FG To Sell Savings Bond For As Low As N5,000

The Federal Government has concluded arrangements to launch its first-ever savings bonds into the domestic bond market next month, providing the retail  investing public opportunity to invest in sovereign bond issue for as low as N5,000.

Market sources and parties to the savings bonds, to be known as Federal Government of Nigeria Savings Bond (FGNSCB), said the issuance of the savings bond could start next month as the government and its professional parties have concluded the pre-offer process for the bond.

The savings bond will bear all the regular features of a national bond, including the zero default rate of a sovereign issuance, fixed coupon or interest rate, privileges and exemptions from certain taxes and levies, as outlined by the Central Bank of Nigeria (CBN), Federal Inland Revenue Services (FIRS) and other government ministries, departments and agencies (MDAs).

The Debt Management Office (DMO), which oversees issuance of Federal Government bonds, will be issuing the savings bonds on behalf of national government.

A copy of the issuance documents obtained at the weekend by The Nation indicated that the FGNSB is deliberately targeted at the lower income earners as part of government’s plan to encourage savings and also earn more income from their savings compared with savings accounts with banks.

The bonds will be issued with a tenor (period) of between two to three years and a minimum size (amount that can be purchased) of investment of N5,000 and maximum of N50 million.

The interest rate, which will be fixed, will be paid quarterly, enhancing the attraction of the savings bond as grassroots instrument for the general public.

The attractions of the savings bonds, according to the issuance documents, included guaranteed returns, competitive fixed interest rate, tax exemption for the interest incomes and collateral for loans.

The retail savings bonds will, in addition, encourage financial inclusion among low income households and enable the public to enjoy those benefits which accrue to high net-worth investors in the capital market.

With the collateralisation of the bond certificate, subscribers can use the bond certificate as guarantee and collaterals where such are required in transactions with the MDAs, financial institutions and private organisations.

Investors will also be able to purchase the savings bond in small units through physical offices and several online platforms. After the closure of the primary issue for the savings bond, retail investors will be able to buy and sell the bonds through the Nigerian Stock Exchange (NSE).

Already, DMO has reached a Memorandum of Understanding (MoU) with the stockbroking community on the marketing and distribution of the savings bond.

The savings bonds will be traded like quoted equities and other securities on the NSE with stockbrokers expected to make two-way quotes for the FGNSB in order to provide secondary market liquidity for the savings bond.

The stockbrokers will act as agents to the DMO for the marketing and distribution of the FGN Savings Bond to retail investors, including selling the FGN Savings Bond to existing clients using their retail investor base and attracting new ones in order to deepen the retail market for FGN securities.

Agency Banking: Bizi Mobile To Launch M Cash At Kaduna Trade Fair

…says cashless policy will lead to employment of several youth

A new mobile money product, M Cash will be launched by frontline banking agency, Bizi Mobile, will be launched on Monday at the ongoing 38th Kaduna International Trade Fair.

This was disclosed by the MD/CEO Bizi Mobile Agency Banking, Alhaji Aminu Bizi, during a press conference at the fair’s venue on Kaduna-Zaria Highway on Saturday after the official opening ceremony, performed by the Deputy Governor of Kaduna State, Architect Barnabas Bala Bantex.

He said that M Mobile after its launch, will go a long way in reducing the suffering of rural dwellers where there are no banks, as they would be provided an alternative way of doing cash transactions.

“This unique product called M Cash, we are doing in synergy with Unity Bank. And even people without bank accounts can receive money from abroad through the use of reference numbers,” he added.

He said that his agency’s presence at the fair was to use the opportunity of visitors from all over the country to create awareness of the need to embrace the  cashless policy because of its several advantages.

“We would be promoting the cashless policy which is coming into introduction from April 1, 2017. We will also teach people how to transfer money with their phones or other mobile devices from the comfort of their homes

Alhaji Bizi stressed that besides the M Cash, his agency has synergy with eight different banks whom they serve as agencies in different parts of the country.

Speaking further, he expressed optimism that when fully introduced, the cashless policy would be a huge employer of labour in the country where several graduates would be absorbed into.

“Right now in all our offices all over the country, we have employed several graduates and even masters degree holders and they are happy working with us,” he said.

Other top dignitaries that were spotted at the opening ceremony of the fair include the Emir of Zazzau, Alhaji Shehu Idris, represented by the Galadiman Zazzau, Alhaji Nuhu Aliyu and several captains of industries.

CAC Reduces Number Of Forms Needed For Company Incorporation To One

The Corporate Affairs Commission (CAC)  has consolidated the forms required to incorporate a business in Nigeria, reducing the number from seven to one, according to the Special Adviser to the commission’s Registrar General, Alhaji Garba Abubakar.

