency, Mr Dayo Obisan, disclosed that a liquid government bonds market implies that there is a sufficient offering of government bonds across a range of maturities, which is key to the construction of the benchmark yield curve (which is important for the establishment of the market-based risk-free interest rate used in equity pricing).

He further stated that the synergistic relationship between the government bonds and equity markets had been observed in several East Asian economies, which experienced a surge in private investment and equity market capitalisation following the establishment of a liquid debt securities market.

“At the same time, an increase in government expenditure funded by debt crowds out private investment, which in turn adversely affects aggregate expenditure and, consequently, economic growth with implications for the capital market.

“In addition, an underdeveloped capital market will affect institutional investors negatively, restraining the amount and maturity of funding available to the government locally,” the DG said at the programme tagged Nigeria’s Public Debt and the Capital Market.

At the event held in Lagos over the weekend, Mr Yuguda stated that as the apex regulator of the capital market, SEC is committed to creating an enabling and facilitative oversight and regulatory framework supportive of the deepening and development of the Nigerian capital market.

“As you are aware, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, launched and unveiled the revised Nigerian Capital Market Master Plan 2021-2025.

“The updated master plan underscores the commission’s commitment to deepening and repositioning the financial market as a key anchor of our economy.

“The Master Plan, which represents collective aspirations of the capital market community, is focused on driving initiatives geared towards growing and deepening the Market with the ultimate goal of accelerating the emergence of our Country into the top 20 global economies by the year 2025,” he stated.

He disclosed that the capital market is more resilient and is on a steady growth trajectory, adding that capital market correspondents have contributed to the development of the market and expressed delight at their partnership with the agency in this noble task of developing and deepening the capital market.

According to him, the reporters have taken on an increasingly important role of communicating to the public some of the commission’s initiatives aimed at developing the market, noting that SEC is committed to supporting efforts aimed at addressing financial literacy and empowerment gaps within society.

“There is no doubt in my mind that, the capital market presents a good platform for addressing many of Nigeria’s economic challenges.

“On our part as regulators, we shall continue to introduce new ideas and policies towards developing and regulating a capital market that is dynamic, fair, transparent and efficient to contribute to the nation’s economic development.

“We will also continue to fulfil its mandate of protecting investors and creating an enabling environment for market operators.

“Policymakers and practitioners alike are keen to understand the complex nexus between the public debt market and the Nigerian capital market,” he added.

In her remarks, the chairman of CAMCAN, Mrs Chinyere Joel-Nwokeoma, said that the annual workshop was part of the association’s contributions to the development and growth of the nation’s economy by bringing regulators, operators and company executives to discuss economic issues that affect the market in particular and the economy in general.

She said that the theme was picked because of concerns in different quarters concerning the nation’s rising total debt stock, which stood at N42.80 trillion as of June 2022.

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Economy

Purple Real Estate N10bn IPO Attracts Investors Ahead of NGX Listing

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By Dipo Olowookere

The Initial Public Offering (IPO) of Purple Real Estate Income Plc (PREIP) is already attracting investors ahead of its planned listing on the Nigerian Exchange (NGX) Limited.

Business Post gathered from a few stockbrokers, who asked not to be named, that the exercise is doing well, though a significant number of shares are yet to the purchased.

Purple Real Estate commenced the IPO last month and it hopes to conclude the exercise before Christmas.

The tech-enabled real estate firm intends to generate N10 billion from the IPO by selling 2 billion ordinary shares of 50 Kobo each at N5.

Intending investors are required to purchase a minimum of 4,000 ordinary shares and multiples of 1,000 ordinary shares thereafter.

After the IPO, which started on November 21, 2022, and will end on December 23, 2022, the stocks will be listed on the exchange.

According to the chief executive of the organisation, Mr Laide Agboola, investing in the company will give subscribers “blended yields” as the firm intends to expand its real estate footprint delivering similar investment-grade assets, including Purple Lekki, an all-inclusive mixed-use centre building on the learnings from its flagship asset.

The principal activities of Purple Real Estate include the purchase, lease, development, and management of properties to generate a sale and rental income as well as income from other services, including advertising and facilities management.

The firm is evolving into a tech-driven real estate company deploying proptech solutions such as Purpleshop and Fractions to eliminate the barriers to world-class retail and real estate ownership.

Its subsidiaries are Maryland Mall Limited, Purple Proptech Limited, Lekki Retailtainment Limited, Purple Asset Managers Limited, Purple Urban Limited and Cible Media Limited.

PREIP, which is on the path to becoming the first approved Real Estate Investment Company (REICO) in Nigeria, grew its revenue by 121 per cent to N1.8 billion in 2021, while the pre-tax profit was N1.5 billion, with total assets at N26.4 billion.

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Economy

OPEC+ Agrees to Keep Current Oil Production Cuts

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By Adedapo Adesanya

The 23 oil-producing nations under the aegis of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, on Sunday agreed to stay the course on output policy ahead of a pending ban from the European Union (EU) on Russian crude.

OPEC+ decided to stick to its existing policy of reducing oil production by 2 million barrels per day or about 2 per cent of world demand from November until the end of 2023.

This will come as a surprise as analysts had expected OPEC+ to consider fresh price-supporting production cuts ahead of a possible double blow to Russia’s oil revenues.

Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November. It came despite calls from the United States for the group to pump more to lower fuel prices and help the global economy.

Meanwhile, the EU is poised to ban all imports of Russian seaborne crude from Monday, while the US and other members of the G-7 will impose a price cap on the oil Russia sells to countries around the world.

EU governments tentatively agreed on Thursday on a $60 a barrel price cap on Russian seaborne oil with an adjustment mechanism to keep the cap at 5 per cent below the market price.

EU countries have wrangled for days over the details of the price cap, which aims to slash Russia’s income from selling oil while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on December 5.

It will allow countries to continue importing Russian crude oil using Western insurance and maritime services as long as they do not pay more per barrel than the agreed limit.

The Russian government has previously warned that any attempt to impose a price cap on Russian oil will cause more harm than good.

Ahead of the week, this may boost prices as they have fallen to below $90 a barrel from more than $120 in early June ahead of potentially disruptive sanctions on Russian oil, weakening crude demand in China and mounting fears of a recession.

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