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NEWS UPDATE (Mon.30.09.19)

NIGERIA’S MOBILITY SECTOR

When Uber invented the modern ride-hailing, it was built on the construct that the operator of the asset is largely the owner of the asset. By doing that, the Uber business model stays asset-light since the vehicular assets are not in its balance sheet. In north America and western Europe, that model works just fine: there are people with cars, and they can put them on the streets to earn extra income.

But in the emerging economies like India and Nigeria where people (yes, potential drivers) do not have access to assets and do not own any, the Uber model struggles. That is why Ola, an India-based ride-hailing company, plans to acquire one million electric cars to pursue its mission. In short, companies like Ola will be the main car buyers, in most parts of Southeast Asia, in coming years, as ride-hailing continues to advance.

Then, when you come to Nigeria, you will notice that entities like Gokada and Max technically own (partially or otherwise) most motorbikes in their platform-fleet. The business model is to do“hire purchase” with the drivers who then pay over time for the assets. The drivers do not own the assets until they finish making the full amounts. Once that is done, the drivers can become owners of the assets.

The hire purchase is a local adaptation to deal with supply paucity in an ecosystem where the drivers may not have the means to acquire assets. Sure, the companies carry the assets in their balance sheets, but without that in the playbook, there is no other option. Of course, they do claim assets-light because most will have a special purpose vehicle (SPV) for the financing of the assets. Yet, the African proverb notes that a bird that is perching on the anthill is still on the ground!

Open your mind as you examine any Silicon Valley playbook. The adaptation in the local ride-hailing domain has been critical to the promise in the mobility sector in the nation. Do same as you work in your sector.
It is important to understand that what Silicon Valley tech titans do in U.S. is different from their playbooks in Africa and other emerging regions.

Google is a quasi-payment company in India even though it has none of such in U.S. Facebook is investing in connectivity systems in Africa when in U.S., it was not an issue. Yes, for every new sign-up Facebook gets, Wall Street watches: IP address is IP address. .My point is that these U.S. firms are not doing them for charity, they have to become parallel ecosystems to pursue their missions. Yes, they have to do things beyond that core mission which they have pursued in America because they do not have other entities helping them to fix the enabling frictions in emerging markets.
Remember – never start a company, rather, go out and solve a problem. If you understand that line, your mission will blossom.

ANT FINANCIAL PLANS TO HIT IPO

Alibaba acquired a 33% stake in Ant Financial, the fintech unit Jack Ma controversially spun out of Alibaba Group in 2011. Alibaba first floated the idea of acquiring equity in Ant last year but regulators only just approved the purchase.

The equity interest cancels Ant and Ali’s previous profit-sharing deal, where the fintech unit paid a 37.5% on profits to Alibaba. Analysts see the deal as a sign that Ant Financial is preparing for an IPO. (Fortune)
Why it matters: The deal further strengthens Alibaba’s relationship with the fintech firm and bumps up its valuation. The transaction hints that Ant Financial’s long-anticipated initial public offering (IPO) could be near. Ant Financial is one of the world’s most valuable startups after closing a record $14 billion fundraise at $150 billion valuation in June.
Meanwhile, Facebook’s digital; currency, Libra, will not stock the yuan in its currency basket. The exclusion could be a way to win favor with Facebook’s U.S. home market, where officials are wary of China’s growing economic influence. The governor of China’s central bank had noted that China will launch a national cryptocurrency.

