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FINANCE

Capital Market: How NCC’s Effort In MTN Listing Is Bringing Economic Gains To Nigeria- Danbatta

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The Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, has said that the regulatory action taken by the Commission to facilitate the listing of MTN Nigeria on the country’s stock exchange market has continued to bring economic gains to Nigeria and Nigerians in terms of boosting market capitalisation and yielding dividends to shareholders.

Market analysts report that MTN investors have raked in approximately N1 trillion in price appreciation and dividends since April 2020.

DigitalTimesNG understands that the listing of MTN was as a result of NCC’s effective regulatory action taken during the mobile network operator’s fine settlement agreement in 2016, which compelled the telco to, among other things, list on the Nigerian Stock Exchange (NSE).

The listing was one of the outcomes of the NCC’s stringent regulatory postures, which served as a tonic for other telcos such as Airtel to follow the same direction.

As the country’s independent telecoms regulatory authority, the NCC, working with the Central Bank of Nigeria (CBN), facilitated the landmark listing of the country’s largest telecommunications operator on the bourse.

“This is in line with its mandate to promote investment, create a level-playing field for all licensees, ensure compliance to existing telecoms laws and facilitate the delivery of top-notch quality of service (QoS) to consumers,” said the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta.

Danbatta noted that through this proactive regulation and timely intervention by the NCC, which led to the listing of MTN on the NSE, a new vista of opportunity has been created in the history of the telecommunications industry in Nigeria.

“That important regulatory action enabled Nigerians, consistent with the Nigerian Communications Act (NCA) 2003, to partly, own, manage and control MTN. This bold and courageous regulatory action is now transforming lives and boosting the economy,” the EVC stated.

He also stated that the listing has helped to translate into action, an important objective of the Commission, which is to promote local investment and ownership in the telecom sector.

“With MTN shares available in the capital market, it is expected that Nigerians will buy shares and by purchasing the shares of MTN, they will be financially empowered and be socially transformed,” he said.

Stating that telecoms is a capital-intensive industry that requires continuous investment, Danbatta said the listing will enable the telecoms companies to raise capital for the expansion of their networks.

“Also, one of the benefits of listing on the NSE is that telcos have an enormous opportunity for raising more capital for network expansion, which will, in turn, bring about improvement in the quality of service delivery and quality of experience for telecom consumers.

“Today, the capital market regulator and shareholder bodies have commended the effort of the NCC in making the capital market more resilient through the Commission’s regulatory action in facilitating telcos listing,” he stated.

Danbatta noted that the listing in the stock exchange will promote liquidity amongst operators, enhance their value as well as promote transparency.

“The Commission is committed, through its regulatory policies and actions, to creating the right environment to attract both Foreign Direct Investment (FDIs) and local investment into the telecom industry for increased economic prosperity for Nigerians,” the EVC said.

 

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FINANCE

Financial Experts Call For Reorganization Of Nigeria’s Market Architecture @Zimvest Economy Conversations

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Stakeholders in the Nigerian Capital market, Asset Management and Banking Industries have called for a rethink of the nation’s economic philosophy and a reset of the financial market architecture.

This was part of the major takeaways from the “Zimvest Economy Conversations”, a thought-leadership series of Digital Private Wealth and Investment Management Firm, Zimvest (Zedcrest Investment Managers) held on Saturday, June 20, 2020.

Gbenga Adigun, Business Head of Zimvest, in his opening remark during the virtual event, noted that investors are gravely concerned with investment returns in the light of the current low yield environment while financial institutions are thinking of how their product development and service delivery should evolve with the changing needs of investors.

Bola Onadele Koko, CEO of FMDQ Group while delivering the keynote speech on the event theme “The Economic Landscape and Investor Preferences in Post-pandemic Africa,” talked about the toll the growing pandemic has had on African markets.

