E-Financial
SEC, Others Cautioned On Cost Saving Measures, AGM Reports Dispatches
Due to the diverse shareholding of public companies, a well regulated environment is paramount for efficient operation and adequate protection of investors’ funds, however, the Securities & Exchange Commission (SEC), the apex regulator for the capital market (CM), the Bulkpost Ventures (BPV) of the Nigerian Postal Service (NIPOST), the courier operators and ultimately, the shareholders, are expected to play the game according to the industry’s rule, to avoid losses.
The lingering issue resonated at the Bulkpost Venture Customers’ Forum/Dinner Night held in Lagos recently, where the regulator, the operators and the shareholders sat to discuss on the topic, “Cost Saving Measures And The Capital Market Rules: The Role Of Securities And Exchange Commission In The Dispatch Of Annual Reports And Notices To AGM To All Shareholders”.
However, shareholders and courier operators are of the view that whatever measures reeled out must contain provisions for the protection of the minority or the shareholders in the industry, while upholding their fundamental rights.
Essentially, stakeholders have over the years used the Forum to throw up, brainstorm on and address critical issues that touch the basics of capital market, while professionals have discussed issues ranging from mail-handling, mail-security, addressing system, crime and its prevention, conversion of warrants, safe delivery of capital market mails, among others.
This year’s forum was no difference as arguments swung from left to right, with SEC seeking for safety from literal ‘missiles’ emanating from shareholders, courier companies and even NIPOST.
The Issues:
Setting the ball rolling, Mallam Mori Baba, postmaster general of the Federation (PMG), said the Service chose to take up its responsibility primarily in the best interest of the Capital Market and the shareholders in general.
Mori Baba represented by Dr. Simon Emeje, senior assistant postmaster general and head of Courier Regulatory Department (CRD), said that the topic for the day was a true reflection of the concern of the Venture as a key player, about the happenings in the CM, and their effects on the general well-being of all the industry and shareholders.
He said, “This is more-so as we, corporate entities and/or individuals, are all in one way or the other affected by this measure either as regulators, operators and/or shareholders. Consequently, some fundamental questions the theme for this year’s programme has thrown up and hopefully would be addressed by the chief regulator of the capital market should include but not limited to should cost saving measure result in breaking established statute rules with impunity? In whose interest is the cost saving measure if shareholders are denied access to information concerning their companies?”
The PMGF also sought to know, “Is provision not made for the printing and dispatch of the reports and notices in the company’s account? What happens to such fund afterwards? Is this cost saving measure not an infringement on the fundamental rights of the shareholders? What is the effect on the shareholders, especially the capital market mail delivery chain? Why has the regulator no punished erring companies as a deterrent?”
He also said that, “SEC should in the interest of fair play, justice and equity address the mind boggling issues once and for all”.
Dispatch Of Annual Reports & Benefits: SEC’s Role
Ms Arunma Oteh, director general of SEC (Nigeria) DG represented by Mrs Molokwu Uche head, SEC, Lagos Zonal Office, admitted that given the diverse shareholding of public companies, a well regulated environment is required for efficient operation and adequate protection of investors funds.
She added that “Governments worldwide set up various regulatory bodies to enhance performance”.
In Nigeria, SEC is the apex regulator for the capital market, Corporate Affairs Commission, Financial Reporting Council, Nigerian Stock Exchange (NSE) a Self regulatory body amongst others.
She said that, the responsibility for evolving specific cost savings strategies for optimal performance, however, lies with individual corporate organisations.
Taking solace on SEC and CAC Rules as regard dispatch of reports and benefits, Molokwu, invoked ISA No.29 of 2007 where SEC was charged to focus “on adequate disclosure from market participants to enable informed decision making while Corporate Affairs Commission (CAC) as empowered by Companies & Allied Matters Act (CAMA)2004 has responsibility for ensuring adequate framework for corporate organizations in Nigeria (incorporation and winding up as well as provisions with respect to meetings, procedures, financial statements, shares etc.)
