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SEC Gives Nod for Islamic Bonds

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Securities and Exchange Commission (SEC) Friday approved rules allowing firms to issue Islamic bonds as part of a broader economic innovation, in a move aimed at attracting foreign direct investment (FDI) from the oil rich Middle East Emirates.

Ms. Aruma Oteh, director general of the SEC, who is having a torrid time with the National Assembly and had her commission’s budget annulled by the legislators told journalists in Lagos that the Islamic bond is a way of opening up the economy to fresh investors.

“We have opened up the market to attract investments into Nigeria, particularly from Middle East investors,” said Oteh.

Nigeria has the largest Muslim population in sub-Saharan Africa, and is trying to establish itself as the African hub for Islamic finance, emulating the success of Malaysia. Islamic banking assets globally exceed $1 trillion and could reach $4 trillion by 2020, analysts say.

Last year, Islamic wealth manager Lotus Capital and Nigeria’s bourse (NSE) launched a debut index of Nigerian Stock Exchange-listed companies deemed compliant with centuries-old Islamic investment principles.

Oteh also said the regulator had licensed a new over-the-counter platform that will facilitate trading in shares of unlisted companies; a move she hoped would deepen the capital market and support companies raising long-term finance.

“We are essentially broadening the market to include unlisted securities. Think about all the public companies that are under the regulatory oversight of the SEC (but not listed) … the potential is enormous.”

In Nigerian law, any firm owned by more than 50 people is a public company.

Nigeria, Africa’s top oil producer and second biggest economy, is growing in popularity as an investment destination after its stock index rose 35 percent last year to end as one of the world’s best performing markets.

Oteh said the stock exchange had developed a pipeline of firms in the telecoms, cement, power and oil and gas sectors for listing this year, marking the resumption of new issuance after the primary market for new shares dried up during a 2008 crisis.

A stock market bubble burst in 2008, wiping 60 percent off the value of shares on the NSE in a year and nearly forcing nine banks into liquidation, until the central bank intervened to prop them up.

“We will start this year to see a number of companies come to the market, some of them want dual listings,” she said, adding that oil firm Seplat and fertiliser business Notore were among those preparing to list on the stock exchange.

She said 15 firms sold shares last year via rights issues and placements, compared with 20 in 2011, noting that new issuers had been wary of selling shares at low valuations after the 2008 crisis.

Oteh said the mutual fund industry in Nigeria will also help grow the stock market as funds collectively target assets under management of 1 trillion naira by 2018, from 103 billion naira currently.

She said retail investors had started to sign up to schemes and that the number was set to grow to 5 million over the next five years, from 169,000, driven by increased disposable income.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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