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Funds Management

In its latest announcement, Mutual Benefit breaks a major dividend rule

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Mutual Benefits Assurance Plc

Insurance firm, Mutual Benefits Assurance, late Friday released its financial statements for the year ended December 2017.

Gross premium written increased from N12.1 billion in 2016 to N14.1 billion in 2017. The company made a profit before tax of N1.3 billion, as against a loss before tax of N1 billion. Profit after tax was also positive at N1 billion as against a N1.3 billion loss incurred in the prior year.

Earnings per share was also positive at 13 kobo as against a loss of 17 kobo in 2016.

The company has also proposed a final dividend of 2 kobo, its first in nearly a decade, amounting to a payout ratio of 15.3% The company last month hinted at the possibility of a dividend payment.

Possible breach of rules?

Companies are barred from paying dividends while they have negative retained earnings or accumulated losses.  At the group level, Mutual Benefits has accumulated losses of N1 billion, while at the company level, it also has accumulated losses of N2.2 billion.

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We also rummaged through the interim report to see if there was any regulatory approval or court-ordered payment of dividends, we found none. There was also no cases of revenue from discontinued operations from which the company could pay dividends indicating that the dividend is not as a result of an extraordinary income.

There was also no court ordered set off of accumulated losses against share premium of the company, which could have paved the way for dividends.

One wonders why the shareholders of the company granted it approval to pay a dividend despite these losses. This singular act is a break from the rule.

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Implications of the action

  • While shareholders may be happy that the dividend drought is over, the dividend itself is minuscule for the average retail investor.
  • However, other insurance companies in similar circumstances could also qualify for dividend payment.
  • It will also be the first time we have seen a company declare dividends out of accumulated profits suggesting that NAICOM may not be as thorough as perceived in reviewing financial statements.

Mutual Benefits Assurance closed at N0.28 on Friday’s trading session on the NSE, down 3.45%. Year to date, the stock is down 44%.

About Mutual Benefits Assurance

Mutual Benefits Assurance Plc was incorporated on the 18th day of April 1995 under the name, Mutual Benefits Assurance Company Limited. The company was converted and re-registered as a public limited liability company on 24th May 2001. On 28th May 2002 the company became listed on the Nigerian Stock Exchange (NSE).

The group is mainly involved in general and life insurance underwriting (under separate licenses held by the company and its subsidiary respectively), risk management and provision of financial services.

The company has  six subsidiary companies namely:

Mutual Benefits Life Assurance Limited, Mutual Benefits Assurance Co. Liberia, Mutual Benefits Assurance Niger SA, Mutual Benefits Homes and Properties Ltd and Mutual Benefits Microfinance Bank Limited.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Funds Management

PenCom okays N2.58billion for relatives of 591 deceased workers in three months

PenCom has released N2.58billion for payment of pension benefits of deceased workers.

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Pencom, pension, Nigeria’s Pension Asset increased by N228 billion in October, PFAs increase investment in infrastructure to N40.52 billion   

The National Pension Commission  (PenCom) has released N2.58billion for payment of pension benefits of 591 deceased workers under the Contributory Pension Scheme in the second quarter 2020.

This was disclosed in the commission’s second-quarter 2020 report.

READ: PenCom should pay 50% of workers’ pension at retirement – TUC

According to the report, the beneficiaries included 288 from the Federal Government sector, 135 from State Government sector and 168 from the private sector, making a total of 591 relatives.

It read, “The commission approved the payment of N2.58bn as death benefits to the beneficiaries of the 591 deceased employees during the quarter under review.”

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READ: PenCom recovers N17.51billion from defaulting employers, imposes penalties

PenCom also said that during the quarter under review, the Pension Fund Administrators recaptured 56,990 Retirement Savings Account holders and uploaded their data on the Enhanced Contributory Registration System.

It stated that the Enhanced Contributor Registration System, which was deployed in June 2019, had provided a platform for addressing various issues identified with the Contributor Registration System.

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READ: How foreign exchange risks and others affect the Nigerian pension industry 

It said the PFAs under the assistance of Pension Operators Association had commenced the implementation of a shared service approach in order to speed up the data recapture exercise.

The commission said it generated a total number of 190 employer codes in the period under review using the ECRS.

