The bank affirmed this as Board members, led by the Managing Director, Dr Adesola Adeduntan, paid a working visit to the rice mill on Friday, July 30, 2021.
This expansion comes barely four years after the Vice President, Prof. Yemi Osinbajo commissioned WACOT’s first mill in 2017. Speaking at the end of the site inspection by the FirstBank team, Adeduntan expressed delight with WACOT’s impressive strides and affirmed the bank’s support for the initiative.
FG Hails WACOT’s Certifications to Export Organic Sesame Globally Brandspurng
He specifically commended WACOT’s premium household brands such as Big Bull and Patriot, which he referred to as ‘world-class.
Adeduntan noted that, apart from ensuring Nigeria’s food security, the new WACOT mill would continue developing Nigeria’s rice value chain, thereby improving the lives of many small-holder farmers.
He said: “This aligns with FirstBank’s goal of developing the economy through sustainable employment generation. Above supporting WACOT Rice, we’ve seen the socio-economic impact of locating this factory in this state. Therefore, we are committing that we will remain a very close financial partner of WACOT Rice Limited.”
Also commenting, Chairman of WACOT Rice Limited, Farouk Gumel, said the expansion of the existing mill would positively impact Nigeria’s food security ambitions.
“We are delighted to be hosting the Board of FirstBank here in Argungu today. Our partnership has come a long way. The proposed expansion of our mill clearly shows the future is bright,” Gumel said.
Group Managing Director of TGI Group, the parent company of WACOT Rice, Rahul Savara assured that it would not relent in its efforts to develop Nigeria’s agricultural sector and the economy.
Savara stated: “Our goal is to have successful farmers and happy consumers, through an efficient value chain. This investment is another important step in our journey to achieving this, and we are grateful to FirstBank for walking with us on the journey”.
Tropical General Investments (TGI) Group is a global conglomerate with a majority of its investments based in emerging markets. TGI’s investments focus on driving inclusivity and value addition using locally sourced raw materials, state-of-the-art manufacturing facilities and a highly skilled workforce to produce world-class products that are consumed both locally and exported to global markets.
The Director-General (DG) Standards Organisation of Nigeria (SON), Mallam Farouk Salim has offered SON’s expertise to the Bauchi State Government in support of MSMEs development in the State.
He made the commitment when he paid a courtesy visit to the Governor of the State Senator Bala Mohammed at the State Council Chambers Government House Bauchi recently.
In his remarks, the DG SON commended the State Governor for the gift of a land and support in the construction of the State/ Regional Office Laboratory.
Mallam Salim disclosed that the Office is ready for commissioning however, the Organisation is in need of additional Operational vehicle and laboratory equipment which will allow for full scale functioning and adequate coverage of every part of the State.
The DG indicated SON’s readiness to sign a Memorandum of Understanding (MOU) with the State to train and support MSMEs’ growth in the areas of Codes of Practices, packaging, labelling and good manufacturing practices.
According to him, SON is ready to train the State ministries and agencies in the ISO Management Systems Certification (MSC) and Occupational Health & Safety (OHS) Standards. These and other strategies he stated are to increase productivity in the state and reduce unemployment which is causing restiveness and insecurity in the region.
SON, Bauchi State Government To Collaborate On SME Development-Brand Spur Nigeria
Salim stated that with the MSME support, “small scale producers will be standardized and their products will be able to key into the AfCTA programme which will be a boost to manufacturers and the economy of the State, making their products acceptable across our borders and overseas”.
In addition, the DG disclosed that SON is putting finishing touches to the office complex towards commissioning, to serve Bauchi and the North East region and would be looking forward to having the governor at the commissioning of the building.
The Governor of Bauchi State, His Excellency Senator Bala Mohammed in his remarks, thanked the President Mohammadu Buhari for appointing the DG, seeing that he is a good fit for the job and expressed his expectations that the Organisation would benefit immensely from his leadership.
Senator Bala Mohammed while reiterating Bauchi State’s continued support for SON in the state, announced the donation of operational vehicles to the state office and also pledged his support for the planned commissioning of the State/ Regional Office.
