Finabiz: November 2014

Thursday 27 November 2014

AMCON Completes Sale of Enterprise Bank to Heritage Bank

The Asset Management Corporation of Nigeria (AMCON) yesterday announced the successful completion of the sale of the entire issued and fully paid up ordinary shares of Enterprise Bank Limited to HBCL Investment Services Limited (HISL) for a consideration of N56.1 billion.

The transaction, according to AMCON, was structured as a broad public auction process which attracted interest from multiple domestic and international bidders, with HISL emerging as the preferred bidder.

It reiterated that

The Managing Director of the Nigeria deposit insurance corporation (NDIC) Alhaji Umaru Ibrahim has disclosed that Nigerian banks can survive the impact of the current falling price on the economy.

Ibrahim also said with the federal government’s response to the situation, banks would emerge even stronger after the challenges.

Speaking yesterday at the 35th Kano International Trade Fair held, the NDIC boss, represented by the Director Assets Management, Alhaji Bashir Dada assured depositors that

The Central Bank of Nigeria (CBN) on Wednesday advised banks it would drain a combined N568 billion ($43 billion) from their accounts to meet the 500 basis-point hike in cash reserve requirements on private sector deposits with lenders.

The planned withdrawal triggered a scramble for funds in the interbank lending market, where the cost of borrowing among banks almost doubled, dealers said.

The overnight interbank borrowing rate closed at

A weak non-oil export sector may foreclose the possibility of Nigeria gaining from the Central Bank’s decision to devalue the naira to N168/US$, from N155/US$ reported before Tuesday.

Nigeria’s Central Bank announced the devaluation Tuesday, to save the naira, dwindling foreign reserves and the economy, while widening the band around the midpoint by 200 basis points from +/-3 percent to +/-5 percent.

Analysts assume that one real impact of devaluation is increased export, which is now expected to be cheaper in international markets. Ideally, also, a regime of devaluation expects imported products to be more expensive for consumers and consequently decline.

However, analysts see a big

Naira touches record low after CBN devalues currency

The naira touched a record low against the dollar on Wednesday, a day after the Central Bank of Nigeria (CBN) devalued the currency, and it was trading lower than the bank’s target band even after rebounding.

CBN devalued the naira by 8 percent and raised interest rates sharply on Tuesday, as it sought to stem losses to its foreign reserves from defending the currency against weaker oil prices.

The naira fell to a record low of 178.85 to the dollar shortly after the market opened, but it rebounded to firm almost 1 percent to 177.05 after two oil companies sold dollars.

That level was still below the new bank’s target band of 5 percent plus or minus 168 to the dollar after the devaluation.

Total sold $20 million while Shell sold an undisclosed amount of

Following the investment of $147 million in Diamond Bank Plc by the Carlyle Group, the Washington-based financial institution currently has 18 per cent stake in the Nigerian commercial bank, a report revealed Tuesday.

The investment was made possible through the company’s purchase of Diamond Bank’s recent rights issue.

The 18 per cent stake is however higher than the 14.8 per cent previously held by Actis.

Commenting on the transaction, Banking Analyst at Renaissance Capital, Mr. Adesoji Solanke described it as positive for Diamond Bank’s equity story.

“To acquire such a

Bajaj Auto Ltd fell as much as 2.7% on Wednesday, while Bharti Airtel Ltd dropped 2.9% after Nigeria’s central bank devalued its currency naira by 8% and raised interest rates sharply on Tuesday.

Nearly 12 percent of Bajaj Auto’s revenues come from Nigeria.

Bharti Airtel entered Africa in 2010 by

Saudi Arabia has indicated it will not push for output cuts to help push up oil prices, as Opec oil producers prepare for their meeting on Thursday.

The oil market will "stabilise itself eventually", said Saudi Oil Minister Ali al-Naimi.

Saudi Arabia is the largest producer of the 12 members of the Organization of the Petroleum Exporting Countries (Opec).

The oil cartel is split over how to react to the sharp slump in oil prices.

The price of Brent crude has plunged 30% since June, triggered by a sharp rise in US shale oil output and weakening global demand.

