Financial Vanguard September 30 2013 by Vanguard Media Limited

SEPTEMBER 30 ,

2013

114.75

-0.9

2,620.00

+23.00

16.92

-0.59

108.78 103.10 CURRENCY BUYING CENTRAL DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI RIYAL KRONA SDR

-0.43 +0.07 SELLING

154.75 155.25 155.75 248.2035 249.0055 249.8074 208.897 209.572 210.2469 169.9242 1 70.4733 1 71.0223 1.5671 1.5722 1.5772 0.2996 0.3096 0.3196 236.3805 237.1443 237.908 25.271 25.3531 25.4352 41.2612 41.3945 41.5278 28.0085 28.099 28.1895 237.0925 237.8585 238.6246

CBN Exchange rate as at 27/09/2013 Executive Vice Chairman and Chief Executive, Nigerian Communications Commission (NCC), Dr. Eugene Juwah (c) and Chief Executive Officer/Managing Director, Airtel Nigeria, Segun Ogunsanya(r) at the Nigeria’s Telecoms Awards, in Lagos. Airtel was adjudged Most Innovative Telco and Best Customer Services Operator.

Banks cut costs to survive tough regulations — HSBC By OMOH GABRIEL, Business Editor

our Nigerian banks may lose N88 billion in revenue to the proposed phase out of Commission on Turnover, COT, charges. This may give rise to a minimum rate on savings accounts that could raise interest expense by the banks to N22 billion in 2013, a recent report by HSBC on four out of the twenty-four Nigerian banks has revealed. The report, which has been circulated among foreign portfolio investors, said that banks operating in the country will struggle to fully offset negative pressure on revenues as cost of risk starts to increase as loan growth recovers due to tighter

regulation of fees and cost of savings account since the beginning of the year. The report focused its search light on First Bank, GtBank, UBA and Zenith Bank. The HSBC report said that Nigerian banks will be under stronger pressure to improve operating costs in order to preserve returns. The report singled out Zenith Bank as the bank that is most sensitive to rising cost of savings account and can hold its cost better than its competitors, as well as having better cost control and asset quality. The report said that better cost control is the only way for Nigerian banks to mitigate reduction in the sector profitability, but high fixed cost base would limit efficiency gains. As an advisor to several institutional investors the HSBC report said, “High fee/loan ratios and cheap, inflation

adjusted, funding costs are key profitability drivers of Nigerian banks. A new set of regulationsston banking charges effective from 1 April 2013 has transformed the profitability structure of the Nigerian banks we cover. A gradual phase- out of commission on turnover (COT) fees and the introduction of a minimum rate on savings deposit accounts, in our view, should have the strongest negative impact on earrings. Continuing the report said “Tighter regulations should encourage banks to focus more on cost optimisation and loan growth. We think that not all banks can mitigate increasing earnings pressure. We calibrate the cost of new regulations for each bank we cover and how they can mitigate such pressure. Phase-out of COT fees will result in revenue loss of

N88 billion, 10 per cent of 2012 combined revenue. The gradual elimination of COT fees to 0 by 2016 from N5per N1000 in 2012 should result in N88 billion in revenue losses for the four banks under our coverage. This is equivalent to 10 per cent of combined revenue banks earned in 2012.” According to HSBC, in 2010, First Bank earned N34 billion from COT. This rose to N39 billion in 2011, N48 billion in 2012 and is estimated to drop to N33 billion in 2013 and further to N24 billion in 2014 and N14 billion in 2015. Gtbank the report said earned N36 billion as revenue from fees in 2010, N35 Continues on page 18 C M Y K

18 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Cover Story

The Basic Guide to Starting Your Business Part 4 Daring successful business man has a mindset that is willing to take risks and tread on places people would not ordinarily want to tread. He would not chicken out at the slightest threat, so if you intend to start and own your business, you must have a die-hard mentality, otherwise you would quit before you even get started. It is also very important to consider the risks involved and your ability to handle them properly, since ever y business involves risks. Most business people are very comfortable with modest risk but quite uncomfortable with big risks. Although they are unwilling to gamble on long shots, they are more willing to take chances if their individual skills can affect the probability of success. Then will they have the courage to step out into the unknown and pursue their personal dreams. Goal getter A successful business man has the mindset of not just setting goals but also achieving the desired result. He does not settle for less but always has his eyes on the prize. To him there are no impossibilities and failure is just part of the game. He does not believe in half measures but believes that he can go all the way and this mentality inspires a lot of confidence in clients and customers and will keep them coming. A high level of energy also keeps the businessman trudging through road blocks because he has his eyes fixed on long term goals. It is important you are very energetic and vibrant as it will ensure that your business is up and running. You need to have a motivation from within and from those around you. The man who invented electricity, tried ninetynine times and failed; he got it right the 100th time! I dare say, that is the spirit you must possess, no matter how many times you fail, you keep trying it out until you get it right….bottom line you must delete the word IMPOSSIBLE from your dictionary. Period! It’s very important you

From left: Mr. Muyiwa Afolabi, Carreer Coach and MD Frontiers Communication; Shina Atilola, Group Head Strategy & Communications, Sterling Bank Plc and Onome Umukoro Communications Department, Sterling Bank Plc at the Get Ready for Work Concert event organized by Sterling Bank

Banks cut costs to survive tough regulations — HSBC Continued from page 17 billion in 2011, N37billion in 2012, N25billion in 2013, N18 billion in 2013 and N10billion is the expected revenue from COT in 2014. According to the report, UBA in 2010 generated N27 billion from COT, N31 billion in 2011, N35 billion in 2012, N23 billion in 2013 and N18 billion in 2014. Zenith Bank Plc, the report said, generated N46 billion from COT in 2010, N57 billion in 2011, N55 billion in 2012 and N43 billion is expected in 2013. HSBC said that COT fees make up the bulk of fee income of Nigerian banks, especially at FBN. Commission on turnover applies to customer -induced debit transactions on current accounts. In its July 2012 draft on bank charges, the Central Bank of Nigeria noted that most banks in the country charged N5 per N1000 transaction. According to HSBC Nigerian banks main profitability pillars are fees and funding. It said “Nigerian and South African banks have highest fee loan ratios among markets covered at HSBC. We estimate that over time Nigerian banks’ fee loans ratio will normalise between that of Egyptian and South African banks GCC banks on the other hand have lowest downside risks to fee income they earn. Nigerian banks earned 2.2 per cent of their loans in commission on turnover (COT) fees in 2012, this was an increase from 1.9 per cent in 2010 We factor in COT fee structure as per CBN guidelines effective 1" April 2013, i.e. a gradual phase-out of fee income . We fully C M Y K

eliminate COT fee income by 2016. The resulting fee loan ratio drops to 2.5 per cent in 2016 from 5 per cent in 2012. We adjusted asset yields and funding costs for inflation in each country to reveal how banks earn their net income margin. Clearly, most banks generate earnings by paying below inflation for their funding. Nigerian, Saudi, Egyptian and Lebanese banks stand out. Asset yields do not cover the rate of inflation in Nigeria,

estimate that FBN paid I per cent on savings accounts. GTbank does not break down its interest expense on savings accounts”. The HSBC report also said “We estimate that the interest rate here was 2.5 per cent in 2012. In the case of Zenith, we estimate cost of savings accounts was I per cent. Zenith and FBN paid the lowest rate on savings (%) 2010 2011 2012 2013e 2014e 2015e accounts in FBN 2.0 1.8 2.0 1.7 1.5 1.4 o u r GTBank 2.7 30 2.6 2.4 2.2 2.1 coverage. UBA 2.7 2.2 2.3 1.8 1.7 1.6 F B N , Zenith 2.6 2.0 2.0 1.6 1.4 1.3 h o w e v e r, Average 2.5 2.3 2.2 1.9 1.7 1.6 has the highest ratio Saudi and Lebanon. Nigerian of savings accounts in its banks report highest net income customer deposits, 23 per margin mainly due to very cheap cent. This makes it most funding cost. sensitive to any increase in “To arrive at our estimate of cost of savings accounts. UBA turnover volume we divided stopped disclosing a 2012 COT fee income by N5. breakdown of its deposit We assumed that turnover expenses in 2012. We think volume will grow by 15-20 per that UBA paid 1.3 per cent on cent per annum in the forecast savings accounts in 2012, in period. Our COT fee income line with 2011”. forecast is a product of turnover volumes and the COT fee ofN3 in 2013, N2 in 2014, and NI in 2015 (per C B N guidelines).

(Nm) 2012 FBN 4,358 GTBank 4,305 UBA 3,200 Zenith 1,507 Total 13,370

% cost 1.0 2.5 1.3 1.0 1.5

The report further said “The large volume of savings accounts, which varies between 8 per cent and 23 per cent of total deposits means that banks will have to increase interest expenses as CBN now requires them to pay a minimum of 30 per cent of monetary policy rate (MPR). With MPR at 12 per cent now, this is equivalent to 3.6 per cent. Before the introduction of the minimum rate on savings accounts, we

2013e 11,564 6,932 10,980 5.639 35,115

% cost 3.5 3.5 3.5 3.5 3.5

Change 7.206 2,627 7,780 4,132 21,745

Combined interest expenses on savings accounts should increase by N2l.7billion in 2013, with the strongest increases at FBN and UBA, as per our estimate. Funding costs will increase in 2013. FBN’s funding cost advantage relative to peers should be less than before. "In our sector initiation report th Save now to invest , 14 September 2012, we Continues on page 19

move with the right people and read books and materials that will prepare your mind and reposition your mindset towards positivity, because “if you can think it then you can be it”. Never forget “you are a product of your thoughts.” This reminds me of a Nigerian drama series that aired on the Nigerian national television network (NTA) in the early 90s, BASSEY& COMPANY. The lead act was fond of saying “if you want to be a millionaire, think like a millionaire”! As funny as it sounded then, it is still very true and applies to business. So permit me to say if you want to be a successful business man, then think like one! If you are going to run a business of your own, you should find something that makes you really happy. This should be at the core of why you are even looking at going into business of your own, because if you try and make something work and you have no passion for it, it probably won’t work out. If you have passion for the industry that you are working in, you will have a good chance of making it work out. What make a business great are the people that run it and the passion that they have for it. Keep this in mind when you are thinking of starting a business of your own. From experience, many just jump into business because they are excited about an idea and haven’t really thought about the ‘ whys and wherefores’. Taking a moment to reflect on your motivations and defining your purpose will be time well spent. A lot of people go into business for the sole reason of making money; this is not a good idea. It’s not a good idea because the main ingredient for success is missing. The main ingredient for success is passion, and it’s virtually impossible to maintain high-levels of energy when you’re doing something you don’t love. There will always be challenges in owning a business. Your love and passion is what takes you through those challenges. Without that passion, you probably won’t make it.

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 19

iscal and monetary policies are the instruments government use to manage the economy. The main focus of economic policy is the over all well being of the citizenry. Economic policy worldwide is meant to gear the economy towards full employment of resources, stable prices, balanced growth, and a favourable external reserve as a back up to exchange rate stability. These overall objectives can be conflicting and it requires men and women with deep knowledge of the workings of the economy to manage the unintended

CBN should develop policies to address interest rate, dollarisation of economy jubilating about are very transient. It is pertinent to grow the real sector and prevent the economy from any further decline as revealed in the GDP figures. The CBN

quarter of this respectively. This is also lower than the projected GDP growth for the fiscal year at 6.91 percent. It is curious to note that the CBN monetary policy committee seems not to be worried that the National Bureau of Statistics has principally

outcome of policy. In Nigeria today, it will appear that monetary policy is concerned mainly with price and exchange rate stability with little concern for balanced growth and the attainment of full employment. The bane of the Nigerian economy is low productivity with a large army of able bodied men and women who are looking for jobs that are not just available. When the global financial crisis erupted in 2007, the various Reserve Banks employed measures that were not conventional to propel the economy. The US for a very long time has not supported private enterprise with tax payers’ money, but in order to pull the US economy out of the doldrum the sub-prime mortgage lending plunged the economy into, it evolved a stimulus package for industries to survive. The reverse seems to be the case here in Nigeria. The CBN Monetary Policy Committee met on the 23rd and 24th of September 2013 to review the domestic and international economic developments. The MPC assessed the challenges facing the Nigerian economy in the near term, primarily since its last meeting in July 2013. At the conclusion of the meeting, the MPC maintained the following stance; 12 percent benchmark rate (MPR) with an asymmetric corridor of +/- 200bps, 12 percent Cash Reserve Ratio (CRR) on private sector deposits, 50 percent CRR on public sector deposits, Liquidity ratio at 30 percent of total assets, Net open position of 1.0 percent of shareholders’ funds. CBN’s calculation is that it is better to have the current level of unemployment than

A reduction in the monetary policy rate is needed now to grow the economy. The real sector of the economy, manufacturing and agriculture can not take loans at 22 percent

Sanusi, CBN Governor trade some of it with inflation rate. A reduction in the monetary policy rate is needed now to grow the economy. The real sector of the economy, manufacturing and agriculture can not take loans at 22 percent. It is the real sector that can lead to the diversification of the economy, create jobs and bring about the transformation agenda being preached by all principal officers of the Jonathan’s administration. Portfolio investment, which the president and the minister of trade and industry are

management team should put on a thinking cap and redesign policies that can offer affordable credit to the real economy, as any economy desirous of growth in real terms must encourage real sector growth by facilitating easy access to low cost funding and create an enabling environment for infrastructure delivery. National Bureau of Statistics data suggests that real GDP grew by 6.18 percent in the second quarter of 2013, a drop from the 6.99 percent and the 6.56 percent posted in fourth quarter of 2012 and first

attributed the decline in GDP to the persistence drop in the contributions from the oil sector to the domestic economy. The oil sector output decline by 1.2 percent apparently higher than the 0.5 percent in the first three months of 2013 and in the first half of the 2013, principally due to the reported incidence of growing crude oil theft and significant revenue leakages in the oil sector. The declining contribution of the oil sector to GDP further buttresses the urgent need to give breath to the real sector through access to cheaper funding, which the current interest rate regime cannot guarantee.

The decision of the CBN monetary policy committee to hold key policy rate may encourage further foreign funds inflow into the economy that could stem the pressures on the naira. This approach certainly will continue to make Nigeria remain vulnerable to hot money reversals as a result of the quantum of Foreign Portfolio Investments in the country. The high interest rate environment and benign inflation outlook bear this out. The persistent domestic foreign exchange demand pressures as rightly observed by the committee are from political activities and not for productive purposes. Allowing the political class to continue to put pressure on the exchange rate by the CBN gives cause for worry. It suggests that the CBN is dancing to the whims of the political class. Coupled with this, is the ever increasing dollarisation of the economy by the same political class. The CBN says it remains committed to defending the naira, even if this requires depleting the nation’s foreign reserves. It has identified the major threat to the naira as the build-up of political activities, resorting to dollarisation of the economy. This remains a key risk to the stability of the naira. CBN should roll out policies that tackle this pressure point by insisting that all local payments, purchases be made in naira and refusing foreign exchange cover for imports that are not essential needs.