Speaking further, the Governor observed that the insecurity and poverty in the North East of the country has eliminated MSME’s in the Sate as they are completely non-existent.
He restated that the State government is looking forward to the partnership with SON to revamp the manufacturing sector in order to galvanize the State’s economy and make Bauchi products competitive internationally.
In his words, the Governor said SON is so critical in getting us out of the woods by standardizing our artefacts, agricultural produce and also the mining industry, by creating a value chain that will make our products acceptable worldwide.
As part of his tour to Bauchi State, the DG SON met with the Organization’s Regional Coordinators who were having regional offices confab in Bauchi State.
At the meeting the DG was briefed by the Director Operations on the outcome of the 3-day strategic meeting and review of activities, with a view of proffering solutions to perennial problems and situations within the state and the regional structures of the Organisation.
The DG addressed several issues raised and assured them of prompt solutions while at the same time urged them to become change agents in their various domains by being creative in their services and provision of solutions.
The DG also paid a courtesy call on the Emir of Bauchi Dr. Riliwanu Suleiman Adamu, mni to pay homage to him in his royal court at the Emirs Palace Bauchi.
The DG also visited the SON Bauchi State Office, where he was received by the State Coordinator, Engr. Hauwa Husseini were he interacted with the staff and afterwards taken on a tour of the SON new State office/ laboratory complex.
He made the commitment when he paid a courtesy visit to the Governor of the State Senator Bala Mohammed at the State Council Chambers Government House Bauchi recently.
In his remarks, the DG SON commended the State Governor for the gift of a land and support in the construction of the State/ Regional Office Laboratory.
Mallam Salim disclosed that the Office is ready for commissioning however, the Organisation is in need of additional Operational vehicle and laboratory equipment which will allow for full scale functioning and adequate coverage of every part of the State.
The DG indicated SON’s readiness to sign a Memorandum of Understanding (MOU) with the State to train and support MSMEs’ growth in the areas of Codes of Practices, packaging, labelling and good manufacturing practices.
According to him, SON is ready to train the State ministries and agencies in the ISO Management Systems Certification (MSC) and Occupational Health & Safety (OHS) Standards. These and other strategies he stated are to increase productivity in the state and reduce unemployment which is causing restiveness and insecurity in the region.
Salim stated that with the MSME support, “small scale producers will be standardized and their products will be able to key into the AfCTA programme which will be a boost to manufacturers and the economy of the State, making their products acceptable across our borders and overseas”.
In addition, the DG disclosed that SON is putting finishing touches to the office complex towards commissioning, to serve Bauchi and the North East region and would be looking forward to having the governor at the commissioning of the building.
The Governor of Bauchi State, His Excellency Senator Bala Mohammed in his remarks, thanked the President Mohammadu Buhari for appointing the DG, seeing that he is a good fit for the job and expressed his expectations that the Organisation would benefit immensely from his leadership.
Senator Bala Mohammed while reiterating Bauchi State’s continued support for SON in the state, announced the donation of operational vehicles to the state office and also pledged his support for the planned commissioning of the State/ Regional Office.
Speaking further, the Governor observed that the insecurity and poverty in the North East of the country has eliminated MSME’s in the Sate as they are completely non-existent.
He restated that the State government is looking forward to the partnership with SON to revamp the manufacturing sector in order to galvanize the State’s economy and make Bauchi products competitive internationally.
In his words, the Governor said SON is so critical in getting us out of the woods by standardizing our artefacts, agricultural produce and also the mining industry, by creating a value chain that will make our products acceptable worldwide.
As part of his tour to Bauchi State, the DG SON met with the Organization’s Regional Coordinators who were having regional offices confab in Bauchi State.
At the meeting, the DG was briefed by the Director of Operations on the outcome of the 3-day strategic meeting and review of activities, with a view of proffering solutions to perennial problems and situations within the state and the regional structures of the Organisation.
The DG addressed several issues raised and assured them of prompt solutions while at the same time urged them to become change agents in their various domains by being creative in their services and provision of solutions.
