Summary of the top business, economic and political news in Nigeria today.
1. The Central Bank of Nigeriahas so far sold a total of $5,747.76 in Forex forwards since June 2016, when it introduced the Flexible Exchange Rate Policy. Link
2. The Consumer Price Index (CPI) which measures inflation declined by 0.02 percent in April, the National Bureau of Statistics, NBS, said on Tuesday. According to the NBS in its new report, the inflation rate, put at 17.24 percent, declined a little further from the 17.26 percent recorded in March . This represents the third consecutive month of a decline in the headline CPI rate, indicating some easing in high food and non-food prices.Link
3. Lagos State Governor, Mr. Akinwunmi Ambodeon Tuesday put the uncertainty concerning the absence of Vehicle Inspection Officers (VIO) on Lagos roads to rest once and for all, stating categorically that he has asked them to stay off the roads permanently. He said the decisions were in line with his administration’s resolve to ensure free flow of traffic across the State, noting that their activities were contributing to traffic congestion on Lagos roads. Link
4. The hotel industry in Nigeriais currently experiencing a supply glut as 3-4 star hotels dominate the skylines of major cities such as Lagos, Abuja and Porthacourt. A flurry of new hotels and recent developments have helped crash hotel room rates as well as drive down occupancy ratio of several of the hotels in Lagos. Link
5. The Nigerian National Petroleum Corporation, NNPC, said it had spent over N1.6 billion on the repairs of the vandalised pipeline between Kaduna and Kano in 2016. The NNPC Group Managing Director, Maikanti Baru said the company had also expended about N2 billion to provide security for the pipelines within the last one year.Link
- Five days after the National Assembly passed the 2017 budget,the Economic Management Team (EMT) chaired by acting President Yemi Osinbajo met in the Presidential Villa, Abuja, on Monday to discuss the modalities for funding the budget. Although the National Assembly was yet to transmit the budget to the executive, the meeting was meant to brainstorm and strategise on how the budget would be implemented ahead of its transmission. Link
7. The Nigerian National Petroleum Corporationon Monday said it would resume oil exploration activities in the Chad Basin in the next six weeks. It said the projection came on the heels of improved security situation in the North-East region, which has been devastated by the activities of Boko Haram insurgents. Link
8. The new British Deputy High Commissioner for Lagos, Laure Beaufils, has pledged to explore opportunities for UK businesses to partnerNigerdock to further strengthen the socio-economic and political ties between Nigeria and UK. Link
9. The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said that the Nigerian Electricity Regulatory Commission (NERC) wants the accounts of and revenues generated by the 11 electricity distribution companies (Discos)to be centralised and escrowed to protect the power sector from collapsing.Link
10. Lagos State has launched its own oil company called Ibile Oil and Gas Corporation, IOGC. The company was formally inaugurated on Monday and will serve as the oil and gas arm of the Lagos State-government.Link
- A scheme known asHelpcolony is taking over Nigeria following the fallout of MMM, the little or no activity of MMM has created room for another scheme called Helpcolony to thrive as Nigerians are claiming that the new scheme has more checks and balances that makes it safe to partake in. Helpcolony promises participants 30% and 50% increase on investment after a month, the scheme boasts of being free of some deficiencies which plagued MMM. Link
12. The dispute between the Petroleum and Natural Gas Senior Staff Association of Nigeria and a subsidiary of United States’ ExxonMobil Corporation took a turn for the worse on Mondayas the union extended its industrial action to other international oil companies operating in the country. Link
13. Neconde Energy Limited, the exploration and production subsidiary of the Obijackson Group,has concluded plans to increase output by 43 per cent. Specifically, the company’s output would increase from the current 15,000 barrels per day, bpd to 70,000 bpd in the coming years. The company stated that it is currently in talks with the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, to ensure that there is a mutually beneficial agreement on some of the demands presented by the association. Link
14. The concessionaire for the National Iron Ore Mining Company, Itakpe, Global Infrastructure Nigeria Limited, has submitted its business plan for the running of the firm to the Federal Government. The new agreement stipulated that the company would be run by the Indian firm for a period of seven years, to bring to 10 years as specified in the original agreement. Link
- Nigerian energy conglomerate, Aiteo Group, has appointed Ratko Knezevic to its Global Executive Management team as Group Advisor on Business and Capital Development with effect from 5 May 2017. A statement from the company on Tuesday said Mr. Knezevic will lead Aiteo’s funds raising activities from global capital markets with the primary objective of reinforcing the Group’s growth and diversification targets in Nigeria and across Africa as a whole. Link
16. The federal government yesterday signed an agreement with Nigeria Mortgage Refinancing Company (NMRC)for the disbursement of N13 billion mortgage refinancing loans to public workers. Nigeria’s leading personal, mortgage and small business bank, Sun Trust Bank, will act as bankers to the transaction, where the funds are being warehoused. Link
- Osagie Okunbor, country chair,Shell companies in Nigeria says Shell has contributed over $30 billion to the Nigerian economy in four years. He said the company in 2016, paid $1.4 billion (SPDC $1.0 billion and Shell Nigeria Exploration and Production Company (SNEPCo) $0.4 billion) in royalties and corporate taxes to the federal government. Link
