Business
Recapitalisation And Retail Investors
The Nigerian capital market traditionally has been known as being driven by Nigerians, as they form the bulk of investors in the market. But the question now is: could the market be said to be driven by Nigerians today?
In the wake of the current recapitalisation of stock broking houses to the tune of N500 million, a cross section of retail investors have began nursing fear that their stock brokers would not meet the new capital base and, as such, do not want to be caught unawares.
The Tide’s findings reveal that the general feeling in this quarter is that retail investors are not wanted in their market, hence there has been a renewed interest in the market by this class of investors, this time around, to sell all that they have in the market and give way for the target foreign investors targeted to project the market to global prominence.
Emerging facts allege that on-going developments in the market points to have targeted this class of investors to force them to conform to specific market direction, failure of which they would have no other alternative than to flee for safety by dumping their shares in the market.
Our reporter learnt that the specific market direction is tied to recapitalisation of stock broking companies and its collective scheme. The retail investors who prior to the pronouncement of recapitalisation of stock broking firms last December have been reluctant to embrace collective investment which may have no option when the deadline for it expired by December 31, 2018.
A survey carried out by The Tide reveal that fund managers, whose stock broking firms have already met the new recapitalisation base of N500 million and mopping of investments for institutional investors and retail investors who are taken care of by grassroots stoke broking companies likely to be unable to meet the order have commenced dumping their shares in the market for fear of uncertainty.
Though, it is being alleged that some investment companies with subsidiary stock brokers have been on the vanguard of creating monopoly in the market by chasing out other ‘margin’ players, this they believe could be achieved by selling the idea of recapitalisation to the securities and exchange commission.
A stockbroker who spoke on condition of anonymity to The Tide said: “the retail side of the stock market has already had so much battering in the past, the retail investors no longer approach the market for purchasing, what they now do is that they are just selling off what they have, and after selling, they don’t come back”.
The broker added that retail investors no longer approach the market for purchasing stocks, they only approach the market to sell off what they have in the market after which they will no longer return to invest in shares.
Dr. Francis Olubike, Managing Director/Chief Executive Officer of Standard Securities Limited, Port Harcourt, told The Tide that recapitalisation has a major role it is playing toward that direction.
How? Most of them are so much in touch with the so-called medium players in the market, most of them are not in touch with the highest flyers supported by financial institutions among others that have even met the N500 million capital bases, and even surpassed it, because they have backings of banks”, he said.
He stressed that in stock trading, there are stock brokers who are in touch with retail investors that are really disenfranchised in the recapitalisation matter.
According to him, now when retail investors hear about N500 million capitalisation, they would become nervous. Some of the stock brokers that buy shares for the Nigerian retail investors may not meet up with N500 million capitalisation. So, what they are doing currently is to sell whatever they have, in order for them not to lose anything at the end of the day when the deadline given by SEC: expires December 31, this year.
Olubike continued that the regulatory directive by SEC has stalled the purchase end of the market, which he described as being comatose because the investors are not encouraged to invest in the market.
Chief Ray Effiong, an investment analyst, told The Tide that the issue of recapitalisation has also continued to weaken the primary end of the market.
According to the expert, the prevailing market trend has continued to impact the market, especially in the direction of fulfilling its obligation as instrument for sourcing cheap funds for corporate organisations.
To this end, he said, while the primary market has remained comatose, the IPO market has also remained in limbo because confidence of the investors in this segment cannot be secured.
As he puts it, “the issuers are not coming up with IPOs because they are not sure of half subscription talkless of full subscription as the case was previously when issuers were assured of one hundred per cent subscription, and at the end, they will record over subscription, some even recorded one hundred per cent over subscription”.
He added: “issuing housing are not eager to issue IPOs anymore because they are not getting underwriters to write-off the offer before it opens. They are not underwriting because they cannot guaranty the offer. Between 2008 and now we cannot count the number of firms that have issued IPOs.
It was further gathered by this weekly that companies are continually starved of funds for expansion and the possible of doing so from the market and issuing rights proved abortive as a result of the challenge for raising Eurobonds as an acceptable rights in the local market that become more difficult.
Professor Kingsley Omokhani, Managing Director of Pendulum Securities Limited, Asaba, Delta State stated in Port Harcourt that the new recapitalisation order would not force retail investors out of the market, but would ensure that they are better placed in more buoyant companies.
