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Stock Market: FG to Partner NSE, Others to Drive New Listings

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  • Stock Market: FG to Partner NSE, Others to Drive New Listings

The Minister of Industry, Trade and Investment, Mr Okechukwu Enelamah, has said the Federal Government will work closely with the Nigerian Stock Exchange and key stakeholders in the capital market to create an enabling environment for companies, in a bid to encourage listings.

Enelamah noted that the country was in need of a robust partnership between the government and the private sector in order to realise the dreams of creating a robust economy that citizens aspire to see.

According to him, to do that, the government needs a partnership with the private sector.

Enelamah noted that the role of the private sector could not be overemphasised, saying, “Private sector and the businesses are the constant partners in relationships; governments come and go, but the businesses remain. We need to make sure that we will survive several administrations.

“The second part has to do with the role of the stock exchange; we clearly need to raise large amounts of capital to industrialise the country. In order to do it, the management of the NSE and other stockbrokers have invited us to work with them to raise the capital we need and we said that message will certainly be taken back to the administration; I believe in due course, we will do more with the stock exchange and the capital market.”

Enelamah added that the government, through the Presidential Enabling Business Environment Council, was working assiduously to improve the ease of doing business in the country and push the country up to the top 100 countries on the World Bank Ease of Doing Business Index in 2019.

According to him, a combination of all the strategies will improve the ease of doing business in the country.

Enelamah said, “The Nigerian Industrial Policies and Competitiveness Council, which is a partnership between the government and the private sector, is to deal with the critical infrastructure needs of the industrial sector.

“We also launched a ‘Project Made-In-Nigeria Meant for Export’ to provide industrial infrastructure in partnership with other financiers such as Africa Export-Import Bank, Bank of Industry, and Africa Development Bank, among others, to attract funding for industrialisation in Nigeria.

“Trade contributes about 20 per cent to Gross Domestic Product and service is about 50 per cent. But what is important is that we want to grow the part of the industry, which is manufacturing, currently at 10 per cent to 20 per cent, which will happen with all these initiatives.”

The Doyen of the Stock Exchange, Mr Yusuf Rasheed, urged the government to make better use of the stock exchange.

He said, “There is no economy without the capital market. I wonder why so much time is spent fighting at the National Assembly on how to finance the nation’s budget when the financing can be done at the capital market.

“We want the government to know that they can raise multiple amounts of the budget at the stock market and when they do that, we will begin to see the country move forward.”

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.

Finance

FG Borrowed $5.9B To Fight COVID-19 and Implement Budget – Minister of Finance

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Zainab Ahmed

The federal government borrowed about $5.9 billion in 2020, to tackle the COVID-19 pandemic and implement its budget. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, revealed this yesterday.

A statement issued by her Special Adviser, Media and Communications, Mr. Yunusa Abdullahi, yesterday, indicated that the minister told the Collaborative Africa Budget Reform Initiative (CABRI) General Assembly during a webinar, that the federal government had to move quickly to save the economy.

Speaking on Nigeria’s fiscal response – short term interventions and impact on public finances, as an immediate fiscal response, Mrs. Ahmed said: “We did the following: Procured a $3.4 billion loan from the International Monetary Fund (IMF) and about $2.5 billion in local currency from the domestic capital market to support the 2020 budget implementation), among others.”

She noted that the government then packaged a N500 billion for COVID-19 Crisis Intervention Fund in the 2020 revised budget, as part of a N2.3 trillion Economic Sustainability Plan.

Mrs. Ahmed said that the government had begun the process of moving the economy away from its primary dependence on oil for revenues and foreign exchange, and making steady gains in addressing infrastructure and human capital challenges before the pandemic hit the global economy.

With COVID-19, Nigeria’s Bonny Light crude oil price fell from a peak of US$72.2 per barrel on January 7, 2020 to below US$20 by April 2020.

She said, “In effect, the US$57 crude oil price benchmark approved in the 2020 budget became unrealistic triggering the need to adjust the following variables: reduction of crude oil benchmark price from US$57 per barrel to US$28 per barrel; reduction of daily crude oil production benchmark from 2.18 million barrels per day (mbpd) to 1.9 mbpd; adjustment of the official exchange rate to N360/US$1 from N305/$.”

Mrs. Ahmed revealed that part of the federal government Supplementary Budget on COVID-19 would be spent on the procurement of 29. 588 million doses of the Johnson & Johnson vaccine.

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Banking Sector

Union Bank CEO, Godson Chukwuemeka Okonkwo Acquires 2.4 Million Shares in the Bank Ahead of Acquisition

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Union bank - Investors King

The Chief Executive Officer, Union Bank Plc, Godson Chukwuemeka Okonkwo, has purchased 2,431,917 ordinary shares of the bank, according to the latest disclosure filing from the lender.

The CEO acquired the 2,431,917 shares of Union Bank at N4.90 per share on Thursday 6th May 2021 from the floor of the Nigerian Exchange Ltd.

Okonkwo’s N11.916 million investment was after Investors King reported a possible acquisition of the bank by Zenith Bank or Access Bank following sources cited by Bloomberg.

Bloomberg said, “Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria.”

It also stated that Atlas Mara received interests from Nigerian and Middle Eastern lenders for its remaining assets on the continent, according to Bloomberg sources.

The sources claimed the banks in talks with Atlas Mara asked not to be identified as talks are private. But they mentioned Nigeria’s Zenith Bank Plc, Access Bank Plc and Morocco’s Attijariwafa Bank as some of the banks that have so far expressed interests in acquiring Union Bank.

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Banking Sector

Zenith Bank, Access Bank, Others Express Interest in Acquiring Union Bank

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Atlas Mara - Investors King

Zenith Bank and Access Bank are some of the financial institutions in talks to acquire Atlas Mara Ltd.’s 49.97 percent stake in Union Bank Plc.

Bloomberg said, “Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria.”

It also stated that Atlas Mara received interests from Nigerian and Middle Eastern lenders for its remaining assets on the continent, according to Bloomberg sources.

The sources claimed the banks in talks with Atlas Mara asked not to be identified as talks are private. But they mentioned Nigeria’s Zenith Bank Plc, Access Bank Plc and Morocco’s Attijariwafa Bank as some of the banks that have so far expressed interests in acquiring Union Bank.

Middle Eastern banks and private equity suitors have also shown interest, according to the people. Some potential buyers have indicated they may acquire all of Atlas Mara’s remaining assets in Africa, which would include its Zimbabwe unit, the people said.

Atlas Mara has been working with Rothschild & Co. to consider options for its Union Bank stake. No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said.

Representatives for Atlas Mara and Zenith Bank didn’t immediately respond to requests for comment. Attijariwafa Bank Managing Director Ismail Douiri and a representative for Access Bank declined to comment.

Speaking on the matter, Frontier and Sub-saharan Africa Banks’ Analyst, Renaissance Capital, Adesoji Solanke, on Thursday said this is good for Atlas Mara.

He said “Good for Atlas Mara if they’re able to exit successfully, as they’ve been selling a bunch of assets over the past year, to KCB and Access Bank respectively across different markets. Whether they get a good valuation for Union Bank is another thing.

“We don’t think it’ll be a transformational deal for Access or Zenith (Return-on-Equity dilutive for both), but could be a good way for the Middle Eastern banks to get a decent foothold in the market. We suspect getting the other private equity investor block to sell will be critical as we wouldn’t expect a strategic bank investor to desire a minority shareholding.”

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