“CAMA 217 Notice of meetings – twenty one days from the date on which the notice was sent out. CAMA 220 Service of notice: A notice may be given by the company to any member either personally or by sending it by post to him or to his registered address.
Challenges And Global Trends On Cost Saving
The keynote speaker said that, “SEC rules support cost saving measures by allowing electronic dispatch of documents to shareholders. The rules are not static but are subject to amendment as issues deserving consideration are brought up. Inputs from stakeholders are solicited and deliberated upon before finalization”.
Other challenges she mentioned are, reoccurring problems with mail distribution system; sharp practices of some courier companies still with many undelivered mails; compact disks’ now in use for companies annual reports; website for Information sharing – a growing trend.
She added that SEC’s key responsibility is shareholders’/investors’ protection hence empowered by ISA it has the responsibility of releasing rules that are fair, objective and in the interest of investors in particular .
“The Commission is poised to provide an enabling environment for an efficient capital market in Nigeria. All hands however must be on deck for the actualization of a growing market where efficient performance through adequate cost saving measures is the watch word”.
In spite these explanations, Mr Bayo Adeleke, general secretary, Independent Shareholder Association of Nigeria (ISAN), said SEC’s regulatory framework has been skewed against the shareholders, especially those with fewer units of shares in companies.
He wondered why SEC thinks digitalization of annual reports is the ultimate hence majority of the shareholders cannot be able to afford the gadgets that will aid them in digesting the minutes, like laptops, or tablets.
To him, the agenda is for the rich among them; hence connectivity is still a big issue with regards website postage of annual reports.
To save cost, Adeleke suggested that nobody is allowed to buy less than 100, 000 unites of shares during the public offers; this is to curtail the printing of over 500 pages of annual report for individuals with as low as seven unites of shares.
Reacting on the debates, particularly on late delivery of mails, Dr, Mike Umo, general manager, Bulkpost Venture (BPV) and the host, said, “What they are saying is not correct. The problem is that the concerned authorities are not sticking to the 21 days as spelt out in the law. We want revenue, so whenever they bring the mails, especially the annual reports, we will collect and deliver them. The fact remains that we do no keep any mail more than 24 hours.
“Most times, we even employ people from outside. They will always want to hide under Bulkpost, when they cannot give reasons for not delivering”.
On the shortage of annual reports, he said, “It is an obvious situation that companies do not print annual report to go round the shareholders. What SEC representative said that any infraction should be reported and addressed; the thing is an obvious situation, whether CD or hardcopy, it is the same story. As the GM of Bulkpost, I have no right to go and report to SEC, rather the shareholders.
Nodding in agreement, Mr. Okey Ubah, managing director and chief executive officer of Ebony Express Limited, said that, the cost saving measures been brandished by the SEC can only be applicable when issues concerning the profitability of stakeholders in the sector are taken into cognizance.
He cited the ban on commercial motorcycles in States like Lagos, Port Harcourt, among others, as inimical to their operations.
He asked, “Why is that certain policies and laws been put in place by the Government and the Agencies do not look into the cases of certain stakeholders or practitioners in the industry. With the ban on commercial motorcycles and heightened by operations of overzealous security agencies; that aside, SEC should know that before adopting any cost saving measure, it should not be skewed against practitioners like courier companies. Remember, we are talking about job cut, because when companies cannot see jobs to deliver they will resort to downsizing”.
According to Ubah, for the issues to be addressed, they should be more engaging platforms where representatives of the regulator, the operators and the shareholders can discuss on way forward.
Since Bulkpost Venture debuted in year 2000 as a marketing outfit of NIPOST, it has continuously organized the Forum, meeting its social obligations to the teeming customers.
BPV uses the opportunity to reward individuals and organizations and bring up issues that are germane for academic discussion.