“We now have just one form which has been deployed this week. It contains all the information you need to register and is available for download on the CAC website. This reduces the cost and time needed to register a business,” Abubakar said on Friday at the Lagos Stakeholders Forum of the Enabling Business Environment Secretariat (EBES).

Abubakar said the CAC would ensure that business owners are able to upload documents electronically as part of its deliverables in the 60-day National Action Plan on Ease of Doing Business in Nigeria.

The Lagos Stakeholders Forum was the second in two days by EBES, following Thursday’s forum in Kano.

According to the coordinator of EBES, Dr. Jumoke Oduwole, the forums are designed to inform private stakeholders about government’s efforts to ease the business environment; share details on the Action Plan; and receive feedback to report back to the Presidential Enabling Business Environment Council (PEBEC).

She pointed out that an example of the feedback process at work was the unscheduled visit on Thursday by Acting President Yemi Osinbajo to the Murtala Mohammed International Airport, Lagos, based on EBES feedback.

“Our vision is a dramatic improvement in Nigeria’s business environment over the next three years to a top 100 ranking in the World Bank Doing Business Report, with increased cross-border trading, increased productivity across key economic sectors and an improved business environment that is attractive to both domestic and foreign investors,” she said.

The two forums in Kano and Lagos were well attended by government officials, heads of MDAs and private sector players who interrogated and interacted with officials, offered advice and aired grievances.

Speaking at the Lagos forum, the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said the renewed push to ease the business environment was due to the realisation that “every country that has gotten it right has enabled businesses. It is the most sustainable long term way.”

In Kano, Gov. Abdullahi Ganduje was represented by his deputy, Professor Hafiz Abubakar, while in Lagos, Gov. Akinwunmi Ambode was represented by the Commissioner of Physical Planning and Urban Development, Hon. Wasiu Anifowoshe.

The state governments highlighted reform efforts in their states especially as regards getting construction permits and registering properties, which are under their purview.

“In Lagos, getting governor’s permit now takes less than 30 days. Quote me anywhere,” Anifowoshe said.

Some other reform initiatives announced at the forums include the CAC upcoming reform that will allow business owners to get e-stamps for stamp duties without the need to visit the offices of the Federal Inland Revenue Service (FIRS).

On its part, the FIRS said Tax Identification Numbers (TIN) can now be gotten when registering businesses at the CAC without having to visit its offices.

Other facilitators at the event include Ms. Yewande Sadiku, the Executive Secretary of the Nigerian Investment Promotion Council (NIPC) and Mrs. Jameelah Ayedun, the MD of CR Services. There were also officials from the Federal Inland Revenue Service (FIRS), Nigeria Electricity Regulatory Commission (NERC), Eko Distribution Company, the National Collateral Registry, Nigeria Ports Authority (NPA), Nigeria Customs Service (NCS), amongst others.

The Stakeholders Engagement Forums were anchored around the seven priority reform areas of EBES, namely, Starting a Business, Getting Credit, Trading Across Borders, Getting Electricity, Construction Permits, Paying Taxes and Registering Property.

Jaiz Foundation Commences ‘Takaful’ Islamic Insurance

The Jaiz Foundation is set to kick start Islamic ‘Takaful’ Insurance in Kaduna, Kano, Lagos with head office in Abuja. As part of the final preparation, the Foundation held a week induction training for the staff of the organization, who are going to be deployed to these states to commence operation.

The chairman of Jaiz Takaful Insurance PLC, who also doubled as the chairman Jaiz bank PLC advice Nigerians to take advantage of the new insurance concept, which he said is for everybody.

“The name Islamic notwithstanding, it is for all Nigerians, provided they adhere to the principle of sharia. Individuals, groups and businesses should take advantage of this rare opportunity. The premium you pay remained there for you as investment, if you don’t suffer lose”

Throwing more light on the operation of the Insurance policy, the Mananging Director of Jaiz Islamic Takaful Insurance, Momodou Musa Joof said, the company shares profit by 80% to its participants who have not suffered loses.

According to Joof, the staff that are being trained here are going to be deployed to states to sell Islamic Takaful Insurance support. They have been into conventional insurance but now we are introducing Takaful or Islamic Insurance, which is basically sharia compliant.

“It insures anything that is ethical and at the end of the year, the profit that the company generates, 80% of it will be distributed to the clients or participants who did not suffer loses in the cause of the year.

In the meantime, those who suffer loses would have been paid first before the distribution of profit. The elements which goes to the needy, which is called Zakat is also distributed before profit is shared.

“Takaful is coming as a scheme for all. The good thing in Takaful is that, if you don’t suffer lose, your contribution become an automatic investment. For the less privileged who don’t have what to insure, if the company is successful in business, one day we will reach out to you in zakat.”

Prominent scholars like Prof Muhammed Nasirudeen Maiturare, the Vice Chancellor of Ibrahim Badamosi Babangida University, Lapai, who is also a member of the advisory council and others were brought in as resource persons in the particular aspect of human needs.

