- USSD, Mobile Devices to Drive Nigeria’s Electronic Offers
Nigeria’s capital market may soon transit from the manual-intensive, paper-based process of issuing securities to electronic offering. When the initiative is operationalised, shares will be issued and bought through electronic platforms and electronic devices, such as Unstructured Supplementary Service Data (USSD).
The market regulators, operators and other stakeholders have endorsed the transition to electronic offering (e-O) and are reviewing a draft framework for the implementation of automated electronic issuance system.
The Capital Market Committee (CMC), the largest consultative assembly of the capital market, has given its support to the transition. The CMC, chaired by the director-general of Securities and Exchange Commission (SEC), consists of chief executives of all registered capital market operators including stockbrokers, solicitors, custodians, fund managers, issuing houses, rating agencies, registrars, reporting accountants, trustees and consultants among others.
Other members included chief executives of the Chartered Institute of Stockbrokers (CIS); Nigerian Stock Exchange (NSE), Abuja Securities and Commodity Exchange (ASCE) and Central Securities Clearing System (CSCS).
The CMC also included two members each from observer groups, which included Asset Management Corporation of Nigeria (AMCON), Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), Debt Management Office (DMO), Federal Ministry of Finance, Federal Mortgage Bank of Nigeria (FMBN) and Federal Inland Revenue Service (FIRS). Others are Nigerian Deposit Insurance Corporation (NDIC), Investment and Securities Tribunal (IST), Nigerian Investment Promotion Council (NIPC), National Insurance Commission (Naicom), National Pension Commission (Pencom) and FSS2020.
SEC Acting Director-General Ms Mary Uduk, at the weekend confirmed that the draft framework for the electronic offering was discussed at the just-concluded meeting of the CMC. CMC had met in Lagos on Thursday.
Speaking on the deliberations at the meeting, Uduk said the capital market community recognised the importance of the electronic initial public offering (E-IPO) project. The automated system will improve issuance processes and encourage more investor participation in the market.
She said the framework and rules guiding the e-IPO have been presented to stakeholders, who now have up till March 29, 2019 to review and send their suggestions as part of the rule-making process. After the review, SEC will consider the comments from stakeholders to finalise its framework and subsequently present the final framework to its board and supervising Ministry of Finance for approval.
A copy of the draft framework obtained by The Nation indicated that electronic offering will be done on a platform purposely established by an eligible service provider registered with SEC.
The framework described electronic offering (e-O) as the use of internet or other electronic means including mobile or USSD platforms to provide access to prospectuses, offering memoranda, subscription forms and other documentation for the subscription to securities and related documentation as well as payment for such subscription.
The e-O platform will translate the current paper-based process of securities offerings into electronic form through electronic display of offer documents, subscription and payment through a combination of web portals, mobile applications, USSD and other electronic means.
Under the e-IPO and other electronic public offers, investors will get allotment and value for their subscriptions within few days as against the current cycle of nearly four months.
The full automation of primary issuance will involve automation of the process, approval, documentation, subscription and allotment of all issues, especially IPOs and public offers. With this, investors will be able to subscribe and make payment for IPOs and public offers online with such orders being matched and allotted electronically and directly to the investment accounts of the investors at the CSCS and any other designated clearing centre.
The full automation will enable the primary market to operate within a designated transaction cycle, possibly within the T+3 four-day trading cycle being operated at the secondary market.
According to the draft guideline, the e-O platform shall give subscribers access to general information regarding the offer, the application input screen, download, view and print the offer documents, provide for electronic online payment options which shall be seamlessly integrated with the e-O platform, allow integration with identity management systems such as Bank Verification Number (BVN) database for the Know Your Customer (KYC) verification and integrate with the depository to enable electronic crediting of approved allotments to subscribers’ depository accounts.
The platform shall also permit subscribers to select a broker of their choice for the purpose of the electronic crediting of the approved allotment while providing mandatory information fields for subscribers to supply surname and other names, full company name and registration number, BVN or any other SEC-approved biometric numbering system, bank name and account numbers of subscribers and mobile telephone number and email address.
The platform is also expected to provide for the upload of provisional rights allocation for rights issues by the relevant registrar to the issue.
To strengthen investors’ protection, the platform must mandatorily require subscribers and end-users to confirm that the subscriber has been provided with sufficient opportunity to access the offer documents and the information disclosed therein and that the information provided by the subscriber is to the best of the applicant’s knowledge, true and accurate in all material respects before submitting the application.
Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc
The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.
His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.
The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.
FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).
The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.
For more information about FCMB Group Plc, please visit www.fcmbgroup.com.
COVID-19: CBN Extends Loan Repayment by Another One Year
Central Bank Extends One-Year Moratorium by 12 Months
The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.
The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.
In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.
The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.
“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.
“Following the expiration of the above timelines, the CBN hereby approves as follows:
“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.
“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”
It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.
To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.
MTN Nigeria Generates N1.35 Trillion in Revenue in 2020
MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020
Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.
The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.
Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.
This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.
MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.
MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.
The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.
Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.
MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.
While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.
The number of shares issued and fully paid as at year-end stood at 20.354 million.
MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.
“Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.
“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.
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