Integrated West African Capital Market By 2016 Is Feasible – Ndanusa

capital marketThe Chairman of the Securities and Exchange Commission, Dr Suleiman Ndanusa, has said that the realisation of an integrated capital market within the West African region by 2016 is feasible.

Speaking at a meeting in Abuja, Ndanusa said that recent economic realities at the international market should be seen as an opportunity by countries in the region to boost activities in the capital market through the adoption of policies that are in the interest of the sector.

He said harmonisation of market processes and financial literacy remains key to achieving its objective of capital market integration.

Representatives of capital market institutions in the West Africa sub region gathered at a meeting to fast track the development of the market through the adoption of regional protocols.

Besides the decreasing prices of oil at the international market, security threat and differences in currencies among countries in the sub region appear to be a challenge to the attainment of the 2016 deadline.

However, many experts at the gathering highlighted great economic potential for the region through the capital market.

The Chairman of the Securities and Exchange Commission outlined some of the benefits of the creation of an integrated capital market which he said would serve as a catalyst to the growth of other sectors.

The Director-General, West African Monetary Institute, Dr Abwaku Englama, as well as the Chairman/C.E.O, Nigeria Stock Exchange, Oscar Onyema, also took turns to give their analyses of the economic potentials and how the dream would be realised in the days ahead.

NSE Fines Companies For Late Filling Of Financial Statement

Some of the biggest companies listed on the Nigerian Stock Exchange are to be fined millions of naira for filing their financial statements for the years 2011 and 2012 after the regulatory due dates.

In its X-compliance report released yesterday, management of the exchange says the sanctions are in accordance with provisions of Section 14 of appendix one hundred and eleven of its listing rules.

While there are 32 companies involved, some of the most prominent named in the report include: Dangote Flour Mills, Oando, Conoil, Union Bank, Wema Bank, and Mutual Benefits Assurance.

Those to pay the highest fines are Linkage Assurance, Equity Assurance, Standard Alliance, Mutual Benefits Assurance, Costain, Unic Insurance, Guinea Insurance, Wema Bank, IPWA and John Holt.

All 32 companies are to pay a total sum of N56.3 million.

FBN holdings gets listed on NSE floor

FBN Holdings PLC has opened a world of opportunities in consolidated financial services following the listing of its shares on the Nigerian Stock Exchange.

Assuring investors of its commitment to sustain the heritage of excellence associated with the Firstbank brand, the Managing Director/CEO, FBN Holdings; Mr. Bello Maccido says the company will continue to improve service delivery while profitably growing the group’s commercial banking and non-banking financial services.

Court orders CBN to make public management of assets seized from Ibru

A Federal High Court sitting in Lagos has given a 72-hour ultimatum to the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, to make available, the total cash and value of properties recovered from the former Managing Director of the defunct Oceanic Bank Plc, now (Eco Bank Plc) Mrs. Cecilia Ibru.

Presiding Justice Mohammed Idris also mandated the CBN governor to make public, the whereabouts of the money and properties recovered as well as what part of them has been returned to Oceanic Bank and/or its shareholders.

The judge gave the directive while giving his judgement in a suit filed by the President of Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, against the CBN where he sought to compel the apex bank to publicise how it managed about N191 billion worth of assets realised from Mrs. Ibru after her conviction on charges of fraud and mismanagement of Oceanic Bank’s assets.

Justice Idris in his judgement said, “The Central Bank of Nigeria is hereby ordered to declare the whereabouts of the money recovered from Cecilia Ibru; and what part of this cash and properties has been returned to Oceanic Bank and/or its shareholders.

“What is done officially must be done according to the law,” he added.

Justice Idris however turned down a request by Mr Okezie to compel the CBN to disclose the total sum paid to the firms of Olaniwun Ajayi and Kola Awodein in respect of the prosecution of Cecilia Ibru and how much of this sum was in the form of commission on the properties recovered from her.

It will be recalled that the assets forfeited by former Oceanic Bank supremo, Mrs Cecilia Ibru included 94 landed properties scattered in Nigeria, Dubai and the United States of America, as well as shares in about 100 firms both listed and unlisted in the Nigeria Stock Exchange (NSE).

