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Low Share Price Threatens Mutual Benefits Assurance’s N2b Rights Issue

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Insurance - Investors King
  • Low Share Price Threatens Mutual Benefits Assurance’s N2b Rights Issue

Trading in shares of Mutual Benefits Assurance Plc opens today at the Nigerian Stock Exchange (NSE) at 37 kobo ‑ 26 per cent below the insurance company’s rights issue price of 50 kobo, which also opens today. The company has traded within a high of 50 kobo and a low of 24 kobo in the past 12 months.

The company is opening application list for a rights issue of N2 billion as part of efforts to increase its capital base. It is offering 4.0 billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share. The rights issue has been provisionally allotted on the basis of one new ordinary share of 50 kobo each for every two ordinary shares held as at the close of business on November 1, 2017.

Application list for the rights issue will close on Friday, September 14, 2018. Both the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) had earlier approved the supplementary offer.

Market analysts said minority retail investors might find the secondary market more attractive, given the double-digit discount to the offer price. However, major investors will need to pick their rights to avoid share dilution and retain the current shareholding structure.

Shareholders of the insurance company had at an Extraordinary General Meeting in Ibadan, Oyo State on June 27, 2018 approved the recapitalization plan. Mutual Benefits Assurance has an authorised share capital of N10 billion and a paid up capital of N4 billion.

The company had, last year, started implementation of a five-year strategic plan aimed at repositioning it for future opportunities and challenges.

The five-year plan focused on four key areas of the group’s business including deepening market penetration and customer acquisition, customer service delivery excellence, transformation of its people and culture and operational effectiveness.

Its Chairman, Dr. Akin Ogunbiyi, said the net proceeds of the rights issue would be used to finance the company’s growth plan including provision of additional working capital and expansion of information and communication technologies to support the company enlarged operations.

He said the strategic goal of the company is to become the number one insurance company in Nigeria in terms of growth and profitability.

He said new investments in technologies would help the company to eliminate delay in its processing and focus more on customer satisfaction.

Mutual Benefits Assurance’s bouquet of insurance products include aviation, oil and gas, marine cargo and hull business and other non-life insurance underwriting, including motor, fire and special perils, goods-in-transit, engineering insurance and retail insurance.

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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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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