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Why investors should take advantage of Lead Balanced Fund now – Lead Capital’s CEO

Wale Adewumi, Group Managing Director, Lead Capital Plc, in an interview with Nairametrics, discussed the newly-launched ‘Lead Balanced Fund’.

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Why investors should take advantage of Lead Balanced Fund now - Lead Capital's CEO

One of Nigeria’s leading investment banking groups, LeadCapital Plc, has launched a new mutual fund called Lead Balanced Fund (LBF).

In this interview with Nairametrics, the Group Managing Director of LeadCapital Plc, Mr Wale Adewumi, gave a detailed insight as to why investors should take advantage of the company’s offer of 5 million (units of N100 each at par).

Mr Adewumi also used the occasion to talk about the milestone LeadCapital Plc has recorded since its establishment.

Below are the interview excerpts:

Mr. Wale Adewumi, Group Managing Director, Lead Capital Plc

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Nairametrics: What do you think people need to know about Lead Capital Plc?

Adewumi: To talk about LeadCapital Plc is like giving a whole day’s lecture. We are a leading investment bank in Nigeria and our footprints strategically cut across the country. We have been around for over three decades.

Since we came on board, we have been involved in several landmark transactions. We are very strong in the federal government’s privatisation exercise. We also have subsidiaries out there blazing their own trails; we have Lead Securities and Investment Limited (“LSI”) which is a stock brokerage firm with a large clientele and doing very well in the stock market. LSI has a trading portal named LeadTraderLeadTrader has been up and running for about four years now and we are the second firm to launch such platform in the Nigerian capital market. It is a platform that allows investors to trade on securities listed on the Nigerian Stock Exchange at anytime and anywhere they are. It also has an app that enables the use of mobile devices like phones to trade.

Lead Capital has another subsidiary called Lead Asset Management Limited (“LAM”), which is in the business of fund/portfolio management. LAM assists investors to invest their money in different assets classes for decent returns.

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Nairametrics: How best can you describe what Lead Balance Fund entails?

Adewumi: The Lead Balance Fund, which we have just launched its initial public offer, is a fund that seeks to offer investors the benefits you enjoy from fixed income securities, together with what you benefit from investing in equities.

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It is, however, pertinent to understand that equities for some people right now seems a no-go area. Equities, if you understand it very well,  is an asset class that gives investors the highest yield on a long run basis. Although, there can be a bearish season where prices are not going up, this is often dictated by the state of the economy. As we all know, Nigeria was in recession about two and a half years ago and only started recovery towards the middle of last year. In view of this, the post-recession effects are still lingering in the economy.

Most companies are not doing very well in terms of profitability as a fallout of the recession that the country went through. The stock market has been stagnated as a result of this. Interestingly, post-recession, the economy is expected to witness a boom again and as that happens, we would see the reflection of that in the equities market.

We are at a point where we should begin to see improved performance by the corporates, especially the listed companies which will translate into price gains for investors in their equities.

So, at this point that we are launching the Lead Balanced Fund, is really the most auspicious time to do this, in the sense that stock prices are at rock bottom now. The prices of equities are really at bargain levels now. When we invest now, over the next year or so as I said, when we expect the economy itself to have experienced some upward trend and growth, stock prices would also gone up. The level of the growth can be quite significant, it can be up to 50% growth or some stocks can even double their prices, as the case may be.

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As an investor in the Lead Balanced Fund, you will benefits from these gains, much more than what you get from investing in just the fixed income securities.

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Staff members of Lead Capital Plc

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Nairametrics: What is the confidence you are giving to people for the mouth-watering returns?

Adewumi: I think for everybody, we just have to be optimistic about the future of our economy. The Government is really the one that is dictating the pace of our economy.

Without campaigning for the incumbent administration, we can see the strides they are making in different sectors of the economy. Transportation, for instance, the rail network they are building will  translate into huge economic benefits. The agriculture sector is another area where the Government is really committed to giving more support.

Besides that, the Nigeria Commodity Exchange will soon take off. When the exchange takes off, it will help in efficient and effective trading of agriculture produce across the country. For the power sector, even though we are not seeing much improvement, we should know that the sector has now been privatised, and following the privatisation, there has been continuous engagement to ensure that the lingering problems are resolved. Ultimately, when power supply increases, our economy will be better for it.

From all these explanations and observations that I have made about the government, one would naturally think that the future is looking brighter. The government is working towards providing a more enabling environment to operate.

In addition, some of the indices coming up are very attractive; inflation is down, while our external reserves is growing. These are indications that the future is looking better for Nigeria.

Nairametrics: Is this fund open to everyone?

Adewumi: As a mutual fund by definition, it is a publicly-accessible fund. It is regulated by the Securities and Exchange Commission and members of the public can confidently invest in it, it is safe and every investor should embrace it and enjoy the rewards that come with it.

Nairametrics: How will you differentiate the Lead Balanced Fund from the initially-launched Lead Fixed Income Fund?

Adewumi: The difference it has compared with the first one (i.e., Fixed Income Fund), is that it takes advantage of the fact that equities are usually in the long-term, much more rewarding than the fixed income.

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Trying not to play-down the fixed income, which gives you a steady and a stable return, any investment you make into equity now, is expected to give you superior returns in 2-3 years. This is much higher than what you would get with fixed income. This is really the catch for the balanced fund.

Famuyiwa Damilare is a trained journalist. He holds a Higher National Diploma (HND) in Mass Communication at the prestigious Nigerian Institute of Journalism (NIJ).Damilare is an innovative and transformational leader with broad-based expertise in journalism and media practice at large. He has explored his proven ability in the areas of reporting, curating and generating contents, creatively establishing social media engagements, and mobile editing of videos. It is safe to say he’s a multimedia journalist.