The DG also paid a courtesy call on the Emir of Bauchi Dr. Riliwanu Suleiman Adamu, mni to pay homage to him in his royal court at the Emirs Palace Bauchi.
The DG also visited the SON Bauchi State Office, where he was received by the State Coordinator, Engr. Hauwa Husseini were he interacted with the staff and afterwards taken on a tour of the SON new State office/ laboratory complex.
With the conditions for first closing having now been met, The Rise Fund and Mastercard have invested US$150m and US$75m respectively in a secondary purchase of shares in AMC BV from a subsidiary of Airtel Africa, with a further US$50m and US$25m respectively to be invested at second close upon further transfers of mobile money operations into AMC BV.
Under the AMC BV shareholders’ agreement., The Rise Fund is now entitled to appoint a director to the board of AMC BV and both Mastercard and The Rise Fund now have certain customary information and minority protection rights.
As previously reported, the proceeds from these transactions will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.
The total consideration was approximately $97 million, of which one third is payable immediately, one third is deferred until July 2023, and one third is deferred until July 2024 (which deferments may in each case be accelerated upon the occurrence of certain conditions); all funded from operational cash flow.
Techedge ApSoffers software solutions and consultancy services. The Company develops sophisticated analysis software for advanced decision support within programme scheduling, market research, brand analysis, campaign planning, and optimization, as well as provides management consulting services to the electronic media industry.
As a precaution to the rising number of COVID-19 cases, the AGM was held virtually via Zoom and afforded all stakeholders the same participatory rights as with a physical meeting.
Dr. Kingsley Obiora, Group Chairman of the Board of Directors, FMDQ Group, ably represented by Mr. Jibril Aku, the Group Vice Chairman of the Board, presided over the AGM and as part of the ordinary business, presented the Audited Financial Statements for the year ended December 31, 2020, to shareholders, together with the Reports of the Directors and Auditors. Recounting FMDQ’s journey in 2020, he acknowledged that “the year 2020 was understandably challenging, with the outbreak of the COVID-19 pandemic, and the attendant turbulence in the global and domestic economic landscapes”.
He further stated that despite the challenges, “2020 was a landmark year for FMDQ, as it saw the Company’s reorganization into a Group structure, with FMDQ Group becoming a non-operating Holding Company registered by the Securities and Exchange Commission (SEC), with three (3) SEC-registered capital market subsidiaries.
These regulated subsidiaries include FMDQ Securities Exchange Limited (“FMDQ Exchange”), FMDQ Clear Limited (“FMDQ Clear”) and FMDQ Depository Limited (“FMDQ Depository”), all further consolidating our business model, transforming FMDQ to Africa’s first vertically integrated FMI group, and helping to de-risk the markets across the full capital market value chain, from pre-trade, trade to post-trade.”
Speaking further, he stated that two (2) new subsidiaries, FMDQ Private Markets Limited and iQx Consult Limited, were operationalized in 2020 to extend the opportunities in the capital market to private companies, amongst others, and ensure operational efficiency and build resilience in the FMDQ Entities through technology and digitization, respectively.
Speaking on the product and market development activities of FMDQ’s capital markets subsidiaries, the Chairman stated that FMDQ Exchange’s Securities Admission business saw eighty-two (82) securities, with a total value of ₦2.07 trillion, admitted on its platform. Furthermore, the Exchange activated its Equity Market Development Project during the year, with relevant activities commencing in earnest towards full operationalisation of the Market.
Also, the FMDQ Exchange-Traded Derivatives (ETD) Market Development Project, following significant financial markets developments, such as the long-awaited introduction of netting and other relevant laws in the Companies and Allied Matters Act (CAMA), 2004, to include netting and other relevant provisions in 2020, has advanced towards the eventual launch of the FMDQ ETD Market, with the planned introduction of pioneer fixed income products later in 2021.
Speaking on FMDQ Clear, the Chairman stated that the receipt of an Approval-in-Principle from the SEC in September 2020 on its registration as Nigeria’s foremost Central Counterparty (CCP), and a full registration from the SEC in 2021, has effectively positioned FMDQ Clear for the actualization of the Company’s vision of becoming a globally accepted CCP by 2025.