In the written affidavit, which was in response to the counter-affidavit filed by the CBN to the suit, Mr Okezie alleged that he had heard the rumour that Sanusi and his associates within and outside of government had embezzled the recovered funds, a development he said necessitated the reason why the CBN must be made to account for the funds at its disposal under Sanusi.

In the counter-affidavit deposed to by one, Chiaka Mogaha, the CBN urged the court to reject the applicant’s request because the information sought relates to the contractual relationship and negotiation between it, the legal practitioners and other professionals engaged by the apex bank.

CBN noted that the disclosure of the information would interfere with the contracts and negotiations between it and the professionals engaged, adding that there is already a momentous condition of service that the details of remuneration “shall never be disclosed to any third party.”

Responding, Okezie stressed that the apex bank had only laboured in vain to avoid the clear duty imposed on it under the Freedom of Information (FOI) Act to disclose payments it has made to consultants and professionals.

While citing Sections 2 (3) (d) (v) and 2 (4) of the FOI Act, the applicant stated that those sections even require the CBN, as a public institution, to publish and disseminate widely “information relating to the receipt or expenditure of public or other funds of the institution,” without prompting.

 

IG of Police reads riot act to fraudsters in capital market

The Inspector General of Police, Mohammed Abubakar, on Wednesday vowed to rid the Nigerian capital market of fraudsters saying the options open to fraudulent market operators is to either stop criminal activities or face the full wrath of the law.

Brokers work on the trading floor of the Nigerian stock exchange in the commercial capital Lagos

Mr Abubakar, who gave this warning in Abuja at the formal inauguration of police seconded to the Securities and Exchange Commission (SEC), explained that the police would do all it takes to ensure that the economy of the nation is protected by ensuring that the capital market is given all the support it requires to function effectively.

“Without safety and security, Nigeria cannot be developed in whatever way. We will therefore not fold our arms and allow criminals to do whatever they want to in this country. They should either desist from their criminal ways or get caught and face the consequences,” the police boss said.

He charged the newly inaugurated officers to be good ambassadors of the Nigeria Police, urging them to be dedicated, honest and fair in the discharge of their responsibilities to the Commission.

Also speaking at the inauguration, the Director General of SEC, Arunma Oteh, said the commission has the responsibility of regulating and developing the Nigerian Capital markets to ensure investor protection, enhance efficiency and support private sector growth, job creation and economic development, adding that the support of the security agencies in fulfilling the Commission’s mandate is indispensable.

According to her, the Commission’s activities are guided by the Investments and Securities Act of 2007, section 304 of which requires the capital market regulatory institution to refer matters of criminal nature to the appropriate crime prevention and prosecuting authorities, including the Nigeria police.

“Some of these infractions include fraudulent disposal of investor assets, illegal fund management, wonder banks, insider dealing, and corporate accounting fraud and share price manipulation.

“In addition to the global financial crisis, the unprecedented decline in the Nigerian stock market between 2008 and 2009 was caused by excessive risk taking and various market abuses. In light of this, and to ensure the speedier resolution of cases, the commission approached the Inspector General of Police for the deployment of officers to jointly work with our staff in investigating criminal issues in the capital market”.

Ms Oteh commended the IG of Police on his commitment to crime prevention generally but particularly, criminality in the capital market where, she said, he has demonstrated through the on-going reforms in the Force and the deployment of some of the best and highly specialized personnel to the commission.

Oteh resumes at SEC

Despite the controversies surrounding her re-call, the Director-General of the Securities and Exchange Commission (SEC), Arunma Oteh has resumed SEC today.

Ms Oteh’s resumption was confirmed to Channels Television on the telephone by the commission’s Public Relations Officer.

The embattled SEC DG was, last week,  recalled from a compulsory leave slammed on her following allegations of financial recklessness. A firm of external auditors was subsequently engaged to examine SEC’s books.

The auditors, however, were said to have found nothing against Ms Oteh which prompted the federal government to recall her last week.

But this did not go down well with some members of staff as they staged a protest against  her recall.

Meanwhile, the Minister of Finance and Co-ordinating Minister for the economy, Ngozi Okonjo-Iweala was said to have met with the commission’s staff on Friday where she told them to sheathe their swords as Ms Oteh has been found to be innocent of allegations against her. It was also gathered that Ms Okonjo-Iweala told the protesting staff that it was illegal for them to form unions at the commission.

