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NSE holds ETF workshop, showcases broader investment opportunities

The Nigeria Stock Exchange (NSE) holds ETF workshop and disclosed it remains committed to the development of the market

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Stock market gains N110.7 billion on Friday trade session , Investors lose N153.6 billion on Monday as ASI dip 1.05% , Top Nigerian stocks, too cheap to ignore, Nigeria bourse crash analysis, Nigerian bourse loses N2 trillion in value in Q1 2020, as oil plunged 65% QOQ

The Nigeria Stock Exchange (NSE) has disclosed that it remains committed to the development of the market as it seeks to increase the number of Exchange Traded Funds listed on the Exchange.

Oscar N Onyema, Chief Executive Officer, NSE, disclosed this at the workshop yesterday at the exchange themed “Investing in Nigerian Equities: Using Exchange Traded Funds (ETFs) as a proxy”.

NSE holds ETF workshop showcases broader investment opportunities in Nigerian equities market

At the event, which was covered by Nairametrics, he added that the purpose of the workshop was to showcase the benefits of indexing and Exchange Traded Funds in accessing broader investment opportunities in the equities market.

“In line with our commitment to developing the market, the Exchange remains resolute in its goal to collaborate with market stakeholders to increase listed ETFs,” Onyema said.

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The NSE disclosed that the Nigerian market was fast embracing the usage of ETFs, as it had seen its supply side deepened from a single ETF tracking the price of Gold in 2011 to 10 ETFs currently offering exposure to equities, fixed income, commodities as well as thematic and smart investment solutions.

[READ MORE: NSE appointed executive committee member, FISD)

Onyema said, “NSE prides itself in its position as the second-largest ETF market in Africa with a current market capitalisation of N6.9Billion. Furthermore, ETF offerings in our market have also provided investors risk management and hedging benefits – the commodities backed ETF returned 31.75% for the year 2019.”

What are ETFs? An Exchange Traded Fund is an investment vehicle that tracks an index, a basket of assets or commodity, but trades like regular shares on a stock exchange. ETFs trade on the Exchange Traded Funds Board of the exchange.

Why EFTs? EFTs have the following features which provide a lot of cost-effective ways of trading a basket of shares making, EFTs attractive to investors. These features include:

  • Low Cost – EFTs are less expensive to operate than actively managed funds because they have less frequent portfolio changes;
  • Transparency – The performance and portfolio composition of an EFT reflects the underlying index or commodity, as the holdings of an EFT closely mirror the underlying index or commodity it tracks;
  • Investment Diversification – An ETF is a direct and inexpensive way to attain diversified exposure to an index, commodity, sector or region while reaming in the capital market; and
  • Tradability – EFTs can be bought and sold on the Nigerian Stock Exchange via a stockbroker throughout the day based on market prices, which are determined by demand and supply.

NSE holds ETF workshop showcases broader investment opportunities in Nigerian equities market

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The NSE stated that Exchange Traded Funcould be bought on the Nigerian Stock Exchange through any dealing member firm. It added that all fees were based on the value of the trade and Withholding Tax (WHT) on dividend or interest is 10%. Capital gains tax is zero.

However, the workshop ended with fastest fingers quiz to the understanding of EFTs where the second runner up, first runner up and the winner all went home with N25 000, N50 000 and 75 000 in exchange-traded funds courtesy the Nigerian Stock Exchange and Meristem Securities.

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Business

Nigeria to begin gold production in 2021 with the Segilola Gold Project

The gold produced is expected to become a part of Nigeria’s external reserve.

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Nigeria to save $300 million from importation of barite 

Nigeria is set to commence gold production in 2021 after the launch of the Segilola Gold Project in Osun state. This was disclosed by the Honourable Minister of Mines and Steel Development, Olamilekan Adegbite, while taking stock of his first year in office as Minister.

In a statement signed by his Special Adviser on Media, Ayodeji Adeyemi, Adegbite said that the project is expected to create about direct 400 direct jobs and 1000 indirect jobs along the gold value chain.

He added that once the project takes off, Nigeria would become a major gold producing country, a move that would hasten the diversification of the economy and reduce unemployment among the youth populace.

He noted that the government was creating an enabling environment across the gold value chain. According to him, “the international roadshows we have had in the past have borne fruits. Today we have Thor exploration in Osun State through the Segilola Gold project, which is projected to start producing in the first half of next year.”

The minister also noted that the government has licenced two gold refineries to refine gold to the London Bullion Market Association, LBMA, standard.