READ: FUGAZ Banks suffer N1.9 trillion in CRR Debits in Q2

Over 92% of employer codes generated were for private sector companies, including about seven per cent for small businesses, it stated.

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Funds Management

Best performing Mutual Funds in September 

Nairametrics reviews the best Mutual Funds in August, judging by their performance.

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Best Mutual Funds in Nigeria

Mutual Funds are professionally managed investment schemes that are controlled by designated Asset Management Companies (AMC). These Funds allow investors the opportunity to invest in stocks, bonds, and securities. They are particularly good for passive investors.

According to data from the Security and Exchange Commission (SEC), Nigeria currently has about 112 Mutual Funds as of October 2nd, 2020. These Mutual Funds cut across several Fund Types. Here is a breakdown of the Fund Types available for investors according to SEC.

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These are the top 5 performing funds. We also included profiles of the Funds as described on their websites. To determine the best performing Funds in the month of September, we looked at the Fund Prices as of August 2020 and compared to the fund prices as of 2nd October, as released by the Securities and Exchange Commission (SEC).


Vantage Balanced Fund – Investment One Funds Management Limited

The Vantage Balanced Fund (VBF), formerly known as Nigerian International Growth Fund is a balanced Mutual Fund, was created to maximize long-term capital growth and maintain regular income distribution.

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The Fund is invested in Equities, Fixed Income and Money Market Instruments, and Real Estate investments. The primary objective of the Fund is long-term capital appreciation, which is achieved by investing not more than 70% of the Fund’s assets in the equities of blue-chip companies listed on the Nigerian Stock Exchange.

August 28th 

Fund Price – N2.17

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October 2nd

Fund Price – N2.41

Return – 11.06%

Ranking – First

 

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Commentary: VBF is a Mixed Fund by Investment One Funds Management Limited. It is the best performing fund in the month of September, growing by 11.06%. The net asset value stood at N1.71 billion as of 2nd October.

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Anchoria Equity Fund – Anchoria Asset Management Limited

The Anchoria Equity Fund is an open-ended fund. It is a collective investment scheme, which seeks to invest primarily in quoted equities (minimum of 75%) and fixed income securities (maximum of 25%). The Fund does not invest in unquoted equity securities. The Fund employs an asset mix strategy with the aim of achieving consistent growth, by seeking significant exposure to a diversified pool of investment-grade equities and fixed income securities.

In order to ensure sound investment selection, portfolio, and risk management practices, the Fund adopts a portfolio strategy that largely depends on fundamental and technical analysis in order to properly assess the inherent risks within the context of the Fund profile. Accordingly, the Fund holds long term quoted equity positions with strong fundamentals underpinned by good economic themes, that are attractively priced relative to their true value and prospects.

August 28th 

Fund Price – N99.33

October 2nd 

Fund Price – N107.87

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Return – 8.60%

Ranking – Second

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Commentary: This is an Equity Based Fund by Anchoria Asset Management Limited. For a fund that is predominantly focused on equities, this is a pretty much impressive performance by all standards. It grew by 8.60% in the month of September. The net asset value stood at N313.78 million as of 2nd October.


Paramount Equity Fund – Chapel Hill Denham Mgt. Limited

The Paramount Equity Fund is Nigeria’s oldest mutual fund which invests in a broad range of high-quality equities and fixed income securities. The Fund seeks to provide an investment vehicle that enables unitholders to achieve consistent capital appreciation and some income over the long term. The Fund is suitable for investors who seek high capital growth and have a high-risk appetite. Investors are also expected to have medium to long term investment horizon.

August 28th 

Fund Price – N11.54

October 2nd 

Fund Price – N12.52

Return – 8.49%

Ranking – Third

Commentary: This is an Equity Based Fund by Chapel Hill Denham Management Limited. The Fund grew by 8.49% in the month of September. The performance is impressive considering that it is predominantly focused on equities. The net asset value stood at N425.28 million as of 2nd October.  


VI ETF – Vetiva Fund Management Limited

The Vetiva Industrial ETF “VETIND ETF” is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETIND ETF is designed to track the performance of the constituent companies of the NSE Industrial Index and replicate the price and yield performance of the Index.
The NSE Industrial Index comprises of the top 10 companies in the Industrial sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity and is a price index weighted by adjusted market capitalization.