The SEC boss, a former top official of the African Development Bank was seen as an outsider by some interests who also were not comfortable with  her hard decisions in the efforts to restore sanity and investor’s confidence in the nation’s battered capital market.

Reps recommend Oteh’s sack, say her appointment is illegal

The House of Representatives on Thursday called for the immediate sack of the Director General of Security and Exchange Commission (SEC), Arunma Oteh, insisting that her appointment was illegal.

Considering the report of its ad-hoc committee on the probe of the near collapse of the capital market, the lawmakers unanimously approved the recommendation that the Ms Oteh be sacked for incompetence and inadequate qualification for the role she is playing.

Giving a summary of the findings of the investigation before commencement of the clause by clause consideration, The Chairman of the ad hoc committee, Ibrahim Tukur El-Sudi (PDP, Taraba) defended the recommendation, explaining that Ms Oteh’s appointment was in violation of the investment and security act, 2007.

The lawmaker objected to the decision of the presidency to bring back Ms Oteh when an investigation on her was still pending.

The house also approved the recommendation that “in view of the breakdown of corporate governance in SEC, leading to total collapse of cooperation and coordination within its board and top management and since the tenure of the board has expired, top management of SEC should be relieved of their duties so as to give the capital market an opportunity of credible regulation through appointment of a neutral board and top management that will regain the confidence of investors.”

Section 3 ( 2 ) a and Section 38 ( 1 ) ( b ), 2 and 3, Section 315 of the investment and Security Act, 2007 stipulates that anyone that will be appointed as the DG of SEC must possess up to 15 years experience in the Nigerian Capital Market, a requirement the lawmakers said Ms Oteh does not possess.

“She has shown incompetence in the management of human and material resources at her disposal in Security and Exchange Commission.”

The lawmakers also called on the SEC to prevail on the Nigerian Stock Exchange to activate and strengthen the Investor Protection Fund (IPF).

They also urged the Minister of Justice, Mohammed Bello Adoke to prosecute the governor of the Central Bank of Nigeria, Sanusi Lamido, Mustafa Chike-Obi, the Managing Director of Asset Management Corporation of Nigeria, (AMCON) and Ms Oteh, for contempt of the House of Representatives.
According to the lawmakers, the public officers contravened Section 4 and 11 (b) of the legislative House powers by refusing to produce documents as requested by the ad -hoc committee.

Furthermore, the lawmakers asked the Economic and Financial Crimes Commissions (EFCC) to investigate Ms Oteh and Mr Chike-Obi, and the Managing Director of Union Bank Plc, Funke Osibodu over the missing N8 billion arising from the Union Bank Public Offer.

Internal fraud in Banks responsible for collapse of Capital market – CBN deputy governor

The deputy governor, financial systems stability, of the Central Bank of Nigeria (CBN), Kingsley Moghalu on Wednesday said that lending to non-priority sectors and to operators of the capital market by commercial banks in Nigeria were key factors responsible for the near-collapse of the nation’s capital market in 2009.

The deputy governor, financial systems stability, of the Central Bank of Nigeria (CBN), Kingsley Moghalu

Mr. Moghalu disclosed this while he was making a submission at the resumed hearing of the House of Representatives ad-hoc committee investigating the collapse of the capital market.

He said that the nation’s financial system would have collapsed if the CBN had not exercised its responsibility as the lender of last resort as he replied to questions by members of the ad-hoc committee on who authorised the CBN to nationalise the bank.

The CBN in November 2008, injected N602 billion into eight banks that were almost running aground.

Giving a breakdown of how some of the banks manipulated their share prices, Mr. Moghalu said that “Afribank PLC via a share buy-back arrangement manipulated its share price when it went to the stock market in 2007.”

He claimed the bank through the services of three stock broking firms bought 66 per cent of the bank’s offer using fictious name of 1,258 subscribers and at the end of the offer, they will announce that their offer was over-subscribed.

He also revealed that Finbank in August 2006 conspired with three companies incorporated by the bank to buy N2.8billion worth of its own shares between August 2006 and August 2008, adding that the bank will claim the offer was over-subscribed.

