Business

Asset Management Company Comes On Stream … As Stocks Begin To Rally

Published

15 years ago

June 11, 2010

The Central Bank of Nigeria (CBN) has set up a technical team to value bad bank loans that will be purchased by the new Asset Management Company (AMC) which comes on stream this month. The CBN and finance ministry have finalised plans for the take-off of the asset management firm which will buy up non-performing loans in exchange for government bonds in order to free up banks’ balance sheets.

In fact, analysts have posited that the impact on liquidity might spur the Central Bank of Nigeria (CBN) into embarking on excess liquidity mop up or a likely hike in Monetary Policy Rate (MPR) in its July Monetary Policy Committee (MPC) meeting.

According to Bismarck Rewane, chief executive of Financial Derivatives Company Limited, in its May report presented at the Monthly Lagos Business School Meeting, short recovery is expected in the next couple of weeks as market bounces back from current low as a result of expected liquidity inflow.

Razia Khan, regional head of research, Africa Standard Bank, said the recovery of oil prices and output, creation of the AMC, and government’s spending plans ahead of elections in 2011 will all add to money supply. She, however, said recovery will be short-lived due to expected increase in interest rates, and further pressure on exchange rate as the holiday season approaches.

“Expect to see a lull in market activity in the summer months, while intervention by regulatory agencies on the broker-dealer community may reduce activities on the stock exchange and introduce further downwards pressure”, she said.

According to Khan, so far the stock market has been showing strong correlation with interest rate environment. For instance, high interest rate volatility has contributed to the volatility in the stock market, with the stock market benefiting from depressed rate environment as investors sought higher yields. In fact, the analysts are sure the apex bank may tinker with the idea of raising rates in its July meeting due to growing money supply.

Khan is, however, optimistic that the fixed income market (a market for trading bonds and other preferred stocks) will benefit as corporate bonds will be issued at higher yields.

For instance, N80 billion FGN bond was sold in the month of May. Similarly, a N25 billion was sold at the 3-year bond end of the market at a yield of 5.5 per cent, while another N25 billion was sold at the 5-year end of the market at 4.0 percent. The N30 billion was sold at the 20-year at 8.5 per cent. Successful bids for the three, five and 10-year offers were allotted at the marginal rate of 8.25 percent, 9.00 per cent and 10.00 per cent.

On how the CBN had fared in one year of Lamido Sanusi’s stewardship as governor, Khan said the apex bank is likely to be encouraged to continue its unbundling of universal banking.

She expects further regulation of banking entities and consolidated supervision to intensify in the coming years. However, she identified some policy challenges such as fiscal dominance and indiscipline at the sub-national government level, and temptation to bleed the Excess Crude Account (ECA) as areas to watch out for.

Others include ensuring an orderly succession at the Nigerian Stock Exchange (NSE), weeding out the insolvent and insidious broker/dealers and sanitising the capital market. The House of Representatives signed a harmonised bill on Thursday, while the Senate is expected to vote on the legislation when it resumes work on June 22. “The central bank and the finance ministry have already set up technical teams that are doing implementation,” Central Bank governor, Lamido Sanusi told CNBC Africa television.

“We are looking at the toxic assets, we are looking at the value of the collateral, we are working on valuation models.” With bad loans off banks’ books, CBN hopes financial institutions will resume lending which had ceased since last year’s $4 billion bail-out of nine weak lenders.

“We will have a return to credit growth. It will be gradual but this time it is hopefully going to be sustainable,” Sanusi said. The central bank wants new investors to recapitalise the rescued lenders but they are unlikely to do so until after the AMC purchases the bad loans.

“By the time we have done the M & A (mergers and acquisitions), taken off the toxic assets and gone through a recapitalisation process, the supply side of credit will improve,” he said.

Sanusi also raised concerns over the state of the troubled airline industry and its potential impact on the banking system. “Every airline in the country seems to have non-performing loans,” he said. “One airline, for instance, owes a bank over N100 billion. Now that is enough to wipe out the entire capital of the bank.”

CBN is already extending a N500 billion fund meant to stimulate credit to the power and manufacturing sectors to airlines.

Meanwhile, after a round of profit taking precipitated a recent downturn in stock values, Nigeria’s stock market will begin a sustained rebound with the commencement of AMC as stock prices are expected to start an ascent in value, analysts have predicted.

The coming on stream of the AMC coincides with the expected rise in government spending, occasioned by federal government’s lining up of a supplementary budget to take care of certain overheads by ministries, departments and agencies (MDAs). This will increase the spending capacity of civil servants and, in turn, boost activities at the stock market.