FirstBank Launches Premium Lounge At Lagos Airport

First Bank of Nigeria Ltd on Thursday launched FirstLounge, a premium lounge on the landside of the Murtala Muhammed International Airport (MMIA).

The initiative is tailored to ease both travellers and non-travellers the stress of waiting on long queues and the endless search for comfort and convenience while at the airport.

Some of the banking activities available at FirstLounge include- getting an international card for use abroad, settlement of last minute airport-related or personal fees via bank transfer or activation of digital banking channels and withdrawal and transfer of last minutes cash via dedicated ATM points.

FirstLounge is operated by FirstBank staff who are mandated to give answers to queries, resolve complaints and provide feedback within a shorter turn-around time.

Other facilities at the lounge include interactive screens, Wi-Fi access, charging points and kids’ play area with an interactive fun floor.

“FirstBank is committed to leveraging evolving technology in delivering lifestyle banking services and products to travellers even as we enable the development of the nation’s travel and tourism industry,” a statement from the bank said.

Union Bank Launches 5 Upgraded Branches In Edo State

To celebrate its 100-year milestone while delivering on its promise to provide consistent banking solutions, Union Bank, one of the longest-standing innovative banks in Nigeria, recently launched five state-of-the-art branches in Edo State.

The upgraded branches are located at Akpakpava Street, Mission Road, Ugbowo branch, Agbor road and Ekpoma branch.

Addressing guests at the event, Joe Mbulu, Transformation Director, Union Bank, explained that the new branches are designed to enhance banking experience, and also provide effective and faster solutions that meet the demands of the customers.

“Our transformation was based on what mattered most – the needs of our customers. Everything that we have done, starting with our revamped brand identity, to the improvements and development in products and services, are focused on providing a simpler and smarter way of banking,” Mbulu said.

“We will continue to invest in quick and friendly service, and we are committed to an effective partnership to help our customers grow,” he concluded.

Speaking with the press after the event, Emeka Emuwa, Chief Executive Officer of the Bank said, “I am immensely proud of the bank and what it has achieved in 100 years. We thank our customers for their support and we will continue to look for ways we can serve you better. We are consistently exploring innovative avenues and services to intensify excellent customer experience, thank you for being with us in the journey so far.”

Unveiling the Ekpoma branch, guests and students at the event had a pleasant experience as Union Bank hosted them to a launch party in the Ambrose Alli University campus. The event featured dance competitions and musical performances, as guests went home with numerous gifts.

Union Bank has upgraded over 110 branches across Nigeria and continues to reaffirm its commitment towards providing simpler and smarter banking that best suit its customers’ needs.

Naira Continues Winning Streak, Closes Thursday’s Market At N480/$

The naira continued on its four-day winning streak against the U.S. dollar on the parallel market yesterday to close at N480/$, stronger than the N501 to the dollar from the previous day, as the new foreign exchange policy actions introduced by the Central Bank of Nigeria (CBN) forced more currency speculators to sell off the greenback as sell rates fell as low as N460/$.

The buy rate of the dollar also strengthened yesterday to close N470/$, as against the N490/$1 at which it closed on Wednesday.

In all, the naira has appreciated by N39 since Monday when the new FX actions were announced by the regulator.

Also, as part of efforts to sustain dollar liquidity in the market and bridge the gap between the interbank FX and parallel markets, it was gathered that the central bank auctioned another $230 million through forward contracts on the interbank FX market yesterday.

It auctioned $370 million on Tuesday and sold $1.5 million on the spot market.

Commenting on the new FX measures, analysts at Cowry Assets Management Limited said the move by the CBN to increase FX availability to end users has been helped by the recent buildup of Nigeria’s foreign exchange reserves amid increased crude oil revenues.

“Given the improvement in the external sector, we anticipate that the new measures could pave the way for a gradual return of confidence in the foreign exchange market.

“We also expect the monetary authority to do more to harmonise the exchange rates and thereby discourage arbitraging,” they added.

In the same vein, Ecobank Nigeria noted that the new policy actions would also help to reinvigorate the hitherto illiquid interbank FX market.

According to Ecobank, the decision to cap the settled rate for the retail transactions at 20 per cent above the interbank market rate and the restriction of school fees to university education only was a subtle way of partly controlling bank charges and manage likely FX demand pressure in the market.

The bank added: “Over all, the impact of the circular could be short-lived, if the CBN does not show strong capacity to support the FX market with liquidity.”

Also, Cyprus-based FXTM Research Analyst, Lukman Otunuga noted that with dollar demand for school fees payments overseas and personal travel allowance enforcing downside pressures on the parallel market, the move by the CBN to sell dollars to retail users via commercial lenders was logical.