NSE: INVESTORS LOSE N12 BILLION IN FIVE DAYS

The market had started the week on a bearish note as the benchmark index dipped by 0.17 per cent to 27,650.28 points, following sell-offs in Dangote Cement and Access Bank. Thus, the Month-to-Date market return moderated to +0.45 per cent, while the Year-to-Date loss worsened to -12.03 per cent while market capitalisation fell by N20 billion to N13.463 trillion.
The domestic bourse sustained Monday’s bearish outing as sell-offs in Stanbic IBTC, GT Bank and MTNN drove the All Share Index (ASI) southwards by 1.08 per cent to 27,352.24 points. Consequently, YTD loss worsened to -13.0 per cent while market capitalisation declined by N138 billion to N13.325 trillion.
Wednesday’s session further closed in the red as the ASI shed 0.5 per cent to settle at 27,283.05 points on the back of sell-offs in the shares of Dangote Cement, MTNN and Zenith Bank. Consequently, investors lost N44 billion in value as market capitalisation declined to N13.281 trillion while YTD loss worsened to -13.2 per cent.
The Nigerian equities market halted its losing streak on Thursday, as investors, late interest in Nestle and Seplat drove the market to a positive return. Hence, the benchmark index widened by 1.09 per cent to settle at 27,579.85 points.
Also, the Month-to-Date return for the market turned positive (+0.20 per cent), while Year-to-Date losses moderated to -12.25 per cent.
Friday’s session saw sustained bull run as the ASI closed in the green, up by 0.35 per cent to close the week at 27,675.04 points while market capitalisation closed at N13.472 trillion. This means that investors lost about 12 billion from N13.484 trillion posted as at last week.
At the close of trading on Friday, 17 stocks depreciated in value while 14 others appreciated in value. CCNN topped the losers’ chart with 9.94 per cent to close at N14.95 per share, LearnAfrica followed with 9.68 per cent to close at N1.12, NAHCO dropped 9.65 per cent to close at N2.34, Chip Plc declined by 9.09 per cent to close at 0.30 kobo while Cornerstone lost 8.70 per cent to close at 0.42 kobo.
On the flipside, Seplat topped the gainers’ chart with 10 per cent to close at N556.60 per share. Total was next with 9.09 per cent to close at N120, Airtel Africa increased by 8.64 per cent to close at N308, Wapco rose by 6.67 per cent to close at N16 while Chams garnered 4.35 per cent to close at 0.24 kobo.
Access Bank was top on the activity chart with 68.27 million shares sold at a value of N544.58 million. Transcorp sold 24.99 million shares worth N25.09 million while GT Bank traded 22.11 million shares valued at N613.13 million.
Overall, the volume and value of shares traded stood at 187.29 million units and N2.12 billion, respectively exchanged in 2,942 deals.
Positive noises from China on U.S. trade talks had lifted European stocks on Thursday and snuffed out a modest rally in safe-haven assets that had dominated in Asia and this is said to have a mild impact on Nigeria’s stock market.
Europe’s main bourses had initially stuttered, but muscled 0.5 per cent higher when China said it was in close communication with Washington and preparing to make progress in upcoming trade talks.
U.S. President Donald Trump had also stoked hopes when he told reporters the two sides were having “good conversations” and that an agreement could be reached.
Reviewing the weekly performance of the market, the Chief Operating Officer, InvestData Consulting, Ambrose Omordion, attributed the development to continued sell down and profit-taking ahead of quarter-end window dressing by fund managers and onset of the third quarter earnings reporting season in October.
For his part, Head, Research and Investments, FSL Securities Limited, Victor Chiazor, noted that the Nigerian market is down currently as a result of global oil prices, as well as the sluggish growth of the nation’s economy.
Chiazor said: “Once your economy is not moving as fast as expected, the market will suffer, Q2 GDP was out at 1.94 per cent which clearly shows that the economy is not moving as fast as people would have hoped as it fell lower than Q1.
“Also we are having issues around oil prices which remain Nigeria’s source of revenue. We have seen a lot of volatility in that space and that is going to send wrong signals to the market.
Once the foreigners are not buying shares, the market will remain bearish because they dominate a significant portion of the market.
“In August, foreign participation was about 52.3 per cent compared to domestic participation which accounted to about 47.6 per cent, clearly showing that they are the drivers of our equities market. Until they see reason to come into the equities market on a large scale, we might not see that activity. A lot of funds are not coming into the market as it should despite the low prices seen in the market”.
He maintained that with the new economic team there might be a probability of the bulls returning to the market in the shortest time.

TIGER BEER RELAUNCHED

Tiger Beer – a product of Nigeria’s brewer, Nigerian Breweries Plc – was recently relaunched through an “Uncage Party”, at the Landmark Beach, Victoria Island, Lagos, to reintroduce itself to fearless and restless young Nigerians across the country.
The event featured a host of celebrities and consumers who got the chance to try out a series of exciting activities and “uncage”, as Tiger beer marked a new dawn in the Nigerian beer industry.
The Tiger beer brand which is enjoyed in over 60 countries has been the brand known for its laudable advocacy for uncaging the pragmatic and resourceful sides of its consumers, breaking limitations, defying expectations, challenging conventions and setting new frontiers just like the beer brand itself.
Commenting on the relaunch, Brand Manager – International Premium, Nigerian Breweries Plc., Chinwe Greg-Egwu, spoke of the brand’s commitment to remaining the uniquely brewed brand which is championing the cause for young daring Nigerians who are unafraid to break the norms.

ETRANZACT TURNOVER HITS N18.62 BILLION IN 2018

Despite the harsh business environment and plummeting consumer spending, eTranzact International Plc, Nigeria’s leading electronic and mobile payment processing company, grew its revenue by 59 per cent in 2018.
The financial statement presented to the shareholders at its 15th Annual General Meeting (AGM) held in Lagos shows that the company’s turnover increased from 11.68 billion naira in 2017 to 18.62 billion naira in 2018.
Speaking at the AGM, Chairman, Board of Directors of the company, Wole Abegunde, said eTranzact has entered into new strategic partnerships and created innovative products that would lead to even better performances in the coming years.
Abegunde said: “The Company fully understands the benefits of strategic alliances and the potential business opportunities these can create. We have fostered new relationships, enhanced and deepened existing ones and explored newer opportunities within the ongoing associations with existing partners. We are positive that our alliances will lead to improved performances in the years ahead.”
According to him, the company’s product, PocketMoni was honoured as the Mobile Money Operator of the Year by the Central Bank of Nigeria (CBN) and the National Interbank Settlement System in 2018, will continue to adopt global best practices in its quest to become a leader in both regional and global markets.
The Chairman reinstated eTranzact’s unwavering commitment to strong corporate governance policies and robust risk management framework, which he said are critical to delivering superior value to all stakeholders.
Its Chief Executive Officer, Niyi Toluwalope, noted that the unprecedented growth in revenue was driven by the growth in the public sector business, the deepening of its financial inclusion and innovative product offerings.
eTranzact International Plc, which launched its operation in 2003, has evolved into a global brand, providing cutting-edge payment solutions that are driving web, mobile, point of sale and automated teller machine payment processing.

  1. NIGERIA’S MOBILITY SECTOR
  2. ANT FINANCIAL PLANS TO HIT IPO
  3. NSE: INVESTORS LOSE N12 BILLION IN FIVE DAYS
  4. TIGER BEER RELAUNCHED
  5. ETRANZACT TURNOVER HITS N18.62 IN 2018

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