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Nigeria Attracted N7.6bn Greenfield Capital Investment in 2018 ­– Report

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  • Nigeria Attracted N7.6bn Greenfield Capital Investment in 2018 ­– Report

Nigeria attracted N7.6bn cross-border greenfield capital investment in 2018, according to the latest report by fDi Market Intelligence, a research unit of Financial Times.

A greenfield investment is a type of foreign direct investment where a parent company creates a subsidiary in a different country, building its operations from the ground up.

In terms of the number of projects, the report said foreign companies executed 52 FDI projects in Nigeria in 2018.

This put Nigeria among the top 10 destinations for FDI projects in the Middle East and Africa.

“The number of FDI projects into Nigeria increased by 49 per cent, with inward capital investment increasing by 58 per cent,” the report stated.

Commenting on the report, the Head of Content, fDi Intelligence, Courtney Fingar, said, “What it reveals is a recovery in greenfield FDI, after its 2017 decline. In 2018, greenfield FDI strengthened with the number of FDI projects increasing by seven per cent while capital investment increased by 42 per cent alongside a 25 per cent increase in job creation via FDI.”

In Africa, the investment market report stated that FDI projects experienced an increase of 12 per cent to 667 in 2018 but a nine per cent decline in capital investment to $74.2bn.

“FDI into the Middle East and Africa by project numbers increased seven per cent in 2018 to 1253, with capital investment increasing by 14 per cent. FDI into the Middle East remained stable by the number of projects with a two per cent increase to 586, while capital investment increased 64 per cent to $61.1bn,” it added.

In the Middle East and Africa region, the report said the United Arab Emirates remained the top location for FDI attracting 24 per cent of FDI projects into the region.

According to the findings, South Africa ranked second for FDI into the Middle East and Africa by the number of projects, with a three per cent increase to 103 and 33 per cent increase in capital expenditure.

“Kenya and Ethiopia both witnessed an increase in the number of FDI projects in 2018, by 14 per cent and 21 per cent, respectively. Morocco was the only location in the top 10 to witness a decrease in FDI projects into the country, with a decline of 21 per cent. However, capital investment increased by 20 per cent,” the study added.

According to fDi insights, Saudi Arabia experienced an increase in capital investment into the country of 124 per cent as well as a 27 per cent increase in overall FDI projects.

Globally, the report said greenfield FDI strengthened with the number of FDI projects increasing seven per cent to 14,845 in 2018 while capital investment increased 42 per cent to $917.3bn alongside a 25 per cent increase in job creation to 2.3 million.

It noted that China replaced the United States as the highest ranked country for FDI by capital investment, with $107.2bn recorded, boosted by major announcements from Foxconn and BASF totalling $19bn.

However, the US was the highest ranked country for FDI by the number of projects, recording 1,581 announcements compared with China’s 796 projects.

“Western Europe was the leading destination region for FDI in 2018 by the number of projects with 4,385 announcements. However, Asia-Pacific received the largest level of capital investment in 2018 with $377.7bn-worth of FDI recorded. Western Europe was the leading source region for FDI in 2018, with 6524 FDI projects recorded. This accounted for 44 per cent of all FDI globally and $305.9bn in capital investment,” the report said.

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.

Investment

FBNQuest Mutual Funds returns 104%

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FBNQuest Asset Management, a subsidiary of FBN Holdings, has held yearly general meetings for five mutual funds managed by the firm.

The funds are the FBN Balanced Fund, FBN Smart Beta Equity Fund, FBN Eurobond Fund, FBN Bond Fund and the FBN Money Market Fund.

The Fund Manager continues to deliver commendable results, as demonstrated by strong performance across all its funds.

The FBN Bond Fund was the best performing of the mutual funds, returning 104.20 per cent over five-year while its US Dollar fund, the FBN Eurobond, returned 48.43 per cent in US dollars over the same period.

The Managing Director of FBNQuest Asset Management, Ike Onyia, said: “Our strong performance track record is premised on the research capabilities, insights and experience of our portfolio management and research teams. Our mutual funds serve as useful investment options useful in formulating unique and value-adding investment strategies for various client segments. This is because our range of mutual funds cut across various asset classes including equities, bonds and money markets.”

“Our funds remain easily accessible, as our goal is to continue to drive financial inclusion and democratise wealth creation, by supporting the financiainclusion and democratise wealth creation, by supporting the financial security aspiration of investors” he added.

Increasingly, financial markets are becoming complex to navigate and as a result, it will not be out of place for investors to actively seek the inclusion of mutual funds in their investment portfolio, which will serve as the structured gateway to such markets. Seeking the help of experienced financial planners to assist you in establishing your risk tolerance levels and advise on suitable options is highly recommended.

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SEC Warns Against Proliferation of Unregistered Investment Platforms

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The Securities and Exchange Commission (SEC) has warned the investing public to be wary of the proliferation of unregistered online investment and trading platforms facilitating access to trading in securities listed in foreign markets.

SEC’s warning was conveyed via a circular issued in Abuja, Thursday to capital market operators.

It advised the investing public to seek clarification as may be required via its established channels of communication on investment products.

The circular read: “The attention of the SEC has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on securities exchanges registered in other jurisdictions.

“These platforms also claim to be operating in partnership with capital market operators (CMOs) registered with the Commission.”

The Commission categorically stated that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.

Accordingly, the SEC notified CMOs who work in concert with the referenced online platforms of the Commission’s position and advised them to desist henceforth.

Public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.

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SoftBank Reaps $33 Billion Coupang Windfall

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SoftBank Group Corp on Thursday racked up a roughly $33 billion gain on paper through the public market debut of South Korea’s largest e-commerce company, Coupang Inc, the latest sign of a dramatic turnaround for its $100 billion Vision Fund.

Shares of Coupang opened 81% above their offer price on Thursday, after the company raised $4.6 billion in the U.S. stock market’s biggest initial public offering this year.

SoftBank paid around $3 billion for a 37% stake in the company, according to sources familiar with earlier fund-raising, giving it a roughly $33 billion headline profit if prices hold.

Coupang’s hugely successful stock market launch is welcome news for SoftBank, which is grappling with the collapse of billions of dollars worth of funds linked to Britain’s Greensill Capital, a supply chain finance start-up.

Vision Fund is Greensill’s biggest backer.

The Japanese conglomerate last month reported third-quarter net profit ballooned more than 20 times thanks to a recovery at the Vision Fund, a huge venture capital operation famous for investing early in Uber and other tech industry startup successes.

Only a year ago, SoftBank had been smarting from the flopped IPO and collapse in value of office sharing firm WeWork, raising questions over whether Chief Executive Officer Masayoshi Son had lost his midas touch and threatening plans to establish a successor to Vision.

The COVID-19 pandemic has also forced Son to sell assets but a second deal reported by Reuters on Thursday bodes well for VF II, a second, smaller fund.

The $225 million late-stage funding round for healthcare startup Forward Health was its first major investment this year, following a pickup in activity and the group’s fortunes in the second half of 2020.

The Vision Fund also made $11 billion on a blockbuster market launch of DoorDash Inc in December, which valued the food delivery company at more than $70 billion.

It also made gains on home seller Opendoor Technologies Inc’s initial offering in December.

The fund still holds large stakes in China’s biggest ride-hailing firm Didi, as well as Uber’s Southeast Asian rival Grab.

SoftBank is also trying to ride the mania for special purpose acquisition companies, launching a handful of blank-check firms this year, although none of them have found investment targets yet.

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