Nigerian governments and companies have raised some N4.6 trillion in new capital from the capital market so far this year, already more than 100 per cent above the total capital raising recorded for the whole of 2020.
Preliminary report at the weekend at the Nigerian Exchange (NGX) Limited indicated that the Exchange has facilitated more than N4.6 trillion so far this year. The capital raising cut across several asset classes including debts and equities and from several issuers including the Federal Government, state governments and companies.
The Federal Government has sustained the monthly issuance of its Federal Government of Nigeria Savings Bonds (FGNSBs) in addition to other intermittent debt issuances. The government, at the weekend, listed two tranches of savings bonds worth N700.5 million on the NGX. The savings bonds were issued in May.
A breakdown of the fund-raising entities showed five broad categories – Federal Government, state governments, quoted companies, fund management finds and special purpose vehicles (SPVs).
Also, a breakdown of the capital raising by issuers showed that the Federal Government accounted for the largest part of the new issues.
Other public sector issuers included Lagos State and Kogi State governments. Corporate issuers included BUA Cement, Fidelity Bank, Flour Mills of Nigeria, Transcorp Hotel and Sunu Assurances Plc.
The report also showed many maiden issues by companies, including debt issuances by Me cure Industries and Emzor Pharmaceuticals.
The latest report further illustrated that the capital market has continued to provide critical funding in debts and equities to governments and companies, after the market braced the COVID-19 lockdowns and disruptions in 2020 to pool more than N2 trillion funding.
Last year, issuers or fund-raising entities had included sovereign issuances by the Federal Government, sub-national issuances by the Ondo State Government, debts and equities raising by several quoted companies, including Dangote Cement, Flour Mills of Nigeria, Consolidated Hallmark Insurance, Coronation Insurance, formerly Wapic Insurance, International Breweries and Golden Guinea Breweries.
Other corporate issuers in 2020 included Abbey Mortgage Bank, C & I Leasing, UACN Property Development Company (UPDC), United Capital, AIICO Insurance, Red Star Express and Interswitch Africa One. Investment management companies such as ARM Investment Managers and Meristem Wealth Management also launched new collective investment schemes.
The market had, particularly, provided innovative finance through SPVs to support key infrastructural development and corporate restructuring. These included issuances such as Axxela Funding 1, LAPO MFB SPV, FBNQ MB Funding SPV and Primero BRT Securitisation SPV.
Despite the pandemic, the market has seen many landmark transactions since 2020, including maiden bond issue by Nigeria’s largest quoted company and Sub-Saharan Africa’s largest cement company, which floated a N100 billion bond, the largest single corporate bond issue in the capital market.
Also, International Breweries, the Nigerian subsidiary of Anheuser-Busch InBev (AB InBev), had in 2020 raised N164.39 billion through a rights issue, reported to be the largest right issue and a major indirect capital injection by a foreign investor in a Nigerian company.
FMDQ Exchange Admits Mixta Real Estate Commercial Paper
The Nigerian commercial paper (CP) market continues to demonstrate resilience and consistency in providing succour to corporates across diverse sectors by offering a viable platform for these institutions to raise finance to fund their capital requirements.
As the leading organiser for the Nigerian debt capital market (DCM) and in its role as a catalyst for infrastructure development, FMDQ Securities Exchange Limited has approved the quotation of the Mixta Real Estate Plc N1.02 billion Series 36 Commercial Paper under its N20.00 billion Commercial Paper Issuance Programme.
Mixta Real Estate Plc, a subsidiary of Mixta Africa, is a leading real estate development company in Nigeria with a strong track record, diverse real estate portfolio, and operations spanning the residential, commercial, and retail sectors of the Nigerian real estate industry.
According to FMDQ, the admission of the CP, which was sponsored by FBNQuest Merchant Bank, serves to re-affirm FMDQ Exchange’s efforts in boosting investor confidence and reinventing the Nigerian CP market.
“As an exchange positioned to bring about revolutionary changes in the Nigerian capital market, FMDQ Exchange, through the collective efforts of its varied stakeholders shall continue to deliver value-adding initiatives, ranging from the continuous upgrade of its listings and quotations service, to product and market innovations, amongst others.
