An average Nigerian investor, especially first-timers unaware of the workings of Ponzi schemes, has suffered considerably. CHRIS UGWU writes that investors should be sceptical of any investment that requires new investors to pay existing investors
Following the rising rate of illegal fund managers in Nigeria, the Securities and Exchange Commission (SEC) and other stakeholders have continued to raise the alarm over the activities of these outfits that have defrauded unsuspecting Nigerian of their hard earned money.
The line of trade of these illegal fund managers, which are known as Ponzi scheme in the developed market, is usually tinted with promises of high returns on investments.
Continue reading Ponzi scheme: Why Nigerians must be sceptical by CHRIS UGWU
The Asset Under Management (AUM) of FBN Capital Asset Management has fallen dramatically over the last few months. Per data from the SEC, the AUM of the fund manager stood at N34.9 billion as at September 30 2016. This represents a whopping 69.3% decrease from its Dec 2015 AUM of N81.7 billion. The reason for the decrease can be traced to the large redemptions being witnessed by the manager’s flagship fund, FBN Money Market fund. The FBN Money Market Fund which began the year 2016 with a net asset of N72.6 billion, has seen an estimated N76 billion in redemption and a net equivalent contribution of N28 billion leaving it with a September 30 NAV of about N25 billion. In October 2015, FBN Money market fund over took Stanbic IBTC Money Market Fund as the largest mutual fund in Nigeria, a position it held until July 2016 when the tides began to turn.
Continue reading FBN Capital Asset Management Asset Losses 69% of Its Assets
It is no longer news that the Nigeria Stock market has been choppy in 2016 with investors scrambling to uncover hidden opportunities. Of the 10 major market indices in Nigeria, four have recorded positive returns YTD as at the end of Q3. The NSE Allshare index boasts of a negative 1.7% return so far this year. Compared to similar period in 2015, this performance is actually an improvement. By the end of Q3 2015, all the major indices, but two, were in the red with the All share index at -9.92%.
There seems to be an asset class that has not done so badly in the first nine months of 2016. That asset class is Nigerian Mutual Funds. Going by data released by the Security and Exchange Commission and analyzed by Quantitative Financial Analytics, mutual funds in Nigeria made an estimated N3 billion profit on a YTD basis by the end of Q3 2016.
Continue reading Nigerian Mutual Funds Gain N3 billion in Nine Months of 2016…See Analysis
The Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, has stated that the strategic focus of the ministry’s master plan for diversification and growth of the Nigerian economy is to work with private and development capital firms to leverage resources in order to achieve set target.
Enelamah disclosed this in Abeokuta, Ogun State on Monday while presenting the plan for economic diversification and growth by his ministry to the 8th National Council on Industry, Trade and Investment.
The minister, in a statement signed by his Strategic Communications Adviser, Constance Ikokwu, stated that with limited resources, the diversification and growth plan, otherwise known as the MITI Plan, was based on a partnership with the private sector.
Continue reading FG unveils plan for economic diversification, growth
Vetiva Fund Managers Limited (Vetiva) on October 24, 2016, listed the Vetiva S&P Nigerian Sovereign Bond ETF (“VS&P ETF” or “the Fund”) on The Nigerian Stock Exchange (NSE). The ETF, which is the first Bond ETF to be listed on the NSE, gives investors access to Nigerian Federal Government Bonds in retail lots; thus providing an opportunity for every Nigerian to invest in Federal Government Bonds.
At current pricing, investors will be able to purchase a unit for as low as N127.41 and have access to attractive bond yields.
According to the Managing Director, Vetiva, Mr. Damilola Ajayi, the listing of the Vetiva S&P Exchange Traded Fund is in line with the Federal Government’s plan to enhance financial inclusion. “For the first time in Nigeria, investors now have access to Federal Government bonds through theVetiva S&P Exchange Traded Fund“.
On his part, the CEO of the NSE, Mr. Oscar N. Onyema, OON, commended the Managing Director of Vetiva and his staff on the listing of the first Bond ETF in Nigeria, a move that will enhance the liquidity of the Fund for investors. “This is indeed a major milestone in our quest to broaden and deepen the Nigerian capital market, and to provide investors with diverse investment products, while giving the broker-dealer community an instrument to better service their clientele”.