Cover Story Banks cut costs to survive tough regulations — HSBC Continued from page 18 (%j 2011 FBN 1.9 GTBank 2.6 USA 3.1 Zenith 2.3

201~ . 2:6 3.0 3.3 3.5

2013e 3.3 3.2 3.8 4.1

argued that Nigerian banks have plenty of room to improve costs. An expected attrition in fees and upward pressure on funding costs should force banks to control costs better. There is in fact little room for banks to maneuver on costs as 40-50 per cent of the cost base is fixed. Our re-examination of the cost structure of the banks we covered suggests that UBA

2014e 3.2 3.2 3.6 3.7

2015e 30 2.9 3.8 3.6

2016e 31 33 3.9 3.6

and Zenith were the two banks which made the strongest progress in controlling costs. This can be seen in headcount per branch numbers in the case of Zenith and in the cost to income ratios of both banks. Zenith and UBA were the only two banks to cut staff expenses in 2012. For comparison, staff costs at First Bank and GTbank increased on the average by 23 per cent year on year in

2012. The report said “We forecast further cost efficiency gains at UBA and Zenith, l per cent of total assets between 2012 and 2015. GT Bank already has a good cost structure, with not much room for potential improvement, in our view. We forecast efficiency improvement at FBN, UBA and Zenith. GT Bank already has lowest cost income ratio. FBN still demonstrates the highest cost per employee. "However we think this metric will be difficult to reduce to the industry average. We believe higher staff cost per employee could be owing to the high headcount allocation at a headquarter level, where staff cost, tend to be higher”.

The report said that AMCON levy puts floor to cost cutting in Nigerian banks. It stated “We assume 0.5 per cent in AMCON levy for next 5 years. Our 2013 forecasts reflect an increased AMCON levy which is now 0.5 per cent of total assets, up from 0.3 per cent a year ago. The negative equity position of AMCON, $19billion as at December 2012, suggests that the levy is unlikely to decrease going forward, unless the Government recapitalises it, which we think is unlikely”. HSBC Research estimates a 7 per cent capital shortfall in AMCON. It said “For now we assume that the Government fully transfers the high cost of the AMCON

recapitalisation to the banking sector. At a 0.5 per cent, AM CON levy and a 15 per cent per annum increase in banking assets, we calculate it would take 23 years for AMCON to be recapitalised in full. Our calculation assumes a 0.5 per cent AMCON levy. “If one assumes that AMCON needs to recapitalise to $I billion, which puts its equity-to-asset ratio at a modest 7 per cent, AMCON would require $20billion in new capital. This is equivalent to roughly half of Nigeria’s foreign currency reserves. In the absence of recapitalisation of AMCON by the Government, the banking sector has little room for large systemic defaults”. C M Y K

20 — Vanguard, MONDAY, SEPTEMBER 30, 2013

FP Advert DSTV

C M Y K

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 21

Business & Economy

No meaningful development without quality statistics — World Bank Stories by FAVOUR NNABUGWU

C M Y K

Expert says Nigeria needs national shipping line

here is no country that can attain meaningful development without quality statistics to address its socio-economic challenges. This is coming from the World Bank Country Director, Ms Marie-Francoise MarieNelly, at the opening of a twoday National Statistical User Satisfaction End-line workshop organised by the National Bureau of Statistics (NBS) in Abuja. She said that there must be quality statistics for any country, including Nigeria to be able to design, develop or evaluate its national strategies. Marie-Nelly said that the importance of strong statistical systems to enhance the country’s ability to control and monitor its development could not be over-emphasised. Represented at the occasion by Mr. Alain Gaugris, the Country Director said the bank was committed to supporting statistical development in the country. She noted that the Statistics for Result Facility (SRF) which is currently being managed by the bank was meant to improve the legal and institutional framework of the Nigerian statistical system at the national and sub-national levels. She added that the workshop had become imperative in order to sustain the dialogue between users and producers of statistics with a view to better meet the demand for official statistics. However, StatisticianGeneral, NBS, Dr. Yemi Kale, said that the National Strategy for the Development of Statistics (NSDS) which is currently being implemented by government was targeted at transforming the Nigerian statistical system for effective and efficient service delivery. Kale said that survey had shown marked improvement in the usage of official statistics, noting that baseline figures for relevance of the usage of official statistics had climbed to 97.1 percent from 90.91 percent, while the use of official statistics for economic and social information had also risen to 83.3 percent from 78.1 percent. Represented by the Director, Real Sector and Household Department, NBS, Mr.

BRIEFS

From left : General Electric (GE) Volunteers, Tanya Spencer; Osagie Ogunbor and CEO, United for Kids Foundation (UKF), Adesuwa Ladoja, during the GE academic volunteer session and donation in Victoria Island Nursery and Primary School, Victoria Island, Lagos, recently. George Oparaku, the NBS boss further emphasised the need for all stakeholders to support the implementation of the NSDS in order to provide the country with comprehensive, timely and reliable statistics. He said the pilot phase of

the NSDS/SRF project would effectively terminate by end of Februar y, 2014 while negotiations were at advanced stage for a successor project that would commence immediately. The pilot phase currently covers Anambra, Bauchi, Edo,

Kaduna, Niger and Ondo states while the second is expected to cover all the 36 states of the federation, including the Federal Capital Territory (FCT) as well as ministries, departments and agencies of government (MDAs).

Bill to punish fake product dealers underway — NASS

he last may not have been heard of sanctions and punishment for dealers of fake and substandard products in the country. This is because a bill that will prescribe stiff messure against dealers in fake product is underway. The Bill that will empower the Standards Organisation of Nigeria, SON, to punish offenders would be passed into law before the end of next month. The Chairman, House of Representatives Committee on Commerce and Industry, Hon. Mohammed Ogoshi Onawo, disclosed this when he led other members of the committee on oversight function to the organisation headquarters in Abuja. According to Onawo, the Bill, which has since been laid before the House, will give more powers to the SON to arrest and prosecute

importers, as well as sellers of fake products in the country when passed. The chairman described as grossly unacceptable the release of only 26 per ent of the capital budget to the organisation in September and promised to address the situation with support of his colleagues in the House. Onawo, while commending the management of SON for the tireless fight against substandard products in the country, urged it to focus more on cement, fuel and generating sets, among others, which fakes, he noted, are in various Nigerian markets. He said: “We commend your efforts despite all the challenges, but we would like SON to do more in terms of quality of cement being sold in the country. The same thing we will like to do with fuel, because we all know that

adulterated fuel has made many people to lose their families.” The chairman also urged the SON to extend its activities beyond the shores of Nigeria in order to achieve better results in the war against fake and substandard products in the country. ” We would not want you to stop the fight in Nigeria, but (extend) it to where the (fake) goods are being manufactured. If they are not good for them, it can’t be good for us in Nigeria”, he said. Earlier, the Director General of SON, Dr Joseph Ikem Odumodu, said that out of N54million capital budget earmarked for the organisation this year, only N14million has been received while the agency generated N1billion.

apt. Dennis Osah, the first President of Nigerian Association of Master Mariners, has called on the Federal Government to consider reviving a national shipping line. Osah said this was necessary to serve as a practical training facility for seafarers, while it would also be doing business. He said that the Nigerian cadets needed sea-going vessels for practical training. Osah said that the Maritime Academy of Nigeria in Oron, Akwa Ibom, could not train the students in practical lessons because the country does not have national shipping line. “If our maritime academy has capacity for practical sea training, those being sent abroad will have been trained here and that would have saved Nigeria the foreign exchange spent,” he said. Osah said he started his training as a cadet with the Guinea Gulf Lines before he went on to the Nigerian National Shipping Line before he progressed to become a master mariner.

FG registers 15.5m farmers under GES

he Federal Government said it has registered about 15.5 million farmers under the Growth Enhancement Scheme (GES). Mr Sunday Edibor, Regional Director for North Central, Federal Ministry of Agriculture and R u r a l Development, announced this in Minna at a stakeholders’ meeting. He said the farmers were from Niger, Plateau, Benue, Kogi, Kwara, Nasarawa and FCT, to ensure national food security. Edibo said the scheme, which would boost agriculture and ensure self reliance for the farmers, was to help the country in its effort to stop food importation by 2015. “We intend to stop importing food by 2015, so we have to take steps that would aid the intention of the Federal Government in producing its own food.” He said the states and number of farmers registered between 2012 and 2013 included Niger, 270,000; Plateau, 360,000 and Benue, 252,000.

22 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Business & Economy BRIEFS Edo generates N2.2bn IGR monthly — Oseni Elama BY GABRIEL ENOGHOLASE

hairman of the Board of Internal Revenue, Edo State ,Chief Oseni Elamah has disclosed that the Revenue Board now generates over N2.2billion monthly revenue as against the N200 million inherited by the present administration in 2008. Besides, he said that the board has put in place an institution that would sustain and advance the pace of revenue drive and continue to meet ANEEJ demands for proper transparency and accountability in governance. Elama who spoke while receiving the management of the Africa Network for Environment and Economic Justice (ANEEJ) led by Rev. David Ugolor in his office commended described ANEEJ as an organisation synonymous with value for money. He said ANEEJ was a transparent organisation that goes to grass root to get their facts rights before publishing due to their commitment to promote good governance in the country.

Budget implementation: House Cmttee scores AGF low

he Chairman, House of Representatives Committee on Finance, Mr Abdulmumin Jibrin, in Abuja rated the office of the Accountant General of the Federation (AGF) low on budget implementation. “We have looked at the releases and performance of the office of the AGF and we won’t say it is excellent, but we will say that it is fair,” Jibrin said during the committee’s oversight visit to the office. “We have had a very good interaction and we believe that the AGF is doing a good job; the committee will continue to support him so that the office can deliver better. “Apart from asking you questions about your activities, we also have the responsibility to protect you.” Jibrin also asked the AGF to present a report on issues currently facing the Federal Account Allocation Committee (FAAC) to the House. C M Y K

From right: Former President of United States , Mr. Bill Clinton; Chairman, Heirs Holdings, Mr. Tony O. Elumelu; and Founder, Microsoft, Mr. Bill Gates, discussing during the 2013 Clinton Global Initiative meeting in New York on Tuesday.

EU-Nigeria bilateral trade volume hits $40bn in 2012 By NKIRUKA NNOROM

he volume of bilateral trade between Nigerian and EU member states stood at $40 billion as at the end of 2012, said Massimo De Luca, Trade Counsellor of European Union Delegation to the Federal Republic of Nigeria and to the Economic Community of West African States. Export from Nigeria to EU countries accounted for $28

billion of the trade volume, while import to Nigeria accounted for the remaining $12 billion. Speaking at a press briefing to announce the second EUNigeria Business Forum billed for 3rd to 4th October, 2013, in Lagos, with the theme, ‘Forging Partnership in Africa’s Economic Powerhouse’, De Luca said there is an estimated 40billion Euro of Foreign Portfolio Investment inflow from EU countries to Nigeria within the period.

“Already today, Europe is the biggest export market for Nigeria for non-oil business whether it is leather, cocoa or rubber. But the problem is that we should discuss how we can increase that volume of business more and more by moving from cocoa beans to other cocoa products, including cocoa cereals and cocoa butter. “We need to discuss how we can move from leather into bags; how we can attract individuals and more European companies to

produce more and more in Nigeria. These are some of the things we will concern ourselves with because there are too many investors looking to Nigeria for investment,” he said. Also speaking at the event, André Rönne, Delegate of the German Delegation of Industry and Commerce in Nigeria / CEO, NigerianGerman Business Association, said, “Despite the general economic upheavals of the last few years, the EU remains the biggest trade and investment partner for Nigeria. Beyond figures, the opportunity to leverage the EU-Nigeria connection into an even bigger relationship is something which comes close to an economic ‘Must Do’ and which certainly represents a very palatable prospect for many people and companies.” He noted that the 2013 EUNigeria Business Forum is a key platform for both public and private sectors to put to work the objective of bringing the EU and Nigeria closer. He stated that in choosing the theme of this year ’s Business Forum, attention was given to those sectors, which are key to bringing development beyond growth in Nigeria, including energy, infrastructure and agriculture, adding, “These sectors will be explored within the broader context of the Nigerian business environment.” According to him, the choice was made somewhat obvious in the light of the Transformation Agenda of the Nigerian government, saying that these were sectors where the scope for specific trade and investment opportunities from both sides were quite remarkable.

PZ posts N5bn profit …declares N2.2bn dividend By EMMA UJAH

Z Cussons Plz has posted a post-tax profit of N5 billion for the business year-ended May 31, 2013. The Chairman of the company, Prof. Emmanuel Edozien, told shareholders at the company’s 65th Annual General Meeting, AGM, in Abuja, that in spite of the global economic challenges the management and board work assiduously to record an impressive achievement in the year under review and declared a N2. 223 billion dividend at 56 kobo per share.

According to him, the dividend would be paid on the second of next month and that all shareholders’ accounts would be credited on the said date. Prof. Edozien disclosed that the company ’s turn over which stood at N71.3 billion was a marginal drop from the previous year ’s figure of N72.1 billion owing to the difficult operating environment and that the management was able to increase its profit due to efficient resource management. “We extended our leadership of the toilet soap

segment with Premier, Joy, and Imperial Leather . Our New Premier range especially Cool Deo is growing rapidly and it is driving our market leadership,” the chairman said. He added that the company successfully introduced its international brand, Carex antibacterial hand wash liquid into the Nigerian market and established a leading position in the antibacterial hand wash segment. Prof. Edozien also said that the successful re-launch of the Morning Fresh brand and the introduction of Zesty

lemon variant significantly drove the growth of the dish wash category. In an interview after the AGM, The Managing Director of the company, Mr. Christos Giannopoulos said that PZ would pursue policies and implement strategies that would sustain its market leadership through the introduction of more products and keeping cost under control. ”Our future plans is to try and increase our market share and introduce more products into the market place. Our costs are now under control, all our investments are paying dividends”, he said.

