It is official. The total asset value of mutual funds in Nigeria has hit the trillion Naira mark, according to the recent report by the Securities and Exchange Commission. What a milestone!
In my April 2019 article on the state of the mutual fund industry in Nigeria, I projected that the asset value would hit the trillion Naira mark before the end of the year, going by observable trends as at that time. And here we are.
NAV summary report
The recently released NAV Summary Report by the Securities and Exchange Commission of Nigeria indicates that the total Net Asset Value of mutual funds in Nigeria is now N1,017,705,544,066. Who could have imagined that what started in 1991 with Paramount Equity fund as the only mutual fund in Nigeria, could balloon to an industry with over 100 funds and total asset value in trillions of Naira? A historical movement along memory lane shows that as at December 31, 1991, the total net asset value of mutual funds in Nigeria was N17.5 million in an industry of one mutual fund.
How did we get here?
Money market funds played an important and pivotal role in pushing the net asset value of mutual funds to the finish line towards the trillion Naira mark. Nigerians love their yield or interest rate, no matter how small. It is that quest for yield and the flight to safety that made money market funds the darling of most mutual fund investors in Nigeria. On a year to date basis, the whole mutual funds in Nigeria attracted an estimated N481.6 billion in additional contributions, so far in 2019. Out of that sum, money market funds attracted N337 billion, according to analysis by Quantitative Financial Analytics. Within the year, three new money market funds were included in the SEC’s NAV Summary report. They are Legacy Money Market fund, FSDH Treasury Bill fund and GDL Money Market fund.
Together, those 3 added about N14 billion to the money market category’s net asset value. Though investors withdrew an estimated N125 billion from mutual funds, on a year to date basis, so far, mutual funds made an estimated gain of N9.3 billion. That analysis, therefore, boils down to the fact that money markets continue to dominate the entire mutual fund industry. 69.89% of the total assets of mutual funds are invested in money market funds, while 9.78% is in Eurobond funds (those denominated in dollar), 7.7% is in fixed income or bond funds, while 4.52% is in real estate funds. It does look like Nigerian investors are yet to either understand funds like Exchange Traded funds, Ethical and Target funds because not much investments are made in those categories. The reason can as well be due to the poor performance of those fund types.
Fund ranking by asset value
Stanbic IBTC money market fund remains the largest fund in Nigeria, with 32.29% of the total asset value of the industry. The second largest is FBN Money market fund, whose asset value makes up 17.64% of Nigeria’s mutual fund asset. Stanbic IBTC Dollar fund has taken over from ARM money market fund as the third-largest mutual fund in Nigeria.
Fund manager ranking by asset value
The dynamics remain the same as Stanbic IBTC sits atop other fund managers as the fund manager with the largest asset under management, AUM. On the day that total mutual fund assets hit the trillion Naira mark, Stanbic IBTC housed 44.54% of that total. Again, FBN Capital Asset Management company retains its second position with 19.05% of Nigeria’s total mutual fund asset value. Once again, Asset and Resources Management company, ARM, is the third-largest fund manager with 8.10% of total assets of mutual funds in Nigeria, while Chapel Hill Denham Management limited took the fourth position from FSDH Asset Management company with 4.4% of mutual fund assets.
Too large to fail
If things continue the way they are, it would not be a surprise if Stanbic IBTC controlled 50% of Nigeria’s mutual fund assets. That should start to concern the regulatory authorities and they should begin to look at issues like too large to fail, in Nigeria’s mutual fund industry.
FG lists approved COVID-19 test centres for international travellers, to sanction airlines over non-compliance
The NCAA also warned airlines to desist from flouting COVID-19 protocols.
The Federal Government has listed the approved COVID-19 test centres for international travellers. This was disclosed by the Federal Airports Authority of Nigeria (FAAN) via its Twitter handle on Monday.
According to the agency, some of the 68 centres are: EHA Clinics, The 54gene COVID-19 mobile laboratory, Medicaid Radio-diagnostics Centre, FCT Abuja; SynLab Ikeja, VI, Lekki; 54Gene Lekki, Medbury Medical Services, Imeja & Lekki; Clina Lancet, Maryland, and Biologix Medical Services, Anthony, Lagos, among others.
