fbpx
Nigeria B2B Links

NEWS UPDATE (Tues. 14.01.2020)

WAPIC EXTENDS N5.9 BILLION RIGHT ISSUE

Wapic Insurance Plc has extended the offer period for its rights issue of 15,613,194,623 ordinary shares of 50 kobo each at N0.38 per share on the basis of seven new share ordinary shares for every six ordinary shares held as at the close of business on September 19, 2019.
A statement signed by the Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai, disclosed that the Securities and Exchange Commission (SEC) had approved a further extension of the Rights Issue which was initially scheduled to close on Tuesday, 31 December 2019 to Friday, 10 January 2020.
With this development, Wapic Insurance plans to raise the sum of N5.9 billion from the Rights Issue so as to achieve its goal of increasing its capital base to meet the new capital requirements stipulated by the National Insurance Commission (NAICOM).
According to the insurance firm, the N5.9 billion will serve as investment funds which will be channeled to Wapic Life Assurance Limited and Wapic Insurance (Ghana) Limited.
Recall that the shareholders of the company had at last year June approved that the authorised capital base be increased to N15 billion in the light of ongoing recapitalisation exercise in the industry. The new capital base would ensure that the company continues to exist and wax stronger after the recapitalisation exercise.

LEADWAY ASSURANCE APPOINTS NEW CEO

Leadway Assurance Company Limited has announced the appointment of Tunde Hassan- Odukale as its new Managing Director/CEO effective from January 01, 2020 after the retirement of Oye Hassan-Odukale.
A statement by the company stated that Tunde Hassan-Odukale has been a key member of Leadway’s executive and leadership team since 1999, previously serving as the company’s Executive Director, Financial Services and Systems.
After three decades of nurturing the company in executive capacity, Oye has picked this moment to bow out, the firm said.
During his tenure, Oye saw the business grow from a small regional company into one of Nigeria’s foremost insurance companies, attaining the number one position in terms of Gross Premium Income (GPI) and balance sheet size.
Announcing Tunde’s appointment, the outgoing CEO, Oye Hassan-Odukale stated that, “In his 30 years of leadership experience at the company, Tunde has been the driving force behind the tremendous growth seen in the areas of life assurance, investments, finance and technology. Thus, this makes him a natural successor to steer Leadway to its next phase in history.”
Oye commended the professional team of the firm, emphasizing his confidence that “Tunde will build on the company’s legacy with their unflinching and committed support.”
Tunde, 55, is a graduate of the University of London and City University, London. He holds a Bachelor Degree in Pure Mathematics and is an alumnus of the Lagos, London, Harvard and Stanford Business Schools.
He sits on the board of directors of various blue-chip companies, which includes First Bank of Nigeria Limited. He is also a member of the Royal Society of Mathematics, the Institute of Actuaries and the Institute of Directors.

7.5% VAT KICKS OFF AS BUHARI SIGNS FINANCE BILL

With Monday’s signing into law of the Finance Bill, President Muhammadu Buhari has triggered the operationalisation of the 7.5% Value Added Tax (VAT) as proposed.
The Value Added Tax is proposed to increase from 5% to 7.5%.
The 2020 Budget projections are based on this new VAT increase with States and Local Government Authorities (LGAs) expected to benefit more from the VAT increase.
The objectives of the Bill, as outlined by President Buhari, are to strategically: “promote fiscal equity by mitigating instances of regressive taxation; reform domestic tax laws to align with global best practices; introduce tax incentives for investments in infrastructure and capital markets; support small businesses in line with the ongoing Ease of Doing Business Reforms; and raise revenues for the Government by various fiscal measures, including a proposed increase in the rate of Value Added Tax (VAT) from 5% to 7.5%.”
The key highlights of the new tax law are that banks will request for Tax Identification Number (TIN) before individuals are allowed to open bank accounts while existing account holders must provide their TIN to be able to operate their accounts.
By this Act, Non-residents who provide imported technical and management services in Nigeria will be taxable at a final Witholding Tax rate of 10%; Dividends distributed from petroleum profits will attract 10% withholding tax.
Those that will be affected by this law will be those with investments in oil and gas.
A minimum tax provision of 0.5% of turnover will apply to companies without profit and are unable to pay Company Income Tax (CIT) and exemption will only apply to small companies that record less than ₦25 million turnover.
Non-resident companies will now pay minimum tax. Specifically, small businesses with turnover less than ₦25 million will be totally exempted from Companies Income Tax (CIT) and entities with less than ₦25 million in turnover are exempted from VAT registration.
Going forward, CIT rate of 20% now applies to medium-sized companies with turnover between ₦25 million and ₦100 Million. This is to boost Small and Medium Enterprises (SMEs). The law will now allow the use of Emails as a communication medium with tax institutions particularly the FIRS and State Revenue Agencies.
Early payment of Company Income Tax has been incentivised with the deduction of 2% of tax payable by medium-sized companies and 1% for large companies.
Henceforth, Stamp duty on bank transfers will apply to amounts from ₦10,000 and above.
Transfers between the same owner’s accounts in the same bank will be exempted. Electronic bank transfers included.
Taiwo Oyedele of PriceWaterhouseCoopers in an interview with TVC noted that “by increasing VAT from 5% to 7.5% at 2019 or 2018 level of performance, you are going to raise around ₦550 billion.
‘’Now when you raise ₦550 billion only 15% goes to the Federal Government, 50% goes to the states and 35% to the local government.
‘’All together that is not going to move the needle in terms of bridging the budget deficit but may be its a baby step in the right direction.”
A positive take on the new VAT initiative Oyedele added is that the “burden does not fall on the vulnerable and poorest people in the society as well as small businesses.
Which is what I think that government has tried to do with the finance bill by expanding the list of exempt items and then creating a threshold for small businesses not to have to worry about charging VAT on their goods and services.”
He described the bill as “a reform measure which I think is good if you are able to enable businesses grow, you can create more employment and then that way you can generate more revenue from VAT because more people can consume because they have more buying power and if businesses become more profitable they can pay more taxes so altogether I think it’s a positive development.”