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 23

Banking & Finance BRIEFS JPMorgan back at Chrysler after bankruptcy loss

PMorgan Chase & Co. (JPM), the lender that lost almost $2 billion during Chrysler Group LLC’s 2009 bankruptcy, is now its chief adviser as the automaker’s two owners haggle over its value. JPMorgan will advise Chrysler in the event of its sale to majority shareholder, Fiat SpA, said people with knowledge of the matter who asked not to be identified because the information is private. The bank was also listed this week as the lead underwriter of an initial public offering of Chrysler shares owned by the company’s other shareholder, a United Auto Workers retiree trust. The dual role highlights the complicated path Chrysler has been forced to take to resolve a dispute between its two backers. Sergio Marchionne, the chief executive officer of both Chrysler and Fiat who has spent four years seeking to merge the companies, is at loggerheads with the UAW’s trust over the value of its 41.5 percent stake in Chrysler said letting public investors put a price on the stake, through the IPO process, is one way to resolve the matter.

Citigroup to pay Freddie Mac $395m on suspect mortgages

itigroup Inc said it has agreed to pay $395 million to Freddie Mac to resolve claims of potential flaws in roughly 3.7 million mortgages it sold to the housing finance company from 2000 to 2012. Citigroup, the third-largest U.S. bank, said the settlement also covers potential future claims arising from the loans bought by Freddie Mac, a large purchaser and guarantor of home loans. The deal follows an agreement by Citigroup in July to pay $968 million to settle similar claims by Fannie Mae, the largest U.S. mortgage finance company. Both Fannie Mae and Freddie Mac were bailed out by the federal government in 2008. “Today ’s agreement with Freddie Mac marks another important milestone in successfully resolving Citi’s remaining legacy mortgage issues,” Jane Fraser, chief executive of CitiMortgage, said in a statement.

Zenith Bank best competition, ranks high in asset quality, cost savings — Report By OMOH GABRIEL, Business Editor

hen in 2004, the CBN asked Nigerian banks to put in place a management succession plan, many banks did not take it seriously. Zenith Bank in its usual proactive approach to banking put in place a team of high caliber managers. One of the managers is Godwin Emefiele who took over from the pioneer Managing Director, Mr Jim Ovia an acclaimed banker. Three year after taking over as managing director of the bank, Emefiele has steered the ship to higher levels that Zenith has continued to fly in high colours. A survey report conducted by HSBC global research on subSaharan African banks has adjudged Zenith bank Plc as the best managed bank in Nigeria for its good quality asset and for being least sensitive to increase in cost of savings accounts. According to the research report which covered four Nigerian banks namely First Bank, GTBank, United Bank for Africa and Zenith bank, Zenith bank’s low upside risk to non performing loans charges provide it more room for earnings growth in the

•Godwin Emefiele, Zenith Bank GMD 2013 financial year with additional 8 per cent on its pre-tax basis. The report rated Zenith bank high in non interest income among the four banks covered. Zenith Bank Plc, the report said, generated N46 billion from commission on turn over COT, in 2010, N57 billion in 2011, N55 billion in 2012 and N43 billion is expected in 2013. COT fees make up the bulk of

fee income of Nigerian banks, especially at FBN. According to HSBC, in 2010, First Bank earned N34 billion from commission on turn over COT. This rose to N39 billion in 2011, N48 billion in 2012 and is estimated to drop to N33 billion in 2013 and further to N24 billion in 2014 and N14 billion in 2015. Gtbank the report said earned N36 billion as revenue from fees in

Stanbic IBTC collaborates with John Deere, Tata on agriculture financing By NKIRUKA NNOROM

tanbic IBTC Bank said it is working in collaboration with Tata Africa Services and John Deere Financial, a division of United States-based John Deere, one of the leading manufacturers of agricultural machinery and heavy equipment globally to provide funding for agriculture in the country. Stanbic IBTC Bank will provide a range of financial services to customers of John Deere. The collaboration was consummated recently in Abuja at the formal commissioning of an office and showroom in Abuja by Tata Africa Services. Chief Executive Officer, Stanbic IBTC Holdings, Mrs. Sola David-Borha, said at the event that the collaboration

will be pivotal in diversifying the country’s economic base. "This is in addition to the immense benefits that will accrue to Nigeria’s quest to catalyse growth of agriculture by unlocking access to bank financing for operators along the entire agriculture chain. “We are thrilled to work with John Deere and Tata as their growth plans resonate well with our strategy to help stimulate growth of the Nigerian agriculture sector on a sustainable basis,” DavidBorha said. She added that as Nigeria’s natural resources are expected to drive strong growth and attract investments in the energy, mining, infrastructure development and agriculture sectors, Stanbic IBTC is well positioned to provide on-theground banking operations, staffed by expert teams familiar with local business conditions

and regulations to deliver excellent service to John Deere and its customers, providing support to dealers and building long-term relationships. On his part, Managing Director of John Deere Financial for sub-Saharan Africa, Mr. Jacques Taylor, said the combination of the globally recognised John Deere brand and Stanbic IBTC, a member of Standard Bank Group, Africa’s largest financial institution, will create a major platform to support all stakeholders, especially the dealer networks to enable them to obtain financing for their customers and enhance sale of equipment.He said the collaboration can make a real difference in the country not only in terms of business, but in helping millions of Nigerians improve their lives through profitable farming.

2010, N35 billion in 2011, N37billion in 2012, N25billion in 2013, N18 billion in 2013 and N10billion is the expected revenue from COT in 2014. According to the report, UBA in 2010 generated N27 billion from COT, N31 billion in 2011, N35 billion in 2012, N23 billion in 2013 and N18 billion in 2014. HSBC said “Interest rate environment is favourable for Zenith’s net income margin (NIM). We raise our target price to N24 from N23 on positive earnings revisions and upgrade the stock to overweight (OW) from neutral,” the report indicated. Looking at the investment prospects, the report observed that tighter regulation of fees and cost of savings accounts since the first quarter of this year and cyclical increase in cost of risk may have set the stage for multi-year compression of the banking sector ’s return on equity in Nigeria. The report also noted that the pressure to improve operating costs so as to preserve returns is getting stronger, while large fixed cost base should limit the gains, with expectation of a more disciplined loan pricing policy. In this respect the HSBC report said “Our favoured play is Zenith Bank (OW, TP N24). It is least sensitive to rising cost of savings accounts, can hold its net income margin NIM, better than competitors, delivers better cost control and asset quality”. The HSBC global research predicts that Nigerian banks will be more disciplined on loan pricing as a result of reduction in fee income, while also reflecting on the increased loan spread assumptions for the banks under coverage.The recent contraction in the combined market capitalization of the banks, occasioned by the regulations amounted to about N220 billion ($1.3 billion), which according to the report, compares with the potential income fee loss of N88 billion ($546 million) through to 2016, with the increase in cost of funds of N22 billion ($136 million). However, a N220 billion [$1.3 billion] drop in market capitalization does not look adequate if one includes the cost of rising loan provision expenses, which bottomed in 2012 on loan portfolio derisking.

24 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Corporate Finance

MorganCapital Securities cuts stockbrokerage fee By PETER EGWUATU

N support of the Securities and Exchange Commission (SEC)’s proposed downward review of cost of transactions in the Nigerian capital market, MorganCapital Securities has spearheaded the move by cutting down its brokerage fee from 1.35 per cent to 0.25 per cent. According to information from the company, “Traders can now enjoy top class brokerage services at a very low fee of 0.25 per cent on all trades.” MorgalCapital explained that the fee was slashed to encourage traders who value execution quality, speed and desire the highest level of flexibility with their execution costs. The Managing Director of MorganCapital Securities, Mr Ayoleke Adu, FCS, CFA, said the fee slash is consistent with the vision and mission of the firm and clearly makes a statement about the need to reduce the cost of Capital Market transactions in Nigeria. MorganCapital provides superior services to all clients on a secured online platform at an extremely low rate; even lower than the Capital Market regulator’s fees (SEC - 0.3% for purchases; NSE – 0.3% for sales). Other outstanding benefits investors get from MorganCapital include Secured online access to their accounts, stock positions, stock valuation analysis, investmentholding profitability analysis, trading history, contract notes, payment/deposit history, share certificate deposits/verification

history/status, etc. An investor can place orders (Buy/Sell) online using the secured customer login portal

(https ://) hosted in the EU. It is safe and guaranteed to be available 99.99% of the time. As a client, you will receive

From left; Dr. (Mrs.) Taiwo Abioye, Deputy Vice-Chancellor (Administration), Covenant University, Ota, Ogun State; Mr. Uzoma Dozie, Executive Director, Lagos Businesses and Retail Banking; Professor Charles Ayo, Vice- Chancellor, Covenant University and Professor AAA Atayero, Deputy Vice-Chancellor (Academic) during the launch of Diamond Bank Multi-purpose card (International Debit Card) at Covenant University in Ogun State .

CSR: Berger Paints donates products to visually impaired B

ERGER Paints Nigeria Plc has donated products to Nigeria Society for the Blind as part of its Corporate Social Responsibility(CSR). The donation is part of Berger Paints’ partnership with the non-governmental organisation towards the beautification of its staff and administrative quarters. The company said in a statement, “We are proud of the

purpose to which the Society for the Blind stands for, our partnership through this donation is a demonstration of our support and encouragement to its course of empowering the virtually handicap through education and skills acquisition”. Berger Paints Nigeria Plc has been delivering quality paints and allied products since 1959. The company is an innovative industry leader, specializing in

Fidelity Bank gets recognition for youth development By NKIRUKA NNOROM

idelity Bank’s activities in the various communities where it operates has been recognised, with the bank being adjudged the Company in Nigeria with Youth-focused CSR at the 2013 CSR Awards (SERAs) held in Lagos recently. The organisers of the Award – TruContact, said that Fidelity Bank was given the award in recognition of the bank’s programmes, services and projects that have directly impacted positively on the youth. Specifically, they noted that

an automated, system generated and system-sent email of your contract notes before 4pm of any day a trade is executed on your behalf. All our clients also have unrestricted access to MorganCapital’s weekly investment rankings, investment tips, and company specific research to guide their investment decisions.

such initiatives like the Creative Writing Workshop (CWW), Fidelity Helping Hands Programme (FHHP), school renovation projects and others have gone a long way in rechanneling the energies of the youth into positive ventures. Receiving the award on behalf of the bank, the Group Head, Marketing Communications, Emma Esinnah, thanked the organisers of the award for recognising the efforts of the bank in empowering its host communities. He explained that Fidelity Bank’s involvement in social responsibility duties is essentially as a result of the

bank’s genuine desire to support growth and development in communities where it does business. He explained that the CSR practice in the bank is particularly unique because of its bottom-up approach, which allows every branch of the bank to identify and sponsor projects in support of the community where they are located. He paid tribute to all the Fidelity Bank’s staff that had done great works in their little corners via the Fidelity Helping Hands programme (FHHP) to make the award a reality.

large chain business segments: Decorative/Architectural Finishes, Industrial Coatings, Marine & Protection Coatings, KCC Heavy Duty Coating, Automotive/Vehicle Refinishes, Wood Finishes and Preservers among others. In a bid to sustain and enhance its shareholder value, Berger Paints has offered 72.5 million ordinary issues of 50k per share at N7.50 to its existing shareholders. The net proceeds of the offer amounting to N543.42 million will enable it finance the modernization of its manufacturing operations. The offer is coming on the heels of recent completion board meeting held at the company’s head office in Lagos for members of the board of directors of Berger Paints, issuing houses to the offer, stockbrokers to the issue and other parties where they signed the final documents of the rights issue in the presence of officials of Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) respectively. Application list for the rights issue opened on August 20, 2013 and the rights are being offered on the basis of one new ordinary share for every three ordinary shares held as at May 31, 2013.

BRIEFS Blackberry reports $965m Q2 loss

lackberry has reported a second quarter net loss of $965 million following a slump in sales. The company warned investors last week that it would report a loss of up to a billion dollars, due to poor sales of its new smartphones. It also announced 4,500 job cuts in a bid to stem those losses. Last week, Blackberry agreed to be bought by a consortium led by Fairfax Financial, its biggest shareholder, for $4.7 billion. Blackberry said it would continue to explore other options while negotiations with Fairfax continued. The company ’s financial problems came to a head this year following disappointing sales of its new Z10 smartphone. Sales were so poor that Blackberry had to write off $934 million in the second quarter to account for the weakness. Released in January - after many delays the phone has failed to enthuse consumers. The firm reported total sales of $1.6 billion compared with $3.1 billion in the same quarter of 2012, a near 50 percent fall.

Oteh commends film industry, capital market partnership

HE Director General of the Securities and Exchange Commission, SEC, Arunma Oteh has commended the partnership between the Nigerian film industry, fondly called “Nollywood” and the Nigerian capital markets. The collaboration has witnessed sponsorship by the capital markets regulator of the production of a full length movie titled Breeze which featured ace film maker, Kunle Afolayan as producer, and a short film entitled Easy Money which was produced by HOMEVIDA. Both films use creative drama and storytelling to teach enduring and didactic lessons on the merits of saving and investing and the folly of not anticipating the “rainy day” by keeping something aside. In a goodwill message delivered during the 10th Anniversary of the Abuja International Film Festival, Oteh lauded the “The Nigerian creative industry for its universally recognized vibrancy and accomplishments”.

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 25

Corporate Finance BRIEFS Big fines key to attacking wrongdoing — US SEC

he head of the U.S. Securities and Exchange Commission warned that her agency will aggressively use its powers to fine wrongdoers and is seeking other creative ways to hold companies and individuals accountable for their misdeeds. “Meaningful monetary penalties - whether against companies or individuals play a very important role in a strong enforcement program,” SEC Chair, Mary Jo White, said in a speech in Chicago. “They make companies and the industry sit up and take notice of what our expectations are and how vigorously we will pursue wrongdoing,” she said. The comments mark White’s second major enforcement policy shift since she took over the helm of the SEC in April. White, a former federal prosecutor, has already sought to add teeth to SEC settlements by requiring defendants in certain cases to admit to wrongdoing, rather than settle without admitting or denying the charges.

US data gives conflicting signals on economy’s health

ontracts to buy previously owned U.S. homes fell for the third straight month in August but fewer Americans filed new claims for jobless benefits last week, in conflicting signals on the health of the economy. Another economic report showed a worrisome decline in consumer prices during the second quarter. Together, the data offers a challenge for the Federal Reserve, which wants to see more solid evidence that the U.S. economy is gaining momentum before it scales back a bond-buying stimulus program. The Fed last week flagged a rise in interest rates as a threat to the economy, and also said that employment and inflation remain too weak. The National Association of Realtors said its Pending Homes Sales Index, based on contracts signed last month, decreased 1.6 percent last month. The decline, which was steeper than economists had expected, was the latest sign that a sharp rise in mortgage rates have put a significant dent in the U.S. housing market recovery.