— Federal Airports Authority of Nigeria (@FAAN_Official) September 21, 2020
Also, the FG through the Nigerian Civil Aviation Authority (NCAA) has threatened to revoke the licenses of domestic airline operators over non-compliance with the COVID-19 protocols.
Director-General, NCAA, Mr Musa Nuhu, issued the warning in a letter to all operators (DG39/20), with reference NCAA/DG/AIR/11/16/267 on Monday.
Nuhu said the warning was made necessary because some domestic airlines had been flouting the protocols.
According to him, the continuous non-compliance with the COVID-19 protocols would attract severe penalties up to and including cancellation of approval to resume domestic operations.
He said: “It has been brought to the notice of the Nigerian Civil Aviation Authority that some domestic airline operators have not been complying with the COVID-19 protocols.
“These protocols were released through All Operators Letter (AOL) DG035/20 ref. NCAA/DG/AIR/ 11/16/260, dated Sept. 4 and an Advisory Circular (AC) NCAA-AC-AMS-006, also dated Sept. 4.
“Approval for resumption of domestic operations are predicated on compliance with the above protocols.”
Nuhu added that this was a warning to all domestic operators who were not in compliance to desist from such acts immediately.
COVID-19 Update in Nigeria
On the 21st of September 2020, 195 new confirmed cases and 2 deaths were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 57,437 confirmed cases.
On the 21st of September 2020, 195 new confirmed cases and 2 deaths were recorded in Nigeria, having carried out a total daily test of 1,162 samples across the country.
To date, 57,437 cases have been confirmed, 48,674 cases have been discharged and 1,100 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 480,874 tests have been carried out as of September 21st, 2020 compared to 479,712 tests a day earlier.
COVID-19 Case Updates- 21st September 2020,
- Total Number of Cases – 57,437
- Total Number Discharged – 48,674
- Total Deaths – 1,100
- Total Tests Carried out – 480,874
According to the NCDC, the 195 new cases were reported from 11 states- Enugu (51), Gombe (40), Lagos (39), Plateau (23), FCT (15), Rivers (12), Kaduna (8), Ondo (3), Bauchi (2), Edo (1), Ogun (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,982, followed by Abuja (5,566), Oyo (3,254), Plateau (3,231), Edo (2,612), Kaduna (2,356), Rivers (2,255), Delta (1,799), Ogun (1,767), Kano (1,734), Ondo (1,600), Enugu (1,285), Ebonyi (1,038), Kwara (1,025), Abia (881), Katsina (848), Gombe (839), Osun (817), Borno (741), and Bauchi (691).
Imo State has recorded 562 cases, Benue (473), Nasarawa (448), Bayelsa (394), Jigawa (322), Ekiti (317), Akwa Ibom (288), Niger (254), Adamawa (234), Anambra (232), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (75), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
AfCFTA: Nigeria securing approval to ratify agreement – Trade Minister
The Minister revealed that Nigeria has set up a National Action Committee on AfCFTA.
Minister of Trade, Niyi Adebayo said Nigeria is currently in the process of securing approval to ratify the African Continental Free Trade Area (AfCFTA) agreement soon.
The Minister disclosed this during a meeting with the Secretary-General of the African Continental Free Trade Area(AfCFTA), Mene Wamkele on Monday.
During the meeting, the Honourable Minister informed him that Nigeria has established … pic.twitter.com/vSDnNqcfmE
— FMITI Nigeria (@TradeInvestNG) September 21, 2020
Recall that Nairametrics reported last week Mr. Adebayo said that Nigeria is actively working to attract more foreign direct investments into key industries to meet the demands of the African Continental Free Trade Area (AfCFTA).
“As we gear up to meet the demands of the enlarged continental market which will be fostered by AfCFTA, we are actively working to attract more foreign direct investments into key industries,” the Minister said.
In today’s meeting, The Minister told the delegation that Nigeria has set up a National Action Committee on AfCFTA, which would implement Nigeria’s roll-out strategy in a bid to take advantage of the agreement. He added, “Nigeria is currently in the process of securing approval to ratify the agreement within the shortest possible time”.
The African Union announced in August that the first commercial deal of AfCFTA will be taking off on January 1, 2021.