Stories by Chinenye Anuforo
The master plan is a product of key committees inaugurated by the Securities and Exchange Commission (SEC) in 2013 to work on long-term blueprints for the capital market for non-interest capital market and for capital market literacy.
The reports from these three committees were consolidated to form the 10-year Capital Market Master Plan from 2015 to 2025, which was launched in November 2014.
The plan outlines ambitious initiatives whose implementation will engender emergence of a more robust capital market capable of financing socioeconomic development priorities of government.
Also, Nigerian economy stands to benefit from implementation of the capital market master plan in a number of ways.
Diversification of the economy
According to capital market experts, the master plan anticipates growth in the capital market that will translate into and drive development of the real sector and, in fact, all sectors of the economy. “A key strategic theme of the master plan is to drive and facilitate capital raising across industries and by all tiers of government. This will facilitate sustainable national development and transformation of critical sectors such as agriculture, solid minerals, ICT and education.”
The market is being reformed to considerably expand its capacity for domestic funds mobilisation and become at all times, the preferred choice for capital raising by both businesses and government. Developing a strong local capacity complemented by foreign capital is a priority of the master plan.
With the current focus on the development of agriculture, experience has shown that effective off-taken system for producers and farmers goes a long way in stimulating production and growth of the agriculture sector. Companies presently engaged in the processing of agricultural produce for export are beleaguered by high cost of production and absence of reliable off-take contracts, among others.
Part of addressing the challenges facing agriculture in Nigeria will require the existence of well-functioning commodities exchange and well funded processing factories. The master plan therefore advocates the development of a thriving commodities trading ecosystem. This will not only aid the diversification of the economy and foster real GDP growth, but will create jobs within the value chain of the ecosystem thereby engendering inclusive growth.
Infrastructure development is a key growth driver with significant multiplier effect on the economy of a country. Investment infrastructure is acknowledged as one of the quickest means of stimulating an economy particularly in times of recession. The master plan envisages that the capital market will be an important source of funding infrastructure projects through a variety of instruments by which the Federal Government, its agencies, state governments and other entities can raise funds.
That is why SEC appreciates both the promise and the enormity of the challenges that come with deploying the capital market to mobilise funds for development. The SEC DG, Mounir Gwarzo, had earlier said, “the capital market must begin to assert itself as the most reliable medium for government to source for funds to finance critical infrastructure. Our infrastructure needs are too massive to be dependent on the meagre yearly budgetary allocation.”
It is true that some state governments have gone to the market before now. It is estimated that over N545 billion worth of bonds issued by state governments have been approved and processed by SEC.
Experts argued that instruments like these, if well-structured with necessary safeguards, should be attractive to Pension Fund Administrators (PFAs) with N6 trillion assets under management. There are also collective investment schemes focused on bonds and infrastructure asset classes, which would be attracted to government’s infrastructure instrument.
Inclusive growth and macroeconomic stability
The capital market master plan will ensure that more entities in the real sector would be encouraged to seek listing and funding from capital. Sectors such as telecommunications, power, agriculture, solid minerals, oil and gas and SMEs would be among targets. Listing will give Nigerians the opportunity to be part of their own companies in these sectors, share in their successes while deepening the capital market and improving visibility.
Increase funds for development
Businesses and projects require a constant supply of funds. The master plan highlights initiatives to improve long term savings by Nigerians, which can be harnessed for investment. This will provide funds that can be channeled through the capital market infrastructure and project financing.
NSE delists 6 stocks from official list
Following the approval of the Quotation Committee, the Nigerian Stock Exchange (NSE) has delisted six companies from its official list effective December 1, 2016.
The delisting is due mainly to their inability to comply with the listing rules and regulations guiding quoted companies.
The affected companies are Lennards Nigeria, PS Mandrides Nigeria Company, Premier Breweries, Costain (WA), Navitus Energy and Nigerian Ropes Plc.
Meanwhile, between January and October 2016, the NSE has delisted nine companies from its operations for mostly failure to comply with regulations.
Delisting involves removal of listed securities of a company from a stock exchange where it is traded on a permanent basis.
Data obtained from the Exchange indicates that the companies include IPWA Plc, G. Cappa, West African Glass Industries, Investment & Allied Insurance and Alumaco. Others are Jos International Breweries, Adswitch, Rokanna and Vono Products Nigeria Plc.
Eight of the companies were delisted for regulatory issues, while Vono Products was delisted because of its merger with Vitafoam.
Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi, said that breach of post-listing requirements, failure to pay the annual listing fee or a company in liquidation were the major reasons for delisting of companies. Uwaleke said that non-submission of audited and unaudited reports as required by the Exchange increased the chances of delisting.
“Other issues bordering on corporate governance may attract sanctions such as trading suspension, which is lifted as soon as the matter is resolved. To avoid being delisted, the management of a quoted company should endeavour to comply with NSE post-listing requirements,” he said.
He stated that delisted companies should be encouraged to list on NASD over the counter platform to provide a secondary market window for the shareholders of such companies.