He laid emphasis on the slowdown in key segments of the economy including the financial markets, tourism, remittances and foreign direct investments and called for a rethink of Nigeria’s economic philosophy with clarity from the fiscal policymakers which will be critical for gaining investors’ confidence.

“Now is the time to develop new and ingenious ways to develop and drive the Nigerian financial market and in the continent at large. Private capital will especially be more essential as recent shocks have shown the limits of Governments’ abilities particularly in developing countries”, he said.

The capital market leader also stated that FX reforms will be critical for the Nigerian economy at this point, noting that trading activity in the Nigerian Fixed-Income and Interbank Currencies market is down by 55% due to economic slowdown linked to the Covid-19 pandemic.

All panellists in this first episode of the thought-leadership series pointed out that most investors were affected by the pandemic and are looking for further ways to diversify their portfolios that may end the year on a negative real return.

Abiola Adekoya, Wealth Expert and Ex-CEO at RMB Securities, while speaking during the panel session, stated that one of the key things that investors are concerned about in this era is the need for diversification, more liquidity and higher investment returns.

“A lot of investors have been focused on one product and this pandemic has shown that that is not enough. The nascent interest in alternative assets has shown that there is strong liquidity in the overlooked retail space and Investment managers should pay keen attention and develop alternative assets products, and reduce the reliance on the traditional Fixed income, Money markets and Equities offerings.”

Buttressing Abiola’s position on alternative assets, Esiri Agbeyi, Partner and Head Private Wealth Services, PwC Nigeria, emphasized the need for investors to take a keen interest in private equity and other alternative assets investments.

She shared a PWC survey on Family Offices. The survey revealed that 63% of family businesses leaned towards private equity as an investment portfolio. Local pools of private capital are important to drive economic development

Onome Komolafe, Divisional Head of Central Securities Clearing System (CSCS), stated the need for improved product development and differentiation, clear market segmentation and smart communication as tools that financial services firms can deploy in evolving with the changing consumer behaviour.

She also pointed to premium service delivery and technological innovation as crucial to the democratization of investment opportunities in Africa.

Ini Ebong, Group Executive, Treasury & Financial Institutions at First Bank, pointed out the present opportunity available for investors, regulators, institutions, market practitioners to reset Nigerian financial market architecture and noted that this opportunity presents itself mostly around periods of crisis. 

According to him, as markets develop, the investing public becomes more able to embrace risk and go for higher return instruments outside traditional bank-based deposits.

“If you want high returns on investment, you must be willing to take on more risky investment products”, said Adetoun Dosunmu, Treasurer at FBN Merchant Bank.

 “Giving the highly specialized nature of investing, working with a regulated fund manager will be most beneficial to the investor in the long run and would protect against fraud and sharp practices from the teeming number of platforms offering untested investment opportunities.”

During his closing remark, the Founder of the Zedcrest Group and the Chief Host of the event, Saheed Adedayo Amzat, CFA, called on the Nigerian capital market stakeholders to unite to further capital formation in the country and sounded a note of warning to Nigerians on suspicious wealth generation platforms.

“Many unsuspecting investors over the last three decades have lost their funds to unregulated institutions that promised unbelievable returns. All stakeholders in the sector need to speak up and inform the unsuspecting public about investment platforms. Our regulators need to do more with the support of all players in the Investment management space,” he opined. 

The much-anticipated event lived up to its billings as over 1,150 participants engaged the speakers on investment challenges and opportunities they can tap into post-Covid.

Zimvest, the newly launched Investment Management subsidiary of Zedcrest, plans to be at the nexus of a continuing conversation series around Investment management and economic policy landscapes.

The second edition of the series is to be announced soon.

A poll conducted during the event also shows that over 60% of participants prioritized “Capital Preservation” when choosing an investment option.

Over 72% were concerned about inflation and exchange rate fluctuations and over 81% were concerned about Proven Track Record, Regulatory Compliance and Transparency when choosing an investment management partner.

 

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