- NSIA: Governors Backed Investment of $250m NLNG Dividend
The Nigerian Sovereign Investment Authority (NSIA) has said that it invested $250 million of the dividend that accrued to the 36 states of the Federation in 2016 from the operations of the Nigeria Liquefied Natural Gas Limited (NLNG) with the support of the state governors.
This revelation is a strong indication that the governors have stopped their opposition to the creation of the NSIA.
NSIA’s Managing Director, Dr. Uche Orji, told the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Mr. Waziri Adio, that the sovereign wealth fund (SWF) agency has a diversified portfolio of medium and long term revenue yielding projects where it invested the funds.
A statement from NEITI in Abuja explained that Adio visited the NSIA to work out partnership modalities on management of revenues Nigeria gets from extractive industries operations but often given to the SWF.
The NEITI also stated it got the National Orientation Agency (NOA) involved in the partnership framework to promote transparent and accountable management of funds in the SWF.
Similarly, it said that it took the decision to seek the partnerships after it published a recent Occasional Paper, which underlined the need for Nigeria to have a robust savings from the revenue it gets from her extractive industries.
In the publication, NEITI drew public attention to the fact that Nigeria failed to save enough oil revenues to sustain economic activities when oil prices were quite high.
“Also problematic is the level of consumption relative to non-oil exports. Nigeria typically responds to high oil prices with equally high but manifestly unsustainable level of consumption. The absence of sufficient savings left Nigeria severely exposed when the price of oil, Nigeria’s main source of government revenues and foreign exchange, started to plunge in 2014,” said the publication.
Adio equally added that its publication of the paper was within its legitimate mandate as an agency charged with the responsibility of ensuring prudent management of revenues derived from natural resources.
He clarified that in carrying out this function, NEITI focused mainly on Nigeria’s strategic interest and not necessarily on the work of any agency including the NSIA.
In his response, Orji explained that the NSIA now enjoys the backing of the governors, and has equally established frameworks for good corporate governance, risk management, transparency, and accountability, as well as a solid governance structure that has attracted credible partners, notable investors, and private equity funds to it.
“NEITI has a voice that resonates with policy makers and its other stakeholders. We found the publication exceptional and commendable. We are here to ask for closer collaboration between the NSIA and NEITI in the discharge of our individual mandates while working together for the common good of our country,” he said.
“The Authority was set up to receive, manage and invest in a diversified portfolio of medium and long term revenue yielding projects. NSIA only invests on projects with huge potentials for direct positive impacts to the development of critical infrastructure in Nigeria, inflow of foreign investment, economic diversification, growth and job creation,” Orji explained.
He further revealed that that the Nigeria Governors’ Forum that was initially opposed to its mandate, is one of its greatest supporters at the moment, adding that “the $250 million we invested in 2016 came from the state governments’ share of the NLNG dividend.”
Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$16 Billion in the First Nine Months of 2020
Mergers and Acquisition Transactions Stood at US$16 billion in the First Nine Months of 2020 in Sub Saharan Africa
Refinitiv today released the investment banking analysis for the Sub-Saharan African for the first nine months of 2020. According to the report, investment banking fees in Sub-Saharan Africa reached an estimated US$40.9 million during the third quarter of 2020, less than half the value recorded during the second quarter of 2020 and the lowest quarterly total since Q1 2005. Around US$264.6 million worth of fees were earned in the region during the first nine months of 2020, down 38% from last year and a seven-year low with fee declines recorded across M&A advisory, debt capital markets underwriting, and syndicated lending.
Advisory fees earned from completed M&A transactions generated US$51.4 million, down 71% year-on-year to the lowest first nine-month level since 2003. Debt capital markets underwriting fees declined 19% to US$46.6 million, marking the lowest first nine-month total for bond fees in the region since 2016, while syndicated lending fees fell 35% to a six-year low of US$105.2 million. Equity capital markets underwriting fees totalled US$61.4 million, more than double the value recorded during the same period in 2019.
Government & Agency fees accounted for 22% of total investment banking fees earned in the region so far during 2020, up from 12% during the same period last year. South Africa generated the most fees in the region, a total of US$160.2 million accounting for 61%, followed by Nigeria with 12%.
Standard Chartered earned the most investment banking fees in the region during the first nine months of 2020, a total of US$23.4 million, or an 8.8% share of the total fee pool.
MERGERS & ACQUISITIONS
The value of announced M&A transactions with any Sub-Saharan African involvement reached US$16.0 billion during the first nine months of 2020, 74% less than the value recorded during the same period last year when Naspers’ US$35.9 billion internet assets spin-off boosted merger activity to an all-time high. The value of deals recorded so far this year is the lowest year-to-date total since 2004. The number of deals declined 11% over the same period to a seven-year low. The value of deals with a Sub-Saharan African target declined 58% to a seventeen-year low of US$7.9 billion, as domestic M&A within the region declined 69% from last year and the combined value of inbound deals reached just US$5.2 billion, the lowest first nine-month level in five years. The largest deal involving a Sub-Saharan African target was announced at the start of September – US pharmaceuticals firm Mylan agreed to buy the thrombosis business from South African drugmaker Aspen Pharmacare for US$758.5 million. Deals in the energy and power sector accounted for 26% of Sub-Saharan African target M&A activity during the first nine months of 2020, followed by materials (23%) and financials (14%). South Africa was the most targeted nation, followed by Uganda and Senegal.