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Appointments

Joe Biden appoints Nigerian-born Funmi Olorunnipa Badejo as Counsel

Nigerian-American, Funmi Olorunnipa Badejo has been appointed as a member of the office of the White House Counsel.

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U.S President-elect, Joe Biden, announced the appointment of Nigerian-American Funmi Olorunnipa Badejo as a member of the office of the White House Counsel, to serve as an Associate Counsel.

He announced it this week in a statement seen on his transition website.

A part of the statement reads:

  • “The Counsels are experienced and accomplished individuals, have a wide range of knowledge from various fields and will be ready to get to work on day one.”

What you should know about Funmi Badejo

  • Funmi Olorunnipa Badejo, before the announcement, was General Counsel of the House Select Subcommittee on the Coronavirus Crisis, chaired by House Majority Whip, James E. Clyburn.
  • Other government roles she has served include serving as Counsel for Policy to the Assistant Attorney General in the Civil Division of the U.S. Department of Justice, Ethics Counsel at the White House Counsel’s Office, and Attorney Advisor at the Administrative Conference of the United States during the Obama-Biden administration.
  • She started her career as an associate with the law firm of Manatt, Phelps & Phillips, LLP and was also a Legal Counsel at Palantir Technologies Inc.
  • She is a graduate of Political Science from the University of Florida, with a Master of Public Administration (MPA) from Harvard University and holds a Law Doctorate from the University of California School of Law.
  • She becomes the 3rd Nigerian American to be appointed under the Biden Government.

Biden’s transition committee said the new Counsels would work under the direction of White House Counsel, Dana Remus, and “help restore faith in the rule of law and the accountability of government institutions.”

In case you missed it

  • Nairametrics reported last month that United States President-elect, Joe Biden, selected a Nigerian-born attorney, Adewale Adeyemo, as the Deputy Treasury Secretary.
  • Osaremen Okolo, 26, was also appointed as COVID Policy Advisor and a member of the COVID-19 Response Team.

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Corporate Press Releases

Global Credit Rating reaffirms Sovereign Trust Insurance Plc ‘A-‘rating

Global Credit Rating Limited has reaffirmed an A-rating for Sovereign Trust Insurance Plc.

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Sovereign Trust Insurance blames IT failure for delaying its 2019 financial statement

Global Credit Rating Limited, an international rating agency, has reaffirmed an A-rating for Sovereign Trust Insurance Plc.

According to a press release signed by the firm’s Deputy General Manager, Olusegun Bankole, and seen by Nairametrics, the insurance firm has consistently maintained its rating for over a decade now.

The key drivers that helped in the reaffirmation of the A-rating by the firm are;

  • Consistency in paying her claims obligations over the years, as captured in an earlier solvency and operational report for financial institutions in Nigeria and other allied businesses, released by the rating agency in December 2020.
  • Listing of rights issue in 2019 which helped to increase the shareholders’ funds of the company to N8.2 billion as at Q3 2020, up by 31% Year-on-Year. This played a catalyst role in maintaining the A-rating status of the firm.
  • The capital adequacy of the firm was also pivotal.

According to the information available on the website of the rating agency, the A-rating reflects high claims-paying ability, strong protection factors, modest risk which may vary over time due to economic and/or underwriting conditions.

This fact was buttressed by a section in the press release which reads:

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  • Sovereign Trust Insurance Plc has great potentials for growth in the years ahead, considering some of the strategies that have been put in place to propel its operations. Global Credit Rating noted that the company has shown a great deal of consistency in her claims obligations to her numerous customers spread all over the country.”

About Global Credit Rating Limited

  • Global Credit Rating Co (Pty) Ltd (GCR) operates as a credit rating services provider. The Company ratings for banks, financial institutions, insurance, corporate and public sector debt, and structured finance serves customers worldwide.

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Manufacturing

Notore chemicals shuts down 500,000 MTPA fertiliser plant for turn around maintenance

Notore Chemicals has shut down its fertiliser plant for turn around maintenance, in expectation of significant improvement in the Plant’s reliability index.

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Notore Chemical Industries Plc, Notore Chemical's plant at Onne, Rivers State, Company result, Fertilizer, Jobs, Profit, Notore Chemical Industries 2019 H1 Financial Statements

Notore Chemicals has shut down its fertiliser plant with a 500,000MTPA nameplate capacity for maintenance, in order to restore the plant’s productivity and facilitate a sustainable bounce back in operations.

This information became general knowledge after a notification issued by the Company Secretary, Mrs. Otivbo Saleh, was published on the website of the Nigerian Stock Exchange.

According to her, Notore Chemical Industries Plc had to shut down its fertiliser plant to pave way for the commencement of the Turn Around Maintenance, expected to return the Plant to its 500,000 MTPA nameplate capacity and improve the reliability index to 95%.

The TAM exercise was initially impacted by the COVID-19 pandemic, as the disruption to global businesses occasioned by the COVID-19 pandemic and its attendant restrictions by Governments all over the world affected the timely delivery of procured spares and the arrival to the site of Vendor Service Men (VSM).

Barring any unforeseen circumstance, the Turn Around Maintenance which has started should be completed on 8 March 2021.

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  • The company’s 2020 audited financial report tells a tale of effete operation, as the company made a Gross loss of N2.9 billion, due to the cost coming from the company’s operation completely eroding all the revenue generated from its operating segment.
  • The company managed to post a positive operating profit of N9.5billion at the back of N18.8billion revenue from contracts with customers. However, this was not enough to set the company on the path of profitability, as the heavy loan book of the company impacted its profitability in 2020.
  • Upon the completion of the TAM programme, the company expects a significant improvement in the Plant’s reliability index and sustained daily production output of 1,500MT.

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