The listing of the Vetiva S&P Nigerian Sovereign Bond ETF brings the total number of ETFs listed on the Exchange to eight.
The issue of youth entrepreneurship in Africa is very critical, as Africa is the only continent in which we will witness a population boom in our lifetime.
Studies reveal the symbiotic relationship between youth unemployment and youth restiveness. Accordingly, most violent crises in Africa have been traced to a lack of education among its teeming youth population.
Genuine search for development and sustainable peace must therefore begin with youth empowerment and entrepreneurship. When I was governor of Bayelsa State and later the President of Nigeria, I asked myself some critical questions:
• Why are some nations rich and some poor?
• Why do individuals who grow up in similar circumstances end up differently, with some as successes and others as failures?
• Is the wealth of nations a result of geography, weather, culture, destiny, etc?
• What could a leader do to effectively lift a people out of the depths of poverty, and enable them to achieve prosperity?
After much soul searching, my conviction with regard to these questions is this: wealth is a creation of the human mind properly prepared by education. It is my firm belief that any nation that does not spend its wealth and resources to developing the capacity of its youth will eventually be forced to devote its resources to fighting insecurity amongst those same youth.
As a leader, you can decide through your policies to educate the youth, or face the consequences of failing to do so. The problem all African leaders have is how to manage the youth bulge. Do we consider this a ticking time bomb or an opportunity?
For me, there are two key areas we must invest our resources in if we are to convert this perceived time bomb to the opportunity I believe it is. The first is in requisite education and capacity building. This should be followed by enabling youth entrepreneurship. Allow me to share with you a brief account of the implementation of my vision to empower the youth.
Continue reading The text of Dr. Jonathan’s speech during “A Conversation to Discuss Some of the Issues Relating to the Promotion of Youth Entrepreneurship at the Oxford Union on October 24, 2016.
The Emir of Kano and former Central Bank of Nigeria (CBN) Governor, Alhaji Muhammad Sanusi II, has said the flexible exchange rate regime recently introduced by the central bank is not being fully implemented, just as he warned that targeting a pegged rate will not resolve the current forex problem.
He urged the central bank to allow the forces of demand and supply to determine the true value of the nation’s currency, in line with the flexible exchange rate policy.
He said this at the Risk Managers Association of Nigeria’s (RIMAN) annual conference in Lagos yesterday.
Continue reading Sanusi Wants Flexible Exchange Rate System Fully Implemented | THISDAYLIVE
A recent article from Thisday has revealed the major roles three Federal Government agencies played in the current financial troubled waters Skye Bank finds itself in.
The article written by Ijeoma Nworgugu explains in details how several bad decisions by the now resigned Board and Management team led to a major loss of value for a bank in one of the most remarkable financial stories of 2016.
The article blames the controversial role of the BPE, AMCON and CBN inadvertently played in the erosion of capital that is now likely to shareholders of Skye Bank their investments. Here is an excerpt
Continue reading A Tale Of How AMCON, CBN Helped Skye Bank Get Into Financial Trouble
The new board and management of Skye Bank Plc have been saddled with a huge task of turning the bank around following Central Bank’s revelation that the bank had failed to meet requirements of its regulatory prudential ratios.
The task is daunting considering how difficult it has been for the bank to raise money in the past two years. Things are however about to get even harder.
Ratings Agency, Standards & Poors has released its first rating report on Skye Bank since the CBN midwifed a board and management change at the bank. S&P downgraded the bank to ‘CCC-‘ from ‘CCC+’ citing an inherent risk of a default. Here is an excerpt of the report;
Continue reading From Bad To Worse: S&P Says Skye Bank Could “Default” In 6 Months
The purpose of this post is to examine intrinsic value and its relationship to margin of safety. The two go hand in hand, or at least they should. These two concepts are the backbone of value investing and the basis for Benjamin Graham’s book, The Intelligent Investor (affiliate link).
Intrinsic value (a.k.a. fundamental value), is the perceived value of an investment’s future cash flow, expected growth, and risk. In other words, intrinsic value is the future cash flow discounted back to a present value.
While the definition may be quite simple the calculation is much harder or imprecise. Because there are literally hundreds of variables that go into the estimate of intrinsic value, the accuracy of such a calculation is dubious at best. We will talk about how to overcome this dilemma shortly.
Continue reading Intrinsic Value and Its Relationship to Margin of Safety