“While the policy may create some transparency, liquidity and efficiency in the Nigerian FX markets, this does not solve the overriding problem of multiple exchanges.

“Eventually, the CBN may be forced to bridge the disparity between the official and parallel markets which have added to Nigeria’s woes.

“With expectations heightened over the central bank devaluing the local currency in an effort to create liquidity and stability, this new policy could be viewed as the first course.

“It must also be kept in mind that the inexhaustible demand for the dollar, that is not the legal tender in Nigeria, continues to leave the naira vulnerable to heavy losses,” he added.

Financial Derivatives Company (FDC) Limited also warned in a note that “Nigerians must remember that this recovery is only as good as the supply remaining consistent”.

“The good news is that oil is currently trading at $57pb. If sustained, this will provide the buffer needed to support the CBN’s policy directive of substantial weekly dollar injections into the market,” FDC said.

Meanwhile, the Special Adviser to the CBN governor, Financial Markets, Mr. Emmanuel Ukeje has said manufacturers could end up benefiting from other funding sources provided by the central bank that may exceed the 60 per cent preferential FX allocation to them, which was stopped last Monday when the new FX policy actions were announced.

Ukeje’s assurance to the manufacturing sector came against the backdrop of complaints by industries.

He said contrary to speculations that the CBN may have relegated the manufacturing sector, the central bank still holds the sector in high esteem.

Speaking on Arise News Network, he said the CBN has developed a strategy of ensuring that funding gets to the manufacturing sector.

“There are other avenues that they will end up benefiting more than the 60 per cent they were getting from those allocations,” he said.

According to him, “Even though manufacturers were given that preference in the past, manufacturers under any condition are still part and parcel of bank customers.

“And that’s what the CBN is going to fall back on, as we feed other sectors for other people to access the funds. The manufacturing sector actually will benefit from other interventions by the CBN because we also hold this particular sector in very high esteem.

“We know the role they are supposed to play in terms of contributing to the economic development of the country.”

Despite its decision to stop the preferential treatment, which required banks to allocate 60 per cent of FX purchases from all sources to specific sectors of the economy, the central bank had maintained that the provision of FX to the manufacturing sector would remain its strong priority.

But since the announcement, there have been diverse interpretations of the central bank’s pronouncement, with some manufacturers raising concern.

20 Investing Mistakes To Avoid In 2017

By Mike Uzor Financial Analyst, Datatrust

By investing, you are putting your money on the job of working for you in expectation of a decent return. How much of good works the money you invest will be able to do for you depend on how you have deployed it and in what conditions it is set to work. You are the master and money the servant; it obeys your commands at all times – good or bad commands.

How well therefore you will succeed in the investment market in 2017 depends on how good are your investing decisions. In order to invest wisely this year, you need to avoid the common investing mistakes that have made people lose fortunes in the equities market. In the same market, fortunes are made and fortunes are lost every year. You can be on the side of winners.

You don’t invest at all, you exclude yourself from a readily available opportunity to build capacity for the future. Nothing ventured, nothing gained! By investing this year, you are taking a step forward to joining those who are buying the future upfront. The biggest mistake anyone can make is to fail to be part of those who will determine future values.

The wealthiest of the future will be people who are buying at today’s prices the values to be delivered tomorrow. Conversely, the poor of the future will be those waiting to buy future values at future prices. These will have no choices in a future in which prices will be significantly higher than they are today. Those who are looking for instant gratification will limit their financial capacity in the future. ‘If I had known’ is no excuse; it is a mistake!

Personal Finance image r

 

Irrespective of the winds and the clouds of the economy as we see them today, we are commanded in Ecclesiastes 11: 4-6 to go ahead and sow this year. There can be no harvesting without sowing. Your corn of wheat must die in the ground for it to bring the much fruit you desire – John 12: 24.

Failure to manage investment risk is one of the key lessons from the last stock market crash. Most people tend to pursue high returns without adequate safeguards to mitigate the attaching risks. Risk and return go together, the higher the return expected, the higher will be the risk accompanying it. Focusing on the return and ignoring the risk leaves the investor without remedial actions to be taken if the risks occur.

Inability to identify and manage the various risks to which financial assets are exposed is one of the critical investment mistakes in the dicey markets to be expected this year. Your investments are, no doubt, exposed to varying doses of risks – economic, market, interest rate, exchange rate, inflation as well as specific. Foreign portfolio investors here, for instance, are exposed to considerable exchange rate risk, which is why they stage a run any time the value of the naira looks unsustainable.

Managing investment risk is clearly defining appropriate steps to be taken in the event of the risk occurrence and effectively taking those steps to defend the value of the investment. Many people tend to be more concerned about how much profit they want to make on their investments than defending the capital they already have. Sacrificing capital you already have for profit yet expected is a mistake investors need to avoid in 2017.

