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Pension Sub-sector Records N770bn Profit in 10 years

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the Director General, National Pension Commission (PenCom), Mrs

The pension industry has recorded N770 billion profit in the past ten years, the Director General, National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu has said.

Anohu-Amazu, who disclosed this at the 17th annual lecture of the Catholic Brothers United (CBU ) of St. Agnes Catholic Church Maryland, Lagos, said the pension industry, raked in the huge profit between January 2006 and June 2016.

She said total contributions to Retirement Savings Account (RSA) for both public and private sectors within the period was N3.06trillion made up of N1.78trillion from public sector, which represents 57.52 percent of the total contributions and N1.30trillion from the private sector, representing 42.48 percent of the total contributions.

“Given that total assets of the RSA fund was N3.83trillionas at the period under review, it showed that a profit of over 770billion was made between January 2006 and June 2016.The public sector contributions include all contributions from federal and state governments as well as the self -funding agencies”, the PenCom boss explained.

She observed that the Nigerian pension fund assets had seen a dramatic growth over the decade from about N2trillion deficit in June, 2004 to N5.74 trillion as at the second quarter 2014.

According to her, this pool of funds is being invested on behalf of the contributors based on the provision of the PRA 2014 on stipulated allowable instruments for investment of pension funds and assets.

She said the commission, had in line with its regulatory responsibilities, issued regulation on investment of pension asset to guide the operators on how pension contributions should be invested.

The PenCom DG stated that the investment policy of the industry is based on the principle of safety, fair returns and liquidity to ensure that retirees receive their benefits as and when due, while achieving measurable impact on the economy.

According to Anohu-Amazu, Nigeria, like other emerging economies, had invested over 69 percent of the pension funds in government securities while investment in equities and money market securities were moderate at 11.54 percent and 8.66 percent respectively as at the second quarter of 2016.

Speaking on infrastructural investment, Anohu-Amazu, said there was only 0.03 per cent investment in infrastructure, a situation, which she said has left a huge untapped financing prospect.

“In addition, there is no investment in infrastructure bonds despite the allowance of 15 percent of the total pension fund asset in this instrument. This was largely due to non availability of this instrument in the market.” she stated.

She said the corporate and the pension industry strategies would help to increase investment in infrastructure and other alternatives assets from four percent in 2014 to 40 percent by the end of 2019.

Furthermore, she said plans have been made to drive efficiency by improving service delivery and the use of technology as well as establishment of share services across the pension industry.

She disclosed that Nigerian pension fund is targeting at inclusive expansive coverage, with the objective of ensuring that a minimum of 18per cent of the population, are covered and increase the asset size of the sector increased by at least 10 percent of the Nigerian GDP by 2019.

The commission, she added, will drive these objectives through excellence in service delivery access to the pension industry and increased investments in infrastructure projects to achieve measurable impact on the Nigerian economy.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Debt Management Office Releases Q1, 2022 Calendar

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Director General DMO - Investors King

The Debt Management Office (DMO) will, on January 16, 2022 issue N70 billion to N80 billion, four years and 20 years Federal Government of Nigeria (FGN) bond, with an interest rate of 12.50 percent.

In its recently released calendar for the issuance of bonds for the first quarter of 2022 (Q1-2022), the DMO noted that this bond has an original tenor of 10 years and 20 years and will re-open in January 2026 and January 2042.

The DMO also revealed that it will issue three years, 11 months and 19 years, 11 months FGN bond of N70 billion to N80 billion on 16th of February.

This bond, according to the DMO, will carry an interest rate of 12.50 percent, to be re-opened in January 2026 and January 2042, and with original tenor of 10 years and 20 years.

Also on March 23, the DMO will issue three years, 10 months, and 19 years, 10 months, 70 billion to N80 billion FGN bond which would last for a period of 10 years and 2 years.

The bond has an interest rate of 12.50 percent, and will be re-opened in January 2026 and January 2042.

FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government.

The FGN has an obligation to pay the bondholder the principal and agreed interest as and when due. When you buy FGN Bonds, you are lending to the FGN for a specified period of time.

The FGN Bonds are considered as the safest of all investments in domestic debt market because it is backed by the ‘full faith and credit’ of the Federal Government, and as such it is classified as a risk free debt instrument.

Prior to the establishment of the Debt Management Office (DMO) in 2000, Nigeria’s public debt was managed by a myriad of Government Agencies in an uncoordinated manner.

This diffusion created systemic and structural problems that brought about serious strain on the country’s debt portfolio and economic growth.

Hence, the establishment of the DMO marked the beginning of the institutionalization and professionalization of public debt management in Nigeria.

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Stanbic IBTC Enlightens Nigerians on Stockbroking

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Stanbic IBTC Stockbrokers, a subsidiary of Stanbic IBTC Holdings PLC, recently hosted a virtual session to enlighten Nigerians on the potentials of investing in the stock market.

The virtual event themed: “You Don’t Know About Stocks? Come On Now,” featured stockbroking experts: Afolabi Gbenro, Head, Sales Trading and Benjamin Jesumuyiwa, Head, Mandate and Settlements, both of Stanbic IBTC Stockbrokers with Tosin Olaseinde, founder of Money Africa, Jennifer Awirigwe, Certified Financial Educator and Solafunmi Oyeneye of Wealth Motley, a Personal Finance Educator as panelists.