FMDQ Depository was not left out of the mix, as it also achieved considerable growth as evidenced in the admission of a total of twenty-one (21) securities valued at circa ₦411.00 billion in 2020, driven by the activation of its market penetration strategy for its securities-related services, despite the downturn in the operating environment.
The Chief Executive Officer of FMDQ, Mr. Bola Onadele. Koko, while speaking to the Group’s outlook for 2021 and beyond, stated that “FMDQ Group will continue to work assiduously to deliver innovative and critical market development initiatives, with the support of and in collaboration with its stakeholders”.
Some of the initiatives market participants can look forward to in the near-term include; the launch of FMDQ Exchange’s Fixed Income Futures products, having received the SEC’s approval for the FMDQ Exchange Derivatives Market Rules in February 2021, and the activation of the Repo market with collateral management service; FMDQ Clear’s activation of CCP services for financial market transactions (cash and derivatives) having received the SEC’s approval for its Clearing Member Rules in April 2021; FMDQ Depository’s extension of its services to new asset classes and customer segments, and further digitisation of its Participants interfaces and services; and, the activation of FMDQ Private Markets’ Startup Accelerator and Liquidity Ecosystem (SCALE) product, supported by the Oxford Foundry, the entrepreneurial centre of the University of Oxford, UK, which will extend much-needed opportunities to market segments that are currently poorly served by capital providers and drive an inclusive growth and development of the Nigerian economy.
Mr. Onadele concluded that “Despite the lingering effects of the pandemic on the economy and the minimal recovery recorded thus far in 2021, FMDQ Group assures its stakeholders of a renewed commitment to channel adequate resources towards achieving the set objectives for the markets under its purview, while continuing to work assiduously towards the swift activation of robust and thriving Derivatives and Equity Markets, as well as consolidating the Group’s Debt Markets leadership position”.
FMDQ Group is strategically positioned to provide registration, listing, quotation & noting services; integrated trading, clearing & central counterparty, settlement, risk management for financial market transactions; and depository of securities; as well as data and information services, across the debt capital, foreign exchange, derivatives, and equity markets, through its wholly-owned subsidiaries – FMDQ Exchange, FMDQ Clear, FMDQ Depository and FMDQ Private Markets – towards transforming the Nigerian financial markets to become “GOLD” (Globally Competitive, Operationally Excellent, Liquid and Diverse) in alignment with its global counterparts.
The Board of Directors of Africa’s leading fintech company, Appzone Group, have approved the appointment of Timothy “Tim” Souter as the new Group Chief Financial Officer.
A seasoned financial expert with expertise garnered in Europe and Africa, Tim Souter brings over 15 years of financial leadership experience across several industries and sectors including technology, telecoms, financial and investment services. Prior to joining Appzone, Tim served as a Partner at Ethos Private Equity SA where he was responsible for origination, execution and portfolio management of the tech and telecommunications sectors. A UK resident, Tim joins the Appzone Group while continuing to manage several other ongoing interests and will be commuting regularly between Nigeria and the UK
Mr. Obi Emetarom, CEO Appzone Group, said: “We are delighted to have Tim join Appzone. He is an experienced finance professional with a demonstrated history of leadership in the financial services industry across sub-Saharan Africa, and his broad financial and strategic experience, particularly his understanding of how technology is reshaping the financial services industry, will be an asset to us.”
Tim Souter has over the years built an extensive network in both the investment & financial services and telecoms sectors in Africa, and he possesses an intricate understanding of managing capital structures, currencies and critical stakeholders.
Tim was also involved in several non-TMT businesses during his time at Ethos, and his portfolio operated and invested across 10+ countries in sub-Saharan Africa. As an active investor and shareholder, he has also held non-executive directorships across his investment portfolio as well as being Chairperson of various subcommittees over the years.
Tim served as a non-executive director on the board of Eaton Towers, an independent tower company present in six countries. He more recently sat on the board of Echo, a corporate ISP, where he played an instrumental role in expanding the business into eight additional African countries through acquisition.