18. Airtel Nigeria and Ericsson, a world-class telecommunications and equipment service company,have announced the launch of Nuvu (nuvu.tv), a subscription-based video-on-demand (VOD) service. Nuvu will provide subscribers access to more than 3,000 local and international TV and film titles, empowering Airtel customers to download content directly to their smartphones or tablets at no additional data cost during off-peak network times. Link
19. The Nigerian Ports Authority, NPA, said it would raise N4.3 billion to reconstruct access roads around Apapa Portas port operators withdrew services over poor infrastructure. The Managing Director of NPA, Hadiza Usman, told a stakeholders’ meeting in Lagos on Monday that NPA would provide N1.8 billion while Dangote Group and Flour Mills would provide N2.5 billion. Link
- The Bayelsa State House of Assemblyhas sought to amend the Directorate of Project Monitoring and Implementation Bill of 2014 to commit to jail any governor and politicians involved in abandoned contract award and execution in the state. Link
21. The Senate on Tuesday has given the Federal Government fresh conditions upon which it would consider and approve its $5.8 billion loan request from the China Exim Bank. The Federal Government had requested the sum for the construction of Standard Guage lines from Lagos-Kano, Kano-Kaduna, Lagos-Ibadan, and Lagos Calabar.Link
Before you transfer RSA: Best Pension Fund managers in Nigeria (1)
Pension fund managers based on the availability of information on the website, responsiveness to inquiries, and ease of navigation of the websites, among other factors.
In a recently published article, I did a piece on what to look for in a fund manager. Since then, a few people have contacted me to ask for my recommendations.
Unfortunately, I do not recommend fund managers, however, I try as much as possible to put the facts out there and leave readers, RSA holders and investors, to make their choice. This is even more important now with the transfer window open for RSA holders.
For those who want to use the pension fund performance as part of the decision variable for choosing where to transfer to, please refer to my recent piece on the YTD ranking of pension funds or contact me directly via the comments page of this article.
Recently, I did a piece on the most transparent pension fund administrators in Nigeria, that article too can be a reference point. Although, a lot has changed since I wrote that piece, either as a result of the article or as a result of adherence to best practice requirements by the pension fund administrators or managers.
So, here are my take on pension fund managers based on the availability of information on the website, responsiveness to enquiries, and ease of navigation of the websites, among other factors, in no particular order.
OAK Pension Fund Administrators
Wow! OAk, you rock! This fund administrator packaged the pricing information in such a downloadable form that anyone can see it in pdf format for the entire month. However, the only issue is that for anyone without the ability to translate pdf files into excel, the historical analysis may be a problem.
Current and past Funds’ audited financial statements are also available for download. I did not see a chart of the fees or portfolio structure, two pertinent pieces of information that investors may need.
Sigma Fund Administrators
Its presentation of the daily reporting for all four funds is a beauty to behold. The data comes in an easily downloadable form. With their information on portfolio structure, it is easy to know what the funds are invested in and to what extent.
You can also easily find the fee structure, which shows you how much fee you are or will be charged. Also available, are current and past audited financial statements for the various pension funds.
First Guarantee Fund Administrators
It reported on all 4 in the last 10 business days, thereby meeting the minimum requirement. Again, it would have been good to show the entire month for people who had no time to visit the site weekly.
The implication of this is that historical data is lacking on the site. There is information on portfolio structure, so it is easily discernible what the funds invest in, however, I could not see any fee chart that shows what investors are being charged. There are audited financial statements but they take an undue amount of time to open up when clicked on.
Stanbic IBTC Fund Administrators
This is one of the most transparent fund managers in Nigeria in mutual and pension funds. In a beautiful format that can be copied, this fund administrator reports its prices for all 5 funds (including micro pension fund). With portfolio structure information readily available and up to date, you can see where your funds reinvested.
However, the only information I saw about fees, is the flat administration fee charge. There is need to put any other fee charged out there for investors to see. The audited financial reports on display are about the pension fund and fund returns for 2019. I did not see the returns for earlier years, although there is information on 3-year rolling returns.
Anchor Fund Administrators
It reports in a very imaginative form, where you can get pricing information for a long period of time. There is also an updated portfolio structure detailing what the funds are invested in and the percentages. There is also a rate of return page where you can see the historical performance of the funds. There are current and past financial reports on display for download and analysis.
Legacy Pension Fund Administrators
It reports on funds – all 5 funds (including micro pension fund), on beautifully and strategically positioned clickable icons on their website. The icons which opens up when you click on the view history, displays the required information which is accessible by defining the period of interest.
Information on the portfolio structure comes in a downloadable format, so you can easily know what the funds are invested in. There is information about the admin fees charged, but that is so close to the price icon that you need to look very closely to see.
The annual rate of return of the funds is also available dating from 2006 (depending on when the fund was launched). You can also see each fund audited financial statement, the latest of which is for 2019, as expected.
