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NSE ETFs Assets Hit N4.26bn in Five Years

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CEO of the Nigerian Stock Exchange (NSE), Mr
  • NSE ETFs Assets Hit N4.26bn in Five Years

The Nigerian Stock Exchange on Monday said the Assets Under Management of the eight listed Exchange Traded Fund stood at N4.26bn as at September, 2016.

The NSE Chief Executive Officer, Mr. Oscar Onyema, spoke at the ETF 2016 workshop organised by the bourse in partnership with Stanbic IBTC Asset Management, Lotus Capital and Vetiva Fund Managers Ltd. in Lagos.

An ETF is an investment vehicle that tracks an index, a basket of assets, or a commodity, but trades like regular shares on a stock exchange.

These investment vehicles allow investors a convenient way to purchase a broad basket of securities in a single transaction.

Onyema said that the figure represented a growth of 1,900 per cent when compared with AUM of N287.5m in 2011 when ETF was introduced on the Exchange.

He said, “As at today, we have recorded about 1,900 per cent growth in our ETF market with total AUM of about N4.24bn as at September 2016 on eight ETFs currently listed and traded on the Exchange.”

He said that ETFs were introduced on the NSE in December 2011 with cross listing of Newgold ETF with AUM of N287.5m to provide investors with new opportunities to diversify their portfolios and access the market.

Onyema said that the eight ETFs in the market are Newgold ETF, Vetiva Griffin 30 ETF, StanbicIBTC ETF 30, Lotus Halal Equity ETF, Vetiva Sector Series ETFs- Banking, Consumer Goods and Industrial, and Vetiva S&P Nigerian Sovereign Bond ETF.

He explained that the Exchange had six equity backed ETF, one commodity ETF, and one bond ETF.

He said that global ETF AUM had grown to $3tn within five year in April, 2016 from $1.4tn in December 2010, representing a growth of over 102 per cent.

He said, “Experts have predicted the continued growth of the ETF industry, estimating that global AUM will reach at least seven trillion dollars by 2021.”

The NSE chief said that currently, there were about 506 ETF investors in the market.

He, however, expressed optimism that “the growth of ETFs in Nigeria has only just begun with the support of market intermediaries, stakeholders and our regulator”.

Onyema said that the existence of ETFs in the Nigeria market was beneficial to retail and institutional investors, as ETFs offer a direct and inexpensive way to attain diversified exposure to an index, commodity, sector or region.

He said ETFs also offer additional benefits of low expense ratio compared to mutual funds, increased liquidity.

Onyema said that this could be used to execute different investment strategies asides from diversification and tradability.

He further said that the workshop was organised to create awareness of the product, address its challenges and promote the opportunities in Nigeria and Africa.

He said, “The Exchange remains committed to partnering with all market stakeholders, to continue to build and develop the Nigerian capital market, while offering a wide range of investment vehicles for all investors.”

The Executive Director/Head, Sub-Saharan Africa Client Coverage Team, MSCI, Mr. Gareth Allison, said that ETF aids investors to diversify their diversification.

Allison said that MSCI would aid the Exchange to develop and transform its ETF market.

He said, “We want to help investors to utilise opportunity in the market and make maximum return.”

On the Fundamental of Market Indices, Allison said that investors need to understand the underlying assets before investing in any market.

He said that indices were very important in investment decision, and as well used as policy benchmark.

He said, “Market is revolving, investors are revolving too, and we are faced with behavioural investors.”

In her comments, Ms. Nerina Visser, ETF Strategist and Advisor from South Africa, said that market regulators needed to know the type of ETFs to develop to ensure investors patronage.

Visser said that market markers were needed to act as liquidity boosters for ETF to thrive in any market.

She said that South Africa had the highest market for the product with 74 Exchange Traded Products across all asset classes.

Visser added that market should come out with specific investors’ needs in the establishment of ETF.

She also said that regulators should consider reducing trading fees for ETF to increase patronage.

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 long experience in the global financial market.

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FBN Holdings Boost First Bank CAR With N25 Billion Capital Injection

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FBN Holdings

First Bank Boosts CAR With N25 Billion Capital Injection

FBN Holdings Plc announced it has boosted the Capital Adequacy Ratio (CAR) of its commercial banking subsidiary, First Bank of Nigeria Limited by N25 billion.

According to the statement released by the bank on the Nigerian Stock Exchange website, the capital injection represents part of the net proceeds of the company’s divestment from FBN Insurance Limited.

It noted that the capital injection upped the bank’s Capital Adequacy Ratio to 16.53 percent –before capitalising year to date profit– as at June 2020.

Oyewale Ariyibi, the Chief Financial Officer of the Company, was quoted as saying “the divestment is in line with the Group’s medium to long term strategic objectives. The divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core banking business for which the Group is renowned“.

Ariyibi further stated that the Company’s objective is to increase capital across the Group in order to drive business growth, enhance efficiency and improve overall shareholders’ value.

Uk Eke, the Group Managing Director, who commented on the company’s performance for the first half of 2020 said “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the results demonstrate our capacity to deliver exceptional services to our customers in these uncertain times. Looking ahead, we remain cautious, but confident that our business is fundamentally strong to surmount any future challenge towards delivering superior financial performance“.