There is speculation that

Governor of Lagos State, Mr. Babatunde Fashola has said that individuals have a responsibility to manage risks for the betterment of their lives.

Fashola said that people should have the awareness of the existence of risk as a natural phenomenon to human existence.

He said, “We are often impervious to the risks we face on a daily basis. Risk here is the probability or the threat of damage, loss, injury or any other negative occurrence that is caused by external or internal vulnerabilities, the consequences of which may be avoided through preemptive action.

“In other words, it can simply be described as the

Goldman Sachs and HSBC are among four platinum and palladium dealers to be sued in New York for allegedly fixing the price of the metals.

The four companies are said to have rigged prices for eight years. BASF and Standard bank were also sued in the first lawsuit of its kind in the US.

The four defendants declined to comment.

Modern Settings, a Florida-based maker of jewellery and police badges, said purchasers lost millions of dollars.

The Florida company filed the complaint in Manhattan federal court.

Platinum and palladium are used in jewellery, cars and dentistry.

The companies were accused of

Data released by the Debt Management Office (DMO) has revealed that the World Bank Group controls a total of 62 per cent of Nigeria’s public external debt at end-September this year.

Analysis of the data also revealed that the international capital market (ICM), where the federal government raised $1billion Eurobond has 16 per cent.

Others are: bilateral lenders, 12 per cent, African Development Bank (AFDB), 8 per cent and 2 per cent by other lenders.

The quarterly data from the DMO also showed that

The Central Bank of Nigeria’s (CBNs) moves to tackle excess liquidity in the banking system via a further hike in reserve requirements may lead to an industry wide reduction in profitability by as much as N40 bn.

The MPC tightened policy via a 1ppt increase in the policy rate to 13 percent. The MPC also increased the CRR on private sector deposits to 20 percent, from 15 percent and devalued the official naira exchange rate, by moving the mid-point from N155/$1 to N168/$1, which is equivalent to 8 percent devaluation.

The committee also widened the band around the midpoint to 5 percent, from 3 percent, implying a new target (official) exchange rate band ofN160-176/$1.

“The moves imply a

Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), said that naira depreciation will increase the cost of production for Nigerian manufacturers who rely heavily on imported raw materials.

According to Yusuf, the increased cost of raw materials will translate into increased cost of production, as well as lower profitability and sales.

“Even when you, as a manufacturer, increase your price as a consequence of a hike in your cost of production, the purchasing power is not there. That is just the point here,” Yusuf said.

“In other words, you find out that the manufacturer or businessman’s cost, profitability and sales are affected negatively. In fact, it will be negative on both the monetary and fiscal sides. This will be

The current oil price volatility that has seen the price of crude oil in the international market drop to $78 per barrel, presents Nigeria a rare opportunity to remove the entire controversial and highly abused fuel subsidy regime in the country. This was part of the emerging consensus among over 150 participants at a BusinessDay conference in Lagos yesterday.

The conference discussed the impact of falling oil price on the Nigerian economy. Imo Itsueli, former NNPC chairman, was the moderator, while speakers included Bismark Rewane, CEO of Financial Derivatives, Ayo Teriba, CEO of Economic Associates and Mansur Ahmed, a director with Dangote Group. Others were Muda Yusuf, director-general of the Lagos Chamber of Commerce and Industry (LCCI), Obafemi Olawore, executive secretary of Major Oil Marketers Association of

Foreign investors fleeing Nigeria as oil prices plunge are leaving stocks undervalued in Africa’s biggest economy, the bourse’s chief executive officer, Mr. Oscar Onyema has said.

The benchmark index’s 18 per cent decline this year isn’t justified by economic changes and as a result Nigerian equities are “effectively on sale,” Oscar Onyema said in an interview with Bloomberg in Diani, Kenya.

“The fundamentals demand higher valuations.”

Nigerian stocks dropped as crude slid into a

The DHL Global Connectedness Index has ranked Nigeria 38 out of 140 countries and 12th worldwide on the breadth of connectivity.

DHL said in a statement yesterday in Lagos that the index was obtained after a detailed analysis of the state of globalisation around the world by the company’s Global Logistics Department.