ARM Pension Fund Administrators
It reports on all 5 funds (including micro pension fund) on beautifully positioned and strategically clickable icons on their website. Past and current funds’ audited financial statements are readily available. It does not, however, look like there were information on portfolio structure, fee or rate of returns as I could not find those on the web site.
I will be releasing another part of this piece as it is not possible to evaluate all the PFAs in one article. So, stay tuned.
Cowrywise launches 6 new mutual funds
Cowrywise has partnered with Asset and Resource Management Holding Company (ARM Holdco) to launch six new mutual funds.
In a bid to attract more first time investors into the mutual funds’ space, Cowrywise recently announced its partnership with Asset and Resource Management Holding Company (ARM Holdco) to launch six (6) new mutual funds.
This is according to a disclosure by the firm, as seen by Nairametrics.
What they are saying
Cowrywise said: “We are excited to launch 6 new mutual funds from Asset and Resources Management Holding Company (ARM Holdco) on Cowrywise. With this partnership, Cowrywise users get more quality investment options in Naira and dollars. Also, this is in line with our continuous drive to get 10 million first time investors into the mutual funds’ space.”
What you should know
The six (6) new mutual funds listed are; ARM Eurobond Fund (Dollar fund), ARM Discovery Balanced Fund, ARM Aggressive Growth Fund, ARM Ethical Fund (Halal investments), ARM Money Market Fund, and ARM Fixed Income Fund.
According to Investopedia, a mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.
RSA Transfer: What to look for in a fund manager
If you are looking at transfering your RSA from one fund manager to another, here are a few things you might consider first.
The National Pension Commission just opened the transfer window for RSA holders to freely transfer from their current PFA to another one. According to PenCom and the code that governs pension accounts in Nigeria, transfer between PFAs is an event that happens once a year, and as such should be taken seriously, after all, the success of a fund has been known to be positively related to the fund manager’s skills.
Why Fire Your Fund Manager: Before you make that transfer, have you asked yourself, why would I fire my current fund manager? One of the reasons, if not the major reason why investors fire their fund manager is because of poor performance. A fund manager that makes negative or near zero returns while his peers or the broad market index makes returns in double-digit will no doubt be on the chopping board during transfer times. However, before you fire that seemingly non-performing fund manager, find out how the market as a whole is doing or did. If the market is doing or did badly, then the issue with your fund manager probably derives from systemic risks that even the best fund managers may not be able to diversify away.
Before Your Transfer: It may be necessary to do your homework before you decide to transfer. Look at the portfolio information of the fund you want to transfer into, what assets is the fund manager investing in and what weights does he give to each asset type, compare that with what your current fund manager is investing in. Because of paucity of investible asset types in Nigeria and adherence to regulatory requirements, most pension fund managers in Nigeria invest in similar assets although with different weights. So pay attention to the difference in weights.
How about Performance: Take a look at the historical performance of the fund you want to transfer into. While past performance does not guarantee future performance, it could give you an indication of the difference between your current fund manager and the prospective one. Ask the fund manager for their performance numbers over the last 5 years and look for out-performance consistency.
How much are you paying for the Services: Take a look at the fees being charged by the fund manager you want to transfer to in comparison with the one you currently have. As required by regulation, Nigerian pension fund managers are required to charge a given percentage of fees, do your research and make sure that the fee requirement is being adhered to by your prospective fund manager.
Customer Services is of importance: Another thing to think through is the responsiveness of a fund manager to RSA holders. How quickly, truthfully, courteously and professionally does your current fund manager and your prospective fund manager respond to enquiries and questions from RSA holders?
Availability of information/data: Think about availability of information and data. In these days, data and information is money, especially when such is provided in a timely manner. Many pension fund managers have the prices of their pension funds readily available on their website but there are still many of them that you would go through the eye of a needle to get the information. There are 2 pension fund managers that I have sent over 10 emails with request for pension fund prices, and they have adamantly refused to respond and the information is not even on their website. For such fund managers, it becomes difficult to know their performance, at least independently and quickly. There is a fund manager that has the information in a format that is not amenable to analysis. If I were to make a change, I will dump those at a blink of the eye.
Explore Data on the Nairametrics Research Website
Experience Matters: Take a look at who the fund manager employees. These days, some fund managers in Nigeria are beginning to publish the names and qualifications/experiences of their fund managers on the fund factsheets, if you can find that information, it will be useful to know that your fund manager is a Chartered Financial Analyst, CFA or the like. Do not be shy, call the fund manager you want to transfer to and they will be happy to give the information, if they know you want to transfer to them, especially if you have large balance in your RSA account.
Fund Managers’ motivation: I know that it may not be that easy to glean information from fund managers, but if you can, find out if the guy overseeing your fund is being paid an incentive fee if he outperforms the index or if he generates a certain return. A fund manager that gets incentivized for his performance tends to be more motivated than one that just gets paid his normal salary irrespective of his investment performance. Therefore, go with those that get performance-based incentive fees.
While the above are only but a few things to ruminate about while you decide on if and where to transfer your RSA account, it is hoped that it will help make the transfer decision a bit easy.