- PFAs Can Only Invest in Safe Infrastructure —Sigma Boss
The Managing Director/Chief Executive Officer, Sigma Pensions, Mr Dave Uduanu, has said that Pension Fund Administrators can only invest in infrastructure instruments that can guarantee the safety of their retirees’ funds.
He spoke at the maiden edition of Sigma Pensions business roundtable forum, where stakeholders deliberated on two themes, which are, ‘Opportunities and pitfalls of alternative investing in Nigeria’ and ‘Nigeria under a rising oil price picture and increasing political risk’.
While speaking on investment in infrastructure, he said, “The key issue with diversification is unavailability of investment instrument. One of the key instruments we could invest in as a means of diversifying the portfolio, infrastructure is not investible.
“When we say it is not investible, it means we don’t have instruments through which we can invest in infrastructure, get a good return and get the money back, so the real question with the PFA is that how do you create diversification in a market where the capital market is shallow? The only person borrowing is the government; the companies, corporates are afraid of coming to us to borrow because our standards are high, much higher than the banks.
“The main thing holding back corporate bonds in Nigeria is corporate governance. A lot of the companies are not interested in opening their books to investors to scrutinise and until we address the issue of corporate governance transparency, we would not see the instruments that will create diversification opportunities for pension funds.”
“The second was on private equity which we think is quite germane because the banking sector is starved of capital, they are not lending anymore and the other sources of capital are pension funds and insurance companies, but according to our regulations, the only way we can invest in the real sector is through private equity fund.”
Flour Mills of Nigeria Repays N51.64 Billion Series 2 Commercial Paper
Flour Mills of Nigeria Plc (FMN) has successfully repaid its N51.64 billion Series 2 Commercial Paper as revealed in a statement issued by the company.
This follows the earlier repayment of its N13.33 billion Series 1 Commercial Paper in August 2023.
Both the Series 1 and Series 2 Commercial Papers, totaling N64.97 billion, were initially issued on February 22, 2023, under FMN’s N200 billion Commercial Paper Programme.
The Series 1, with a yield of 13.0%, raised N13.3 billion, while the Series 2, with a yield of 14.0%, raised N51.64 billion.
FMN had launched its N200 billion Commercial Paper Programme on February 10, 2023, reflecting the company’s strategic financial planning.
The Group Chief Finance Officer, Mr. Anders Kristiansson, expressed satisfaction with the timely and successful repayment of the Series 2 Commercial Paper.
He emphasized FMN’s commitment to financial prudence and acknowledged the confidence placed in the organization by the investing public.
Kristiansson expressed gratitude to stakeholders for their continuous support, reiterating FMN’s dedication to delivering sustainable value and upholding the highest standards of corporate governance.
In addition to the successful repayment, FMN tapped into the market for its Series 3 Commercial Paper in June 2023, with subscriptions from banks and Pension Fund Administrators, contributing 39.7% and 40.8%, respectively.
The transaction was managed by FBNQuest Merchant Bank Limited as the Lead Arranger, with ChapelHill Denham Advisory Limited, FCMB Capital Limited, and United Capital PLC serving as Joint Arrangers.
African Airlines Projected to Cut Losses to $400m in 2024, Says IATA
The International Air Transport Association (IATA) has forecasted a reduction in losses for Nigerian and other African airlines from $500 million in 2023 to $400 million in 2024.
The Switzerland-based IATA made this projection while presenting the global airline industry outlook in Geneva, Switzerland, on Wednesday.
IATA’s Director-General, Willie Walsh, shared the outlook, stating that global airlines are expected to generate approximately $964 billion in revenue in the coming year.
The report indicated that airline industry net profits are anticipated to reach $25.7 billion in 2024, reflecting a slight improvement over the projected $23.3 billion net profit for 2023.
Despite the challenges faced by the aviation industry in recent years, IATA sees the $25.7 billion net profit in 2024 as a testament to aviation’s resilience.
Walsh acknowledged the impressive speed of recovery but emphasized that the net profit margin of 2.7% remains below industry expectations.
IATA estimates that around 4.7 billion people will travel in 2024, surpassing the pre-pandemic level of 4.5 billion recorded in 2019.
However, Walsh highlighted ongoing challenges, including regulatory burdens, fragmentation, high infrastructure costs, and a supply chain populated with uncertainties.
He emphasized the need for the industry to build a resilient future, given its significant contribution to global GDP and livelihoods.
Fuel prices are expected to average $113.8 per barrel in 2024, accounting for 31% of all operating costs, totaling $281 billion.
Walsh concluded by expressing optimism about more normal growth patterns for both passenger and cargo in the post-pandemic era.
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