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9mobile Joins MTN, Launches E-Sim Service 

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9mobile

9mobile Launches E-Sim Service

Nigeria’s mobile network operators have joined the rest of the world in launching E-Sim, an embedded sim.

In July, MTN Nigeria set the ball rolling with the launching of its E-Sim trial. This was followed by 9mobile that launched its E-Sim earlier this month.

E-Sim is a form of an in-built sim that is embedded directly into a device without using a physical Sim.

Speaking on the new E-Sim, the Acting Director of Marketing, 9mobile, Layi Onafowokan, described the latest move as the most excellent experience that advanced technology provides.

According to him, the E-Sim is an in-built sim embedded in mobile devices in order to reduce the possibility of losing or damaging sim and eliminate the stress of dealing with the cutting of sim cards or finding adaptors.

It also enables multiple usage and adaptation of one subscriber profile across a broad range of mobile communication devices, internet of things (IoT) and artificial intelligence (AI) apps including smart commuting, metering, tracking, and surveillance, rather than the restricted single-device use of the conventional SIM card.

Onafowokan said: “Customers can walk into any of our select 9mobile Experience Centres to request E-Sim activation. A QR code will be provided to scan and download E-Sim profile and perform the usual SIM registration.

He added that customers that activate E-Sim service will enjoy up to 7GB data-free while those who want to change to E-Sim will only do a SIM swap at approved centres.

E-Sim is compatible with Google Device like Pixel 3, 3 XL, 4, and Pixel 4 XL. Apple Device like Iphone 11, 11 Pro, 11 Pro Max, Xs, Xs Max and Iphone XR. Samsung S20 Series.

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Access Bank Enters Into Definitive Agreement With Cavmont Capital

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herbert wigwe

Access Bank Signs Definitive Agreement With Cavmont Bank Ltd

Following July 8, 2020 announcement, the Board of Access Bank Plc on Thursday said its subsidiary, Access Bank Limited (Zambia) has entered into a definitive agreement with Cavmont Capital Holdings Zambia regarding the acquisition of Cavemont Bank Ltd.

In the statement released through the Nigerian Stock Exchange, the bank said the proposed acquisition will position Access Bank as one of the top 10 banks in Zambia and improve the bank’s momentum to advance its strategic objectives.

The bank said “This is a highly complementary transaction, combining ABZ’s wholesale and trade finance capabilities with Cavmonth Bank’s retail and commercial banking operations. Customers of the enlarged bank will benefit from greater security offered by what will be one of the most capitalised banks in Zambia with a more diversified product and service offering and a broader geographical footprint and infrastructure. The enlarged bank will be well-placed to participate in the long-term economic growth of Zambia, predicated on the country’s vast reserves of natural resources and fast-growing young population.

The transaction agreement showed Access Bank Zambia will acquire the entire issued share capital, assets and liabilities of Cavmonth Bank while Capricorn Group Limited, majority shareholder of Cavmonth Capital Holdings, will invest around $16.5 million or ZMW300 million of preference shares into Access Bank Zambia.

According to the bank, the transaction is expected to be completed in the fourth quarter of 2020.

Speaking on the transaction, Herbert Wigwe, the Group Managing Director, Access Bank Plc, said “Access Bank is focused on building the scale needed to become a leading bank in its key operating markets through leveraging the right partnerships. This transaction underscores our approach and is another stepping stone towards delivering on our strategic aspirations of becoming the World’s Most Respected African Bank and Africa’s Gateway to the World. It will strengthen our presence in Zambia, while furthering our footprint for growth in the COMESA region, Africa’s largest free trade area.

“Over the years, we have worked hard to build a sustainable international bank of African origin that can expand the potential of businesses, support economic prosperity, facilitate trade and investment and extend the power of banking to millions of people who do not yet have the financial tools to achieve their dreams. This proposed transaction aligns with that strategy”.

Thinus Prinsloo, Managing Director of Capricorn Group, also said: “Access Bank is an African banking group with an impressive growth trajectory and geographic reach across Africa and internationally. This transaction is an excellent strategic fit with Cavmont Bank’s presence in Zambia and will strengthen the capital base from which to achieve long-term sustainable growth. Zambia is an economy with th potential that is poised for a robust recovery, and this combination best positions the combined bank to harness these opportunities“.

Peet van der Walt, the Managing Director of Cavmont Bank, explained that: “Cavmont Bank’s vision is to be a world-class bank, rated amongst the best in Zambia. This proposed merger with Access Bank Zambia accelerates our strategy and positions us as a top ten bank in the country. As a subsidiary of one of the largest banking groups in Africa, Access Bank Zambia has the scale, capabilities and ambition to enable the combined bank to pursue exciting strategic opportunities in Zambia.

“Our customers will benefit from greater security offered by one of the most capitalised banks in the country, increased scale in Zambia, access to a broader digital and retail offering, and a geographic network across the continent. We look forward to working closely with Access Bank to deliver the benefits of the merger to all the stakeholders.” Shareholders should note that the cautionary announcement dated July 8, 2020 is hereby withdrawn and shareholders are no longer required to exercise caution when dealing in the group’s shares in relation to the potential transaction.”

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