The statement quoted the Managing Director of DHL Express, Sub Saharan Africa, Charles Brewer, as saying that the index was based on international flows of trade, capital, information and people.

It said Africa averaged the third largest increase in connectedness among all global regions in the last four years.

It noted that five countries — Burundi, Mozambique, Madagascar, Mali and Cote d’ Ivoire –showed the largest increase in

The host community to the Oil Mining Lease (OML) 29 has opposed the intention of the federal government to sell the oil block to interested buyers.

Anglo Dutch oil giant, Shell, has been offering several of its onshore oil assets for sale to interested buyers as part of global divestment strategy.

However, the host community to OML 29, Nembe Bassambiri, Bayelsa State, in a position paper on Tuesday, said it rejected any purported divestment or sale by the Shell Petroleum Development Company of Nigeria Limited (SPDC), Nigerian Agip Oil Company Limited (NAOC) and

European Commission President Jean-Claude Juncker has given details of a €315bn (£250bn;$393bn) investment plan to kick-start Europe's economy.

At the heart of his five-year agenda is a new €21bn fund, which would be used as "seed money", to entice private backers to "pitch in" most of the rest.

Only €8bn of the original money would come from the EU budget itself.

The project would take the burden off national governments, already facing big debts after the financial crisis.

"Europe needs a kick-start and today the Commission is providing the jump leads," he told the European Parliament in Strasbourg.

Critics have already suggested that

The US economy grew much faster in the third quarter than first reported, official figures have shown.

It expanded at an annualised rate of 3.9% between July and September, up from the 3.5% first estimated by the Bureau of Economic Analysis.

The rise, which follows a strong second quarter, means the US has seen its strongest two consecutive quarters of growth for a decade.

Consumer spending was the biggest driver of the raised estimate.

It grew by 2.2% according to the latest estimate, which was higher than the initial calculation of 1.8%.

Consumer spending is closely watched as it accounts fo

South Africa’s Business Event Celebrates 20 Years of Democracy

The South Africa National Convention Bureau (SANCB) is celebrating South Africa’s 20 years of democracy at EIBTM this year, by reflecting on the significant growth of the business events industry on the African continent.

South African Tourism, the official destination marketing organisation of South Africa, is also honouring the tenth anniversary of Meetings Africa, an event dedicated to showcasing Africa’s diverse offering of services and products.

The tenth edition of Meetings Africa, hosted by

The glitz and glamour of the World Travel Market held in London may have come and gone, but the event was an eye opener that African tourism remains a big force in world tourism as the continent’s representatives in unison said despite the Ebola epidemic in three West African States, nothing is going to stop tourism in Africa. Funke Olaode reports

The World Travel Market situated in Excel, East London has often been described as a place to showcase tourism and hospitality by stakeholders across the globe. And over the years, it has lived up to its expectation by parading the best. Between November 3 and 6, the world again converged on London to brainstorm on how to make the industry better.

Leading the Nigerian delegates was the

The price of a 50-kilogramme bag of imported rice hits N10,000 at the Mile 12 market in Lagos, for the week ending Friday, Nov. 21.

This is contained in the commodity index made available by Novus Agro Nigeria Ltd in Lagos on Friday.

The index showed that one bag of the commodity sold for N9,167 last week, recording a N833 increase.

Meanwhile, there is reduction in the prices of the 60kg bag of white garri, 100kg bag of maize and 100kg bag of onion, against the preceding week prices.

A 60kg bag of garri, which cost

Dangote Farms have started a pilot hybrid tomatoes production in Kano to meet the demand of it’s tomatoes processing plants in the state, its Managing Director, Alhaji Abdulhamid Kaita, disclosed on Friday.

Kaita told newsmen at the end of a two-day stakeholders’ forum on tomatoes value chain in Kano that the company had also introduced the hybrid seedlings to farmers.

He said the farmers, however, insisted that the seedlings be tried by the company’s farm before they could patronise it.

He noted that

Commerzbank to charge fees to biggest depositors

Germany's Commerzbank is to charge big corporate clients fees if they hold substantial deposits at the bank.

Commerzbank is the first major bank to make such a move and says it will encourage big clients to move cash into alternative investments.

