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Regulator, Market Operators Mull e-IPOs

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A committee comprising of the Securities and Exchange Commission (SEC), Nigeria Stock Exchange (NSE), Central Securities and Clearing System(CSCS), and six other organisations have been set up to work out the modalities involved in issuing Electronic Initial Public Offers (e-IPOs) in Nigeria’s financial markets.

 

e-IPO is an application based and browser based software that facilitates online offerings to the public on a private company’s stock. Such company can thus raise money by going public through a cost-effective and comprehensive benefit that an E-IPO offers.

 

Mary Uduk, the ag. the director general of the SEC, said that the e-IPO committee was set up in Lagos last week during the first Capital Market Committee (CMC) Meeting.

 

Other organisations involved in the e-IPO deliberations include, Association of Issuing Houses of Nigeria (AIHN), Association of Stock Broking Houses of Nigeria (ASHON), Institute of Capital Market Registrars (ICMR), Capital market Solicitor Association(CMSA), Fund Managers Association of Nigeria (FMAN), and Nigerian Interbank Settlement System (NIBSS).

 

According to Uduk, globally, capital markets are moving towards e-IPO and the Nigerian Capital Market is working to adopt this trend.

 

Uduk who briefed pressmen alongside Messrs Isiaku Bala Tilde, Ag. Executive Commissioner, Operations; Henry Adekunle Rowlands, Ag. Executive Commissioner Corporate Services; Reginald Karawusa, Ag. Executive Commissioner, Legal and Enforcement on the resolutions of the CMC meeting, said the issue of increase in delistings by public companies was highlighted, and recognised as a threat to the growth and development of the market.

 

In a bid to curb the trend the Ag. DG noted that “In view of the fact that quite a number of them are highly capitalized companies. We are expecting the committee on listings would come up with strategies to attract new listings.”

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Towards further strengthening of the capital market, Uduk explained that the extension of a forbearance window to investors on multiple subscriptions and forbearance for shareholders with multiple accounts, will last till September 2018. “Registrars have acknowledged that investors have started coming forward but there are challenges in the process.

 

The CMC deliberated and recommended the appropriate Technical Committee to seek input and come up with recommendations to address the challenges. Therefore, we encourage all affected investors to come forward and take advantage of the window before the new deadline.” Speaking on Direct Cash Settlement (DCS), Uduk that out of 5.1 million accounts with the CSCS, only 1,191 have Direct Cash Settlement (DCS) subscriptions and only 15 out of 18 settlement banks have contributed to the DCS initiative.

 

“Considering the fact that DCS will instill confidence in the market, there is the need for all parties involved in the process to work harder to achieve a 100% migration.” She said.

 

On the issue of commodities market, Uduk said “The Technical Committee working on developing a vibrant commodities market for Nigeria presented its report at the meeting. The report will be exposed to the public to elicit comments and inputs from all stakeholders.

 

She added that “the Technical Committee on Non-Interest capital market reported that the first sovereign sukuk was issued in 2017 and about 1,600 retail investors invested N5 billion on the instrument.

 

The next level of engagements is to work with supra-national entities (such as IFC, AfDB), state governments, institutions (such as Federal Mortgage Bank, NMRC) to include sukuk options in their capital investment plans.

 

“The Technical Committee on E-dividend registration reported that the total approved mandates currently is about 2.5 million translating into 466,000 unique investor accounts. The deadline for the free E-dividend registration was 31 March 2018 and that has not changed. The new direction of the industry is that bank managers along with registrars will charge a token sum of N150 per mandate.

 

The Commission also warned the public to exercise extreme caution with regards to crypto currencies as a vehicle of investments, as part of its investor protection mandate.

 

The warning was particular, especially as none of the persons, companies or entities promoting cryptocurrencies has been recognized or authorized by SEC or by other regulatory agencies in Nigeria to receive deposit from the public or to provide any investment or other financial service within or outside Nigeria.

 

Other deliberations and outcome at the CMC meeting include an update of the Commission’s database for registration and functions of Capital Market Operators (CMOs), which can be found on the SEC website, the issuance of a new set of Registration Certificates to operators without expiry dates, made available at the SEC’s head office and Lagos Zonal Office and the commencement of the distribution of electronic annual accounts of public companies.

 

On financial inclusion, the Ag. DG mentioned that the Commission is working with National Educational Research and Development Council (NERDC) to institute a stand-alone capital market curriculum for basic and senior secondary education in Nigeria. “To this end, Trade Groups made commitments at the meeting to support this initiative.”

 


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E-Financial

Reps to Grill Banks, Others over $30Bn Forex Racketeering

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House of Representatives has summoned 24 banks and 14 oil companies over an alleged forex racketeering leading to an annual loss of over $30bn as revenue.

Reps to Grill Banks, Others over $30Bn Forex Racketeering

The Joint House of Representatives Committee on Finance; and Banking and Currency will today begin an investigative hearing.

Those appearing before the committee are to explain their roles in the alleged over $30bn revenue leakages arising from oil revenue interest payment on account of foreign currency dominated contracts by companies in engineering, procurement, construction, installation and marine transportations.

According to the committee, which is jointly chaired by James Faleke (Finance) and Victor Nwokolo (Banking and Currency), the investigative hearing would be conducted in accordance with COVID-19 protocols. The committee said the hearing would be conducted in phases, with the first phase lasting three weeks.