Uwaleke called on SEC to ensure that shareholders of liquidated companies benefit from its National Investor Protection Fund (NIPF) as a way of compensation.
President, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said shareholders suffer most whenever a de-list from the Exchange occurs.
Okezie said that market regulators, going forward, should ensure proper scrutiny of companies before listing and their ability to adhere to post-listing requirements.
He said that shareholders must not bear the pain because regulatory agencies are the ones that approve the accounts that attract investors.
Union Bank launches elite banking in Abuja
As part of its commitment to provide a range of personalised banking services to its customers, Union Bank, a leading financial institution, recently launched its Elite Banking Segment for the emerging and established middle class in Abuja.
At the segment launch, which took place at the bank’s Abuja Main Branch, elated guests and customers of the bank commented on why its Elite Banking Segment represents another innovative service for them in Abuja.
Speaking with newsmen at the event, Ikechukwu Oliya, a customer of the bank, said, “my experience as a Union Bank customer has been very rewarding. Union Bank has been in existence for a long time and it is very satisfying to know that the bank keeps providing useful solutions to its customers’ banking needs.”
With the launch of the segment, the emerging middle class in Nigeria can enjoy benefits and value added banking service, which are usually reserved for high net worth individuals. Some of these include an elite associate or relationship manager dedicated to them, access to exclusive elite lounges at select Union Bank branches where they can carry out banking privately and priority pass cards, which, among other benefits, grants them access to 850 airport VIP lounges around the world.
The Elite Banking Segment also offers benefits such as accounts with zero maintenance fees, higher interest rates, premium discounts on loans, discounts at select local partner stores and an Elite Debit Card, which gives customers automatic membership to the MasterCard Platinum programme where they can enjoy exclusive lifestyle offers on travel, dining, entertainment and lots more.
Addressing guests at the event, Dayo Odulate, Head, Elite and Royalty Banking, confirmed the bank’s promise to provide customers with access to unique banking services that fit their lifestyle needs.
She said, “Union Bank recognises the need to pay special attention to the middle class. From regular conversations with our customers, we realised the need to address the gap in service delivery to this economic class in the country and the Elite Banking segment has been designed to plug that gap.
“With the proposition, ‘It’s All About You’, we are showing how we intend to engage our Elite Banking customers across Nigeria. From personalised service by dedicated relationship managers, to higher interest rates on savings and investments and special discounts on loans, we intend to support them fully in achieving their life goals and dreams.”
Speaking with guests at the event, Ibrahim Kwargana, Executive Director, Public Sector, Union Bank, emphasised the bank’s commitment to focus on customer segments in order to satisfy the real needs of each segment.
“With the feedback from the public, we have segmented our customers and this has aided the bank in providing essential and precise banking services that truly benefit the customers, depending on the segment they belong or aspire to,” he said.
He continued by saying, “the introduction of the Elite Banking Segment is our way of rewarding hardworking Nigerians in the middle class by providing benefits that help them achieve their personal goals. The launch of this segment is in line with the bank’s objective to provide simpler and smarter banking solutions and we are pleased to present this new offering to our esteemed customers,” he concluded.
Millionaires emerge in Diamond promo
More winners have emerged in the DiamondXtra directorate draw where 41 lucky customers were rewarded with cash prizes and a star prize of a Hyundai SUV at the Season 8 grand finale draw held in Lagos recently.
Speaking at the event, which held at the Oshodi branch of the bank, Head, Retail Performance, Lagos/West District, Chigozie Onyeocha, stated that Diamond Bank’s sincerity in purpose is highlighted in the fact that eight years after the inception of the SavingsXtra scheme, the bank still retains the same passion to rewarding its loyal customers.
He informed the gathering that Diamond Bank Plc has given out over N4 billion over the course of the promotion. In his words: “Diamond Bank is committed to meeting the needs of all our customers nationwide. We are inspired to do more for new and existing customers and the SavingsXtra reward scheme is just one of the ways in which we say thank you for being loyal to the bank.’’
He further explained that to qualify for the draw, all a customer needs to do is maintain a minimum monthly balance of N5,000. Each sum of N5,000 represents a single entry meaning that additional deposits will represent multiple entries thereby increasing the customer’s chances of winning.
Present at the event were representatives from the National Lottery Commission and leading audit firm, KPMG, who endorsed the authenticity of the draw process, which saw 10 customers win N1 million, 30 customers win N500,000 and one lucky winner drive home the star prize of a brand new SUV.
The ceremony also had in attendance past winners who came to share testimonials of how Diamond Bank has improved their lives through the SavingsXtra promo.
Onah Emeka, a past winner in the salary-4-life category, said he didn’t believe until he went to his branch. He stated that with his earnings, he has started building a house and has been able to boost his provision business to suitably take care of his family.
Adebayo Omotunde whose story aroused emotions within the gathering, said he had lost all his goods to a fire accident and was without hope before he got the call that he had won in the Diamond SavingsXtra promotion. He further stated that the money he received has greatly helped him stabilise and he is currently flourishing as a land developer.
Diamond Bank, through the DiamondXtra reward scheme, has continued to impact positively on lives and families across the nation since 2008.