Private savers and small and medium sized businesses will not be affected by the policy.

In June the European Central Bank (ECB) said that banks would have to pay to park money at the central bank.

That negative interest rate was an effort to

Following Thursday’s invasion of the National Assembly by security agents, Senate President and chairman of the National Assembly, David Mark, has shut down the federal parliament.

The pandemonium reached a climax when Mark, speaker of the House of Representatives, Aminu Tambuwal, alongside other members of the National Assembly, journalists and staff of the federal parliament were tear-gassed by security agents.

Consequently,

Bank of Industry says its empowerment funds have so far taken a total of 793, 428 Nigerians off the street as they have been gainfully employed across four key sectors of the economy in the last three years.

These sectors are agro processing, metals and solid minerals, gas/ energy and the creative economy.

The bank has also advised existing and prospective entrepreneurs in the country to learn from the business models of Promasidor Nigeria Limited and Globacom Nigeria, for bankable projects.

Data sourced from the bank showed that

The Nigeria Stock Exchange (NSE) main share index fell for the third straight day on Thursday, shedding more than 3 percent in volatile trading as investors sold off relatively liquid consumer and oil stocks, dealers said.

The index was down 1,091 points to 33,054 by 1021 GMT. Top decliners included Flour Mills of Nigeria and Nestle, both down more than 9 percent, while Oando lost 8.1 percent.

Dangote Cement, which accounts

Activity in some of China's factories and workshops hit a six month low in November, a fresh survey has shown.

The preliminary data from lending giant HSBC, called the purchasing manager's index (PMI), measures a number of variables including new export orders.

It showed that factory output contracted in November for the first time in six months.

China's manufacturing sector is a key driver of its economy, which is key to global growth.

The preliminary PMI reading came in at

Tech giant Yahoo will now replace online leader Google as the default search engine on Firefox's internet browsers in the US.

Yahoo said it would launch a "clean, modern and immersive design" search engine for Firefox users starting in December.

The news comes as Google's arrangement with Firefox maker Mozilla nears an end after a decade-long partnership.

Market leader Google accounts for 67% of searches from US desktop computers.

That compares to about

Quoted Fast Moving Consumable Goods Companies have mostly been affected by the insurgency ravaging huge swathes of Northern Nigeria, as data from their 2014 nine months results show flat growth in revenues.

Some of the Fast Moving Consumable Goods Companies that have released third quarter results include Nestle Nigeria Plc, Nigerian Breweries Plc, Flour Mills of Nigeria Plc, Unilever, Dangote Sugar Plc and GlaxoSmithKline Nigeria Consumer Plc.

The cumulative revenues of the six major players for the third quarter of 2014 (Q3 2014) remained flattish at N603.60 billion, data compiled by BusinessDay shows.

Analysts say the

The Central Bank of Nigeria, CBN has warned commercial banks operating in the country against placing unrealistic deposit targets on their marketers.

Mr Godwin Emefiele answering questions during his screening by the Senate for Central Bank Governorship in Abuja on Wednesday

The apex bank gave the warning during the 2014 Bank Directors Association of Nigeria stakeholders’ forum held in Lagos.

The warning is as a result of the current practice by some financial institutions in the country whereby prospective employees are forced to meet unrealistic deposit target as a pre-requisite for employment or promotion.

The practice, according to the CBN Governor, Mr. Godwin Emefiele who was

Access Bank Plc and Airtel Nigeria Limited have gone into a partnership to introduce a mobile money service known as Access Money.

The service allows customers to perform simple, secure and instant financial transactions using their mobile phones.

With the service, customers on the mobile network can send and receive money, make deposits and withdrawals, pay their utility bills and buy airtime for their lines.

In addition, it provides the ability for customers to receive money through agents nationwide or through cardless withdrawals from any Access Bank ATM machine.

Speaking at the launch of the product in Lagos yesterday, Group Managing Director of Access Bank, Mr. Herbert Wigwe said:

Eko Disco raises prepaid meter price by 60%

Electricity consumers seeking to transit from the old metering system to the prepaid metering under Eko Electricity Distribution Company (EKEDC) are to pay almost twice the initial price of the meter to get hooked up.