National Information Technology Development Agency (NITDA) has been mandated by President Bola Tinubu to lead the implementation of the Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) Data Management Platform project.
The project is aimed at removing Nigeria from the Financial Action Task Force (FATF) Grey List by 2025.
Nigeria was included in the FATF Grey List in February 2023.
NITDA is expected to build better systems to manage financial data and compliance in Nigeria in collaboration with the Nigerian Financial Intelligence Unit (NFIU).
Nigeria’s goal is to be taken off the Financial Action Task Force’s (FATF) Grey List by 2025.
During the project implementation’s first meeting, Malam Kashifu Inuwa, director-general, NITDA stated that the project will rectify the shortcomings noted in Nigeria’s Mutual Evaluation Report (MER).
According to Inuwa, FATF put Nigeria on the grey list due to seven problems, including the country’s incapacity to stop arms financing, growing cash inflows, and inadequacies in fighting money laundering.
“We had shortcomings in combating terrorism financing, anti-money laundering regime, counter-terrorism financing regime, and deficiency in our counter-proliferation financing regime.
“The main objective of building a better system is to help us with global compliance; to help Nigeria position itself as a key player in the global effort to combat financial terrorism and other crimes.
“This will help us to create visibility in Nigeria, as well as improve our global reputation and relationship in the financial market,” he said.
He claimed that by strengthening law enforcement, the economy, and investment, the project will enhance national security by enabling the tracking of illicit financial flows and the disruption of financial sector criminal networks.
Inuwa underlined Tinubu’s dedication to using innovation and technology to fight financial crime and corruption.
Nigeria deserves to be at the forefront of cutting-edge technologies, according to Rep. Stanley Adedeji, chairman of the House of Representatives Committee on ICT and Cybersecurity, who emphasised the importance of technology.
Adedeji promised that the National Assembly would see to it that projects received the money they were due.
“We are going to make sure that the right funding is put in place for this project without any doubt.
“We are also going to make sure that if there are any laws today that are going to impede or be a stumbling block to what this project stands to achieve, we have to go and amend those laws.
“If there are things that require executive orders so that we can quickly move forward, we will do whatever needs to be done,” he said.
Hajiya Hafsat Bakari, director-general, NFIU, called for more collaboration among stakeholders to sustain the gains of exiting the grey list.
According to Bakari, the grey list is not just a one-off project but a continuous project.
“The next cycle of evaluation will be done in 2027, and we do not want a situation where, after exiting the grey list, we still find ourselves in the next evaluation.
“This is why we have decided that the use of technology will give credibility to every statistic that we have, not just to our domestic stakeholders but also to our international partners.
“Everything should be done in real-time—accessible, credible, and factual; that is the project that we are doing today,” she said.
The equity market rebounded on Thursday from its previous session’s loss, gaining N53 billion.
Investor interest in key stocks such as Dangote Cement, FBN Holdings, Guaranty Trust Holding Company, GTCO, and Fidelity Bank, alongside other advancing equities, contributed to the market’s positive performance.
The market capitalisation increased by N53 billion, or 0.09 per cent rising from N62.257 trillion at the opening to N62.310 trillion at the close.
Similarly, the All-Share Index, ASI, advanced by 0.09 per cent, gaining 87.11 points to close at 102,183.06, compared to 102,095.95 reported on Wednesday.
This performance brought the Year-To-Date, YTD, return to 0.72 per cent.
However, in spite the gains, the market breadth closed negative, with 35 gainers against 26 losers.
On the losers’ chart, Livestock Feeds led by 60k to close at N5.40, Eunisell trailed by N1.73 to close at N15.63 per share.
Neimeth International Pharmaceutical and Regal Insurance lost 7k each to close at N3.12 and 68k per share respectively, while Honeywell Flour shed 94k to close at N9.21 per share.
Conversely, North Nigerian Flour Mill led the gainers table by N4.95 to close at N54.45, Dangote Sugar followed by N3.65 to close at N40.50 per share.