From left: Mr Charles Aigbe, Divisional Head, Marketing and Corporate Relations, UBA; Anne Omezi, Group Managing Director, Signature group and Zandiley Blay, Editor in Chief, True Tales Publication at the media briefing by True Tales Publications in Lagos on Wednesday. Photo by Lamidi Bamidele

UK to partner NSE in boosting investment in Nigeria Stories By NKIRUKA NNOROM

he United Kingdom will collaborate with the Nigerian Stock Exchange, NSE, to attract more British companies to list in the market and also influence direct investments in the country, said British High Commissioner to Nigeria, Dr Andrew Pocock. Pocock, spoke when he in the company of Mr. Mike Purves, Director, United Kingdom Trade and Investment, paid a courtesy visit to the Nigerian Stock Exchange and to also ring the trade closing bell. Pocock, who said that UK has been involved in the Nigerian capital market for many years, stated that they are exploring other areas of possible investment in the country. “UK is very involved in Nigeria capital market and also in other forms of commercial activities for many years. We see Nigeria as a country with great potential economically, especially in the area of extractive industry, also in manufacturing and services sectors and increasingly in moving up the value chain in the service sector. “Part of my duty here is to invite companies over there to come down here and have another look on the Nigerian market and make up their mind about the

existing trade and investment opportunities on the basis of what they see, not just on what they read on Newspapers or hear in mass media. So, we think that there is great potential here and we want to get companies in UK to come down here and have a look,” he said. He added, “We are looking at the future as much as

possible; we are looking at the time when British companies will a look at the market in all respect, its natural resources, high value at the end of the chain.” He, however, said that investment decision would be dependent on existing market condition and the business environment of any particular company, adding that they are

in discussion with government all levels in Nigeria on how to improve the business environment visa-viz infrastructural development and security challenges. “British companies are worth coming in, but it is not entirely a matter of the British government to say whether a company should invest or not,” Pocock noted. Speaking on the security challenges in Nigeria, Pocock said that it is not overwhelming to deter companies from investing, affirming that the UK companies weigh the risks against the available opportunities in any particular country before taking an investment decision. His words, “We look at the risks and we balance it with what the opportunities may be. So, that is the approach we will use to lure individual companies and we won’t mislead peple. There are security challenges here, but they are not overwhelming in any respect. They can be mitigated and they can be managed. So, I think the best way is to come and look at the market.” Earlier, the Chief Executive Officer, NSE, Mr. Oscar Onyma, said that they intend to use the Nigerian stock Exchange as a vehicle to attract foreign direct investment into the country from Britain and vice versa. He added that the Exchange is in talks with more British companies to list on the NSE.

Chellarams expects improved returns over demand for local products

he Chairman of Chel larams Plc, Asiwaju So lomon Onofowokan, has expressed optimism over the company’s ability to deliver improved return on investment to all its stakeholders following increased demand for locally manufactured quality products. Addressing shareholders at the 64 th Annual General Meeting, AGM, in Lagos, he said that with the expansion in one of its subsidiaries – Dynamic Industries- and improved business environment, the subsidiary companies are expected to perform better during the current financial year. He said, “Over the years, your company has rationalised its prod ucts groups, and moved towards strong product-mix. There has been greater emphasis on best manufacturing practices. Your

company has been accredited with ISO (International Organisation for Standardisation) certificate and has received both SON and MANCAP accreditations. With increasing demand for ‘locally manufactured quality products, your company will gain further market share and recognition.” He, however, said that following civil unrest at the beginning of 2012, as well as the unfulfilled power sector reforms, coupled with security challenges in the north, the company recorded negative trend in turnover for both the group and its subsidiaries. According to him, this led to 5.58 percent and 6.75 percent decrease in turnover for the group and subsidiaries respectively. “However, despite the lower turnover, your company showed an improved profit before tax of 3.19 percent, while

the group’s profit before tax lowered from N378.9 million to N241.3 million as at the end of March, 2013 (a decrease of 36.32 percent). The reason being that Dynamic Industries Limited, one of our subsidiary companies expanded its production capacity to almost double. “The growth in the first year of expansion was not commensurate with growth in expenses. Similarly, another one of our subsidiaries, United Technical and Allied Services Limited went through a rough period due to slow down in capital expenditure plans of its major customers.” Though he said that the adoption of International Financial Reporting Standard, IFRS, had a negative impact on its result during the year, he stated that the disclosure standard would substantially improve the benefit derivable from the new presentation. C M Y K

C M Y K

76.99 9.06

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

37.50 60.61

9.93 5.90 13.40 2.51 4.75 25.00 4.10 2.33 7.30 10.16 0.55 0.93 19.90

0.50 0.78 1.15 0.50 0.50 1.40 0.50 0.50 0.50 0.50 0.66 0.50 0.50 0.50 0.50 2.01 0.50 0.70 0.50 0.50 0.60 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.80

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc

Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance

0.50 0.80 1.15 0.50 0.50 1.43 0.50 0.54 0.50 0.50 0.72 0.50 0.50 0.50 0.50 2.15 0.50 0.70 0.50 0.50 0.70 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.85

10.03 6.10 13.46 2.57 4.75 25.10 4.10 2.30 7.70 10.16 0.60 0.95 19.90

38.00 60.61

32.27 4.00 1.88

45.50 990.03

1.87 0.50 1.21 16.01 552.20 0.52

1.87 0.50 1.09 16.40 552.20 0.52

6.60 0.78

32.27 3.66 1.88

Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

1.65 0.50 0.50 0.50

46.00 990.03

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

9.05 10.80 83.00 2.89 12.00 0.59

1.49 0.50 0.50 0.50

9.05 10.90 83.00 2.82 11.92 0.59

Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc

66.00

15.55 254.00 19.05 164.00 0.74

0.50

100.00 50.00

16.35

76.99 8.46

5.05 1.01

1.65 4.41 1.09 5.32 1.55 58.50

3.90

0.50 48.05 33.30

0.50

Closing Price (N)

6.60 0.79

72.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc

16.99 248.60 19.75 160.99 0.74

0.50

100.00 50.00

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

15.70

5.05 1.11

CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc

Real Estate Development UACN Property Development

3.72

1.55 4.41 1.07 5.32 1.50 57.99

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc

0.50 48.05 33.30

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

Livestock/Animal Specialities Livestock Feeds Plc

0.50

Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc

Company

Opening Price (N)

Capital Market

45,482

91,817 22,000 140,000 6,362,059

100 2,000 1,000 70,000

4,100 2,000

1,000 2,740,178 12,500 331,687 10,000 1,903,878 120,000 62,500 500,000 200,000 3,922,105 1,670,890 56,875 2,000 380 313,999 51,656 2,363,108 9,440 300 2,363,108 200 4,300,000 200 1,000 3,722 1,000 3,066,000 2,735,042

5,081,406 1,861,751 7,244,187 4,664,589 865,336 9,079,797 1,595,377 11,069,163 7,848,143 643,965 21,815,134 2,734,634 3,126,457

809,310 322,928

60 200,184 495,200

154,292 99,515

242,389 398,803 70,249 2,489,414 687,378 103,900

255,363

50,000 173,962 729,577 853,445 3,000

43,595

1,000 -

178,761

17,200 333

67,679 383,309

121,540 1,000 424,029 50 121,869,251 1,355,832

273,885

143,551 49,200 162,429

2,000

Quantity Traded

0.75 0.50 2.02 20.00 552.20 0.78

1.57 0.50 0.50 0.50

6.00 1.18

0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08

12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49

41.02 47.39

36.19 5.54 2.88

37.27 840.10

19.90 16.20 95.00 6.60 6.70 0.88

51.49

4.63 255.00 7.10 100.00 1.01

0.50

100.00 -

20.15

62.26 8.28

4 2,720,390.38

2.54 7.60 8.82 8.28 1.82 42.50

0.66

0.50 24.58 8.30

0.50

Year High

0.00 0.50 2.02 8.57 552.20 0.50

1.37 0.50 0.50 0.50

0.00 0.92

0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96

21.02 27.60

33.96 2.91 2.88

8.33 400.00

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

2.23 186.00 5.23 72.50 0.93

0.50

97.00 -

11.59

32.96 3.01

1.45 6.43 5.89 5.52 0.50 28.70

0.48

0.50 14.53 6.40

0.50

Year Low

0.19 0.00 0.00 2.03 12.68 0.13

0.19 0.02 0.00 0.00

0.04 0.92

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07

1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09

0.82 1.44

13.89 0.61 0.00

1.35 25.43

0.00 0.91 4.09 0.39 1.01 1.13

2.69

0.00 9.95 0.41 5.08 0.00

0.00

11.75 -

1.69

4.11 4.73

0.16 0.31 0.00 0.35 0.24 6.89

0.11

0.10 7.33 2.75

0.09

E.P.S.

9.16 0.00 0.00 9.85 43.55 6.00

47.6 7 25.00 0.00 0.00

150.00 10.56

0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43

8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24

4.39 32.91

2.44 7.07 0.00

27.61 32.84

16.91 14.38 16.89 16.92 5.75 8.83

13.92

0.00 19.98 16.29 22.22 0.00

0.00

8.51 -

7.33

10.11 2.26

5.18 20.74 0.00 15.77 3.64 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

1.71 2.74

0.94 2.00 0.50

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

Intergrated Oil and Gas Services Oando Plc

0.50

4.23 6.10

Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company

0.79 4.90

Speciality Interlinked Technologies Plc

1.87 1.95 2.52 3.81 Road Transportation Associated Bus Company Plc

0.50

4.55 0.80

0.50

4.10

1.44

0.50

Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC

SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc

Hospitality Tantalisers Plc

20.50 0.50 28.80 35.70 107.00 36.14 157.01

0.50 10.82

OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc

3.98 11.87 12.68 4.30 1.05 2.92 0.66

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc

1.44

0.50

Paper/Forest Products Thomas Wyatt Nig. Plc

10.50

Metals Aluminium Extrusion Ind Plc Non-Metalic Mineral Mining Multiverse Plc

6.50

7.85

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

4.23 6.10

4.90

0.74

1.87 1.95 2.52 3.80

0.50

4.55 0.80

0.50

4.10 1.36

1.44

0.50

20.50 0.50 28.80 35.70 107.00 36.14 156.51

11.00

0.50

3.98 11.87 12.68 4.30 1.05 2.78 0.66

1.44

1.81 0.50

0.99

0.50

10.55

6.50

7.85

1.71 2.70

20.90 8.70 37.00 9.09 190.00 0.50 1.90 98.50 5.60 2.04 10.93

0.50

ICT Telecommunications Starcomms Plc

19.10 8.70 37.00 9.09 190.00 0.50 1.90 90.00 5.60 2.04 10.93

0.50

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

18.70 2.29

0.50

0.68

16.83 2.29

0.50

4.32 3.29 1.99 69.00 2.20 1.15 7.36 1.85

0.50

2.23

103.50 19.20 1.39

Closing Price N

IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc

0.75

Computers and Peripherals Omatek Ventures Plc

3.29 3.29 1.97 69.00 2.20 1.15 7.36 1.85

0.50

2.01

103.50 19.30 1.38

Opening Price N

ICT Computer Based Systems Courteville Investment Plc

Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

17,405 231,371

1,050

583,000

75,235 2,320 100 209,481

5,000

10,000 12,370

22,000

138,405 1.28

37,776

11,000,000

1,000

82,191 2,600 8,219 113,514 6,823 2,641 159,013

15,963,106

6,862,422

6,888 2,190 500 29,198 200 84,311 2,749,340

2,000

185,000 10,100

110,000

104,000

500

12,500

1,020 2,717,101

408,816 15,122 31,894 23,116 218,042 2,000 60,000 701,541 4,180 25,750 30

2,307,692

3,000

790 800

1,500,500

93,000

100 2,930 628,000 96,462 72,784 4,300 100 3,053,443

100

785

832,190 1,725,663

Quantity Traded

Year Low

2.78 11.75

5.15

0.80

0.00 6.82

3.68

0.50

400 2.07

1.64

3.67 865,327

3.65

0.72

1.57 6.50

4.90

0.50

3.17 0.30 0.00 3.60

0.48

3.00 1.33

0.90

2.65 0.25

1.30

0.51

141.00 63.86 195.50

163.50 2,100 240.00 200

0.50 0.50 3.89

27.99

0.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33

1.62 2.58

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.50

9.52

103.50 10.64 0.03

37.10 0.70 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51

2.50 2.58

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

50,000

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

0.50

10.54

103.50 15.69 1.41

Year High

0.60 12.53

0.00

0.54

0.25

0.00

0.34 0.92

0.04

0.60 11.12

0.21

0.00

0.01

6.11 2.98 14.63

4.93 0.00 0.61

1.73

0.19

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.03

0.11 0.00

0.00

0.01

0.13

0.78

0.00

0.5 0.25

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

0.00

0.00 0.01

0.00

0.10

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.00

10.56 0.87 0.21

E.P.S

4.22 8.75

0.00

27.69

12.19

0.00

34.09 2.12

11.25

4.91

8.19

12.75

11.11 19.23 17.07

7.40 0.00 6.99

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80

13.15 0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

0.00

9.71 18.03 6.71

P.E Ratio

Daily Stock Market Report as at Friday, September 27, 2013

26 â&#x20AC;&#x201D;Vanguard, MONDAY, SEPTEMBER 30, 2013

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 27 Sept 20 –Sept 26, 2013

Micro - Finance

Capacity building drives microfinance sector — LAPO MD Stories by PROVIDENCE OBUH

he capacity building initiative for Microfinance Bank (MfB) operators, coupled with the certification programme is a driving force to the growth of the sub-sector. Managing Director Lift Above Poverty Organisation (LAPO), Mr. Godwin Ehigiamusoe, told Vanguard in a telephone conversation, noting that more funds are coming to the industry, in addition to the recently launched Micro Small and Medium Enterprises Development Fund, MSMEDF. He said this consequence upon the enterprising efforts of low income earners in the country, stating: “Nigeria has a large number of people who are exceptionally enterprising, more funds are coming to the sector and all stakeholders in the industry have been building capacity. These are positive factors that will lead to a vibrant microfinance sector in no distant future.” Recall that the sector’s capacity building initiative and the Central Bank of Nigeria, CBN’s certification programme aims to contribute to strengthening and giving quality training to microfinance staff to facilitate access to financial services for the base of the pyramid. The Initiative provides financial and human resources to improve management training and development and to drive product and process innovation, enabling organizations to meet their social and financial goals in an efficient

and responsible manner. Access to finance is a major challenge confronting the operators of the MSMEs. Towards bridging this gap, the Central bank of Nigeria introduced the Micro Finance Policy that guided the establishment of MFBs across the country. As a result of the several hiccups encountered in the operation of the MFBs, there was the obvious need for the capacity building of the operators of the MFBs. This is to enable them understand the workings of the MFBs and even the clients they are to serve. The objective of the certification programme is to continue to build a sustainable skilled labour force for the microfinance sub-sector through the certification of operators and nonexecutive directors of microfinance banks in Nigeria. Also, Chairman, National Association of Microfinance Banks, Ikeja Branch, Mr. Dele Oyekanmi, at a media parley urged the CBN to improve its capacity to build micro finance sub-sector, saying that sub-sector required more training in view of growing sophistication of their operations. He said that their operations had improved in recent times because of the training which the operators had received. According to him, “There is a need for the apex bank to continue the capacity building process in the micro finance sub-sector to enhance efficiency in the system. “A lot of the operators are from the conventional banking background, they need thorough training to enable them manage their businesses effectively and in accordance with the guiding rules. ‘For instance, my managerial skill has improved than when I started operating micro finance business because of the various training programmes I have attended,” he said.