Godwin Idimudia, the manager, corporate affairs of EKEDC, confirmed to BusinessDay on Monday that the company has raised the price of the meter from about N25,000 to N39,375, an increase of about 60 percent.

“The cost of meter now is N39,375. We have new smart meters now that can be read directly from our various offices to guide against tampering and other vices. It is also in the interest of the customers that they will now be paying for exactly the energy consumed,” said Idimudia.

Owing to estimated electricity billing of consumers across the country, pressure has been mounting on

The Federal Government through the minister of Finance and the Co-ordinating Minister for the Economy, Ngozi Okonjo-Iweala, announced last Sunday, some measures to insulate the economy from the oil price slump.

A key measure announced was a cut of the 2015 oil benchmark price from $78 to $73 per barrel. BusinessDay investigations reveal that this measure was not reached in a haphazard or rushed manner, but based on statistical analysis – an Autoregressive Integrated Moving Average (ARIMA) model, and carried out over several months.

The new benchmark price is based on

Faults with Microsoft's cloud computing platform have knocked many third-party sites offline, as well as disrupting the US firm's own products.

Microsoft Azure's status page says problems began at 00:52 GMT across the globe. Its European operations are taking the longest to fix.

Access to Microsoft's Office 365 online suite of apps and its Xbox Live gaming facility are among services affected.

The faults could set back the company's efforts to sell Azure.

Microsoft is attempting to make gains on the market leader, Amazon Web Services, as well as IBM, Google and others offering rival products.

Their pitch is that

Shares in Areva have plunged after the French nuclear firm suspended its financial targets for 2015 and 2016.

The firm blamed delays to its Finnish nuclear project, a slower than expected restart for its Japanese reactors after the 2011 nuclear accident in Fukushima and a "still lacklustre" nuclear market for the decision.

Areva said it was reviewing both its mid-term funding plan and future goals.

The shares were down 15.5% in morning trading.

However, Areva said

The Nigeria Stock Exchange (NSE) recently experience sharp decline in market capitalization due to foreign investors exit from the market in apprehension of the impact of the decline in price of crude oil on the naira exchange rate.

Commenting on this development, some shareholders who spoke to Investors Forum described the foreign investors as casino players, who want to make money at the detriment of the economy, others attribute their action to fears of the outcome of the forthcoming election. Excerpts:

Alhaji Gbadebo Olatokunbo, shareholder activist: I will describe the foreign investors as casino players. I have been a stock market player for more than

Bank of Tokyo-Mitsubishi (BTMU) has been fined $315m (£200m) by US authorities for watering down a report about transactions involving Iran and other sanctioned countries.

Key warnings were removed from the report by PricewaterhouseCoopers (PwC), due to pressure from BTMU employees, New York State regulators found.

One BTMU employee resigned following the investigation.

Two others were banned from working with any New York banks.

"It is clear that

ANZ, one of Australia's biggest banks, has suspended seven traders as part of an inquiry into the potential rigging of key interbank interest rates.

The Australian Securities and Investment Commission (ASIC) has been investigating the country's interbank market since mid-2012.

Nigel Williams, chief risk officer of ANZ, said it was co-operating fully with ASIC.

The bank has been also been conducting its own investigation.

Mr Williams said:

Governments of the 36 states in the federation have requested to withdraw $2 billion from the country’s $4.11 billion oil savings account to complete projects and provide security ahead of February polls, Timothy Odaah, the chairman of the States’ Commissioners of Finance Forum, said on Wednesday.

Revenues to be distributed to

Shell Petroleum and Development Company has denied that it lied to a Dutch court in The Hague about oil pollution in the Niger Delta.

The multinational company, half owned by Nigerian government and with significant Dutch shareholding, said sabotage, not company negligence, caused the spills in 2004 along the Trans-Niger pipeline that destroyed several hectares of mangrove forests and the livelihoods of the residents of Goi village.

SPDC, according to AFP,

Ghana, yesterday, accused Nigeria of breaching the agreement between both countries to supply gas to Ghana, a situation that has worsened the country’s power supply.