Investing without investigating is a road that leads to losses and therefore has to be avoided. Stock market investing is an information-driven endeavour. You will need to find out as much information as possible about the company you want to invest in, particularly where it is headed on the earnings track. You need to probe beyond what equity issuers tell you in their offer documents and the information that company officials willingly dish out.

You will be amassing a great deal of investment risk by investing in a company you don’t have a reasonable idea of what business it is into. The more discoveries you make about a company’s operations, the more you will modify your investment decision and the more you reduce your risk exposure. You can’t afford the risk of putting your money in a company you don’t know its future prospects. Your investment decision is as good as the quality of information you have. Corporate earnings prospects have dimmed generally and the ability to select the most promising companies will be the key determinant of success in investing this year.

Buying/selling in panic is the easiest way to buy a bad investment and to be shaken out of a good investment as well. A panicky market is driven by sentiments of what is feared or anticipated rather than value. If you have good information about a company and therefore an idea of its fair value in the market, you will be mistaken to pick it at a higher price because others are buying it in panic. It is a mistake to buy a good investment at a costly price because it will not offer you a good margin of safety.

Also, if you have entered a good stock at a fair value on the basis of reasonable information about the company, why should you be shaken out of it in panic selling? When the market returns from such temporary outbursts of sentiments, solid companies easily rebuild their values and bad investments stay down. Consequently, the good investments you have sold, you can only buy back at higher prices and the bad stock you picked in panic you can only sell at a loss.

Investing with short-term money is equal to shooting yourself on the leg that you need for a marathon race. Investment in the stock market yields returns on a long-term basis. Availability of long-term money is the primary consideration for investing in equities. You can’t do the long running the market requires with money needed to meet short-term commitments. Your investments aren’t likely to mature for sale by the time you will have to pull the money to meet the short-term commitments.

If you have made a good investment in a stock, you have need of patience to permit the market build value for you. It normally takes quite a while for a stock to make a large gain. Expecting the large gain with short-term money is a big mistake. If you want to enter the market or you are already in it, define exactly who you are: a short-term, speculative trader doing hit and run on good and bad stocks or an investor sitting patiently on value building equities.

Greedy expectations from investments lead to a loss of sense of value of the investment. Something has caused the share price to move up after you have invested. Whatever that strength is, is it still available to justify your expectations for a further rise? An extra-ordinary growth in profit may have induced the capital growth your stock has achieved for you. Whether the high growth is sustainable or not, it usually spurs a bullish run any time a big leap in earnings per share occurs.

The potentials for a spectacular share price advance do get exhausted and so your sure winner isn’t going to continue winning every time. Test your winner for ability to remain on the winning stream and a trader may leave before the market exhausts the short-term potentials. If a trader enters a winning stock without a potential exit point, it is a mistake because he will be expecting a historic event to build value in the future. It will not happen! Expecting a stock that won yesterday to keep winning without a new potential is greed to be avoided this year.

Putting all eggs in one basket is a major mistake in the equities market because you can’t get far with just one or two stocks in the basket. Diversification is the widely recommended approach to reducing investment risk. You may have invested in shares with profound information available at that point in time, yet your investment is subject to so many imponderables in the economy. Some investments are bound to perform below expectation while some might do better.

personal-finance R

A diversified basket reduces the risk of underperformance by including stocks that stabilize portfolio value in a difficult market. Diversification isn’t in any way suggesting covering the waterfront. It is not a matter of numbers but of how the stocks in the basket are positioned to counter the downward risks of others and ultimately achieve the expected average return on investment.

You don’t know when to invest, you are bound to lose because even the blue chips have their seasons of buy and sell and growth stocks do lose their high growth momentum. When you discover a good stock, you need to target a good opportunity to buy it cheap – that is when it is under priced by the market. This creates a margin of safety for you, which easily places you in profit and builds a defensive margin of error if something goes wrong.

Most people tend to buy stocks when the price is moving up, not considering whether it is about to exhaust the short-term movement. Timing your entry into a stock is a far more important strategy to build profit than the average investor appears to appreciate. Studies have shown that making a right entry on a stock gives you a 50% chance of making a profit and a 20% chance of making a loss. It is a mistake to enter a stock when it is making a new price high because the potential for a loss in the short-term is high.

Dealing with a ‘deaf’ stockbroker in a dynamic market leaves you with a great risk of striking when the iron is cold. Before he acts, the opportunity you wanted to take advantage of has passed. The stockbroker plays a crucial role for an investor to make the right entry and exit on a stock. For this reason, he should be a stockbrokers that ‘hears’ your orders at once, understands what you want to accomplish and executes them promptly.

If your broker is hard of hearing and slack in acting on your orders, you will be making a mistake to continue to rely on him this year and expecting better results. If he has caused you to lose good opportunities before, don’t be mistaken, he isn’t going to change this year. Try a new stockbroker and let him know your reason for leaving the old one. That will be a warning signal for him that if he fails to satisfy you, you will most likely leave him as well. The Nigerian Stock Exchange has developed facilities for individual investors to buy and sell stocks directly.