August 28th 

Fund Price – N11.19

October 2nd 

Fund Price – N12.00

Return – 7.24%

Ranking – Fourth

Commentary: The VI ETF by Vetiva Fund Management is the best performing Exchange Traded Fund in the month of September. It grew by 7.24% in the review month. The net asset value stood at N126.32 million as of 2nd October. 


VCG ETF – Vetiva Fund Managers

The Vetiva Consumer ETF “VETGOODS ETF” (launched in 2015), is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETGOODS ETF is designed to track the performance of the constituent companies of the NSE Consumer Goods Index and to replicate the price and yield performance of the Index.

The NSE Consumer Goods comprises the top 15 companies in the Food/Beverages and Tobacco sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity, and is a price Index weighted by adjusted market capitalization.

August 28th 

Fund Price – N4.27

October 2nd 

Fund Price – N4.57

Return – 7.03%

Ranking – Fifth

Commentary: This is another of Vetiva’s products, and it is one of the best Exchange Traded Funds based on September performance, growing by 7.03%. VCG EFT Funds are a great source of investment, and it is not surprising to see another in the top 5 rankings. The net asset value stood at N117.36 million as of 2nd October. 


Bubbling Under: The following Funds make up the rest of the top 10 on our list in descending order.

6.VG 30 ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)

Return – 6.64%.

7. ACAP Canary Growth Fund – Alternative Cap. Partners Limited (Mixed Funds)

Return – 6.22%.

8.VETBANK ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)

Return – 5.80%.

9. AIICO Balanced Fund – AIICO Capital Ltd (Mixed Funds)

Return – 5.75%.

10. Frontier Fund – SCM Capital Limited (Equity Based Funds)

Return – 5.34%.


NB: The figures are based on SEC weekly performance report 

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Funds Management

Depositors of Post Service Homes Savings and Loans Limited soon to be paid – NDIC

Depositors of Post Service Homes Savings and Loans Limited currently in liquidation will soon be paid their claims.

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NDIC

The Nigeria Deposit Insurance Corporation (NDIC), the official Liquidator of the defunct Post Service Homes Savings and Loans Limited (in-Liquidation) is in the process of paying insured sums to the depositors of the closed bank.

As from Monday, 5th October 2020, all depositors of the bank are requested to visit any branch of the defunct bank, for verification of their claims with the NDIC officials.

READ: NDIC set to pay insured depositors of liquidated Femaz Microfinance Bank

NDIC further directed the affected Depositors to present their cheque books, passbooks, and any other proof of account ownership, together with any valid means of identification; and alternate account as part of the verification exercise, before the insured amount can be paid to them.

All eligible depositors could also contact the representatives of the Director, Claims Resolution Department in any of the underlisted NDIC Zonal Offices nearest to them, to file their claims or seek further clarifications as may be deemed necessary.

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READ: CBN says Nigerian Youth Investment Fund is coming soon

NDIC Zonal offices and phone numbers:

S/N OFFICE ADDRESS TELEPHONE
1 Lagos Office NDIC NECOM House 10th Floor, 15 Marina, Lagos. 08166569995; 09072412332
2 Enugu 10, Our Lord’s Street Independence Layout, Enugu. 042-290898
3 Benin 28A/28B Benoni Hospital Road, Off Airport Road, GRA Benin City, Edo State 08150999577; 08150999588; 08150999599; 08150999600; 08150999535
4 Kano Plot 458 Muhammad Muhammad Street, Off Maiduguri Road, Hotoro GRA, Kano. 08097756130; 09092748222
5 Ilorin No 12A Sulu Gambari Road Ilorin. 08023123185
6 Bauchi Plot No 3 Bank Road, P.M.B 0207, Bauchi. 09-4601505
7 Sokoto No 2 Gusau Road, Opp. NNPC Mega Station, Sokoto. 08033155162
8 Yola No 6 Numan Road P.M.B. 2227, Jimeta Yola, Adamawa State. 08067910599; 08068418069; 08067923383; 09-4601515 09-4601516
9 Port Harcourt No 104 Woji Road, Off Olu Obasanjo Road, GRA, Port Harcourt 09090726737; 09029150752
10 Head Office Abuja Head, Bank Examination Unit (BEU) Abuja Plot 447/448 Constitution Avenue, Central Business District, Abuja. 09-4601260; 09-4601261

 

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