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Capital Market

SEC Plans To Reduce Cost, Targets Profitability In 2 Years

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Securities and Exchange Commission

The Securities and Exchange Commission (SEC) has unveiled plans to reduce its operating costs in order to boost profitability within the next two years.

The Director-General of SEC, Mr. Lamido Yuguda, said this in a statement made available to the News Agency of Nigeria in Lagos.

Yuguda said the commission had been paying 25 percent of gross revenues into the coffers of the government. He said that the total revenue paid so far by SEC into the treasury as of the end of June 2021 was about N1.5 billion.

Yuguda noted that the commission had been operating under very difficult circumstances occasioned by the coronavirus pandemic.

He explained that the commission was currently superintending over a market affected by the negative impact of the coronavirus pandemic.

The director-general said that steps were being taken to reverse the fortunes of the apex regulator of the capital market.

“If we go through the Medium-Term Expenditure Framework (MTEF) which we started last year, if we look at 2022 and 2023, you will see that we have worked on our expenditure so that by 2023, the deficit will actually turn into a surplus of N1.24 billion and by 2024 we should have N2.5 billion surplus.

“We, therefore, need the support of all to engineer the kind of transition we are thinking of at the SEC and that 30 percent which is taking most of the staff cost is part of the set we are targeting for the early retirement programme.

“There is a lot of interest within the commission to do it but we are really short of the funds to do it now.

“We have done a lot of revenue rising drives just to ensure that the commission stays on track.

“This is something we are mindful of and we have the intent and capacity to deliver on this.”

On the high overhead costs, Yuguda explained that this was being reduced aggressively.

“It has reduced because we have since we came, aggressively looked at the overhead and staff cost and reduced certain components of our staff pay that has generated over N2 billion of savings as at now.

“If you take the MTEF numbers, as you go forward, you find that by 2024 staff cost reduces to only N5.88 billion. So that is the trajectory that we are working on,” he said.

Yuguda said that SEC had approached a number of institutions including the African Development Bank, Financial Sector Development Africa and a number of other donors to shore up resources.

This, he said, was expected to fetch a grant figure of N3.84 billion, adding that more grant was being expected in the near term to boost operations.

He added: “The truth of the matter is that not only for the sake of cutting down on the cost of the SEC when we came last year, but we also discovered there has been no IT investment in the SEC for over a decade.

“So, our IT infrastructure is now obsolete so we have to renew that.

“And given this difficulty, we could only do that by going out and looking for grant, and thankfully we have gotten very positive feedback. But this grant is only going to address investment in IT infrastructure.

“We are working hard to ensure we deliver, from 2023 the tide will begin to change and that is because of the massive efforts that we have made both on the revenue front and on the cost front.”

The News Agency of Nigeria reports that the Senate on Sept. 2, 2021, raised the alarm that the nation’s capital market regulator, SEC, was going bankrupt.

The lawmakers made the observation when Yuguda, made a presentation before the Senate Joint Committees on the 2022-2024 MTEF and Fiscal Strategy.

Senator representing Lagos West and Chairman Senate Committee on Fice, Mr Solomon Adeola, the Chairman of the Senate Joint Committee was the first to raise observation on the personnel cost.

They slammed the commission for recording N9 billion deficits in the past three years.

As contained in the document submitted by the director-general, SEC recorded a N2.9 billion deficit in 2019; N4.3 billion in 2020 and N1.7 billion as of June 2021.

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Capital Market

Facebook, Apple, Others Lose Big in Market Value

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Stock - Investors King

The global financial market rout has plunged the value of the world’s largest technology companies by over $1 trillion in the last three trading days. This was after the Federal Reserve raised interest rates by 0.25% last week, below the 0.75% projected by experts.

The Federal Reserve had attributed its decision to a series of global uncertainties due to the Russia-Ukraine war and extended COVID-19 restrictions in China, the world’s second-largest economy. These were a few of the uncertainties predicted by a global investment bank, Deutsche Bank to plunge the U.S and the rest of the world into a recession by 2023.

Concerns over projected recession have led to a broad-based selloff in risk assets across the world.

“When risk assets fall and fall fast enough, there’s no question they’re going to hurt growth,” said LaVorgna, who was chief economist for the National Economic Council under former President Donald Trump. “If anything, the relationship is even better when asset prices decline than when they go up.”

Apple Inc, the world’s most capitalised company shed $200 billion in the last three trading days.

While Microsoft lost $189 billion in market value. Tesla, Amazon, Alphabet, Nvidia and Meta (Facebook) lost $199 billion, $173 billion, $123 billion, $85 and $70 billion, respectively.

In only three trading sessions the “Stocks at large have sold off since the Federal Reserve raised its benchmark interest rate on Wednesday, but technology has endured more pain than other sectors of the economy.”

 

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Capital Market

MTN Nigeria to Raise N150 Billion via Commercial Paper

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MTN Nigeria - Investors King

MTN Nigeria Communications Plc on Monday announced plans to raise N150 billion via Commercial Paper (CP) to diversify the company’s financing options.

The leading telecommunications company declared in a statement signed by Uto Ukpanah, Company Secretary for MTN Nigeria and obtained by Investors King.

Commercial paper is an unsecured, short-term debt issued by a company to finance short-term liabilities like payroll, accounts payable, inventories, etc. Maturities of most Commercial Paper range from a few weeks to months.

According to MTN Nigeria, the N150 billion would be raised in two tranches, Series 1 & 2 commercial paper.

Explaining the reasons for the new fundraising, the telecom company said it is part of its strategy to diversify financing options. The proposed funding rasing would be deployed towards working capital and general corporate purposes.

The new fundraising would be in addition to the N200 billion commercial paper issued in 4 series in 2021.

The statement reads “MTN Nigeria Communications Plc (MTN Nigeria or the Company) hereby notifies the Nigerian Exchange Limited and the investing public of its N150 billion Commercial Paper Programme. To this end, the Company proposes the issuance of Series 1 & 2 Commercial Paper (the “Issuance”) of up to N150 billion.

“MTN Nigeria had initiated and successfully concluded 4 series of issuances under its previous N200 billion Commercial paper shelf program.

“Further details on the issuance (as well as subsequent issuances) will be communicated to the market as the transaction(s) occur.”

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Capital Market

Abbey Mortgage Bank Lists Additional 3.692 Billion Shares

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Nigeria Mortgage Refinance Company NMRC

Abbey Mortgage Bank Plc, one of Nigeria’s leading mortgage banks, announced it has listed an additional 3,692,307,692 ordinary shares on Wednesday, 16 February 2022 on the Daily Official List of the Nigerian Exchange Limited (NGX).

The additional shares listed on NGX arose from the Company’s Rights Issue at 82 kobo per share on the basis of four (4) new ordinary shares for every seven (7) ordinary shares held as at Friday, 8 October 2020.

With this listing of the additional 3,692,307,692 ordinary shares, the total issued and fully paid-up shares of Abbey Mortgage Bank Plc. has now increased from 6,461,538,462 to 10,153,846,154 ordinary shares of 50 kobo each.

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