The bearish trend that is being witnessed in the Nigerian Equity market is a reflection of Nigeria’s current economic woes, as weak growth has dragged the Federal Government’s economic plan into great uncertainty.
With the devaluation of the naira and a looming recession, many young Nigerians are following in the footsteps of Africa’s richest man, Aliko Dangote who announced earlier this year that he plans to diversify his wealth and invest more in advanced economies like America.
Dangote’s plan is aimed at hedging against naira’s volatility and inflation. The dangers of the effects of inflation strengthen the attraction of foreign-denominated assets as a better option for storing wealth and value. More so, investing in foreign stocks and other financial assets provides a viable choice for many Nigerians who are largely discouraged about investing in the Nigerian equities market due to several reasons.
There is also the perception that meaningful investment in value stocks on the NSE is exclusively reserved for the elite and super-rich. In other words, big money investors make up a large chunk of the Nigerian bourse.
Also, certain Nigerian stocks are not readily available for sale, based on the fact that they are not liquid, although listed on the Nigerian Stock Exchange.
On the other hand, most foreign stock markets have engaging success stories of young entrepreneurs like Google’s Larry Page, Tesla’s Elon Musk, and Facebook’s Mark Zuckerberg. There are also trusted and stable global blue-chip names like JP Morgan Chase, and Pepsi.
The Nigerian equities market has a market capitalization of less than $70 billion. Interestingly, Apple (which manufactures iPhone and is America’s most capitalised stock), is about 20 times more capitalised and more dynamic than the entire NSE. This shows that stocks in advanced economies are more liquid and transparently available.
The United States does not have any law prohibiting foreigners from investing in US markets. Therefore, that is not a concern. Also, most American companies do not produce paper stock certificates. Administration costs have reduced the number of companies providing stock certificates. Therefore, most stock ownerships are proven digitally as the related institutions (brokerage firms, transfer agents and so on) are required to keep records.
In view of the foregoing, a few Nigerian startups are now making it easier for many Nigerians to access foreign equity markets. Nigerians can now access top world brands like Coca-Cola, Pepsi, Twitter, Facebook, Amazon, General Electric, Exxon Mobil and so on, just by using their smartphones.
These Nigerian fintech startups offering such brokerage services include:
Bamboo: It is an investment platform that gives Africans real-time access to invest in or trade over 3,500 stocks listed on the American and Nigerian exchanges right from their smartphones or personal computer. In partnership with US-based Drive Wealth LLC, Bamboo provides seamless, secure access to US and Nigerian securities. The minimum balance for Bamboo accounts is $20 (N7, 600) which is charged on deposits based on payment method.
Chaka.ng: Led by Tosin Osinbodu, the company provides top-class access to stocks listed on the Nigerian and American stock exchange. The online trading platform offers access to investment in assets listed on Nigerian and American Stock Exchanges as well as global top brands from over 40 countries. Chaka partners with Citi investment capital. The minimum opening balance for Chaka.ng is about $10 (N3800). It offers zero transaction charges and wire transfer fees.
Trove: Founded in 2018, Trove allows young Nigerians to trade the Chinese, American and local securities through your mobile phone by downloading its app. Trove also has partnerships with Drive Wealth LLC and Sigma Securities, a Nigerian based company; this allows access to securities in local and international markets.
Trove users have the choice to buy fractional shares, rather than full shares, in firms which can cost thousands of dollars to buy like in the case of Google trading at a price of $1,206 (N458 280).
Rise: Eleanya Ekev, Bosun Olarenwaju, Mayowa Dami Lawal, and Anthony Odib are determined to help you get the best dollar-denominated returns from safe high-performing dollar investments. Rise holds its clients’ investments through its cooperative license. Foreign investments are held through third party partnerships with regulated entities in their perspective jurisdiction. Its minimum opening balance stands at about $10 (N3,800) it offers no transaction fees except for withdrawal charges.
US imposes $15,000 visa bond on 15 African countries, others
The US has issued a visa rule requiring tourist and business travelers in some countries to pay a bond of up to $15,000 in addition to the visa fees.
The outgoing administration of US President, Donald Trump, on Monday, November 23, 2020, issued a new temporary visa rule that requires tourist and business travelers from 15 African countries and others to pay a bond of up to $15,000 in addition to the visa fees, which ranges from $16 to $300, in order to visit the United States.
According to TheCable, the US State Department said the visa bond pilot programme, expected to take effect from December 24 and end on June 24, 2021, is targeted at countries whose citizens have higher rates of overstaying B-2 visas for tourists and B-1 visas for business travelers.
The Trump administration said the six-month pilot program aims to test the feasibility of collecting such bonds and will serve as a diplomatic deterrence to overstaying the visas. Hence, overstay places significant pressure on Department of Justice and Department of Homeland Security.