Kwankwaso lauds accountancy profession

he Kano State Governor, Engr. Rabiu Kwankwaso has commended the Institute of Chartered Accountants of Nigeria (ICAN) over its professional exception, saying there is no other accounting body that matches its competence and capacity building. Kwankwaso made the statement at his Kano office while receiving the 49th President of ICAN, Alhaji Kabir Mohammed. He said, “I learnt ICAN was established about forty-eight years ago and it has made a lot of contributions to the economy of this country through its training of competent hands and capacity building. We are all proud of ICAN and that is why we will continue to encourage our children and youths to register and pass its examinations for the betterment of their future. I will continue to encourage Kano indigenes to embrace accounting because

accounting is important to all, both at the public and private sectors.” On his part, Commissioner for Land and Physical Planning, Kano State, Alhaji Muhammed Yahaya added that the institute is reputable given its mode of professional training and exposure to the latest global methods of accounting practice. “We have known ICAN since we were children and the integrity it is known for is still intact. There has never been any case of exam leakage and maybe that is why some people believe the examination is too difficult to pass.” Earlier, Mohammed explained that he was in the state because of the dearth of Chartered Accountants in the northern part of the country, as this is following crusade of catch them young to the zone to encourage youths embrace accounting profession. C M Y K

28 — Vanguard, MONDAY, SEPTEMBER 30, 2013

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38 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Homes & Housing Finance

NITP seeks low mortgage rates

igerian Institute of Town Planners (NITP) has called on the Federal Government to formulate policies that will ensure reduction of interest rate on mortgage loans in the country in order to increase home ownership. NITP President, Chief Steve Onu, made the call during the investiture of 39 new Fellows of the institute which held in Abuja recently. According to him, the government should emulate the United Kingdom where the interest rate on mortgage loans is around two per cent, noting that this would boost the real estate sector and assist many working Nigerians to build their own homes. He said government was paying lip service to urban planning, adding that government should rather come up with programmes to assist the people to develop and improve their homes, especially those living in vulnerable areas. He said this could be done through subsidy or reduction of interest rates on mortgages so that people who want to rehabilitate or build their homes could access such loans.

‘Building codification will end collapse’

hairman, Association of Town Planning Consultants of Nigeria, Lagos branch, Mr. Bisi Adedire, has said the spate of building collapse in the country can be checked if a system of building codification and registration is adopted by governments at all levels. He said the process would ensure that a code was assigned to every building and could be monitored for defects. “With this code, all the details of any development can be accessed from a central system being linked to the Internet and appropriate actions taken. A more united approach to operation within the building industry is a sure bet to counter this menace. Pulling together the wealth of knowledge and experience of each profession within the industry, in collaboration with government agencies, building collapse can become history,” he said. Adedire added that people must also be sensitised and carried along with the new process to guarantee its success. According to him, building collapse is an avoidable occurrence, which adequate information and control within the built environment can salvage.

Aba Mega Mall project is private sector driven – Obanua Stories by YINKA KOLAWOLE

bia State government recently entered into partnership with a real estate investment and infrastructure company, Greenfield Assets Ltd, to develop the Aba Mega Mall, comprising of 5,830 ultra modern shops in Aba. In this interview, Group Managing Director, Greenfield Assets, Paul Obanua, gives insight into the significance of the project. Excerpt. What is the Aba Mega Mall project all about? The project is geared towards creating a commercial hub for the entire eastern and southsouth regions of the country. It is designed to stimulate the urban renewal of Aba city, by providing a structured facility where trading and other commercial activities can be done in an orderly manner. Presently in Aba, every nook and cranny including the roads, drainages and streets, are trading posts. This project is an attempt to sanitise the city by giving the people of Aba a dignified trading centre, which from a survey conducted by us, the traders and dwellers in the city are eager to have it operational. Are you constructing on virgin land or will already existing properties pave way for the project? The construction has already begun and it is on a virgin land. The Aba Mega Mall would consist of 5,830 ultramodern shops and they will come in four sizes of 12sq meters, 16sq meters, 24sq meters and 48sq meters. Now the interesting part is that the facility will also have provisions for banks, security post, petrol station, 25,000 sq meters of climatecontrolled warehouse space, restaurants and a massive parking space for over 5,000 cars. When completed, the mall facility management will require considerable manpower in excess of 20,000 direct jobs and over 100,000 indirect jobs. What is the significance of this project to the people of Aba and Abia State in general? The significance of the Aba Mega Mall project is that we are providing the

•Paul Obanua, CEO, Greenfield Assets Ltd most needed infrastructure for the South-East, South-South, and the entire country and even beyond our borders. We are talking Cameroon, Gabon, Togo, Ghana and the entire sub region of West Africa. At the moment there is no standard retail infrastructure in Aba. We are building a world-class retail facility, with 10MW 24 hour power supply, paved roads, clean sanitation, guaranteed security in order to create an atmosphere of world-class shopping centre with peace of mind. The availability of the mall would give the people an opportunity to grow their customer base, market share

BRIEFS

the elevated concrete technology. JK Structures has been in existence for almost 30 years and were involved in the building of the Euro Disney.We are also involving local contractors. The competencies of our development partners are not in doubt, and we call them our development partners because they have some level of venture financing. Does Greenfield have needed resources to ensure the mall does not become one of uncompleted government projects? First of all, government does not intentionally fail in their projects but the level of

Governments across the country should do everything possible to encourage private investors and keep to PPP agreements

and profit, while regenerating the city, which becomes a winwin situation for the traders and the city. An insight into the profile of foreign firms partnering Greenfield on the project Q B Construction is a renowned Construction Company in the United States. They have done projects all over the US. There is JK Structures Limited, a Pan European company; they have

bureaucratic bottleneck in the Nigerian system is the reason many projects fail. Secondly, the Aba Mega Mall project is private sector driven. The Abia state government is encouraging private sector driven development; this is what governments all over the world do by creating an enabling environment, laws and support system to the private sector to assist in developing the economy of a

state. Aba Mega Mall can never be one of the abandoned white elephant projects because before the project started we had attained what is called a financial close; this means that the money to build is already in place before we went to site. Based on your experience, do you think that the PPP route is the way to go in the development of Nigeria? Yes, it’s the way to go, but the various governments should endeavour to keep to agreements. The government alone does not have the money and all other resources to develop the country. Take a look at our national budget which is barely $30 billion (less than that of New York City Council 2014 budget of $70 billion) will not be enough to reconstruct all our federal highways as there are today. Hence governments across the country should do everything possible to encourage private investors and keep to PPP agreements. What is Greenfield’s vision for the city of Aba in the next 10 years? In the next one year we would have completed the mall and have it operational, after which we’ll then go into building the 1,000 hectares Free Trade Zone. On the other the hand, the various power projects in and around the city would have also become fully operational. Aba having the right infrastructure in place, in 10 years’ time will be comparable to places like Shenzhen and Chengdu in China. It will be a commercial/industrial hub for Africa in the next 10 years. The idea of the project is to eliminate street trading. One of the causes of people trading on the street is the lack of funds to rent a decent shop. Does the Aba Mega Mall intend addressing this by making shops cheaper to rent? I will tell you that street trading is not as a result of the inability to afford a shop but stems from lack of adequate retail infrastructure. Trading is a commercial decision geared towards wealth creation. So when you’re talking of such economic decisions, you are looking at a venture where the intention is to make profit. Trading is not a social activity, neither is it born out of communism. Every trader is a capitalist and so the interest of a capitalist is to engage in a sustainable venture that offers growth and profit. In effect, if you have a commercial facility where people can grow their business and make more sustainable profit, they’ll go there. Why would anyone want to remain on the streets if there’s an alternative location where customers consider more accessible, secure, orderly, healthy and conducive to do business; wouldn’t the traders rather have their trading outlets there?

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 39

Insurance

From left: Mr. Aigboje Higo Jnr -Managing Director, Capital Bancorp Plc, Mrs. Njideka Eke -Chairman, Anniversary Committee and Mr. Olutola Mobolurin , Chairman of Capital Bancorp Plc at a press briefing heralding the company’s 25th anniversary celebration held in Lagos.

NCRIB president reels out achievements in office By ANGELA OKPE

S the President of the Nigerian council of Registered Insurance Brokers, NCRIB, Mrs. Laide Osijo, gets set to bow out from office, she has said that her tenure as the president of the Council was successful. Osijo, who highlighted some of her achievements at a farewell lunch for insurance Journalists held at the NCRIB Headquarters in Lagos last week said that she strived to give quality leadership and service to the Council within the limits of her capacity and grace. Osijo who will be handing over the baton of leadership to the next president in a month’s time highlighted her achievement to include professionalism; inauguration of legal committee; empowerment of Area Committees; manpower development, government/ institutional relations; as well as intellectual development. Others are Associateship certification; opening of business vistas for members; maiden investment platform for insurance brokers; secretariat building/staff development; as well as IFRS compliance. Talking on professionalism, Osijo said “The worth of any professional lies in his or her continuous acquisition of knowledge as well as subjugation of such individual to established code of ethics and discipline.” She said that in the last two years,

the council took significant strides to affirm ethical prescriptions, especially those espoused in the 2003, NCRIB Acts and the rules for members, adding that the intention is to restore the dignity and respect expected of insurance industry and in order to reduce the vexation incidence of quackery, and unethical conducts by Brokers. On inauguration of legal committee, Osijo said “In view of the need to position the council to meet the various unfolding legal and regulatory challenges, the council inaugurated the legal committee with membership drawn from legal practitioners in the insurance broking confraternity while the council now has a legal department manned by seasoned lawyer who also acts as the secretary to the council. On empowerment of Area Committee, she said the regime made it a point of duty to empower all Area Committees of the council for the collective interest of the council and members and also adopted the bottom up membership involvement approach whereby, members were made to enlist their membership from the Area Committee level. On manpower development, Osijo said that they paid considerable attention to human capital development of staff and members during her regime, adding “It is to the credit of the administration that it initiated the idea of a yearly

strategic retreat for management and middle cadre staff of the secretariat, board management and chairman of all Area Committees”. The retreat according to her had featured brains storming session leading to the conception of the mission and vision statement strategic objectives for the council. Osijo also recalled that the council facilitated and had collaborated with notable local and international consultancies and bodies for the knowledge enhancement of membership. She said, “The council also organize training in oil and gas insurance in Dubai, UAE and

most recently in Canada, as well as in partnership with Innovat Consultants organized oil and gas training for members in Lagos and Kaduna for the benefits of members in that zone, while the training had led to accelerated patronage of brokers in several multinational oil companies including NNPC.” According to Osijo, going by the increasing need for effective networking in order to grow contemporary organization, the administration identifies the need for the NCRIB to maintain effective liaison with government and institutional bodies and notably, the administration had most robust relationship with the National Insurance Commission (NAICOM) against the belief that the industry could achieve its desired growths. She added “Aside projecting the insurance broking profession as ethical practitioners, it has also eliminated unethical practitioners from the profession. The NCRIB has made an impressionable presence in the West Africa Insurance Institute WAII and the West African Insurance Companies Association (WAICA). While the council has also become a recognised constituent of WAICA with a sub body christened West Africa Insurance Brokers Forum now chaired by Mr. Rotimi Edu. “Being the first female president of the NCRIB and a governing board member of WAII, I have personally instituted a yearly monetary donation to the development of the collage and instituted a yearly award for graduating students of the collage of insurance,” Osijo said.

BRIEF NAICOM’s Deputy Commissioner passes on

he National Insurance Commission, NAICOM, has announced the death of its Deputy Commissioner for Insurance (Technical), Mallam Ibrahim Hassan, who passed away on Tuesday, 24th September, 2013 after a brief illness. Mallam Ibrahim Hassan was a Lawyer and an Associate of the Chartered Insurance Institute of London (ACII). He was an Alumnus of Ahmadu Bello University, Zaria and the CII College of Insurance, Kent-Sevenoaks, United Kingdom. He had a vast experience in legal and underwriting issues spanning over 28 years. A highly experienced and versatile technocrat, he had, at different times, held other top management positions in different organisations. Hassan was first appointed Deputy Commissioner for Insurance (Technical) of NAICOM by the Federal Government in October 1999. But his stay in NAICOM lasted barely a year when he returned to NICON in 2000 and was appointed Executive Director (Special Risks) covering marine, aviation, oil and gas. He rose to become the acting Managing Director of the corporation for three months in 2004. In March 2004, Mallam Hassan was appointed Managing Director and Chief Executive of the Federal Housing Authority (FHA) in acting capacity.

AIICO elevates Sobanjo, Igbiti T

HE Board of AIICO Insurance Plc has announced the elevation of Mr. David Sobanjo as Non-Executive Director of AIICO Insurance Plc whilst Mr. Edwin Igbiti takes over the role of the Acting Managing Director. In a statement by the company, Mr. Sobanjo was until his recent elevation, the Managing Director/Chief Executive Officer of the company; and he served in this capacity for seven years. The Acting Managing Director, Mr. Edwin Igbiti has served in various capacities within the insurance industry, covering claims management, underwriting and sales. He joined AIICO as Deputy Manager and rose through the ranks to become the General Manager, Non-Life and Technical Operations, until his new appointment. Igbiti is an Alumnus of Howard Business School, Maryland, USA as well as the University of Lagos. He holds an MBA from the University of Ado Ekiti and is a Fellow of the Chartered Insurance Institute of Nigeria

(CIIN), an Associate member of the Chartered Insurance Institute of London (ACII) as well as the Nigerian Institute of Management (Chartered) (AMNIM). He is a seasoned practitioner and has attended several national and international courses on risk management, reinsurance and claims administration. As part of the ongoing restructuring exercise, some long serving top management staff have also been retired: General Manager, Life, Mr. Festus Olabiyi; Company Secretary, Mr. Samuel Oduroye and the Chief Finance Officer, Mr. Olalekan Otusanya. These officers have been commended for their immense contributions to the organisation during their tenures in office. AIICO Insurance Plc is a life insurer in Nigeria and has grown its non-life business significantly in recent years, to become one of the major players in its market segment and strongly affiliated to Chartis Group, Zurich Insurance, Munich, Swiss Re, amongst other reputable industry players.