John Holt gained 83k to close at N9.30, The Initiate Plc added 25k to close at N2.80 and Omatek went up by 8k to close at 90k per share.
Trade turnover settled higher relative to the previous session, with the value of transactions up by 76.82 per cent.
A total of 472.16 million shares valued at N16.70 billion were exchanged in 12,336 deals, compared with 435.54 million shares valued at N9.44 billion traded in 12,098 deals, posted in the previous session.
Meanwhile, GTCO led the activity chart in volume and value with 65.05 million shares worth N3.77 billion.
Culled from NAN
IFC, a member of the World Bank Group, issued a three-year social bond, raising $2.0 billion to support low-income communities in emerging markets.
The transaction represents IFC’s largest ever social bond, and the largest US dollar denominated social bond issued by a supranational. The orderbook reached a total size of $11 billion, IFC’s largest ever order book for a single bond issuance. It follows a 1 billion Australian dollar denominated social bond issued by the corporation last week.
Announced on Monday, the orderbook grew steadily during the marketing process and continued to do so throughout the bookbuild.
“In an era marked by rising inequality and poverty, social bonds have emerged as a crucial tool for directing investments to essential projects in emerging markets,” said John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization. “This bond will unlock additional funding for vulnerable communities and underserved groups in emerging markets in areas such as health, education, and food security.”
The social bond is issued under an updated social bond framework, which IFC published last week. The social bond framework received a rating of “excellent” from second opinion provider Sustainable Fitch, who confirmed the framework’s full alignment with the International Capital Market’s Social Bond Principles.
IFC is one of the largest global issuers of social bonds and the only World Bank Group entity that issues social bonds.
Barclays, Goldman Sachs, Nomura, and SEB acted as joint lead managers for the transaction.
“Congratulations to the IFC team on achieving great success with their second US dollar fixed rate benchmark outing of the fiscal year. The high-quality orderbook, in excess of $11 billion, and limited price sensitivity of the global investor base, is testament to the depth of demand for the IFC credit.
Despite a busy primary market, IFC achieved an upsized transaction at a minimal new issue concession. Barclays are honored to have supported this new issue,” said Alex Paterson, Managing Director, Head of SSA DCM, Barclays.
“Congratulations to the IFC team on an incredibly successful transaction with today’s three-year US dollar benchmark! This marks IFC’s largest orderbook ever, comprising of very high-quality orders from central banks, official institutions, bank treasuries and other real money investors from across the globe.
Tightening the spread by four basis points from initial price thoughts is a testament to IFC’s strong credit quality and global investor demand,” said Dorothee Amar, Managing Director, Co-Head of SSA, Goldman Sachs International.
“With this new $2 billion three-year social bond transaction (the first under the new framework), the International Finance Corporation has once again demonstrated its commitment to the US dollar market and its loyal investor base. Despite very congested markets IFC was rewarded with its largest orderbook ever and over five times covered for the deal.
The sheer volume and quality of the orderbook underscores IFC’s position as a US dollar market favorite and has enabled IFC to achieve the largest spread tightening seen in the market this year! Congratulations on this fantastic result,” said Spencer Dove, Managing Director, Head of DCM SSA at Nomura.
“Congratulations to IFC on this fantastic outcome. In a crowded market the response from global investors is truly an endorsement of not only their standing in capital markets but also of their leadership in the development of the social bond market. SEB is delighted to have been part of the team on this transaction,” said Anna Sjulander, Head of SSA DCM, SEB.
Proceeds from IFC’s social bonds fund a diverse range of social projects which include: affordable basic infrastructure (e.g. clean drinking water, sewers, sanitation, transport, energy); access to essential services; affordable housing; women-owned small and medium sized businesses who lack access to finance; and companies that incorporate people at the “base of the economic pyramid” into their value chain; as well as food security.
IFC is a frequent issuer of social bonds in public and private markets, in various currencies and tenors.
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