The banks summoned by the committee are Unity Bank, Stanbic IBTC, United Bank of Africa, Polaris Bank, First City Monument Bank, Fidelity Bank, Keystone Bank, FBN Merchant Bank, Access Bank, Bank of Industry, Jaiz Bank, Coronation Merchant Bank, SunTrust Bank, Union Bank, CitiBank, Guaranty Trust Bank, Ecobank, First Bank of Nigeria, FSDH Merchant, Sterling Bank, Zenith Bank, Wema Bank, Standard Chartered Bank and Heritage Bank.

The oil firm are Nigeria Agip Exploration, Nigeria Agip Oil Company, PAN Ocean Oil Nigeria Limited, Shell Nigeria Exploration & Producing Company Limited, Esso Exploration & Producing Nigeria Limited, Mobil Producing Nigeria Limited, Statoil Company Limited, and Shell Petroleum Development Company.

Others are Star Deep Water Petroleum Nigeria Limited, Total E&P Nigeria Limited, Total Upstream  Nigeria Limited, Sterling  Oil Exploration  Energy Limited, Addax Petroleum  Development Company Limited, and Addax  Exploration Limited.

The House had on March 5, 2020, resolved to investigate the Central Bank of Nigeria and the Federal Inland Revenue Service over alleged racketeering in the allocation of foreign exchange to companies.

The House, which said the leakages were causing the Federal Government to lose revenue worth over $30bn, had also resolved to probe commercial banks, forex dealers, importers and beneficiary companies.

 


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Fidelity Bank Appoints Mustafa Chike-Obi Chairman

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Mustafa Chike-Obi has been appointed as the chairman of Fidelity Bank Plc, following the retirement of Ernest Ebi who has completed his tenure in line with the bank’s internal governance policy.

Fidelity Bank Appoints Mustafa Chike-Obi Chairman

Mustafa Chike-Obi

In a statement, the bank also announced that Seni Adetu, an independent non-executive director, has completed his tenure too.

Ebi, who was appointed chairman of the bank in 2016, recently celebrated his 70th birthday.

His successor, Chike-Obi, is currently the executive vice-chairman at Alpha African Advisory.

Chike-Obi was also the first chief executive officer of the Asset Management Corporation of Nigeria (AMCON), an institution established to resolve the problem of non-performing loan assets of Nigerian banks after the 2008 global financial crisis.

“He has over 40 years of experience in investment banking and the financial services sector, working with reputable global investment banking and asset management firms,” the bank said, referring to Chike-Obi.

“He provides overall leadership at Alpha African Advisory and has direct oversight over the capital raising division.”

Commenting on the bank’s status during his exit, Ebi said: “I feel that the management team has consolidated on our plans to become one of the fastest-growing banks in the country strongly rooted in technology only comparable with the best in the world.

“I am confident that my successor will continue on that path to take the bank to its next stage of growth and advancement. I wish my successor, the management team, and the entire staff of Fidelity Bank the very best for continued success.”

Nnamdi Okonkwo, Fidelity Bank’s CEO, also commended the contributions of the outgoing board members, saying the bank has benefited immensely from their experiences and looked forward to continuing the bank’s upward growth trajectory with the incoming chairman-designate.

The bank said Ebi will continue in the role until the incoming chairman steps in.

Chike-Obi holds a bachelor’s degree in mathematics from the University of Lagos (first class honors) and an MBA from Stanford University Graduate School of Business.


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CBN Debits Banks N1.977.7trn to Tightens Liquidity

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Central Bank of Nigeria (CBN) has debited close to N2 trillion from several banks in the last quarter in line with its Cash Reserve Ratio (CRR) compliance requirement, and this has left many banks cash-strapped and unable to pursue various profitable ventures.

CBN Debits Banks N1.977.7trn to Tightens Liquidity

Mr. Godwin Emefiele, CBN governor

Many banks in the country, now have billions of their customers’ debits sterilised for the sake of CRR compliance.

The cash reserve requirement is the minimum amount banks are expected to leave retained with the Central Bank of Nigeria from customer deposits.

In January, the CRR was increased by five per cent to 27.5 per cent by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.

Recall that in January 2020, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) raised the Cash Reserve Ratio by five per cent to 27.5 per cent.

The move shocked bankers who had expected the CBN to taper down on its tight monetary policies considering the economic headwinds. This was very well before the COVID-19 virus exploded worldwide.

In April, the apex bank debited 29 banks the sum of N1, 469,179,201,591.39 trillion with Zenith Bank accounting for N355.9 billion, UBA: N204.7 billion; First Bank: N206.1 billion and Stanbic IBTC: N143.9 billion of the total fine.

The CBN followed this up in June again, debiting 26 banks to the tune of N459.7bn for failure to meet their CRR obligations.

Among the banks that were most affected are United Bank for Africa Plc (N82.3 billion), First Bank of Nigeria Ltd (N59.3), Zenith Bank Plc (N50 billion), First City Monument Bank (FCMB) Limited (N45 billion), and Guaranty Trust Bank Plc (N40 billion).

In its latest sanction, 14 banks were debited to the tune of N118bn, the lowest in three months. Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures.

According to data sourced from the CBN’s official website, Stanbic IBTC Bank Plc and Guaranty Trust Bank got the highest debits of N15bn apiece, while Union Bank of Nigeria Plc was debited N12.5bn, and FBN was debited N12.4bn.

Fidelity Bank Plc, Citibank, FCMB were debited NN11bn, N10.2bn, N10bn respectively. Meanwhile, among the five biggest banks, Access Bank got the least sanction with a debit of N3bn in July followed by Zenith Bank Plc’s N7bn.


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