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Stanbic IBTC to Float New Exchange Traded Fund

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Stanbic IBTC

Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, has concluded plans to launch a new Exchange Traded Fund (ETF). According to the company, to be called the Stanbic IBTC Pension ETF 40, the ETF will mirror the Pension 40 Index.

The launch will bring to two the ETFs in Stanbic IBTC Asset Management Limited’s portfolio. In 2014, the company launched the Stanbic IBTC ETF 30, which tracks the performance of the top 30 stocks listed on the Nigerian Stock Exchange (NSE).

The Pension Index, launched last year by the NSE to drive market optimisation, is a tracking mechanism for investors, particularly institutional investors like Pension Fund Administrators (PFAs), that invest in line with guidelines set out by the National Pension Commission (PENCOM). The NSE Pension Index monitors the top 40 most capitalised and liquid companies in the market.

Commenting on the new ETF, the Chief Executive, Stanbic IBTC Asset Management Limited, Mrs. Bunmi Dayo-Olagunju, said the primary objective of the Stanbic IBTC Pension ETF 40 is to provide investors access to the most liquid publicly quoted companies on the NSE that are compliant with the regulatory requirements for investing pension assets in terms of taxable profits, free float, dividend, sector and individual stock weighting.

“The Stanbic IBTC Pension ETF 40 is designed as an instrument of choice for PFAs, Life Assurance companies, institutional investors, as well as foreign portfolio managers who are desirous of the Nigerian exposure with minimal liquidity and exit risk,” Dayo-Olagunju said.

Highlighting some of the benefits of the ETF, Dayo-Olagunju said the fund would provide investors with a strategic exposure to the equities market, allowing for flexibility, cost effectiveness, diversification of investment, as well as liquidity. She added that it would act as a benchmark for PFAs to measure performance and report same to Retirement Savings Account (RSA) holders.

“The ETF is an asset product which is designed as a cost effective way to provide the same economic value as an investment in the underlying equities. In this case, the Stanbic IBTC Pension ETF 40 will help investors gain access to the 40 most capitalized and liquid equities on the NSE in a seamless way without the costs, risks and complexities associated with direct investments, particularly for retail investors,” Dayo-Olagunju stated.

According to her, the Stanbic IBTC Group, in line with its emerging market strategy and desire to become a one-stop shop for investable products, has invested in world-class investment management and market-making solutions which should ensure that the tracking error of the ETF ranks amongst the lowest in the industry. The fund will also have a dedicated broker publishing bid and offer prices online and real-time and pay out its dividend quarterly.

Dayo-Olagunju noted that Stanbic IBTC Asset Management Limited will continue to leverage its expertise in asset and wealth management, built over the past 20 years, as well as the Stanbic IBTC Group’s rich heritage in corporate and investment banking to provide quality products and services that will not only deepen the market but enhance transparency, add value and lead to investor confidence.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria Offers 12 Oil Blocks and 5 Deep Offshore Assets to Global Investors

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Oil

Nigeria has unveiled plans to offer 12 oil blocks and 5 deep offshore assets to global investors.

The announcement was made during the ongoing 2024 Offshore Technology Conference (OTC) in Houston, United States, where Nigerian officials presented the country’s vast hydrocarbon potential to an international audience of industry stakeholders.

Addressing participants at the African Oil Industry Opportunities Session, a side event at the OTC, Gbenga Komolafe, Chief Executive of the Nigerian Upstream Regulatory Commission, outlined Nigeria’s significant reserves and emphasized the strategic importance of leveraging these resources for economic development.

With over 37.5 billion barrels of crude oil and condensate reserves, as well as 209.26 trillion cubic feet of natural gas reserves, Nigeria stands as a major player in Africa’s energy landscape.

Komolafe highlighted the government’s commitment to conducting a transparent and competitive bidding process, in accordance with the Petroleum Industry Act (PIA) and applicable regulations.

The 2024 Licensing Round, he noted, marks a significant milestone in Nigeria’s hydrocarbon development initiative, introducing 12 carefully selected blocks spanning diverse geological formations, from onshore basins to deep offshore territories.

Each block has been identified for its potential to enhance Nigeria’s reserves and stimulate economic growth, offering opportunities for investors to participate in the country’s oil and gas industry.

The bidding process, which commenced on April 29, 2024, is structured to ensure fairness, competitiveness, and transparency, with guidelines issued to guide prospective bidders.

In addition to the 12 blocks, Nigeria will also conclude the sale of seven deep offshore blocks from the 2022 Mini-Bid Round Exercise, covering approximately 6,700 km2 in water depths ranging from 1,150m to 3,100m.

This comprehensive offering underscores Nigeria’s commitment to maximizing the potential of its petroleum resources and attracting strategic investments to drive sectoral growth.

The bidding round, scheduled to conclude by January 2025, presents a significant opportunity for investors and companies to participate in Nigeria’s oil and gas sector.