40 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Tax Matters

Judges pick 3 finalists for IIDA 2013

S the countdown to the 2013 DUFIL sponsored Indomie Independence Day Award (IIDA) for Heroes of Nigeria draws near, three finalists have emerged following a judges’ seating which held in Lagos recently. The final three stories were picked after a thorough brainstorming session, which saw a select panel of Judges whose roles were to pick three finalists in the first, second and third position to deliberate on stories totaling over 100 after which the eventual identified stories that came tops after the session will be made public on October 5, 2013 - the award day proper. Judges who sat for this year’s heroes of Nigeria award selection are: Mr. Martin Ayankola, Editor, Punch Newspapers; Professor Kabiru Akinyemi, Dean of student Affairs, Lagos State University; Mr. Graham Stothhard, Principal, Lagos Preparatory School; Mrs. Laja Adedoyin, Founder, Heart of Gold Children Hospice; Mr. Kunle Soriyan, Managing Director, ST Consulting and Mr. Bimbo Manuel, a renowned actor.

Guinness appoints new board member

UINNESS Nigeria Plc has announced the appointment of Andy Fennel as a non-executive member of its Board of Directors with effect from 12th September 2013. The appointment was made at a recent meeting of the company’s Board which also approved the company’s full year results for the period ended 30 June 2013. During the meeting, the resignation of Mr. Mark Taylor from his position as a nonexecutive director was also ratified. Mr. Babatunde Savage, Chairman, Guinness Nigeria Plc, said: “We are delighted to welcome Andy to the Board and look forward to working together with him to continue to push forward our ambition to be the best performing, most trusted and respected consumer goods company in Nigeria. “ Fennel holds an honours degree in Psychology from Cardiff University in the UK, and was recently appointed President/Chief Operating Officer of Diageo Africa, joins the Board having held various positions within Guinness Nigeria’s parent company, Diageo.

Administration of withholding tax (1) By FRANK OBARO

ithholding Tax is an advance payment of income tax. In principle, WHT is a payment on account of the ultimate income tax liability of the taxpayer or company. Withholding tax is not a separate tax on its own and does not confer an exemption from the filing of annual tax returns by the company which had suffered WHT. The tax is normally to be deducted at source when a payment is to be made to the beneficiary. APPLICABLE TAX LAW Withholding Tax (WHT) is not a distinct tax type and therefore has no legislation of its own. It is only a mechanism for the collection of other taxes. Consequently, its application is provided for in the enabling law of other tax types i.e. Section 81 of Company Income Tax Act, Section 54 of Petroleum Profit Tax Act, Section 73 of Personal Income Tax Act and Section 13 of Value Added Tax Act TAX COVERAGE AND INCOME SUBJECT TO WITHHOLDING TAX The WHT provisions seek to collect taxes that may otherwise have been lost through evasion and/or avoidance. The aim is to ensure that taxpayers’ are correctly taxed but it must be understood that transactions that are ordinarily not liable to tax in Nigeria are also not liable to WHT; thus, contracts and supplies of goods and services performed entirely outside Nigeria by nonresident taxpayers will not be liable to WHT. The residence of the taxpayer is generally not relevant for the purpose of determining liability to tax or the application of WHT, but it is important to consider whether the provider/supplier of the goods or services is liable to Nigerian tax. The rate of tax applicable to the various goods and services is provided in later parts of this paper. The introduction of the WHT regime came about in order to address the problem of tax evasion although, there is the overriding objective of full disclosure, transparency, predictability and fairness. In the light of these objectives and bearing in mind that the tax is intended as an advance payment of tax, its operation should always be optimized to ensure that taxpayers are not overtaxed and Government does not lose revenue. Rents:This includes rental income on both real and

personal property. As a general rule, income on a property (rent, hire or lease payments or rights (royalties) situated in Nigeria is liable to tax in Nigeria, the place of payment notwithstanding. Where a person rents or hires property/services from another, WHT at the rate of 10% will apply. But where a person provides services to another for e.g. air/land transport service, using its own equipment/facilities, the transaction becomes a contract of services rather than rental or hire. Interest: This is income from investments of every kind. WHT is applicable to income from government securities and income from bonds or Treasury bills. Interest on loans paid by a Nigerian company is often not subject to WHT. Dividends:Refer to income from shares. The income is subject to tax whether it is received by a Nigeria company or a non-resident company. The tax imposed is

rate would apply; the same treatment applies to Professional/Management services. For instance, if an engineering company is carrying out a construction activity, the proper classification for the services would be “construction” as opposed to Professional/ Technical services; similarly, the use of industrial machinery/equipment to provide a service does not render it to be ‘Technical” because the industry position requires that only arrangements thatinvolve a transfer of Technology should be classified as technical. All types of Contract Activities and Arrangements, other than Outright sale and Purchase of Goods and Property This classification is wide enough to capture every transaction, other than outright purchase/sale of goods and property. The Revenue holds the view that majority of the activities carried on in the oil industry are done by way of

BRIEFS

If Agent C is mobilized by Manufacturer B with fund to source for materials for its operation, there will be need to segregate the service cost from the entire contraction, and only the service component will be liable to WHT.

regarded as final tax, but corporate bodies are allowed to recoup WHT deduction where the dividend is to be redistributed as Franked Investment Income (FII). The Petroleum Profit Tax Act (PPTA) however exempts dividends payable by oil producing companies on petroleum operations from WHT imposition. Royalty:Refers to unearned income which accrues to the owner from past endeavors. Permission must be obtained before it can be used. It is payment of any kind as a consideration for the use of or the right to use any patent, trade mark or right/ Consultancy/Professional/ Management/Technical Services-These are specialized services rendered by persons with the required knowledge and skills. The mere fact that services are provided by a company which has consultancy as part of its name does not by itself render such service as consultancy. The real content of the services being provided must be examined and if it amounts to a consultancy service, then the appropriate

contractions, and should properly fall under this category. The issue of contracts and transactions, not being conducted in the ordinary course of business has over the years been subjected to series of reviews and amendments, aimed at improving the WHT system in order to achieve efficiency as well as minimize the cost of doing business. The aim of withholding tax is not to compound the problems of producers, manufacturers and those engaged in any forms of activities, other than services. The definition of manufacturing activate as contained in the FIRS information circular No. 2002 appears to have further generated more controversy than expected. The following classification will assist in the understanding of circumstances where WHT will apply in relation to any production activity. WHERE THERE IS A DUAL RELATIONSHIP BETWEEN PARTIES IN A BUSINESS TRANSACTION An example of this contract is where a manufacturer/ producer require raw

materials from a supplier for its production. This is dual relationship between both parties and the transaction will not be liable to WHT. E.g. a farmer supplies groundnut to a manufacturer of groundnut oil; a manufacturer of glass supplies bottles to a bottling company or soft drink manufacturer or an oil marking company supplies diesel direct to a user. WHERE THERE IS A TRIPARTITE RELATIONSHIP BETWEEN PARTIES IN A TRANSACTION In a tripartite contract relationship involving a manufacturer, supplier and agent, there could be either two options, depending on the level of financial arrangement. For example, where Manufacturer A, engages Agent C to procure or source for raw materials from Supplier, B, for his production line, there is a tripartite arrangement here. There is nothing preventing Manufacturer, A from dealing directly with supplier B in order to achieve a dual contract relationship. (a) If Agent C is mobilized by Manufacturer B with fund to source for materials for its operation, there will be need to segregate the service cost from the entire contraction, and only the service component will be liable to WHT. (b) If the Agent, C, entirely finances the sourcing of the raw materials for Manufacturer A, the entire contract value will be liable to WHT at the time of payment. WHERE A MANUFACTURER DELIVERS ITS NORMAL PRODUCTS TO ITS DISTRIBUTORS AND DEALERS FOR SALE In this situation, the income accruing to the manufacturer will not be liable to Withholding tax (WHT) as it is regarded as transaction in the ordinary course of business, but theCommission earned by the distributors/ Dealers will be subjected to WHT. AGENCY TRANSACTIONS & ARRANGEMENTS Agency arrangement implies a contract between a principal and agent. The reward payable for services rendered by the agent is Commission, which is subject to WHT of 10%. However, if the principal is a non-resident, any sales proceeds from the arrangement will attract5% WHT, where any of the conditions in Section 26(1) (b) of CITA holds.

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 41

People in Business

Work to learn and develop yourself not just for money — Femi Adeoya Mr. Femi Adeoya is the Chief Executive Officer of Skytrend Consulting Limited, an accounting and business development outfit based in Lagos. Armed with a first degree in Accountancy from the University of AdoEkiti in 2000, he did his compulsory one year national youth service in Anambra State where he taught accounting, mathematics and economics in a secondary school. After the youth service, Adeoya went back to Lagos and worked in various places as an accountant/ accounting officer during which he was able to put into practice what he learnt in school. He rose to become the head of finance at Marketing Mix, a marketing communications/public relations outfit that is also into hospitality industry, before starting his own business last year. He speaks on his business, challenges and advises the youths to take responsibility for their lives. Excerpts:

Motivation:

aid Adeoya “At a point in time, I felt the job was becoming monotonous and I needed to move on. I told my boss and he was reluctant to let me go, my friends could not understand why I wanted to leave a well-paying and secure job for the unknown. But my goal was not just to make money. I read Rich Dad, Poor Dad where I learnt I should work to learn, not just for money. The import of that to me is that it is not just about earning money, it is about networking and developing yourself. Yes, I was not unaware of the challenges, I have heard of people who left their jobs to start their own business and failed but I told myself I was going to move on.”

Stepping out:

n July 1, 2012, Adeoya officially started Skytrend Consulting. “When you are working for somebody, you should not just resign without notice, give them enough time, it’s all about relationship. So I gave my boss six months notice, from January to June, 2012.” It was no wonder then that Marketing Mix became his first client. I have always wanted to become an entrepreneur. I had registered the company before as Skytrend Company Limited in 2009 but that was more service-oriented and

when I left Marketing Mix, I felt I needed to register a company that is devoted to my profession so I started Skytrend Consulting Limited. Basically, it is a business development and accounting solutions company. It covers the entire business functions of an organisation. When someone is sick, he goes to the doctor and the doctor diagnoses him and gives him medications. That is how the job of an accountant is – diagnose the ailments of a business and proffer solutions. A lot of people have the misconception that an accountant/economist is synonymous with stinginess, someone who does not want to spend money, a miser. That is not correct. An accountant is someone who maximizes limited utility or funds at his disposal, someone who optimizes the use of money, who puts money to the greatest use. For instance, if you have N1 million and put it under your pillow for one week, that is wrong because that money has a cost of fund attached to it. An accountant looks at an organisation and asks: What can I do to make this organisation work? Have they employed the correct number of staff? What can we do to increase their income and turnover? Are they making turnover without making profit? So it is the duty of the accountant to look at the financial and business dynamics of an organisation and put some

Training: “We also do training. We don’t just train the accountants but the CEOs also. They either come here or we go to their organisations to train them. We do week-day and weekend training for those executives who cannot attend the week-day training. I have many clients using the software now and they are very good at it. You can analyse your organisation at a glance. We are planning to go to every university in Nigeria and educate the final-year students and let them get the training before graduating from school. It’s unfortunate that a lot of accountants cannot prepare an accounting system. Many still use excel which is not an accounting package, it is a business package.”

•Femi Adeoya

things in place to make it positive. That is what Skytrend Consulting does. We look at the entire concept of a business and help the business owner in projecting a good financial framework.

Our focus: “Our focus is more on small and medium scale enterprises (SMEs), that is where the challenges are. A lot of business owners don’t take much interest in the finances of their organisations. They may or

By EBELE ORAKPO

turnover are fed into the system and at the end of the day, week or month, you can easily determine your turnover, profit, loss etc. You can determine illegal bank charges.”

and run the organisation like a personal fiefdom. Of course they own the business but we advise them. When you want to spend money, allocate yourself a salary; don’t just take money from the company for personal use. That is business development. The second aspect is accounting solutions for organisations. A lot of businesses do not have proper accounting solutions to run their business. In those days, things were done manually

There are so many people with ideas but no matter how good your ideas are, without access to working capital, you cannot go far.

may not have accountants but they have the cheque book with them and they withdraw money any time. They don’t appreciate how the financial aspect of a business can impact the long-term sustainability of the business. We help them appreciate the business so they can also sit down and understand the financial activities. Just in the one year we have been at work, we have worked for at least 10 clients and one common denominator is the way many of them spend money

but today, things have become a lot easier with simple accounting solutions. With a little knowledge of accounting, you can become a quasi accountant. You don’t need to have a degree in accounting to be able to use these packages so we help many organisations develop their accounting system and then give them the best accounting solution that will help them run their business. The accounting solution is automated. Once you know how to use it, all the money coming in/

Challenges:

deoya noted that although there are so many challenges like power, access to funds etc., “but if you are goal-oriented, you will make it. Lack of funds is a big challenge to SMEs. I know a new generation bank that does not lend money to SMEs. So SMEs are not able to make progress because of lack of access to loan. There are so many people with ideas but no matter how good your ideas are, without access to working capital, you cannot go far. We want to expand but we are limited by lack of access to funds. I applied to a bank for loan and they said I should go and bring cash-back which means I should get someone who can make fixed deposit to the bank and then they will give me from there. That is exploitation. Government should help us look into this.” He regretted that many graduates want to become rich overnight without paying the price. He, however, advised the youths to take 100 per cent responsibility for their lives. This means that although there is no power and no access to funds, but you just tell yourself that you are the one to provide those for yourself. Find solutions; don’t wait for anyone to do it for you. Don’t wait for loans from banks, you can go to family members and start with whatever you have, no matter how little and build up from there,” he advised.