Prior to his role at Ethos, Tim was part of the EMEA TMT advisory team at Macquarie Capital, based in Johannesburg, South Africa and Chicago, USA.
Tim holds a Master of Finance degree from INSEAD and is a CFA charter holder. He also holds a Bachelor of Business Science from the University of Cape Town.
Coronation Merchant Bank experts analyze the fundamentals of the Factor approach to investing, the various types of Factor Investing, and its numerous benefits.
The concept of investing broadly covers the purchase or creation of assets with the use of funds or capital in order to obtain a return on the investment, also known as capital gain. It entails the purchase of a financial product with an expectation of favourable future returns. Investment assets comprising equities, fixed income instruments, derivative instruments, commodities, etc., are purchased with the sole aim of earning the maximum possible return.
Over the years, researchers have developed various approaches and models for driving optimal returns on various investment products. The two major approaches to investing include Factor Investing and Value Investing. These models were developed to ensure optimal asset allocation and maximum return on investment.
Understanding Value Investing
Value investing is an investment approach that seeks to leverage the value of underpriced or cheap stocks on the expectation that improving market conditions and strong corporate fundamentals will be priced into the value over time. The strategic asset allocation expectation is that the stock price will rise as its intrinsic value becomes more evident and widely acknowledged by investors. When the stock price rises to its intrinsic value over a given time frame, this translates to an increase in the value of the investment portfolio through capital gains and dividend cashflow. The greater the difference between the intrinsic value and the current stock price, the greater the margin of safety for value investors looking for investment opportunities.
Key financial metrics (such as earnings, revenue, or cash flow) are usually deployed to determine the value of a stock. Other characteristics considered during the stock valuation process include consistent profitability, stable revenue streams with reasonable growth, future earnings outlook and a long streak of established success history.
Understanding Factor Investing
Factor Investing is an Investment approach that involves targeting specific drivers of return across asset classes with the goal of achieving a given investment outcome or to improve long-term risk adjusted return. The drivers of return are called “Factors”, and they form the foundations of factor investing. At its most basic level, factor-based investing is simply about defining and then systematically following a set of rules that produce diversified portfolios. The underlying assumption is that an investor can build a portfolio that consistently outperforms market by examining assets under defined characteristics.
The Role of Factors as Drivers of Risk and Return
The Capital Asset Pricing Model (CAPM) advancement has shown great potential for factor-based strategies to play a key role in diversified portfolios. The identification of the CAPM “beta” (the measure of the sensitivity of a stock to the movement of the broader market) and other factors/betas that drive risk and return has established the importance of factor investing.
Factor analysis also helps explain the behaviour of portfolios in ways that were previously not understood using historical patterns/behaviour of the portfolios.
The concept of factor investing would prove useful for fund managers in active portfolio management, corporate treasurers as part of liquidity management and individual investors. Investment decisions at all levels seek to determine the preferred asset allocation mix that satisfies risk and return constraints. With the aid of factor investing, investors seeking to maximize the return on their investment at a given level of risk exposure can achieve their objective.
Understanding the types of factors and their importance
Generally, two main factors drive portfolio returns: Macro Factors explain broad risks across asset classes like the pace of economic growth and inflation rate, which in turn provides an explanation for the returns on asset classes. On the other hand, Style Factors explain the risk and returns within these asset classes. For instance, low priced stocks are more likely to generate higher returns than high priced stocks.
Style Factors
Size – Research has proven that smaller-cap stocks yield a higher return premium. This is sometimes attributed to the inherent risky nature of these stocks. Smaller companies are typically more volatile and are exposed to a higher risk of bankruptcy. As such, investors seek to be compensated for taking on the additional level of risk.
Value – This is the second factor introduced in the Fama-French model. It suggests that inexpensive stocks should outperform expensive stocks. According to Graham (1949), the belief is that expensive stocks with lofty expectations leave room for error, while cheaper stocks that can beat expectations may afford investors more upside.
Momentum – This entails examining price trends to forecast future returns. Empirical evidence, first published in 1993 by Narasimhan Jagadeesh and Sheridan, demonstrated that stocks that had outperformed in the medium term would continue to perform well, and vice-versa for stocks that had lagged.