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About the Ajaokuta Steel Plant, Adegbite explained that the global travel restriction caused by the pandemic had prevented the technical experts from Russia from coming over to the plant to conduct an audit of the steel plant. He assured that this would be done as soon as the flight restriction was over, and there are hopes to revive the plant before the expiration of President Buhari’s tenure.

Why it matters

The take-off of gold production in Nigeria is expected to open up an industry centred around gold production, from equipment leasing and repairs, logistic and transport. Note that gold requires a specialized means of transport, security, insurance, aggregators among others. These, according to Adegbite, would ultimately create tens of thousands of jobs across the gold value chain.

The minister further stated that Nigeria has mined, processed, and refined gold under the Presidential Artisanal Gold Mining Development Initiative, PAGMI. The first batch of PAGMI gold was unveiled at a presentation ceremony to President Buhari on July 16, 2020.

The gold produced is expected to become a part of Nigeria’s external reserve after being purchased by the Central Bank.

“PAGMI will result in the creation of thousands of new mining and formalized jobs, leading to poverty alleviation for many households. Under the scheme, artisanal and small scale gold miners will earn more from higher productivity, better recovery rates through mechanization of operations, and better access to reliable geological information,” he said.

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Business

AGF launches Committee on Financial Transparency Guidelines and Open Treasury Portal

This initiative will provide the public with financial information of all MDAs.

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Office of Nigeria's Account General is reportedly engulfed in flames, Auditor-General, Accountant-General, grants, FAAC disburses N327.68 billion to States and LGAs in September, as allocation drops again,

Office of the Accountant-General of the Federation has launched a Committee on Federal Government Financial Transparency Guidelines and Open Treasury Portal to enable Transparency on economic governance policy.

Speaking during the launch today in Abuja, the Accountant-General of the Federation, Ahmed Idris, FCNA, said the committee would provide the public with financial information of all MDAs to promote accountability and anti-corruption campaign.

The AGF said that the Honourable Minister of Finance and National Planning (HMFBNP) had in July 2018, presented a memo to the Federal Executive Council (FEC) for the approval to establish the Financial Transparency Guidelines and Open Treasury Portal.

“The approved Transparency Policy provides for Transparency requirements, thresholds and responsibilities as part of Government Policy on accountability in line with Freedom of Information Act 2014.

“The HMFBNP, then constituted the composition of the Quality Assurance and Compliance Committee which membership were drawn from MDAs,” he said.

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Idris said that the Committee would implement transparent governance and improve the FG’s whistleblowing programme, which would help Nigerians report financial crimes in the MDAs.

He disclosed that the operations of the committee would be accounted through the Office of the Accountant-General of the Federation which will offer its secretariat services to the committee, and enable the committee request information and clarification.

Idris added that the Committee would report to the Accountant General and the Minister of Finance, Zainab Ahmed monthly, citing that the Committee would work transparently “without fear or favour”.

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Economy & Politics

FG meets group to access AfCFTA’s $650 billion market

AfCFTA is aligned to the ministry’s twin national objectives of industrialization and export based diversification.

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UNIDO’s $60m investment programme to boost Nigeria’s industrialisation - FG, FG to strengthen economic ties with Turkey, FG moves to facilitate tax incentives for SMEs, Made-in-Nigeria vehicles gulp N364 billion from FG

The Ministry of Industry, Trade and Investment has met with executives of the Nigerian Agribusiness Group (NABG) on the implementation of the African Continental Free Trade Area (AfCFTA) and access the continent’s market worth $659 billion, in mostly manufacturing goods and services.

This was disclosed by the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo during the meeting on Monday.

The minister emphasized on the importance of AfCFTA, as it is aligned to the ministry’s twin national objectives of industrialization and export based diversification. It provides us with a preferential access to African market worth over $650bn, in mostly manufactured goods .

Back story: Nairametrics had reported when Aissata Koffi Yameogo, ECOWAS’ Programmes Officer in charge of implementing AfCFTA rules of origin in the continent, said that the implementation will expand market for the manufacturing industry to 1.3 billion West African citizens, without additional duties and fees.

“It will build production capacity in the region and develop the value chain, and increased export to other African states” she added.

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The benefits would also encourage member states to specialise in the production of a certain good where they have a comparative advantage, thus enhancing the quality and quantity of local production and creating more jobs.

He said, “This would improve our competitiveness and the perception of our products and services in the African market. Intra-African trade in Agro products and services will develop our local value chain, create jobs and increase our GDP.”

According to International Monetary Fund (IMF), the elimination of tariffs could boost trade in Africa by 15-25% in the medium term, and once fully implemented, is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion.

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