The goal of the session was to acquaint individuals new to the stock market with basic stockbroking terms, useful tips for stock trading and how to use the Stanbic IBTC stockbroking app.

Afolabi stated the importance of diversifying investments in stocks. He listed factors that affect the prices of stocks which include supply, demand, news, and investor sentiments. The benefits of investing include dividend yield, capital appreciation, equity share holder privileges and utilising investments as collateral. He stressed the importance of research and advised Nigerians to conduct their own research and evaluate companies before investing.

On considerations before entering the stock market, he said, “You would need capital, investment objective, and risk profile assessment to determine the kind of investment you should venture into. You would also need to stay abreast of market updates.”

Benjamin Jesumuyiwa, Head, Mandate and Settlements, Stanbic IBTC Stockbrokers, urged Nigerians to invest in stocks to reap long term rewards. He said: “The stock market makes it easy to buy shares of companies and they can be purchased through a broker or via online platforms. Stanbic IBTC Stockbrokers offers a discounted rate of 0.7% on brokerage fees. Once you have set up an account, stocks can be purchased in minutes.”

Benjamin talked about the ease of using the Stanbic IBTC web and mobile applications platforms, stating that the platforms have been designed to allow customers sign up themselves, with direct access to the market.

Tosin Olaseinde commended Stanbic IBTC for making stock trading accessible and affordable for Nigerians, as individuals can open a stockbroking account with zero naira. She advised beginners to invest while gaining knowledge about the stock market and recommended Exchange Traded Funds (ETFs) as an entry point especially for people who have an aversion to high-risk investments. She said: “As a beginner, the best place to start is the Exchange Traded Funds (ETFs). It is a mixture of different equities in one stock. It offers you the opportunity to participate in a couple of stocks without buying everything individually.”

Solafunmi Oyeneye mentioned liquidity and dividends over a long period of time as advantages of trading stocks, encouraging beginners to access the Stanbic IBTC stockbroking app through their smartphones for convenience and less paperwork.

Jennifer opined that the stock market is a good place to invest because it is highly regulated, and the risks can be easily assessed. She also recommended the Stanbic IBTC Stockbroking app for trading stocks for ease of use and speed.

The stockbroking investment series by Stanbic IBTC further reaffirms the commitment of the financial institution to equip individuals with essential information required to make informed investment decisions.

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Why Every Investor Should Now Include ESG: deVere CEO

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Every investor needs exposure to environmental, social and governance (ESG) investments to build wealth over the long-term, says the CEO of one of the world’s largest independent financial advisory organisations.

The observation from deVere Group’s Nigel Green, a long-term advocate of impactful investing, comes as it is revealed that global sustainable fund assets almost doubled in the six months through to September.

Global ESG assets are on track to exceed $53 trillion by 2025, according to Bloomberg Intelligence, representing more than a third of the $140.5 trillion in projected total assets under management.

Mr Green says: “In January 2020, we identified that ESG would be this decade’s ultimate investment megatrend.

“Of course, that was before the pandemic that has acted as a catalyst for the sustainable investing boom.

“The health of our planet and how it affects human health which, in turn, affects the way we all live, interact and do business, dramatically came to the fore.”

He continues: “Previously, ESG investments were often considered a ‘quirk’ or ‘nice to have.”

“But now we believe that they should be a part of everyone’s investment portfolio for several key reasons.

“First, they typically deliver a legitimate diversification tool – which is how investors can seize opportunities and mitigate risk, especially during periods of higher volatility.

“Second, funds investing in entities with robust ESG credentials have outperformed their benchmarks over recent years. From a risk management point of view, including these companies in your portfolio is, clearly, a sensible decision to take.

“Third, ESG represents a revolution of investment strategy itself. A seismic shift has occurred in corporate behaviour. How firms approach ESG factors and the value they place on them compared to other considerations has already changed forever.  The ESG themes are already embedded in the global economy as this is only set to grow in the years to come – and, of course, investors should embrace the concept of having early advantage.

“And fourth, the last 18 months have underscored how we have a moral obligation to back and fund entities that support the wellbeing of the planet and society”

In October, deVere announced that it will double its commitment to position $2 bn of assets under advisement into ESG investments.

This follows a similar announcement earlier this year when it said it would aim to have $1bn in socially responsible investment vehicles within five years.

As well as its commitment, deVere is one of 18 founding signatories of the UN-backed Net Zero initiative, the international alliance of finance powerhouses that will help accelerate the transition to a net-zero financial system. Its membership means it is committed to “aligning all relevant products and services to achieve net-zero greenhouse gases by 2050 and to set meaningful interim targets for 2025.

Other founding signatories include BDO, Bloomberg, Campbell Lutyens, Deloitte, EY, Grant Thornton, KPMG, The London Stock Exchange Group, Minerva Analytics, Moody’s, Morningstar, MSCI, PwC, SGX, Solactive, S&P Global and SSE.

Mr Green concludes: “The case for now having exposure to ESG in your investment portfolio is undeniable.

“We believe that a failure not to seek profits with purpose could negatively impact your long-term accumulation of wealth.”

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