Quality – This style of investing is based on company performance and selection is based on financially healthy company stocks or debt securities. The position is that companies that generate superior profit, possess strong balance sheets, and strong cashflows can provide optimal return and outpace the market over the long term.
Low/Minimum Volatility – Owning stocks with lower risk or return volatility than the broader market has historically resulted in higher risk-adjusted returns. Research has also shown that low-volatility portfolios have the potential to outperform the broader market over time.
Macroeconomic Factors
Key macroeconomic factors are outlined below;
Economic Growth – Fluctuations in business cycle is a key factor in investing as various asset class returns are affected by changing economic activities and business cycles. Some economic sectors perform well in recession, recovery and growth phases while some sectors are adversely affected in recessions and only do well in growth phases of the economy. A careful consideration of the performance of companies operating in different economic sectors, and their asset price performance in different phases of the business cycle will provide empirical data for factor investment selection.
Interest Rates – The direction of interest rate movements determines the selection of an asset class; equity, commodities, derivatives, real estate, or fixed income investments to be considered given the correlation of interest rates, fixed income yield, real estate prices, commodity prices, derivative value and stock prices.
Nigeria Policy rate versus 10Yr FGN Bond Yield
The graph above shows the relationship between Nigeria’s policy rate and 10year FGN bonds yield over the last 10years. The trend shows some correlation, thus direction of interest rate will be a good factor for bond investing.
Nigeria Policy rate versus Stock Market Index
The chart above plots the relationship between Nigeria’s policy interest rate and the stock market index over a 10year period. A close look at the graph shows low correlaton between the two factors and it can be deduced that other micro and macro factors beyond the movement of the policy interest rate were driving stock index prices.
Nigeria Policy rate versus Naira Exchange Rate
Inflation: The general rise in prices of goods and services impact the value, cashflow and return of various asset classes depending on the cause of inflation. If inflation is due to increase in money supply, it could lead to financial assets price inflation (or bubble) and this is considered in asset selection and factor investing.
Credit: Default risk from borrowing companies maybe aggravated in a recession and minimal in a recovery or growth phase of the economic cycle. Asset managers consider this in allocating portfolio to companies and sectors their credit risk and the impact of the economic cycle on their performance. Sectors that thrive in recession tend to receive the highest credit allocation during recessions while other sectors adversely impacted by a recession receive the lowest allocation. By so doing, active asset managers balance their investment and generate improved risk-adjusted returns though a given business cycle.
Emerging Markets – Political and sovereign risks: Political and sovereign risk factors are key elements in factor investing as a weak or unstable polity, sovereign downgrades or defaults can adversely affect economic sectors and asset classes in the affected country and harm investment returns. Diversification across industry sectors and across countries may not ameliorate political and sovereign risk factors.
Liquidity: Liquidity of the market and liquidity of the asset class play a critical role in asset selection as the value, return/price volatility and saleability of assets are influenced by this factor.
Background to the development of Factor Investing
The foundation of factor investing begins with the Capital Asset Pricing Model, a mathematical expression that tries to quantify the drivers of individual asset or portfolio returns while accounting for risk exposures. This is also known as the “One Factor” model as it accounts only for market risk. This was expanded further by Eugene Fama and Kenneth French when they accounted for size risk and value risk (Fama & French, 1992). The expanded CAPM model was able to explain asset or portfolio outperformance with a greater level of accuracy. This was also known as the three-factor model. Overall, the model was able to explain about 90% of the difference in asset returns.
Mark Carhart built on the Fama three-factor model by adjusting for momentum in explaining asset returns. In his paper “On Persistence in Mutual Fund Performance,” (Carhart, 1997), he defined the momentum factor as the average return of the top 30% of stocks minus the average return of the bottom 30% as ranked by this measure. According to Berkin & Swedroe (2016), the addition of momentum to the three-factor model increased the explanatory power of the model by 5%Expanding on Mark Carhart’s model, Robert Novy-Marx and Alan S. Zekelman added the quality or profitability factor to the model. Quality or profitability factor adopted by Benjamin Graham defines low quality in an enterprise as low debt, long history of paying dividend and earnings growth.
