FOREIGN INVESTORS DROP NIGERIAN STOCKS WORTH N275 BILLION IN 2019
The value of Nigerian stocks bought by foreign investors dropped from N1.22 trillion in 2018 to N942.55 billion as at the end of 2019, as hope for reforms that could boost the Africa’s biggest economy fizzled.
Report from the Nigerian Stock Exchange confirmed that more than half of the N942.55 billion transactions were recorded for sale of stocks.
What it means: Investors increased the pace of outflows last year after President Muhammadu Buhari took office for the second term but failed to appoint a cabinet until months later.
Funds sold out of the banking, consumer and oil sectors as capital flight worsened, piling pressure on the naira.
The International Monetary Fund (IMF) has projected that Nigeria’s economy would growth at 2.5% this year and next.
NoSimilar to stocks, investors also cut their participation in Nigerian government bond auctions last year. Instead, they piled into treasury bills supported by central bank’s policies.
A stockbroker, Funso Oluwole, explained that the President has pursued protectionist policies since he took over office in 2015, a development he said does not help the economy and scare some foreign investors.
NIGERIA GOVERNMENT BORROWS 72% OF PENSION FUNDS
This is a surprising discovery: the federal government of Nigeria has borrowed 72% of pension funds, and then invested the funds in government securities. With government securities (read treasury bills and bonds) returning dem-go-dey-pose returns, those funds will not even beat inflation. We have a long way to go in Nigeria. This investment can be permanent which means these pensioners may get into a loop where government becomes unable to return the funds. Also, the private-sector capital markets will miss the liquidity which the pension funds could have injected into the markets. Government taking this lot means stocks of private companies will lose.
The total pension assets under the Contributory Pension Scheme rose to N8.49tn as of the end of November 2018 financial period, latest figures obtained from the National Pension Commission on Tuesday revealed.
The pension commission said 72.5 per cent of the fund had been borrowed by the Federal Government and invested in the FGN securities totalling N6.16tn during the period under review.
TECHCRUNCH BAPTIZES NIGERIA AS CENTER OF AFRICA’S DIGITAL FINANCE
Here, TechCrunch baptizes Nigeria as the center of Africa’s digital finance: “more founders and VCs are opting for Nigeria as the epicenter for digital finance growth on the continent”.
On debate, the case could be made that 2019 was the year when Nigeria become Africa’s unofficial capital for fintech investment and digital finance startups.
Kenya has held this title hereto, with the local success and global acclaim of its M-Pesa mobile-money product. But more founders and VCs are opting for Nigeria as the epicenter for digital finance growth on the continent.
A rough tally of 2019 TechCrunch coverage — including previously mentioned rounds — pegs fintech-related investment in the West African country at around $400 million over the last 12 months. That’s equivalent to roughly one-third of all startup VC raised for the entire continent in 2018, according to Partech stats.
SEC GOES TOUGH ON ILLEGAL FUND MANAGERS
The Securities and Exchange Commission (SEC) has restated its determination to go after illegal fund managers in the country and ensure they are made to face the full wrath of the law.
Acting Director-General of the SEC, Ms Mary Uduk, who stated this in an interview with journalists in Abuja at the weekend, said what the commission had done apart from continuing to educate people, is to also go after the promoters of these schemes.
She said, “We are stepping up our enforcement mechanisms to ensure that they are apprehended and their offices sealed off. So many of them are being prosecuted in courts, we have secured convictions for some, and we have closed down so many.
“We verify ownership and return monies collected by them to the owners. It’s a problem around the world and we can tackle the problem by educating the public, telling them the right investments to make and the right places to put in their money.”
Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where the operator, an individual or organisation, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.
Ms Uduk, however, advised the investing public to be wary of any investment that is proposing return levels that are unreasonably high and advised investors to ensure that the fund managers and the products they are offering are registered with the commission.
“So, when people come to you and say that you can invest N50,000 today and in 2 hours, you will get N200,000 tomorrow or get 50 percent in 2 hours know that it’s is a lie.
“No legal investment that pays investment that way. So, what they must likely be doing is using your money to pay someone else and using someone’s money to pay you. It’s is important that we don’t engage in such investments.
“These fraudsters or promoters of Ponzi schemes are the false prophets of the investment environment; they are the ill wind that blows no good and at whose sight you must flee. They are to be avoided. This is one message you must take home to family, friends, relations and acquaintances in order to save them from the agony of loss of their hard-earned money,” the SEC chief said.
According to Ms Uduk, such ventures have no tangible business model, as returns would be paid from other peoples’ invested funds, making it a fraudulent investing scam.
The SEC boss, who restated the commission’s resolve to make the capital market more user-friendly to boost investors’ participation in the market, said the agency had been doing a lot in terms of education to increase investors’ knowledge of the capital market and enable them make informed investment decisions.
“There are new investible products in the Nigerian capital market. We have a lot of ethical funds. One of the safest areas to invest in is in mutual funds, and collective investment schemes and we encourage Nigerians to be part of these and others.
“The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value,” she said.
Besides, Ms Uduk stated that the SEC’s effort to migrate all shareholders to an e-dividend regime is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend.
“Unclaimed dividend is an undesirable feature of the Nigerian capital market, which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money that should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks that are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others,” she noted.
According to her, “There is gain in investing in the capital market and that is why we keep imploring investors to register for e-dividend and regularise their multiple Subscriptions so that they can benefit from their investments”
MTN UNVEILS NEW CAMPAIGN
MTN Nigeria has launched Turn it Up, an initiative to spur Nigerians to look within their environment to improve their lives.
With Turn it Up, Nigerians are encouraged to ‘turn up’ their creative, imaginative and innovative energies while MTN serves as an enabler. The company seeks to continue empowering Nigerians with the tools and connectivity for the right opportunities.
Speaking at the launch, Chief Marketing Officer, MTN Nigeria, Rahul De said “We want Nigerians to excel and attain their dreams and aspirations. This campaign is about changing and improving the quality of lives, encouraging Nigerians to rethink and embrace a new approach that reflects the changing dynamics of the world around us. This is what drives us to continue investing and exploring opportunities for Nigerians.”