“With a vision to be “the most attractive Exchange in Africa by 2025”, and a mission to “collaborate to empower markets for economic progress towards delivering prosperity,” FMDQ Exchange is committed to articulating and pioneering, innovative ways to improve and make the Nigerian financial markets globally competitive, operationally excellent, liquid, and diverse,” it said.
FMDQ Group is Africa’s first vertically integrated financial market infrastructure group, strategically positioned to provide registration, listing & quotation services, seamless trading, clearing, settlement, risk management, and depository of financial market transactions, as well as data and information services, across the debt capital, foreign exchange, derivatives and equity markets, through its wholly owned subsidiaries – FMDQ Exchange, FMDQ Clear Limited and FMDQ Depository Limited.
Ecobank to Raise US$300 Million Through Fixed Rate Reset Tier 2 Sustainability Notes
Ecobank Transnational Incorporated (“ETI”), the parent company of Ecobank Group, has announced plans to raise US$300 million from the international debt capital markets through the issuance of Tier 2 qualifying sustainability Notes pursuant to the United States Securities and Exchange Commission Rule 144A and Regulation S (the “Notes”).
The leading financial institution listed on the Nigerian Exchange Limited, the Ghana Stock Exchange and the Bourse Régionale des Valeurs Mobilières (the “Stock Exchanges”) planned to use the next proceeds of the not to finance or refinance new or existing eligible assets in line with ETI’s Sustainable Finance Framework.
The bank disclosed this in a statement signed by Adenike Laoye, Group Head, Corporate Communications/ Chief of Staff to the Group Chief Executive Officer.
The statement read in part, “An equivalent amount of the net proceeds of the Notes will be used to finance or re-finance, in part or in full, new or existing eligible assets in accordance with ETI’s Sustainable Finance Framework.
“In view of the foregoing, ETI is pleased to notify the Stock Exchanges of the proposed launch of the Notes. ETI intends to list the Notes on the London Stock Exchange, with the expectation that the Notes will be traded on its regulated market.
“It should be noted that the issuance of the Notes (the “Transaction”) is subject to prevailing market conditions and the conclusion of the necessary Transaction documentation.”
Oxford Business Group and African Securities Exchanges Association to team up for new Covid-19 Response Report
A landmark Covid-19 Response Report (CRR), produced by Oxford Business Group (OBG) in partnership with the African Securities Exchanges Association (ASEA), will explore the impact of the pandemic on efforts to attract inflows to the region’s capital markets and the investment opportunities emerging ahead of the global economic recovery.
Titled “Financial Markets in Africa“, the CRR will provide in-depth analysis of the industry’s performance during the pandemic and potential for growth in an easy-to-navigate and accessible format, focusing on key data and infographics relating to the region’s socio-economic landscape.
Marking OBG’s latest Pan-African CRR, the report will examine the contribution that Africa’s exchanges are expected to make towards the region’s economic development in the near term.
Other topics set for analysis include the collective push under way across the continent to strengthen financial integration, which is seen as key to boosting investor interest in the region’s capital markets.
The report will include an in-depth interview with Edoh Kossi Amenounve, ASEA President, together with case studies looking at how key industry players-maintained business continuity during the pandemic and are now preparing for post-Covid expansion.
“Although the Covid-19 pandemic crisis will continue in 2021, the vaccination rollout is giving new confidence to African capital markets, and we expect to have a significant better year than 2020 in terms of transaction values,” Amenounve said.
Commenting ahead of the signing of a Memorandum of Understanding for the report, Karine Loehman, OBG’s Managing Director for Africa, said Africa’s capital markets were poised to play a pivotal role in attracting investment for the next phase of the region’s social and economic development, which is expected to focus on making future economic growth both sustainable and more inclusive.
“While the pandemic has inevitably taken its toll on the region, Africa had already carved a niche as a popular investment destination before Covid-19 arrived and is today home to some of the world’s fastest-growing economies,” she said. “Our report with the African Securities Exchanges Association will look at the many opportunities awaiting investors who are keen to help drive the region’s transformation and, at the same time, unlock the potential of Africa’s capital markets.”
The CRR will form part of a series of tailored reports which OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Covid-19 Economic Impact Assessment articles and interviews.
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