He stressed that the recapitalisation order would end up creating mergers and acquisitions in the sector which would further reveal that emerging companies post-capitalisation will have special products to accommodate all classes of investors, including retail investors.
According to him, what is currently going on in the case of recapitalisation does not concern retail investors, but it will boost their investment confidence, hence they would now be dealing with highly capitalised stockbroking companies.
Omokhani further disclosed that when the recapitalisation is concluded, the companies that have emerged post-capitalisation order deadline would have some products designed for retail investors.
“There are unit trust schemes and portfolio investment schemes. Some firms would carve a niche for dealing with retail investors in the new dispensation in Pendulum Securities Limited, we have products designed for retail investors.
“The retail end of market and mutual benefit of the market will be stronger, post-capitalisation and all these are for the hitherto unprotected retail investors. Unit trust investment scheme will be more highlighted” he said.
Dr. Sarah Anikulemi, an economist and Head of Marketing Department at the University of Jos, in her contribution on the recapitalisation told The Tide that even as the recapitalisation hammer slammed against stock brokers expires by the end of this year, targeted to boost market confidence and the case of protecting retail investors in the market need to be given utmost priority by the capital market regulators.
As she puts it: “we have instructed our clients to always have stock broking companies that have solid base. One or two of them may qualify for the new capital base, but that is not enough, the regulatory authorities need to put measure in place to protect all retail investors on the market”.
Lending credence to recapitalisation, a university don and chairman of Rivers State University Microfinance Bank, Nkpolu, Port Harcourt, Prof Adolphus Joseph Toby stressed that he has faith that stockbroking firms would meet the new order of recapitalisation.
He, however, added that if otherwise, he has the option of migrating to a more qualified stockbroking firm.
He said that he is not harbouring any fear on being forced to migrate to collective investment scheme which he has not subscribed to, but will always find a reliable stock broking company to move his stocks to.
Toby, a professor of corporate finance added. “I am dealing with a more reputable stockbroking company, but if it fails to meet with the recapitalisation order, I will then move my stocks to a new stockbroking firm that meets the capital base. I will not embrace collective investment scheme, but go to a stockbroking company that meet the capital requirement”.
Bethel Toby
The daughter of late Nigerian banking executive, Herbert Wigwe has sold her father’s luxury yacht for $6.5 million which is the equivalent of N8.74 Billion following legal proceedings involving her, Otutochi Wigwe, and the company holding the vessel, Grosvenor Marine Ventures Limited.
This was contained in an online report obtained by The Tide Source in Port Harcourt recently.
The Source further clarified that $6. 5 Million dollars or N8.74 Billion was the asking price as at March this year but was unable to prove, if the said amount was exactly what the vessel went for.
The yacht, known as Chitochi, is a 2016 Custom Line 108 superyacht measuring approximately 33 metres (108 feet) in length. The transaction was handled by international yacht brokerage firm IYC, with its sales and charter consultant, Mark Elliott, overseeing the sale.
The disposal of the high-value vessel followed legal steps taken to address the corporate status of Grosvenor Marine Ventures Ltd., the company through which the yacht was held.
Otutochi Wigwe reportedly approached a court in the British Virgin Islands (BVI) to secure the restoration of the company to the corporate register, a move that enabled the necessary legal steps towards the sale of the vessel.
The proceedings were central to resolving the corporate issues affecting the company and facilitating the transaction, underscoring the legal complexities that may arise when valuable assets are held through corporate entities in foreign jurisdictions.
The sale is also significant in the context of estate administration, as luxury yachts require substantial financial commitments to maintain, even when they are no longer actively used by their owners or beneficiaries.
Such vessels typically attract considerable expenses, including crew salaries, insurance premiums, berthing charges, routine servicing and other maintenance costs, making their continued ownership a major financial responsibility.
Beyond the recurring expenses, luxury yachts are depreciating assets that may lose value over time. Their disposal can therefore form part of a strategy to preserve estate value, reduce liabilities and convert an expensive asset into liquid funds.
Wigwe, who was the former Group Chief Executive Officer of Access Holdings, died on February 9, 2024, in a helicopter crash in California, United States, alongside his wife, Chizoba; their son, Chizi; and former Nigerian Exchange Group chairman, Abimbola Ogunbanjo.