FOREX MARKET TO WITNESS STABILITY IN 2020

THE foreign exchange (forex) market will witness stability in 2020, while the Central Bank of Nigeria (CBN) will continue to sustain its Open Market Operation (OMO) sales at high interest to continue to attract foreign investors.
This was the position of analysts at Cowry Asset Management in a research note: “Outlook and Investment Strategies for 2020”.
They said there would be an attempt by the monetary authority to drive down interest rate to single digit, adding that the Monetary Policy Rate (MPR) might be adjusted down to 13 percent from 13.5 percent to accentuate the permanency of low rate regime, at least in the medium term.
They said: “We expect CBN to sustain its OMO sales at high interest rates in order to attract foreign portfolio investors and maintain foreign exchange rate stability as OMO interest mature. This is because anticipated liquidity glut will depress interest rates and result in negative real returns on investment, a situation that could lead to a reversal of foreign exchange flows as well as speculative attacks on the Naira.
“Furthermore, we anticipate favourable global crude oil prices which in addition to sustained crude oil output – on account of relative stability in the Niger Delta – should lead to sustained crude oil dollar revenues, boosting Nigeria’s external buffers.”
On the anticipated effort to drive down interest rate to single digit, they said: “We believe the monetary authority will remain aligned with the fiscal authority’s economic growth objective by seeking to create and sustain conditions that will boost liquidity in the financial system in order to drive down interest rates to single digit.
“Thus, we expect interest rates to remain suppressed in 2020. In a complementary move, we suspect the Monetary Policy Rate may be adjusted downwards from 13.50 percent to 13 percent in order to further signal its expansionary monetary policy regime. This should result in a downward spiral of deposit rates as well as lending rates of commercial banks.
“Furthermore, we expect the monetary authority to continue to perform OMO auctions at attractive interest rates above the prevailing inflation rate in order to retain foreign portfolio investors, and hence, ensure exchange rate stability.”

BUA CEMENT SHARES UP 6.63% TO N41 PER SHARE

THE shares of BUA Cement Plc rose again by 6.64 percent on Friday, a day after its listing on the Nigerian Stock Exchange (NSE) following buy interest from investors. The stock, which was listed at N35 per share, rose to N41 after investors bought 8.198 million units valued at N336.14 million in 161 deals.
The share price had risen maximally by 9.9 percent after the listing on Thursday to N38.45 per share, bringing its cumulative gains for the two trading days to 17.1 percent.
The listing of the company, which has effectively become the third largest capitalised entity on the stock market, followed the merger of Cement Company of Northern Nigeria (CCNN), previously a listed company and Obu Cement Limited, which resulted in the listing of a bigger entity – Bua Cement Plc.
Consequently, the entire 13.14 billion ordinary shares of CCNN were delisted from the Daily Official List of the Nigerian Stock Exchange, while the entire 33.86 billion ordinary shares of 50 kobo each of BUA Cement Plc were listed. Mr. Yusuf Binji, Managing Director, BUA Cement, had assured at the listing that shareholders of the enlarged company would benefit from the expected increase in profitability and dividend.
“The merger will increase the production capacity of the enlarged company to 8.0 million metric tonnes per annum (mtpa). It is anticipated that in addition to meeting the demand from customers in our core regions in the country, the enlarged company would be positioned to distribute its products in new geographical markets, creating the potential for additional shareholder value creation.
“The merger will provide a platform where the enlarged company benefits from economies of scale in procurement, distribution and manufacturing of the products offered to our customers. We expect the benefits accruing from greater economies of scale to accrue to many stakeholders,” he said.
He explained that the merger would provide opportunities for significant cost savings and improved operational efficiencies by streamlining operations and optimising the use of combined resources.

  1. WAPIC EXTENDS N5.9 BILLION RIGHTS ISSUE
  2. LEADWAY ASSURANCE APPOINTS NEW CEO
  3. 7.5% VAT KICKS OFF AS BUHARI SIGNS FINANCE BILL
  4. FOREX MARKET TO WITNESS STABILITY IN 2020
  5. BUA CEMENT SHARES UP 6.63% TO N41 PER SHARE

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More