A flight in penny stocks faces a high risk of a crash. Penny stocks are like roses growing on thorns: you may hit the jackpot and you may also lose everything. They are more or less a gamble; anything can happen. It takes only a few kobo movement to produce a large percentage gain as well as a big loss. If you have an investment basket dominated by penny stocks, you are taking a flight that has a high chance of crashing.

While penny stocks are comparatively low priced and sell at a small fraction of the prices of major equities, it is a mistake to consider them as cheap. Cheapness is relative when it comes to share investing. A stock is only cheap when it is underpriced and expensive when overpriced. A stock is therefore cheap if it has the potential to go up in price and expensive if it is likely to go down irrespective of the price tag. You think a stock that merits its low price is cheap, you are mistaken.

Investing forward and looking backward is very likely to end in a stumble and a fall. Investing is future dependent and no one can build a good future by relying on what happened in the past. The company may have doubled profit last year but what is it likely to do this year. Does the company have strength in the future – financial health, household product names, able sales force, a large distribution network, capable management and so on? Share prices are built by current and anticipated earnings, not how big was last year’s profit and dividend.

Whether or not your investment will do well is dependent on the company’s future performance. If you are investing in the future, you are betting with your money that the company is going to do well in the future. You need to convince yourself about the ability of the company to maintain or improve its earnings growth momentum. If you are making such a serious bet with what happened in the past, it is a mistake. You can’t really move forward while looking backwards.

Impatience with good investments prevents you from being around when the stock market will finally build wealth for those that are right with their investments. It is a great virtue to be patient with share investments but only when the investment is right. Many people who move out of good investments are usually those who do not understand the stock. They might have entered it because they expect the price to move up in the short-term. If it does not, they are not interested. If you are one of such people, the post crisis equities market is not for you.

In the pre-crisis period, even the stocks of closed down companies went up in prices. In the present market environment, even the best performing companies aren’t easily bulging up. It appears to be a market that tests the heart of investors – whether they know their stocks. Those who are sure of their investments need patience to get to the points of harvest. If you are sure that your company is on the high growth track and you are impatient with it, you are mistaken.

Investing in highly indebted companies will be a major mistake in the present high interest rate environment and depreciating local currency. High interest rates have undermined the ability of many companies to grow wealth for shareholders for many years now and the sustaining fall in the value of the naira is increasing the pain through exchange losses. Before you invest, you need to be pretty sure that your capital is going to work for you and not for lenders.

The impact of finance cost on the income statement is now very crucial and is worth giving a careful consideration before you invest. A high level of balance sheet borrowing registers its adverse impact on the bottom line by claiming a significant share of a company’s revenue. Highly indebted companies have continued to face considerable erosion of profit margins for the past several years, which could worsen this year. You can’t rightly invest in such companies this year and expect to earn a decent return.

Gambling in the name of investing is exposing your money to a high level of uncertainty of possible events and yet expecting the favourable outcome. If your investment has a 50-50 chance of winning or losing, you are gambling. Investing doesn’t reside in that realm of high risk exposure. If you do not take steps to reduce the chance of losing on your investment and improve that of winning this year, you are making a big mistake in a dicey market.

The low risk approach involves probing into the future prospects of companies and selecting those with sustainable earnings capacity. You need to convince yourself about how big and sustainable the future earnings of the company before you invest. The higher the prospects for delivering unending stream of incomes in the future, the lower your risk exposure on the company.

Investing with money you can’t afford to lose and still stand is equivalent to betting with everything – money, life and family in a market that is subject to innumerable, indeterminable forces. No matter how proficient you are in stock market investing, you are bound to pick up bad investments from time to time. If by picking one or two bad investments, you are ruined, this is a mistake – you have not yet learned the lessons of the last market crash.

The stock market is a high risk zone and you cannot safely enter it with all you have. When you send out your money into the stock market for a high return attack, you are like a military commander, who has dispatched soldiers to the battle front. Some may win and return, some may fall under cross fire and still all may be lost. If you send out everything without considering the chance that all may be lost, it is a big mistake.

Ignoring inflation is to ignore a major risk element in deciding where to invest in the first place. When prices rise, the value of an investment goes down and all investments that offer below inflation rate returns will wash away the real value of your capital. Is the value of your investment likely to grow ahead of inflation this year?

One of the main attractions of share investing is that it provides a hedge against inflation. Investing in the stock market has proved to be one effective way of preserving and increasing the real value of money. If the value of your capital isn’t likely to grow ahead of inflation this year, rising inflation arising from depreciating local currency is bound to penalize you.