Applying factor Investing in Fixed Income
Despite the importance of factors, factor-based investing in fixed income has been slow to develop and remains a developing area of study. This is driven partly by the lack of data, relatively opaque pricing, and a relative lack of transparency in the asset class. Another challenge identified in applying factor investing to Fixed Income assets is that the various segments of fixed income markets make it difficult to create a one-size fits all factor investing model. However, factors may be even more critical in fixed income, as systematic risk constitutes a significant proportion of bond total risk.
Fixed income markets are, by nature, more reliant on systematic drivers than equity markets and the outperformance of a significant portion of fixed income portfolios have been driven by exposure to systemic risk (Khan, 2015). Soe & Xie (2016) identified that the combination of uncorrelated or low-correlated fixed income risk factors potentially allows for smooth return patterns and may offer portfolio diversification benefits over market cycles. All things being equal, the more volatile the bond yield is, the higher the yield needs to be in order to compensate for the volatility risk. Higher exposure to the value factor may be used to seek enhanced returns, while lower exposure to the low-volatility factor may be used to mitigate risk.
In assessing government and corporate bond indices, the usual weighting of securities based on market capitalization poses a peculiar challenge because it implies that high weightings are assigned to the most highly indebted countries and companies, respectively. Investors will therefore be disproportionately invested in issuers with the highest debt burden. In addition, debt indices are often less balanced than equity indices.
While there exists an extensive body of literature evaluating the use of factor-based models in developed markets, we have limited insight into its application in emerging markets like Nigeria. The following constraints have been identified for implementing factor investing in the Nigerian capital markets (Fixed Income and Equities)
Limited data availability for backtesting
Lack of market depth and efficient price discovery
Lack of liquidity in the corporate debt market.
As the market develops, the expectation is that investors would have access to larger data sets and diversity of the asset pool would increase. This would see to increased efficiency in decision making as well as a data driven approach to generating alpha returns.
African Prudential Plc has announced its unaudited financial statements for the 6 months to June 2021.
Financial Highlights:
Gross Earnings: N1.67 billion, compared to N1.87 billion in HY 2020 (11% YoY Decline);
Profit Before Tax: N0.97 billion, compared to N1.22 billion in HY 2020 (20% YoY Decline);
Profit After Tax: N0.83 billion, compared to N1.08 billion in HY 2020 (24% YoY Decline);
Total Assets: N88.87 billion, compared to N17.73 billion as at FY 2020 (401% YTD Increase);
Total Liabilities: N80.71 billion, compared to N9.36 billion as at FY 2020 (762% YTD Increase);
Shareholders’ Fund stood at N8.16 billion, a 2% YTD decline from N8.37 billion as at FY 2020.
Commenting on the results, Obong Idiong, Managing Director/Chief Executive Officer said: “Despite the challenges that we encountered in the first half of the year, we are happy with the milestones that we achieved over the period, which should reflect in stronger earnings in the second half. The decline in H1 revenue reflects the impact of the renegotiation of fee rates of some contracts with customers.
“In addition, delays in the signing of notable digital consultancy contracts mean that we were unable to report the associated revenues in the first half of the year. We also made a strategic investment in the recently launched Heir Insurance company which should offer fresh opportunities for us to deploy our digital technology service.
Concerning our operating costs, we endured the impact of rising inflation and exchange rate volatility on our operating expenses as these factors contributed to higher development costs associated with our growing digital technology business. Nevertheless, we are committed to the achievement of our strategic aspirations and look forward to reporting the gains from some milestones that we have achieved in the subsequent quarters.
The outlook for the third quarter is positive on the back of the progress we are making in our digital technology business. We are seeing a domino effect of the successful launch of digital technology solutions for a few clients in the first half of the year that have led to contracts to build similar solutions for other clients in the public and private sectors.