His death was widely mourned across Nigeria’s banking and business communities, where he was recognised for his contributions to the financial services industry, entrepreneurship and philanthropy.
Wigwe’s passing left behind an estate whose administration involves the management of assets and other financial interests, a process that can require legal and financial decisions to protect the interests of the estate and its beneficiaries.
The sale of Chitochi highlights the challenges associated with managing high-value assets held through corporate structures, particularly where the relevant companies and legal proceedings fall under different jurisdictions.
The $6.5 million transaction brings the yacht’s ownership chapter to a close while illustrating how legal procedures, financial considerations and estate management can intersect in the administration of the assets of a prominent business figure.
‘’We determined to get all our equipments and machinery functioning as we progress. For now we’ve about 105 workers, comprising daily paid harvesters and regular staffs. But aside these 105 staffs we also employ daily slashers who for now are about 100.
“During peak periods, hopefully on or before January 2026 we hope to increase our work force for maximum production”, the firm’s management Stated.
King Onunwor
Ariwera Ibibo-Howells, Yenagoa
Some traders at the Rumuwoji Market popularly known as Mile 1 Market have decried the continuous increase in the prices of food stuffs and other items in the ember season.
This was made known by the traders when The Tide visited the market recently.
The traders revealed varying changes in the prices of foodstuffs, with some commodities recording higher increase than others .
A trader Mrs Charity Obinna, at the market, said the price of yam remained the same last week and this week compared to the prices from last month to this month, adding that only a difference of about N100 to N200 was seen.
Another trader, Chukwuebuka Livinus who deals on garri, reported that the prices of some food commodities had been changing frequently.
According to him, the price of a bag of garri increased from N45,000 last week to N58,000 this week, representing an increase of N13,000.
Livinus described the increase as scary and called on the government to do something about it, especially as we get closer to the festive period.
A trader that deals on vegetables, Mrs Joy reported that a significant increase in the prices of pepper rose from N20,000 last week to N40,000 this week.
Similarly, the price of a bag of melon (egusi) increased from N420,000 toN490,000 this week.
In a separate report, Mrs Charity Obinna said that foodstuffs were generally cheaper last month than this month, with price differences ranging from N150 to N200 for some items.
Meanwhile, Giff Okoro reported a decrease in the price of tomatoes. According to her, a quantity of tomatoes that cost N45,000 last month now sells for N25,000, indicating a reduction of N20,000.
Another trader, Usman Ibrahim said the cost of transporting goods from the communities to urban areas where they are sold is one of the major reasons for high cost of goods.
He said transport cost has doubled due to the cost of petroleum products in Nigeria, adding the whole cost is part of the goods because “entrepreneurs must cover their cost and make their gains .
Ibrahim called on the government to help farmers and traders even with little capitals to expand and sustain their business.
Another trader, Mrs Choice Promise a fish retailer said a cartoon which sold at #35,000 last week now sells at #50,000 .
Promise complained that there is no gain or profit because the price has drastically increase and most people cannot afford to buy fish again.
“Mr. President’s Renewed Hope Agenda recognizes that economic ambition requires dependable infrastructure,” Tegbe said.
He added that investments in electricity infrastructure would strengthen the foundations for business expansion, employment and economic growth.
The Kankia substations comprise two 60 MVA, 132/33 kilovolt (kV) facilities designed to strengthen the transmission network serving Katsina State and neighbouring areas.
Tegbe said the infrastructure would improve the network’s ability to distribute available electricity, supporting commercial activities and household welfare.
He also urged residents to protect the facilities against vandalism and other activities that could disrupt electricity infrastructure, asking them to report suspicious activities to TCN or security agencies.
Katsina State Governor, Dikko Umaru Radda, described the project as a significant investment in the state’s electricity infrastructure.
Radda stated that improved electricity supply could support industrial development, economic growth and public service delivery.
He further commended the President, the Federal Ministry of Power and TCN for completing the project.
It would be noted that the latest projects come amid a broader government’s drive to address bottlenecks in Nigeria’s electricity transmission network, which has constrained the amount of electricity that can be delivered to distribution companies and end users.
Wali Chioma, Obasi Chidinma & Amarachi Uche
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