The inclusion of both new greenfield blocks and assets from previous bid rounds reflects the government’s dedication to fostering innovation, technological exchange, and capacity building within the industry.

With criteria emphasizing technical competence, financial capacity, and viability, the 2024 licensing round aims to be conducted in a fair, competitive, and non-discriminatory manner, in line with the provisions of the Petroleum Industry Act.

As Nigeria positions itself as a prime destination for oil and gas investment, stakeholders are optimistic about the potential for sustainable growth and development in the sector.

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Microsoft to Invest $2.2 Billion in Malaysia’s Digital Infrastructure

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Microsoft - Investors King

Microsoft Corporation has announced plans to inject $2.2 billion into Malaysia’s digital infrastructure over the next four years.

This investment shows the company’s determination to harness the potential of Southeast Asia’s burgeoning technology market.

During his visit to Kuala Lumpur, Microsoft’s Chief Executive Officer, Satya Nadella, revealed the company’s ambitious agenda, which encompasses the construction of essential infrastructure to support its cloud computing and artificial intelligence (AI) services.

Nadella also outlined plans to provide AI training to 200,000 individuals in Malaysia and collaborate with the government to enhance the nation’s cybersecurity capabilities.

The move comes amidst intensified competition among tech giants, including Alphabet Inc., Amazon.com Inc., and Alibaba Group Holding Ltd., to gain a foothold in Southeast Asia’s rapidly digitizing landscape.

With a population exceeding 650 million people, the region presents a lucrative market for tech companies seeking to expand their operations beyond traditional strongholds like China.

“We are committed to supporting Malaysia’s AI transformation and ensure it benefits all Malaysians,” stated Nadella.

During his visit, Nadella met Prime Minister Anwar Ibrahim and discussed the importance of collaboration between the public and private sectors in driving digital innovation.

Microsoft’s investment not only serves to fortify Malaysia’s technological infrastructure but also aligns with the company’s broader strategy to assert its presence in the Asian market.

Nadella has previously pledged a substantial sum of $7 billion to bolster Microsoft’s services across the region, emphasizing the pivotal role of AI as a catalyst for growth and urging countries to ramp up investment in the technology.

In Malaysia, the southern region of Johor Bahru, linked to Singapore by a causeway, is emerging as a key hub for AI data centers.

The partnership between Nvidia Corp. and local utility YTL Power International Bhd. to establish a $4.3 billion AI data center park in the area underscores the region’s growing significance in the realm of digital infrastructure.

While AI adoption in Southeast Asia is still in its nascent stages, experts predict significant economic benefits with the potential to add approximately $1 trillion to the region’s economy by 2030.

Malaysia is poised to capture a substantial portion of this growth with estimates suggesting a potential windfall of around $115 billion for the country.

Microsoft’s commitment extends beyond Malaysia, as the company announced similar investments during Nadella’s regional tour.

In Indonesia, Microsoft unveiled a $1.7 billion investment plan, while an undisclosed amount was pledged for initiatives in Thailand. Notably, Microsoft intends to invest approximately $1 billion in a new data center in Thailand, as reported by the Bangkok Post.

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Investors Flock to Nigerian Treasury Bills, Subscriptions Soar to N23.75 Trillion

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FG Borrows

Nigeria’s Treasury Bills market has witnessed an unprecedented surge in investor interest with subscriptions soaring to N23.75 trillion in the first four months of 2024.

This increase represents a significant 292% Year-on-Year growth from N6.06 trillion recorded in the same period in 2023.

Treasury Bills, short-term government debt instruments issued by the Central Bank of Nigeria (CBN), have become increasingly attractive to both local and foreign investors.

The double-digit interest rates offered on NTBs have lured investors seeking refuge from the uncertainties of the global economic landscape.

The surge in subscriptions comes amidst Nigeria’s efforts to bridge its budget deficit and manage monetary challenges amidst a scarcity of foreign exchange and double-digit inflation rates.

Investors’ confidence in the CBN’s ability to navigate these challenges has been bolstered by robust subscription rates, indicating a positive outlook for the country’s fiscal stability.

The 2024 Budget of ‘Renewed Hope’, proposed by President Bola Tinubu, outlines a total expenditure of N27.5 trillion, with a deficit of N9.18 trillion.

The high demand for NTBs underscores investors’ confidence in the government’s fiscal policies and its commitment to economic reform.

As interest rates on NTBs have risen in response to inflationary pressures, the CBN has capitalized on this demand by auctioning larger volumes of NTBs.

The move aims to address liquidity in the financial system while attracting foreign investors seeking higher yields.

Analysts view the surge in NTBs subscriptions as a testament to investors’ confidence in the Nigerian government and its reforms.

The massive oversubscription signals significant system liquidity and reflects the attractiveness of NTBs as a safe investment option amidst economic uncertainties.

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