This should buoy revenues in the third quarter. We are also set to launch an upgrade of a digital solution for annual general meetings in Q3 as well as a new e-commerce platform.“
Following the release of the half-year result, Africa Prudential will host a conference call for investors and analysts on Thursday July 29th, 2021. To obtain the dial-in details, kindly pre-register for the call HERE.
Nigeria’s private sector began the second half of the year on a positive footing as they continued the run of expansion that began in July 2020.
Quicker upticks in output, new orders, purchases, and employment supported growth. Despite this, firms were able to keep backlogs at bay, though sentiment did moderate to the weakest since last September.
On the price front, higher raw material, wage and transportation prices were linked to another robust rate of overall input price inflation. Output prices also rose sharply. The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The headline PMI rose in July to 55.4, up from 53.6 in June. The reading signaled a marked improvement in business conditions and one which was the strongest since January 2020.
The uptick was centered on stronger demand conditions, with new orders rising at the fastest rate in one-and-a-half years. As a result, firms raised their output levels, and at the joint-quickest rate since August 2020.
Greater output requirements led firms to raise their buying activity during the month, which they did so at the sharpest rate in one-and-a-half years. The sustained period of output and new order growth encouraged firms to add to their inventory holdings. Anticipation of greater demand was also linked to stockpiling efforts.
To cater for higher workloads, firms raised their headcounts. Job creation has now been seen in each month since February. This allowed firms to clear their backlogs for the fourteenth month in a row. The rate of backlog depletion eased to the softest in four months, but was still among the quickest in the series history.
Meanwhile, vendor performance improved again, a trend observed throughout much of the series’ history. That said, the rate at which lead times shortened was the softest in 15 months. According to firms, busier road conditions and material scarcity affected supplier delivery times.
Material shortages drove higher costs, with firms also mentioning rising transportation and staff expenses. Overall input price inflation eased to a seven-month low, but was still strong in the context of the historical average. Output price inflation meanwhile quickened, with the improving demand environment allowing firms to raise their charges.
Finally, sentiment remained positive amid plans to raise exports and expand business operations. That said, the degree of positivity moderated to the fourth-weakest in the series.
Konga, Nigeria’s foremost composite e-Commerce giant, has promised huge excitement and mouth-watering deals for the August 2021 edition of its monthly online auction tagged – Konga Last Price.
The August edition of Konga Last Price holds on Monday, August 2, 2021 by 12pm.
Held on the first Monday of each month, Konga Last Price is a live auction pioneered by the e-Commerce group and held digitally across the company’s social media platforms, including Instagram, Facebook and YouTube, among others.
The initiative has seen Konga deliver a range of genuine products at ridiculously pegged opening bid prices, thereby affording bargain-hungry shoppers who bid for them a chance to grab the items on offer at exciting sale prices unmatched in the market.
In addition, the management of Konga has often added interesting dimensions to the digital auction.
One of these is by putting up multiple quantities of specific products on auction with the fastest shoppers to pay for them online claiming the items.
Top on the bill for items expected to go on auction on Monday is genuine products from Konga’s wide-ranging suite including Mobile Phones, Home & Kitchen, Fast Moving Consumer Goods (FMCG), Computing, Electronics and much more.
Konga Last Price, a novel initiative pioneered by the e-Commerce giant, has turned out to be a highly anticipated monthly sales campaign that draws huge excitement among shoppers.
‘‘We encourage our loyal customers to make it a date by 12pm on Monday, August 2nd, 2021 as usual for the Konga Last Price. Also, we advise intending shoppers to come prepared to make swift payments as the fastest fingers often go home smiling at this auction,’’ disclosed Kenny Oriola, VP Konga Online & Marketing.
‘‘In addition, we encourage shoppers to sign up for KongaPay for swift and seamless payments which is often required for easy confirmation.’’
‘‘The August edition of Konga Last Price will be another discount party in line with our usual tradition of making this auction a memorable affair for Konga customers. This is an opportunity to grab some of those items you have been eyeing for a while now at unbelievable bid prices,’’ he concluded.
The August edition of Konga Last Price goes live by 12pm on Monday, August 2, 2021, across Konga’s social media pages on Instagram, Facebook, and YouTube, among others.
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