42 — Vanguard, MONDAY, SEPTEMBER 30, 2013

FG’s N14trn budget for three years

“

WE have projected crude oil production for 2014 to be 2.3883mbpd [million barrels per day]. This figure is lower than 2.526mbpd budgeted in 2013…it is hoped that government’s efforts at tackling the (oil theft) problem will yield further results in the medium term, hence production is estimated at 2.5007mbpd and 2.5497mbpd for 2015 and 2016”. Federal Government to the National Assembly. September 17, 2013. The document, 2014-2016 Medium Term Expenditure Framework, proposed N4.495 trillion as the budget for 2014 – N425 billion less than the current year. For that sense od reality demonstrated, the Federal government deserves some credit. It would have amounted to economic self-delusion of the worst kind if the Federal government had failed to take into account the failure of this year’s budget, largely on account of the shortfall in crude shipments while preparing next year’s budget proposals. By July, revenue shortfall for 2013 had already reached N686bn and are projected to get close to N1 trillion by year end. So instead of N4.925bn proposed for 2013, the nation

will be extremely fortunate if N4tn is received. Thus, while the 2014 proposed budget is lower than the 2013 appropriation, it is N495bn more than what can be reasonably expected this year. Incidentally, Nigeria, like other predominantly oil exporting nations had benefited immensely from political turmoil in the Middle East. Since the 1973 Yum Kippur War between Israel and the Arab countries, decisively won by Israel, which led to an activist Organisation of Petroleum Exporting Countries, OPEC, Nigeria had been a perpetual beneficiary of trouble in the Gulf. Indeed, it might not be wrong to state that two straight years of peace in the Arab countries could spell doom for Nigeria. Our dependence on trouble in the region for our survival is almost total. So, to some extent, the projections for 2014 are partly based on the assumption that tension will persist in the Nile Basin. Without that assurance, the National Assembly might as well throw the Medium Term Expenditure Framework into the waste basket. In no single year, since 2011, had the projections proved accurate and no budget had been faithfully im-

plemented. The MTEF lacks credulity for a number of reasons. Let me mention a few. History is against it. No budget presented by any government since 1999 had ever been implemented as approved by the NASS. From Obasanjo’s first one, the 2000 budget, to Jonathan’s 2013, now headed for the graveyard, no single budget was ever executed as proposed. Each budget had failed for various reasons but the most common has been lack of will by the leaders to implement them. Next to the lack of will, and perhaps allied to it, is the unprecedented amount of time all three Nigerian presidents – Obasanjo, Yar’Adua and Jonathan – had been spending attending to internal political conflicts within the ruling party – the Peoples Democratic Party, PDP. It is quite possible that no other Head of State, in the world, spends as much time as the Nigerian president attending to purely political party problems. The leading papers in every country tell the story regarding what engages the leaders’ time. In Nigeria, virtually everyday, the lead stories are always about PDP and the President. Seldom is the

economy in the lead and usually for negative reasons. There is a clear absence of a president leading the charge towards achieving stated economic goals for the year, for mid-term and for the long run. The appointment of Dr Ngozi Okonjo-Iweala, the Minister for Finance, as Coordinating Minister for the Economic Team, CMET, as well as the selection of a handful of business moguls and governors, to manage the economy, while freeing the president from overseeing routine economic decisions has been allowed to elide into presidential abdication of responsibility. The buck still stops at the president’s table. Dr Ngozi was not elected by the people of Nigeria. Alhaji Dangote will not be held responsible if things go disastrously wrong. Every one of these people can walk away if and when they choose and nobody can ask them any questions. The President can delegate his duties to anybody he chooses but he is still responsible for the results. Right now Jonathan is behaving as if he is not responsible. At any rate, the 2014 budget proposal is heading for the stormiest sessions the NASS

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had ever experienced. To begin with, many lawmakers, for political and selfish reasons, are spoiling for a fight. Like sharks, they can smell blood in the water – the President’s blood, that is. They know that the 2013 budget had not, and could not possibly, be implemented. Generated revenue had been running below budget from January; they also are aware that only a miracle can produce any positive turnaround before the year ends. States are owed backlog of revenue allocation, ASUU remains on strike and government claims it cannot afford to pay, doctors have joined the strike and soon public servants throughout Nigeria will feel the lash. The President is the perfect scapegoat for political demagogues bent on bringing him down at all costs. With the 2013 budget set to ignite passions and “bring out the beasts” in our elected officials at Federal and State levels, the credibility of the 2014 budget is already in doubt. Fourteen straight years of “Voodoo economics” which had formed the basis of Federal budgets had eroded any confidence in the current proposals. Only a gambler will bet his money that the 2014 budget will be better executed than the previous thirteen and for one reason; at least.

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 43

Appointment and Promotions vicahiyoung@yahoo.com 08033348923

ENTRAL Bank of Nigeria, CBN, has confirmed the appointment of Rislanudeen Muhammad as the Acting Managing Director, MD of Unity Bank Plc. This came on the heels of the departure of Ado Yakubu Wanka, who retired earlier this month. The appointment of Muhammad was contained in a letter to the Bank dated September 20, 2013, signed by CBN Director of Banking Supervision, A. O. Idris. A statement Aliyu Ma’aji, Head, Corporate Communications, Unity Bank, said Muhammad was the Executive Director, Enterprise

CBN confirms Mohammad Unity Bank Acting MD Risk Management. An alumnus of three prestigious business schools; Harvard, London and Lagos, Muhammad started his banking career over two decades ago with the Center Point Bank, one of the nine legacy banks that merged to build Unity Bank Plc in 2006. He holds a B.Sc Economics from the Bayero University, Kano and an M.Sc in the same field from the Ahmadu Bello

University, Zaria.” According to the statement the Acting MD sojourned through various directorates of the Bank making him highly attuned with its operations and the sector in general, and no doubt, particularly suitable for the position. Prior to his confirmation, he held various positions in the Bank including steering the North-West Directorate, which comprises of its offices in Kaduna, Kano,

Jigawa, Sokoto, Zamfara and Kebbi states.” “He is part of the Management team that built the strong corporate governance culture which Unity Bank is reputed to have as well as the impressive results of 2012 in which gross earnings grew by 16%, while total operating expense declined by 8%: interest and similar income growth by 30%, impacting positively on its cost to income ratio.

Nasarawa chairman of SURE-P tasks beneficiaries

ASARAWA State chairman of the State coordination and implementation unit of Community Services Women and Youths Employment, CSWYE Project of SURE-P, Joseph Ishekpa, has advised beneficiaries of the project to see it as a rare opportunity to serve their father land and not a means of sharing the national cake. Joseph gave the advice in Lafia Nasarawa State during a town hall meeting organized by the State project implementation unit to assess and receive complains from beneficiaries, as well as to address challenges faced in implementation of the project in the state. According to him “My message to the beneficiaries of CSWYE project is for them to see it as an opportunity to serve their fatherland and not a means of sharing the national cake, they should impact positively on their society as services assigned to them are to the benefit of their immediate community and not Mr. President so they should see it as God giving opportunity to impact positively on their community”. Speaking further, Hon. Joseph stated that CSWYE project is a singular programme that has direct impact on the lives of ordinary people at the grassroots. He appreciated President Goodluck Ebele Jonathan.

CEO Alkhezai Nigeria Limited, Mr Kizito Alakwe (Right) receiving the US International Partner Awards 2013 from US Consul General, Jeffery Hawkins in Lagos

US Commercial Service rewards partners

l-Khezai Nigeria Limited has received the US International Partner Awards 2013, in recognition of its Entrepreneurship Initiatives. The initiative is said to have resulted in the increase of US presence and new-to-market exports to Nigeria under the SME category. The U.S. International Partner Forum and Awards, an annual event organized by the United States Commercial Service (CS), which is the

trade promotion arm of the U.S. Department of Commerce’s International Trade Administration was held in Lagos to honour Nigerian businessmen who promote U.S. products and services. In the process they have contributed significantly to the achievement of the goals and objectives of the U.S. Commercial Service Nigeria (CS Nigeria). The ceremony featured an interactive session and presentation of awards in five categories. It also featured presentation of three papers as well as speech by the outgoing US Commercial officer, Rebecca Armand. She used the opportunity to share insights and lessons learned over the past three years especially in the areas of promoting and facilitating Nigeria-American Trade. Receiving the award, the Chief Executive Officer, CEO, Al-Khezai Nigeria Limited, Mr. Kizito Alakwe who described the award as very fulfilling, expressed gratitude to the company’s local and international Partners. He equally commanded the organizers of the event and promised that his organisation would not relent in its effort towards ensuring quality services to strengthen the trade relations between Nigeria and US.

Emirates appoints Ghaith VP Commercial Operations for North, West Africa

MIRATES Airlines has announced the appointment of Adil Al Ghaith as Vice President, VP, Commercial Operations for North and West Africa. Adil joined Emirates in 1999 by enrolling in the Management Training Programme for UAE Nationals. He was subsequently appointed Designate Sales Manager for Melbourne, Australia. From 2001 until 2007, Ghaith was the Area Manager for Yemen, Qatar and Egypt. In 2007, he was promoted to Vice President for Pakistan and three years later for Saudi Arabia, Bahrain and Yemen In his new position, Ghaith is responsible for Emirates’ business operations in a number of markets, including Egypt, Tunis, Morocco, Algeria, Libya, Sudan, Senegal, Guinea, Ghana, Nigeria and Ivory Coast. Commenting on his recent appointment, Ghaith said, “I’m really looking forward to leading the Emirates team in North and West Africa and expanding our services and our satisfied customer base. There is scope for strong growth in these markets, and together with my highly experienced and capable team, I’m confident of our success.” Adil Al Ghaith holds a degree in Business Administration from Seattle Pacific University, Washington State.

•Ghaith

UBA GMD wins CEO of the Year Award

ROUP Managing Director, GMD of the United Bank for Africa, UBA, Plc, Mr. Phillips Oduoza, has been named Socially Responsible Investment, SRI, 30 “CEO of the Year”. The award was bestowed on him by “African Investor”; one of the leading investment and specialist communications firm advising governments and businesses on investments in Africa. Charles Aigbe, Divisional Head, Marketing and Corporate Relations Directorate, in a statement, said Mr. Oduoza received the award at the Africa investor (Ai) CEO Institutional Investment Summit, held at the New York Stock Exchange, last week. The SRI Index series were instituted in 2008 at the United Nations, as a concrete step to engage investors and businesses in support of the UN Millennium Development Goals, MDGs, in Africa. He was chosen in recognition of his exceptional achievements over the last year which is seen as an “inspiration for business and government leaders working to raise Africa ’s investment profile” the award organisers said in a statement. The panel considered excellent leadership skills, enhanced organisational image, innovation and originality as well as alignment with the millennium development goals in choosing the SRI 30 CEO of the year. Since becoming GMD, Oduoza has been spearheading a number of growth initiatives including, the recently launched Project Alpha; UBA’s three-year road map of key transformation initiatives, designed to consolidate the group’s strategic positioning, and fully exploit the burgeoning opportunities from Africa’s economic renaissance, and the group’s unique platform.

•Phillips Oduoza

44 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Aviation

Arik Air, IATA sign Weblink agreement Stories By LAWANI MIKAIRU

rik Air, and the International Air Transport Association ,IATA, have signed a Weblink agreement that allows accredited travel agents direct sales into the Billing Settlement Plan (BSP) system. According to Adebanji Ola, Communication Manager of Arik, the agreement was signed by Arik Air Managing Director, Mr. Chris Ndulue and the Director General of IATA, Mr. Tony Tyler at the IATA Aviation Day Africa 2013 held at the Eko Hotel and Suites, Lagos. Ola said “ Weblink is an alternative means to Global Distribution Systems (GDS) channels (Amadeus, Galileo, Sabre, Worldspan, etc). It allows the IATA accredited travel agents to access the Arik inventory and pricing directly via Mercator Airline Reservations System (MARS) bypassing the GDS.” “With Weblink, all reservations and ticketing transactions are direct via

Weblink to MARS, with sales reported as individual transactions to the BSP Data Processing Center (DPC).”

The statement further said , at the signing ceremony, Arik Air Managing Director, Mr. Ndulue said the agreement is

one step forward in making things easier for Travel Agencies and passengers. Arik Air intends to

implement Weblink in Cameroon, Ghana and Senegal markets and later in other offline Central West African markets such as Benin, Burkina Faso, Chad, Mali, Mauritania, Niger and Togo.

Infrastructure development not matching passengers’ traffic growth — Uriesi

that the capacity for processing passengers has been massively upgraded with the expansion of the Departures and Arrivals Halls to increase the ability to handle passengers by four times.

M r. Uruesi , regretted that in spite of the phenomenal growth in passengers traffic ,infrastructure were not developed to keep up with the pace of development which has been on the upsurge since the advent of democracy. In the continuous effort of the Authority to reduce the facilitation of passengers he explained that the screening points are to be increased from eleven to twenty with the deployment of more screening points. The Managing Director also explained that the power improvement and water improvement programme have been completed to replace the archaic equipment that came with the construction of the airport.

Mr. Ifie Sekibo, Heritage Bank's MD/CEO and Guest Speaker on "Small & Medium Enterprise Funding in Africa - a banker's experience"; Special Guest of Honour and Vice President, Republic of Seychelles, Danny Faure; with other dignitaries at the 2nd US-Africa Trade & Investment orum/Africa Investment & Development Awards which took place on 25th September 2013 at St. Regis Hotel, New York, USA.

He disclosed that multiple story car parks and hotels well as the expansion of the internal road are projects that are in the pipeline for the comfort of airport users.

he Managing Director of Federal Airports Authority of Nigeria, FAAN, Mr. George Uriesi said infrastructure development in the country’s airports has not matched the increase in

passengers traffic witnessed in recent times in all the airports Uriesi revealed this at the International Air Transport Association (IATA) African Aviation Day Conference in Lagos. He however explained

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Vanguard, MONDAY, SEPTEMBER 30, 2013 — 45

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46 — Vanguard, MONDAY, SEPTEMBER 30, 2013

EXTRA STORIES Motorcycle operator wins at star promo The on-going Star ‘Win and Shine’ promo has produced yet another winner in the person of Okorie Denis, a Lagos-based commercial motorcyclist. He emerged as one of the win-

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Vanguard, MONDAY, SEPTEMBER 30, 2013 — 47

Advertising, Media & Marketing

Distribution as ambit to product availability Stories by PRINCEWILL EKWUJURU

HE Nigerian consumer market is growing on all fronts and this is a pointer that it cannot continue to be business as usual. Brand handlers who understand this are thinking outside the box to create strategies for a deepened consumer affinity that will guarantee market share, profitability and brand loyalty. In the past, some brands had dwelt on the old proverb of building mousetrap and allowing the world to beat a path to their door. This was true then. Today’s mousetrap requires intensified communication. In any competing market, brand handlers have to package and promote the mousetrap and the market will definitely come enmass if other variables are in tandem. The objective of every marketer in the fast growing market like Nigeria is to allow the world to continuously beat a path to its door. For this to happen, it requires certain factors which includes the completion of production process of allowing the goods to reach the fi-

nal consumer. This is a marketing strategy employed by brands like Chivita Premium fruit juice in its marketing mix to create sales and achieve consumer satisfaction. Mr. John Igri, Managing Director of Orlick Haulage Enterprises agreed that the perpetual unavailability of any product in some regions cannot effectively enhance sales as would have been expected. The handlers of Chivita have leveraged on an efficient distribution system which comprises of retailers, wholesalers, multilevel marketers and sales representatives to bring the product closer to consumers with the underlying objective of creating more market share. This effective distribution strategy has ensured that millions of people across the country readily have access to it. A quick check at various retail shops in Ibadan, Abeokuta and Lagos revealed availability of the product. For Atinuke Jegede, who operates Choice

Stores in Ibadan, ‘’Chivita’ premium fruit juice is always readily available at shops and its 100 percent pure juice content has really endeared to its consumers who are increasingly becoming conscious of realness and quality” The brand has been able to achieve market- appealing product availability with economical price and exciting marketing promotion strategy especially in a competitive juice market lack Nigeria’s which has created a positive effect on the return on investment, RoI. To achieve this, Mr. Ephraim Ojike, a brand analyst, said that “brand loyalty cannot happen without a thorough understanding of the consumer and a deliberate decision The handlers of Chivita Premium fruit juice in creating a compelling and unique brand experience by incorporating other marketing mix tools such as price and promotion to ensure it consolidates its top market ranking is an effort and adoption of a functional campaign strategy communicating the reality of the brand’s 100 per cent fruit juice content that won it the preferred fruit juice drink in a preference study among 15,000 youths across Nigeria at the Next Generation Survey Award recently.