Another bank accused of the fraudulent shares buy-back was Intercontinental bank. The CBN deputy governor said that the bank bought 3.4million units of its share which constitute 29 per cent of the bank’s share value on the stock market between September 2007 and December 2009.

He gave a breakdown of the non-performing loans by the eight liquidated banks as below:

  • Bank PHB – 40.86%
  • Oceanic Bank – 44.35%
  • Afribank – 47.0%
  • Finbank – 47.45%
  • Intercontinental bank – 48%
  • Equatorial Trust Bank (ETB) – 57%
  • Wema bank – 77%
  • Spring Bank – 85%

He described the banks as ‘net-takers’ that are only surviving exchanges from the inter-bank rate markets’. He added that between 2008 and 2009 “the banks were also on ‘life-supports’, surviving on sub-ventures from the CBN such as the Expanded Discount Window and Standing lending facility.

Bank Consolidation

A member of the committee, Bimbo Daramola, raised the issue on how the bank consolidation of N25 billion forced on the bank’s was the reason why the banks were involved in the round-tripping of share buy-back in a bid to rush and make the N25 billion.

Mr. Moghalu noted that it was just eight banks that were culpable of the wrong-doing and not all the banks that sort to carry-out the consolidation. “Without the consolidation, the global financial crises would have wiped out all the Nigerians bank” he said.

He added that the knock-on effects of the global financial crisis and the capital flight of $15 billion also contributed to the crash of the capital market.

Another Member of the ad-hoc committe, Representative Usman Mohammed, noted that despite the huge investment of funds into the banks, the lending rate to the real is still poor. Responding to the observation, Mr Moghalu stated that “the most important obstacle and challenge to the nation’s real sector is the absence and lack of power and not interest rate”, adding that “loans to the agriculture sector has risen from 1% to 3% in the last one year.”

He also assured the hearing that with the ongoing reforms across the nation’s economic sector, the banks will start granting more loans to the sector once the reforms kick-off.

He further explained that banks lending has increased drastically due to AMCON’s purchase of all bad loans. “Just about 5% of banks loans are now bad loans” he stated.

First Bank profit jumps 48 pct in 2011

First Bank Nigeria said on Tuesday its 2011 pre-tax profit jumped 48.28 per cent to N50.06 billion from N33.76 billion the previous year.

The lender proposed a N0.80 dividend for its shareholders from its net profit.

Gross earning rose 27.68 per cent to N296.33 billion, compared with N232.08 billion in 2010.

 

 

Fidelity and Skye Banks’2011 profits drop

Fidelity Bank said on Monday its pre-tax profit for 2011 fell 11.32 per cent to N7.67 billion from N8.65 billion in the previous year.

The bank disclosed this in a statement it forwarded to the Nigerian Stock Exchange.

Gross earnings rose to N70.04 billion, from N56.04 billion in 2010, the bank said.

It also declared a dividend of N0.14 per share.

Fidelity Bank shares rose 4.93 per cent, almost the 5 per cent maximum allowed in a day’s trading on the local bourse, on Monday to N1.49 per share, after it announced it’s earning results.

Skye Bank profit fells despite rising revenue

Similarly, Skye Bank on Monday said its pre-tax profit fell by 45.5 per cent to N6.51 billion in 2011, down from N12.73 billion the previous year, and it declared a dividend of N0.25 per share.

Gross earnings rose to N104.83 billion for 2011, from N83.97 billion in 2010, the bank said in a statement through the Nigerian Stock Exchange.

It did not explain the fall in profit despite rising revenues, but a number of Nigerian banks have issued disappointing results for 2011 because of write downs of non-performing loans left over from a 2008/9 banking crisis.

 

Diamond Bank shares falls 3 per cent

Diamond Bank fell 3.36 per cent on Monday after posting a pre-tax loss of N16.26 billion for the full year 2011, compared with a N4.72 billion profit in 2010.

Diamond Bank fell 3.36 per cent on Monday after posting a pre-tax loss of N16.26 billion for the full year 2011.

Diamond bank shares which slumped 74 per cent in 2011, had gained more than 20 per cent so far this year. Diamond Bank shares were trading at N2.28 per share at 11.43am on Monday.

Its gross earnings rose 5.84 per cent to N96.34 billion in 2011, the company said in a report.