Outbound M&A reached a four-year high of US$4.6 billion during the first nine months of 2020, 80% more than the value recorded during the same period in 2019, despite an 11% decline in the number of deals. The value was boosted by Angolan state-owned Sonangol’s purchase of PT Ventures from Africatel Holdings for US$1 billion and Templar Investments’ US$1 billion offer for Jindal Steel’s Oman unit.
With advisory work on eleven deals worth a combined U$1.7 billion, JP Morgan holds to the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first nine months of 2020.
EQUITY CAPITAL MARKETS
Sub-Saharan African equity and equity-related issuance reached US$2.0 billion during the first nine months of 2020, 25% more than the value recorded during the same period last year, but lower than every other first nine-month total since 2013. The number of deals recorded declined by 10% to the lowest year-to-date tally since 2012. One initial public offering has been recorded so far this year, compared to three at this time last year. Malawian telecoms company, Airtel Malawi, raised US$28.7 million on the Malawi Stock Exchange in February.
JP Morgan took first place in the Sub-Saharan African ECM underwriting league table during the first nine months of 2020.
DEBT CAPITAL MARKETS
The African Development Bank raised $3 billion in a “Fight Covid-19” social bond at the end of March to help alleviate the economic and social impact the Coronavirus pandemic will have on livelihoods and economies in the region. With this deal, and Ghana’s US$3 billion Eurobond in February, Sub-Saharan African debt issuance totalled US$8.9 billion during the first quarter of 2020, the second-highest first quarter DCM total in the region of all-time.
Only US$1.9 billion was raised during the second quarter, the lowest quarterly total in eight years, followed by US$4.0 billion during the third quarter. The total proceeds raised during the first nine months of 2020 is US$14.7 billion, down 26% from last year and a five-year low. BofA Securities took the top spot in the Sub-Saharan African bond underwriter ranking during the first nine months of 2020 with US$2.2 billion of related proceeds, or a 15% market share.
REVEALED: Millionaire Investors’ Biggest Mistakes in a New Survey
Relying on guidance from historical returns is the number one investment mistake made by millionaires, reveals a new global survey.
The survey was carried out by deVere Group, one of the world’s largest independent financial advisory and fintech organisations, and queried 752 investors with investable assets of more than £1m (or the equivalent) in the UK, Europe, Asia, Africa, the Middle East, Australasia, Latin America and North America about their biggest errors whilst investing before they became clients.
The top cited mistake (38%) was reliance on historical returns, the second (35%) was not having sought advice, and the third (21%) was lack of diversification. A collection of other mistakes and ‘do not knows’ made-up the remaining 6%.
deVere CEO and founder, Nigel Green, says: “It’s interesting to see that for the first time in our surveys of this kind that the number one investment mistake high-net-worth individuals have made is, they say, reliance on guidance from historical returns.
“To me, this suggests that wealthy investors are paying attention to how the world has changed dramatically this year and, therefore, investment strategies need to adapt and evolve too in order to reflect the new era we’re living in.
“With fundamental shifts in economies and the markets, the often-quoted industry phrase ‘past performance is not a reliable indicator of future performance’ has perhaps never rung more true than it does today.”
He continues: “It’s encouraging that seeking advice is deemed fundamental to success by millionaires as it shows that DIY investing and not having a regularly reviewed plan is, typically, a path full of costly pitfalls.”
Mr Green goes on to add: “The lack of diversification was in some ways bound to make the top three. Why? Because it is universally regarded as an investor’s best tool to mitigate risks and capitalise on opportunities that arise.”
The fact the top three mistakes are all fairly close in percentage terms says to the deVere boss, “that, in fact, they all link in pretty tight to number two – that’s to say, having a robust, considered and consistently reviewed strategy for your personal finances.”
Mr Green concludes: “To some, this could appear as if investing your hard-earned money is dangerous.
“Yet nothing could be further from the truth – not investing is likely to be more dangerous to your wealth over the longer-term.
“This is shown by the fact that most of the world’s wealthiest people are themselves committed investors.”
Investors Turn to Digital Health Startups With $10 Billion Funding in 2020
Global Investors Dump $10 Billion on Digital Health Startups in 2020
Data presented by Buy Shares shows that digital health startups funding has hit $9.9 billion in 2020. The highest funding was recorded in Q3 at $4.6 billion.
The surge in funding is expected to continue
Between Q1 and Q3, the funding grew by 58.62%. During Q1, the funding was $2.9 billion. The figure slightly dropped during Q2 to $2.4 billion.
The Buy Shares research also overviewed the five largest digital health funding deals as of Q3 2020. Bright Health was the biggest deal at $500 million with funding from Blackstone, Tiger Global Management among others. XtalPi recorded the second-highest funding at $319 million.
In the third spot, there is RecursionPharmaceuticals with cumulative funding of $239 million while Ro is fourth at $200 million. Out of the overviewed top funding, Ground Rounds is ranked fifth at $175 million.
The research highlights the value of digital health to investors. According to the research report:
“To investors, the digital health sector offers a promise of both good financial returns and key positioning by supporting companies that build solutions to address clinical and operational hurdles. The sector offers a unique value to companies as they hold integral direct access to both providers and patients.”
The surge in funding is expected to continue and shatter various records in 2020.
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