Publishing market, Nigeria best in Africa – Hello! Nigeria Editor

IGERIA’s reputation as the biggest and most robust publishing market in Africa has been identified as critical factor that would ensure the success of a new upscale magazine franchise that has debuted in the country. Speaking at the press conference organised to herald the launch of Hello! magazine in the Nigerian and Englishspeaking West African markets, Editor of the new publication, Zandile Blay praised the depth and quality of the Nigerian market. Blay, who lamented the poor presentation of the African story before the global community was of the view that Hello! will go a long way in riveting global attention to the volumes of good stories coming out of Nigeria and Africa but which were not being told. “I am excited to be a part of those who are going to tell the African stories well. We are at the threshold of history where there would be genuine love for our celebrities and icons flowing from our hearts and minds because we are going to tell the stories in the unique Hello! style, with compelling depth and detail,” Blay said.

•From Left: Vice President International Operations Cold Stone Creamery, Mr. Brian Richard, Managing Director Eat N’ Go Africa, Mr. Eric Andre and Vice Presidents International Operations Domino’s Pizza during the grand opening of Domino’s Pizza and Cold Stone Creamery in Ikeja.

Aspen unveils Infacare baby formula

S effort aimed at supporting mothers with challenges of breastfeeding, Aspen Pharmacare Nigeria has been moved to launch three variants of baby food –Infacare Starter, Infacare Follow on and Infacare Growing up, in Lagos. Speaking at the launch, the Chief Executive Officer of the company, Dr. Sanjay Advani, said that exclusive breastfeeding, especially at the early stages of a baby’s development, constituted the best form of nurturing babies, whilst adding that not all mothers have the capacity to actually breastfeed their babies. He stated that the introduction of the new baby formula was informed by the need for babies from mothers with breastfeeding challenges to suffer from malnourish-

ment at the early stages of their lives. According to him, the products, which were in three variants, were designed to cater for the different stages of a child’s development. ‘While the Infacare Starter Formula is designed for babies that fall within the age group of 0-6 months, the Infacare Follow on Formula and Infacare Growing up Formula are meant for children whose ages fall within 6-12 months and 1-3 years respectively,’ he added. Sanjay explained that since the company was not introducing the products purposely for profit-making, but to help mothers with the deficiency of breastfeeding their babies, the company would use medical doctors and other medical personnel, instead of the regular advertising to create awareness for the product. That, he noted, would ensure the products get to the target consumers.

Hire the Smile

ordstrom. That name definitely rings a bell. It could aptly serve as a synonym for service. Nordstrom – the US-based speciality retailer – has carved a comfortable niche for itself as a paragon of service in the minds of its teeming customers – and even non-customers. Its legendary service is such that competitors seek to emulate it, while organisations in different industries hold it up as a standard for excellence in customer service. It’s not unusual for organisations in different sectors to aspire to be the “Nordstrom” of their industry. That’s the enchanting mystique of being an icon for service excellence. (You may wonder: which companies are service icons in Nigeria?) Whatever Nordstrom has achieved wouldn’t have been possible without its extraordinary – you might even say, wacky – employees. Stories abound on what nordies (that’s the pet name for Nordstrom employees) do or can do. It takes a Nordstrom employee to replace $2000 worth of clothes that shrank when a customer washed them in hot water. It definitely takes a Nordie to take back a pair of shoes purchased three years earlier and make a full refund. And I bet that only a Nordstrom employee will send a “Thank You” note to a customer who returned merchandise! For more of such stories, please read The Nordstrom Way to Customer Service Excellence by Robert Spector and Patrick McCarthy. You’ll most likely be “wowed” by the heroics (that’s what they call stories of extraordinary service at Nordstrom). Or you may scour the Internet. Google search for “Nordstrom” returns over 32 million results. In very simple terms, Nordstrom employees are spectacular people. And this is not a coincidence. Nordstrom started it all. As a company, it believes in hiring people with the right attitude – those who are willing to help, those who enjoy serving others, those who are willing to do what it takes to make someone happy. Nice people, in short. To Nordstrom, degrees and experience are not the critical factors. Company executives spill it all in the book mentioned earlier. One of them, Bruce Nordstrom, says: “we can hire nice people and teach them to sell, but we can’t hire sales people and teach them to be nice.” True words. Some people are simply nice; others aren’t. And you don’t blame them. We all differ in our temperament, background, education, life experiences and even preferences – all of which may affect our attitude to people. That’s why a curious interviewer once asked Bruce Nordstrom: “Who trains your sales people?” And the answer: “Their parents”! It seems nice people are nice because they were brought up that way. Now, before you hire people to serve customers, you need to study them closely. Are they nice or grouchy? Do they like people? Or would they rather be dealing with “things?” Do they smile or frown often? Do they sound haughty or polite? What extraordinary things have they done to help someone? To what extent would they go to assist someone? Do they sound like extra-mile people? If they don’t make a good impression on you, they’re not likely to impress your customers either? Borrow a leaf from Nordstrom and hire the smile. You can teach skills, not smiles. In summary: egrees and experience are useful. But they don’t guarantee success on the frontline. In fact, the more experienced some people are, the more likely it is that they have picked up some bad behaviour that you will find difficult to wean them from. As the Chinese say, an unsmiling man should not open a shop. Have you met some people who approach service as if it were punishment? They have no business in business! Employees who are not very nice (as individuals) cannot be nice to customers. Spend just 30 minutes interviewing them and their rudeness will show. Why bother about changing attitudes? Hire those with the right attitude. Nice people without selling/ service skills can be trained. So am I suggesting that you should fire your notso-nice people? Not exactly. You may want to give them less visible roles. Stop inflicting them on your customers!

48 — Vanguard, MONDAY, SEPTEMBER 30, 2013

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

THE report of the 14 Nigerian banks which had been appointed as Asset Managers of Nigeria’s reserves was carried on the back page of The Guardian Newspaper of the 5th of October 2006. The report confirmed that “already deposits worth $7bn representing part of the apex bank’s share of foreign reserves estimated at about $38bn had been released to the consortium of bankers, according to the CBN Head of Corporate Affairs, Mr. Festus Odoko”. “In this event, the CBN had made good its promise to invite Nigerian banks which have consolidated $500m capital base to a “foreign reserves banquet” if they show evidence of collaboration with internationally recognized financial houses. The Guardian report further confirmed that all 14 Nigerian banks are already associated with reputable affiliates, but it is not clear whether or not the M.O.U. between both parties involves joint responsibility for profits and loss, with global best banking practice and ethical standards, or if collaboration is simply glorified banking correspondence. “Nonetheless, critics wondered if the 14 banks which had just raised their capital base under duress to N25bn could also raise additional capital of about N35bn in so short a space of time to qualify for management of CBN’s reserves, in which case, CBN may have quietly dropped this requirement so as to pursue its declared agenda! “But whose interest is CBN serving? The sum of $7bn is a huge sum of money in any currency and disbursement of such huge public funds should not be treated with levity.

oversight approval.” The above is a summary of the above article, which was first published in October 2006. Not surprisingly, less than two years after Soludo’s lauded banking consolidation, most Nigerian banks tittered on the verge of collapse. There has never been any confirmation that the 14 banks repaid the $7bn “soft loan” granted by the CBN before the banking crisis; consequently, it is more likely that Nigeria’s $7bn may have ultimately ‘gone with the wind’ during the ensuing financial meltdown! Nonetheless, such probable default has not stop the banking sector from receiving additional largesse in excess of N5tn ($30bn) from lifelines from CBN and AMCON interventions between 2009 and 2010! Notwithstanding, CBN’s misguided generosity the banking sector has remained resistant to providing the real sector with loanable funds at affordable rates to stimulate industrial rejuvenation, economic growth and increasing employment opportunities.

14 Nigerian banks to enjoy $7bn reserve Although in the Guardian report “Mr. Odoko confirmed that the appointment of the 14 banks was ratified by the Investment Committee of the CBN on Tuesday, 3/10/06, the deposits worth $7bn had already been shared by Thursday morning, 5/10/06! “Nigerians may not realize that with one stroke of the pen, the CBN had committed Nigeria to possibly its largest single investment ever! The questions is whether or not the returns from this huge investment will stimulate productivity and employment, and improve our social welfare. If not, who will benefit from this biggest ever single investment paid upfront by the Nigerian nation? Yes, you have got it, the 14 banks who will wear broad smiles to their overseas vaults! Although CBN has not yet declared what returns it would demand from the 14 fattened beneficiaries, it is unlikely that the CBN will get more than prevailing international cost of about 3% interest per annum for such placements. “Incidentally, the 14 favoured banks are at liberty to invest anywhere in the world! Thus, while we are pleading with foreign investors to come to Nigeria to support economic and industrial development, we are simultaneously exposing our hard earned foreign exchange to a consortium of Nigerian banks which have a consolidated capital base of less than $3bn for minimal gain, without asking for some measure of audit control or equity participation.

•Sanusi “Nigerian banks have found it unattractive to invest in the real sector, particularly the income and employment generating SMEs; so, it would be foolhardy to expect that the largesse of $7bn low interest

“

the 14 banks are free to repatriate all or part of the $7bn back to the Nigerian capital market, it is not difficult to predict where their interests would lie: you have got it; the obvious destination would be further patronage of government’s treasury bills and bonds where they can earn rates of return of up to 17% from government borrowings! “Worse still, moneys so collected for sale of government bills and bonds are regrettably not tied to any specific infrastructural project but are inexplicably just kept idle in CBN vaults. “Mr. Odoko, the CBN mouthpiece had also indicated in the Guardian report quoted above that “the $7bn represents the apex bank’s share of the foreign reserves!’ I beg your pardon! What work did the CBN do to earn $7bn? The Constitution does not separate

Worse still, moneys so collected for sale of government bills and bonds are regrettably not tied to any specific infrastructural project but are inexplicably just kept idle in CBN vaults.

loan would change their attitude to the Nigeria economy. The bizarre strategy of a minimal returns of 3.5% for a $7bn investment without a time limit is amplified by CBN’s willingness to conversely pay interest rates of between 12 and 17% for monies it borrows from the domestic capital market in Nigeria! “Indeed, in the event that

In the above event, it may be necessary for the Economic and Financial Crimes Commission to take a closer look at the circumstances and the ultimate fate of CBN’s extraordinary loan of $7bn to the banks in 2006; Nigerians surely have a right to know, especially now that a new set of managers has been selected, complete with their own parastatal establishment to manage the $1bn assets designated as our sovereign wealth fund, while we still go capin-hand to solicit for development loans with oppressive interest rates.

a share of dollar reserves for the CBN; our crude oil earnings belong to the Nigerian people as expressed by the three tiers of government; the Senate and the House of Representatives would have defaulted in their constitutional duties if CBN is not invited to defend why $7bn of our reserves should be ‘given’ to 14 banks without

SAVE THE NAIRA, SAVE NIGERIANS!

Business & Economy Last minute bond issuance raises hope for final quarter

ARKET participants are hoping that the strong primary market volumes in the past weeks will continue until the end of the year, countering a sharp drop in global bond issuance in the third quarter. According to Thomson Reuters data, investment-grade issuance in the last three months was down 14% to $557.8bn versus Q2, the slowest pace of investment-grade issuance since the second quarter of 2012. Global debt issuance year-todate was also down 3% from the first nine months of last year at $1,094bn. The third quarter started under a cloud as the prospect of the Fed reducing monetary stimulus sent markets reeling at the end of May. This, added to the usual seasonal slowdown, kept a lid on issuance.

"The last five weeks of the second quarter were quite challenging with issuers having to pay substantial new issue premiums. However, the picture has changed. New issue concessions have moderated, and credit investors have enjoyed a very good total return quarter," said Chris Whitman, head of global risk syndicate at Deutsche Bank. We are ending the quarter in a very good place. Just like in golf, the view on some holes looking backward from the putting green isn't nearly as onerous as the view from the tee box." A deluge of investment-grade deals in the U.S. made September the biggest new issuance month ever, with $143.9bn tallied. A $48.9bn transaction for Verizon, the largest corporate

bond since records began, clearly helped boost numbers. Borrowers, whipped into issuance frenzy by the Fed's nontaper surprise last week, are now pulling forward deals that were scheduled as far away as next year, fearing this might be the last time they see Treasury yields at current levels. It remains to be seen whether this continues, however. "What is noticeable is the lack of issuers available or bridge loans that need to be refinanced in the market more generally," said Jonathan Brown, head of European fixed income syndicate and head of emerging market syndicate at Barclays. "It feels relatively empty in terms of visible pipeline, including high-yield where most of the refinancings have been done. One bright spot is that

will also play a part. Brown said the US budget discussion and tapering will be some of the main issues the market is focused on, as well as political events in Italy.

there continues to be flow of issuers deciding to pre-fund, especially as they see a future where rates are likely to go higher." The macro backdrop

OUR TEAM Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Market Yinka Kolawole Correspondent Favour Nnabugwu Correspondent Godwin Oritse Correspondent Godfrey Bivbere Correspondent Michael Eboh Reporter Franklin Alli Agric. Reporter Ebele Orakpo Reporter Ifeyinwa Obi Reporter CONTRIBUTORS

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