Buying sympathy stocks isn’t going to draw sympathy for your dwindling capital value when they eventually begin to show their mediocre performance. Sympathy stocks are the laggards in every market segment, just next in consideration to the leaders in that segment. Because they trade at lower prices than the best equities in the segment, there is always the temptation to believe they will follow the impressive advance the leaders are exhibiting.

This is often quite deceptive because the market quickly remembers their poor fundamentals every time the bear shows up in the market. Just because the leading stocks have moved up in price does not offer a justification for sympathy stocks. They are likely to follow the leaders in sympathy for a rising market but they sympathize much more for a falling market. Expecting to win with mediocre stocks is a big investing mistake.

Averaging down on a bad investment is throwing good money after bad. The consideration for buying any stock is good earnings expectation or technical outlook. The expectation is that the stock will go up in price but if it begins to go down instead, it is an indication that the expected earnings quality may no longer be realizable. This calls for a reassessment of the company’s earnings potential.

When the share price is declining due to deteriorating earnings, the strength for a price recovery is broken. Such a stock is set on a long downward journey. If you start average down on it, this is a mistake because there will be no end to it. Using your money to defend your mistake on a bad investment is another way of trying to hide the truth from yourself. Accept you have made a bad investment and then cut your loss and run.

Defending stocks instead of capital is trying to show that you are right when you might be wrong. Mistakes in equities selection are inevitable in stock market investing and this requires a plan of action to prevent the mistake from consuming your capital. The profit you are going to make isn’t more important than the capital you already have. You therefore need to draw a defensive sell line for each investment you make this year, setting the price point at which you must cut your loss and leave.

The defensive line is a downside target price for the stock, which allows some room for normal share price fluctuations in the short-term. How much accommodative room to allow depends on the relative strength of the stock’s performance and the state of the stock market generally. If the share price touches the sell line, no matter how much you love the stock, it is a sell. Your duty is to defend your capital and not stocks that are mere instruments for its growth.

Acting on buy/sell opinions rather than research-based findings and superior information can cost your good money. Buy and sell seasons come and go continually for individual stocks and for the market. Irrespective of the strength of fundamentals, every stock has alternating periods of buy and sell. A stock needs to pass a series of signals to be reasonably judged a buy or a sell. Without the confirming signals, a buy/sell tip is a mere opinion and it is a mistake to bet with your money on it.

For instance, the key test for a buy is whether a company is growing ahead of its five-year average earnings per share. The earnings test serves as a screening tool to separate good stocks from the laggards. For a stock growing ahead of average, at every point of short-term correction, it is likely to bear a buy signal if the other indications are supportive.

Sage Foundation Launches $1m Enterprise Fund To Inspire Innovation And Change In Africa

The new $1 million fund is open to non-profits in Africa with enterprising ideas to help improve the lives of military veterans, young people or women and girls

Sage, the market and technology leader for integrated accounting, payroll & HR, and payment systems, has today launched Sage Foundation’s Enterprise Fund (https://www.Sage.com/company/sage_foundation). The new $1 million fund is open to non-profits in Africa with enterprising ideas to help improve the lives of military veterans, young people or women and girls.

Every day, across Africa inspiring non-profit leaders, volunteers and their supporters are working tirelessly to make their communities better places to live. Sage Foundation’s Enterprise Fund has been designed to support those organisations generate further income, create new initiatives or enhance existing and proven activity.

The $1 million will be split between two rounds of $500,000; with the second round ready for release in July 2017. Applications for the first round are open until April 5; grants between $5,000 and $35,000 will then be awarded to successful applicants.

All applications that fulfil the eligibility criteria will be considered. However, Sage Foundation is especially keen to support organisations that are currently small but have ambitions to expand, grow and deliver sustainable change. It is also hoped that the fund will support needs such as; capital projects, core running costs or new innovations.

“Sage Foundation’s Enterprise Fund is designed to help organisations generate further income, create new initiatives or enhance existing activity,” says Joanne van der Walt, Sage Foundation Manager, Africa at Sage. “There are some wonderful charities across Africa who has innovative yet practical ideas about how they can solve some of the socio-economic challenges their communities face each day. We want to help them turn these exceptional ideas into reality.”

Sage Foundation’s Enterprise Fund was originally announced at Sage Summit in Chicago in July 2016, part of a series of new initiatives to mobilise Sage colleagues, partners and customers around a common vision for change.  As part of 2017’s new Sage Summit Tour, Sage Foundation will be working with Sage’s brilliant network of business builders, to take action together.

Since January 2016, Sage Foundation has been taking action to build sustainable social, economic and entrepreneurial opportunities in Sage’s local communities around the world. By investing and supporting non-profit partners that are helping people reach their true potential, and committed to doing business the right way.

Sage Foundation is powered by the ‘2+2+2’ model. Through this, Sage Foundation donates: 2% of employee time each year (5 volunteer days), 2% of free cash flow in grants and 2 donated software licenses to eligible partners.