Business

TTP Trains Customs Agents, Freight Forwarders On Eto App

Published

22 hours ago

May 1, 2025

The Tide

In a concerted effort to tackle racketeering and reduce inflated transportation costs in the Nigeria’s seaports, Trucks Transit Parks Ltd. (TTP) has trained Licensed Customs Agents and Freight Forwarders on the use of its Ètò electronic call-up system.
The training was held recently at Customs Processing Centre (CPC) Auditorium, Apapa, Lagos, in collaboration with the Nigeria Customs Service (NCS) and supported by the leadership of the Joint Association of Licensed Customs Agents and Freight Forwarders (JALCAFF), Apapa Command.
Speaking at the event, Comptroller Babatunde Olomu expressed appreciation to TTP for facilitating the training and emphasized the need for customs agents to take personal ownership of the Ètò booking process.
“I want to thank TTP for this impactful training. I encourage all customs agents to begin doing their own bookings directly. By doing so, they can take back power from the unscrupulous elements exploiting their lack of knowledge, selling tickets at highly inflated prices,” Olomu declared.
He noted that empowering agents with hands-on training was key to dismantling racketeering networks that have plagued access to the ports and frustrated efficient logistics processes.
Also speaking, the Chairman, Apapa Chapter of the Association of Nigerian Licensed Customs Agents (ANLCA), Chief Emeka Chukwumalu, said the engagement was critical to the ongoing push to reduce cargo transportation costs and ease business operations at the Apapa Port.
According to a freight forwarder, “The training is basically for us to have awareness of the operations of the Ètò call-up system through TTP. We also want to brainstorm on ways to reduce the high cost of cargo transportation in Apapa Port.
“This training opened our eyes to how simple it is to book tickets ourselves. We now know the right steps to follow and how to avoid falling victim to fraudsters.”
Earlier, Head of Operations at TTP, Mr. Irabor Akonoman, talked on common misconceptions about ticket pricing, reaffirming that the cost of Ètò bookings had remained consistent since its inception.
“The official price remains the same since inception. What people are paying higher amounts for is the manipulation by racketeers”.

Business

NECA Holds MSME Fair To Drive Growth

Published

22 hours ago

May 1, 2025

The Tide

Towards strengthening small businesses and promoting a more supportive regulatory environment, the Nigeria Employers’ Consultative Association (NECA) says it will hold the 2025 edition of its flagship MSMEs Fair on Tuesday (May 6, 2025).
The event, themed, “Galvanising MSMEs for Economic Growth and Stability”, will take place at NECA House in Lagos.
According to NECA’s Director-General, Mr Adewale Smatt Oyerinde, the fair seeks to provide micro, small, and medium enterprises with essential tools, resources, and strategic networks to thrive in Nigeria’s challenging business climate.
He emphasised the vital role MSMEs play in national development, describing them as the “lifeblood of Nigeria’s economy.”
Oyerinde noted that the fair is designed to offer entrepreneurs practical solutions to navigate economic uncertainties, regulatory hurdles, and business scalability issues.
A major attraction of this year’s event is the keynote address by the CEO of FATE Foundation, Mrs. Adenike Adeyemi, a prominent advocate for MSME development.
She is expected to share transformative insights on innovative strategies for sustaining and growing small businesses in Nigeria.
A unique feature of the fair will be interactive sessions with key regulatory bodies. Entrepreneurs will engage directly with agencies responsible for licensing, compliance, taxation, and business registration.
NECA said these sessions aim to demystify bureaucratic processes and foster a more enabling business environment.
It also said the fair will provide a platform for entrepreneurs to exhibit their products and services, connect with potential investors, and explore new markets.
It added that participants would gain critical knowledge on digital transformation, access to finance, and strategies for sustainable business growth.
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· NECA stressed that the fair aligns with its broader mission of promoting enterprise development and economic resilience.
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· “By empowering MSMEs with the right support and information, the organisation aims to stimulate job creation, innovation, and long-term economic stability”, NECA said.
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· The 2025 MSMEs Fair is expected to attract a wide range of stakeholders, including financiers, tech experts, regulators, and industry leaders, all united in advancing the growth of Nigeria’s MSME sector.

Business

Over 2m Passengers Board Blue Rail Train – Commissioner

Published

22 hours ago

May 1, 2025

The Tide

The Lagos State Commissioner for Transport, Mr Oluwaseun Osiyemi, says over two million passengers have been transported on the Blue Line Rail since its launch, while state-run buses move an average of 42,000 commuters daily.
Osiyemi, who disclosed this during the Year 2025 Ministerial press briefing held at the Bagauda Kaltho Press Centre, Alausa, on Tuesday, noted that the Lagos State Transport Policy, launched in May 2024, was now in its implementation phase, focusing on inclusivity, safety, affordability, and sustainability.
“On rail development, Phase One of the Blue Line (Marina to Mile 2) has served over two million passengers, with Phase Two (Mile 2 to Okokomaiko) in progress.
“Phase One of the Red Line (Agbado to Oyingbo) is now operational with eight stations and additional rolling stocks procured, while Phase two (Oyingbo to link Blue Line at National Theatre) is underway”, he said.
The Commissioner said in the state-owned bus operations, over 60 million commuters have been served since 2019, with daily ridership exceeding 40,000.
He also said plans were on to deploy new buses with Quality Bus Corridors under construction, adding that the Abule=Egba Bus Terminal had also been commissioned.
“For water transport, 15 locally-built Omibus Ferries have been launched and are in operation, with the Ijegun Egba Terminal now open.
“The OMI EKO project, in partnership with the French Development Agency (AFD), will deliver 25 terminals and 78 electric ferries.
“Over 280,000 passengers have used ferry services in the past year, and 12 boats have been upgraded to meet safety standards”, he said.
On road infrastructure and traffic management, the Commissioner said 49 junction improvement projects had been completed, including ongoing ones at Ikorodu, Iju, as well as Allen-Opebi-Toyin axis.
He added that solar-powered Traffic Signal Lights, road markings covering 67.9km, new medians, laybys, and 3,941 parking lots had also been provided.
Additionally, Osiyemi announced that the deployed Automatic Number Plate Recognition cameras had detected over 470,000 traffic violations and that the Vehicle Inspection Service issued over one million roadworthiness certificates.
He also said that the Lagos State Drivers’ Institute trained more than 32,000 drivers in the past 13 months.
The event marked the second anniversary of Governor Babajide Sanwo-Olu’s second term, showcasing major strides in the transport sector under the THEMES+ agenda.

Nkpemenyie Mcdominic, Lagos