Mr. Edward Bawa, Communications Consultant at Ghana’s Energy Ministry told a Ghanaian news medium that since the inception of the West African Gas Pipeline Project, Nigeria, which is responsible for supplying Ghana, Togo and Benin with natural gas, has proven to be unreliable.

“Since gas started flowing through the West African Gas Pipeline, Nigeria has demonstrated that they can’t be relied upon to give us gas,” he maintained.

According to him, Nigeria was supposed to send

The World Bank now expects the impact of the Ebola epidemic on Sub-Saharan Africa’s economy to be around $3-$4 billion, well below a previously outlined worst-case scenario of $32 billion, the bank’s chief economist for the continent said on Wednesday.

“The risk of the highest case of economic impact of Ebola has been reduced because of the success of containment in some countries. It has not gone to zero because a great level of preparedness and focus is still needed,” Francisco Ferreira said in Johannesburg, answering questions at a lecture.

In a report in October on the possible economic impact of the Ebola epidemic, the World Bank had said

The Central Bank of Nigeria (CBN) and key players in the power sector, including gas suppliers, electricity distribution and generation companies, among others, on Tuesday signed a N213 billion definitive agreement to begin the implementation of the CBN-Nigeria Electricity Market Stabilisation Facility (NEMSF).

This is expected to be followed by disbursement of funds and monitoring of the implementation of the agreements.

Speaking at the ceremony in Abuja, the CBN Governor, Mr. Godwin Emefiele, said the intervention would reset the economics of the power sector and address liquidity challenges occasioned by legacy debts and revenue shortfall in the sector.

He said all parties have had to make compromises in order to make progress in the interest of the country.

Emefiele however stated that

Man United revenues down over Champions League failure

Manchester United has said that its revenue fell by 9.9% to £88.7m for the three months to the end of September.

The Old Trafford club lost out on payments from Nike from failing to qualify for the Uefa Champions League.

The fall in income could have been more but was partially compensated for by an increase in sponsorship money and a lower wage bill.

Club boss Ed Woodward said 2014-15 financial results would reflect "absence from the Champions League".

But he said the club had

Delta State government has said it will pay N90 million to offset the 9 percent interest rate on the Central Bank of Nigeria's (CBN's) N2 billion micro, small and medium enterprises development loan to the state for disbursement to small and medium scale entrepreneurs.

Governor Emmanuel Uduaghan who stated this on Tuesday during the official disbursement of the first tranche of the funds in Asaba, maintained that his administration would continue to develop human creative capacities forthe creation of economic values.

Uduaghan said

The number of people killed in militant attacks worldwide jumped more than 60 percent last year to a record high of nearly 18,000 and the figure could rise further in 2014 due to an escalation of conflict in the Middle East and Nigeria, a report showed on Tuesday.

Four Islamist groups operating in Iraq, Syria, Afghanistan, Pakistan and Nigeria were responsible for two thirds of the 2013 attacks and the vast majority of the deaths occurred in those countries, the Australia and US-based Institute for Economics and Peace (IEP) said in its Global Terrorism Index.

However, militant attacks are

The Ondo State Board of Internal Revenue monday sealed off offices of Zenith Bank Plc in Akure and Ondo Town over failure of the bank to remit about N100 million tax due to the state government.

The sealing of the bank’s premises was carried out by the board officials led by the Director, Management Services, Legal and Enforcement Department, Mr. Emmanuel Akinmutimi, who was accompanied by security personnel.

However, when contacted, a source at bank who pleaded to remain anonymous said the matter would be resolved amicably.

The officials of the state agency were said to have stormed the banks premises as early as

UK inflation rose to an annual rate of 1.3% in October, up from 1.2% in the previous month, official figures show.

The slight increase moves the rate, as measured by the Consumer Prices Index (CPI), above its recent five-year low.

The Office for National Statistics (ONS), said the marginal rise was because transport costs fell by less than they did a year ago.

In addition, prices in the recreation and culture sectors rose, particularly for computer games and toys.

However, the price of food and non-alcoholic beverages fell by

Thursday 27 November 2014

Wednesday 26 November 2014

Saturday 22 November 2014

Thursday 20 November 2014

Wednesday 19 November 2014

Tuesday 18 November 2014