At the Sage Summit Tour in Johannesburg from 7-9 March this year, Sage will update delegates about how the Sage Foundation is making a difference for communities and non-profit organisations across Africa with its approach to social investment. It will also disclose how the Enterprise Fund will benefit the region’s charities.

Forex Intervention: CBN Releases $370mn

Sequel to its promise to ease the difficulties encountered by Nigerians in obtaining funds for Foreign Exchange transactions, the Central Bank of Nigeria (CBN) on Tuesday, February 21, 2017, carried out wholesale interventions in the interbank FOREX market by providing a total sum of $370,810,810.79 to 23 banks to meet the visible and inviable requests of customers.

A source at the CBN disclosed that the qualified bids for the United States dollars ranged from N315 to N360, adding that seven banks received full allotments of their respective bids valued at $37,500,000 each. Other banks received allotments ranging from $46, 512.50 to $15,578,081.51.

Confirming the information, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the Bank’s intermediation in the Forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.

He further explained that the CBN offered $500,000,000.00 for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.
While expressing optimism that the wholesale intervention of the CBN would substantially ease the foreign exchange pressure on visible and invisible needs of customers, Okorafor assured that the Bank would continue to make interventions based on qualified bids from the banks on the requests of their customers.

He reiterated that the Bank was more than ever ready to support the inter-bank market by ensuring liquidity and transparency to guarantee efficiency in the Forex market.

Okorafor therefore urged all market participants to contribute their patriotic quota and assist in ensuring that the new measures put in place by the CBN guarantee the steadiness of the financial market as well as the growth and development of the economy to the benefit of all Nigerians.

It will be recalled that the CBN, after a meeting with Deposit Money Banks (DMBs) last Friday, issued new policy actions on FOREX aimed at easing access to foreign exchange for Personal and Business Travel as well as educational and medical fees, among others.

As part of its new policy action, the CBN also directed all banks in the country to open forex retail outlets at major airports as soon as logistics permit them to do such.

Meanwhile, a breakdown of the forwards indicates that $216,465,671.02 was for 30 days, while $154,345,139.77 is for 60 days. The CBN also on Tuesday, February 21, 2017, made spot sales of $1.5 million to four banks, totaling $6 million. The Bank also offered $41 million for sales out of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.

We Won’t Subscribe To IMF Programme – Adeosun

Nigeria sees no need to apply for an International Monetary Fund programme as it is pursuing its own economic reform plan, Finance Minister Kemi Adeosun said on Tuesday.

Sharp falls in the price of crude oil, its main export, have tipped Africa’s biggest economy into its first recession for 25 years and hammered the naira currency, prompting speculation it might need IMF funding to cover a growing budget deficit.

“For us the IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem,” Adeosun told CNBC in an interview.

“We are already doing as much reform as any IMF programme would impose on Nigeria,” she said. “Nigerians want to take responsibility for their future. We must have our home-grown, home-designed programme of reform.”

Adeosun said non-oil revenues were improving while the government was fine-tuning an economic reform plan needed to support an application for a loan of at least $1 billion from the World Bank. It is also seeking further funds from the African Development Bank.

“Non-oil revenue is improving very steadily. All the measures we have put in place are beginning to yield fruits,” she said, without giving numbers.

“Oil production is back up, we are very grateful for that, but we should be careful for getting excited about that.”

Diplomats and officials have told Reuters that Nigeria, Africa’s leading crude producer, which relies on oil revenues for most of its income, plans to finalise its proposal to the World Bank this month.

The country needs to plug a gap in its record 7.3 trillion naira ($23.17 billion) 2017 budget, which contains a number of measures aimed at stimulating the economy.

It had initially promised to submit an economic plan to the World Bank by the end of December but did not do so, sources told Reuters last month.

Nigeria will also present its economic proposal to the African Development Bank to help release a second loan tranche worth $400 million to support the budget, officials have said.

Source: Reuters

Ladi Balogun Quits FCMB As Group CEO

Mr. Ladi Balogun, son of Otunba Subomi Balogun, founder of the FCMB Group, is quitting his job as Group Managing Director/CEO of FCMB Limited come March 20, 2017.

Balogun who has steered the ship of the commercial bank, a subsidiary of FCMB Holdings, for 10 years is required by law to vacate office for a successor.

Adam Nuru, Executive Director in charge of Business Development for the bank will take over from Balogun. According to a statement from the bank, Nuru who has 28 years banking experience (7 years with FCMB) contributed immensely to the growth of the bank’s Northern franchise.

Meanwhile Mr. Balogun will now assume a bigger responsibility as Group Chief Executive of the holding company which comprises of FCMB Limited, FCMB Capital Markets, CSL Stockbrokers and CSL Trustees.

Send this to friend