The visa bond rule will permit U.S. consular officers to request tourist and business travelers from countries whose nationals had an overstay rate of 10% and above in 2019 to pay a refundable bond of $5,000, $10,000, or $15,000.
The countries whose tourist and business travelers fall into this category and subjected to the bond requirements are 24 countries, including 15 African countries. While these nations had higher rates of overstays, they sent relatively fewer travelers to the United States.
The countries include Afghanistan, Angola, Bhutan, Burkina Faso, Burma, Burundi, Cape Verde, Chad, the Democratic Republic of the Congo (Kinshasa), Djibouti, Eritrea, the Gambia, Guinea-Bissau, Iran, Laos, Liberia, Libya, Mauritania, Papua New Guinea, Sao Tome and Principe, Sudan, Syria, and Yemen,
Nigerian travelers escaped paying the temporary visa rule, as their overall score was below the threshold of 10% and above overstaying rate.
Senate approves issuance of N148bn promissory notes to Bayelsa, 4 others
Promissory notes worth N148,141,969,161.24 has been approved by the Senate as refund to Bayelsa, Cross River, Ondo, Osun and Rivers States
Promissory notes worth N148.141billion have been approved by the Senate as a refund to Bayelsa, Cross River, Ondo, Osun, and Rivers States for projects executed on behalf of the Federal Government.
The approval which was given by the Senate at the plenary on Tuesday, 24th November 2020, came after the presentation of a report by the Committee on Local and Foreign Debts, led by Senator Ordia Clifford (PDP-Edo).
According to a news report by NAN, this is a go-ahead to the Federal Government, who had sought the approval of the Senate for issuance of promissory notes for a refund on federal projects executed by State governments.
The request was contained in a letter addressed to President of Senate, Dr. Ahmad Lawan by President Muhammadu Buhari, and read at plenary. The Senate referred the matter to the Committee on Local and Foreign Debts for further legislative input.
Senator Ordia Clifford, while presenting the report of the committee, said the Permanent Secretary, Federal Ministry of Finance; Federal Commissioners of Finance and Works in the five states, had briefed the committee on details of the projects.
He said the Committee was presented with documents relating to the approvals of the Federal Government through the Federal Ministry of Works and Housing for the execution of the projects and certificates of completion, amongst other documents.
At the plenary today, Senator Ordia moved the motion that the Senate approves the Committee’s recommendations by approving the issuance of the promissory notes to the State governments.
According to him, the amount due to the five states is N148.14billion.
- Bayelsa was allotted N38.40billion
- Cross River was allotted N18.39billion
- Ondo was allotted N7.82billion
- Osun was allotted N4.57billion
- Rivers was allotted N78.95billion
What they are saying
The President of the Senate, Ahmad Lawan, disclosed that records showed PDP states had the highest refund, he said: “If you look at the list of states, only two are APC states and they have the least in terms of refund, this is fantastic and a mark of leadership by the Federal Government. This shows tolerance and leadership by this administration.”
Interswitch Group becomes Finastra’s lead technology partner in Nigeria
nterswitch Group has unveiled a consolidated partnership with Finastra, one of the world’s most influential Fintechs.
In a bid to further develop its market and expand, Interswitch Group has unveiled a consolidated partnership with Finastra, one of the world’s most influential Fintechs.
This is according to a verified post by Interswitch Group on Linkedin, as seen by Nairametrics.
What this means
The strategic partnership enables Interswitch to become Finastra’s lead technology partner and will avail the latter the opportunity to bring the broadest set of financial software solutions to financial institutions in Nigeria and across Africa, in conjunction with Interswitch’s strong understanding of the local banking and payments landscape, as well as the ability to deploy solutions across these markets.
Some of Finastra’s financial software solutions that will be incorporated into Interswitch’s digital solution include: Fusion Kondor and Fusion Trade Innovation, which will consolidate Interswitch’s position as a hub for financial solutions, including treasury and trade solutions.
What they are saying
Commenting on the partnership, the Founder and Group Chief Executive Officer of Interswitch, Mitchell Elegbe, was quoted by Tech economy saying: “Our partnership with Finastra is consistent with our strategic growth plan and we both share the vision of deepening access to financial services by providing world-class technology and innovative solutions.
“The partnership enables Finastra to seamlessly deploy its technology in this market. For Interswitch, we will be leveraging our proven success and expertise in delivering transaction banking solutions to support Finastra in localizing and implementing their technology in this region.’’
On the other hand, the Head of Partner Ecosystem MEA & CIS at Finastra, Hamid Nirouzad, said: “Interswitch has a proven track record of delivering solutions to commercial banks, as well as, a strong understanding of the local banking landscape across Nigeria and sub-Saharan Africa.
“Finastra is committed to providing its solutions to financial institutions across the world, and partnerships such as this will result in successful projects, with rapid delivery at a reasonable cost.”