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AMCON recovers N682bn bad debts in six years

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The Asset Management Corporation of Nigeria (AMCON has recovered N681.5 billion over the past six years from debtors in form of cash, properties and shares, its Managing Director/Chief Executive Officer , Mr. Ahmed Kuru, said yesterday.He disclosed this at a conference of Federal High Court Judges, which held at the National Judicial Institute’s (NJI) complex in Abuja.

The theme of the conference was “The AMCON Regime: A Paradigm Shift in Debt Recovery.” Explaining why AMCON would continue to crave the support of the judiciary, the AMCON boss disclosed that most of the Corporation’s recoveries were made possible through court sanctioned settlements or outright judgment, adding that AMCON presently has at least N1.7trillion worth of assets under litigation across the federation, which he also said “seriously underscored” the need for an effective resolution mechanism through the courts.

Mr. Kuru who attended the event with Dr. Eberechukwu Uneze, an Executive Director with the Corporation said AMCON, recognized that the judiciary was the greatest and most important stakeholder in the pursuit of its statutory mandate, which was why the corporation would continue to seek the support, association and collaboration of the judiciary all through its lifespan.

Kuru said his assertion was based on the fact that when all ther resolution strategy fails, AMCON resorts to the courts in order to exercise AMCON special enforcement powers.

He said: “We understand the crucial role of the judiciary, which is why we always look forward to opportunities like this where we can share some of our unique experiences towards ensuring that justice is done in all of our cases based on a thorough understanding of the unique regime under, which AMCON was established in 2010.”

AMCON was set up in 2010 to absorb banking sector-wide nonperforming loans in exchange for government bonds, after the Central Bank of Nigeria (CBN) rescued nine weak lenders from collapse in 2009. But pressure has been building up again, with loan books – nearly half of them in dollars – hammered by shrinkage in the economy, a sinking currency and acute foreign exchange shortages – all consequences of the slump in oil prices.

Last February AMCON took over the day-to-day running of Arik Air in an attempt to rescue the country’s largest airline, which was placed in receivership after it failed to pay workers or creditors.

Last week, it sold the nationalised Keystone Bank to a consortium of local investors. Also speaking at the event, the Administrator of the NJI, Justice Rosaline Bozimo, reiterated the importance of the judiciary and all stakeholders in the financial industry to support the activities of AMCON and its debt recovery efforts because of the huge positive impact of that to the Nigerian economy and its ability to correct the economic flaws of the past, which led to the establishment of the corporation.

She said the call had become necessary because of the critical but difficult assignment of AMCON to recover huge debts as mandated by its establishment Act.

She informed that it was based on the importance that the Chief Justice of Nigeria, Justice Walter Samuel Nkanu Onnoghen, attached to AMCON as an integral component of the financial safety net system, that made him to graciously grant approval forthe interaction.

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Dangote Cement plans to revive London IPO

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Dangote Cement Plc has revived plans for a share sale in London that could raise about $1 billion.
According to report from Bloomberg, the Nigerian company, controlled by Aliko Dangote, has approached investment bankers to discuss a potential U.K. listing, said the people, who asked not to be named as the talks aren’t public.
Once banks have been appointed, it will probably take at least five months to complete the process, one of the people said. The cement maker is also considering issuing a debut Eurobond, according to two different people familiar with the matter.

Discussions are ongoing and a listing of Africa’s biggest cement maker may not go ahead, the people said.
“We have not, to the best of my knowledge, taken such a decision,” Anthony Chiejina, Dangote Cement’s spokesman in Lagos, said in an emailed response to questions, without commenting on the banker talks.
Fresh capital would enable Dangote Cement to fund expansion plans in sub-Saharan Africa and broaden its base of investors.

It sees London as a more favorable place to attract about $1 billion than in its home base of Lagos, Nigeria’s commercial capital, where no company has raised more in an initial public offering than Starcomms Plc’s $796 million in 2008.

Dangote Cement has a free float in Lagos of 14.9 per cent and a market valuation of $12.3 billion. It mulled raising equity in London in 2010. At the time, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley helped it prepare a sale that could have raised as much as $5 billion, before the move was abandoned.

The revival of the plan comes as Dangote Cement shares climb to near records as the Nigerian economy recovers from a downturn caused by the 2014 slump in oil prices. The economy of Africa’s most populous nation went into recession in 2016 as government revenue plunged. Nigerian stocks are up 11 percent this year in dollar terms, the sixth best performance globally according to data compiled by Bloomberg.

Aliko Dangote has a net worth of $13.5 billion, according to the Bloomberg Billionaires Index. His Dangote Industries Ltd. conglomerate has interests in sugar, flour and packaged food as well as controlling the cement company. The 60-year-old has repeatedly expressed a desire to bid for London’s Arsenal Football Club and is building a 650,000 barrel-a-day oil refinery near Lagos, which will cost more than $10 billion.

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Stock market extends weekly loss by 1.13%

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Following sustained profit takings, the NSE All-Share Index and market capitalization depreciated by 1.13 per cent to close last week at 42,638.83 and N15.302 trillion respectively.
Similarly, all other indices finished lower last week with the exception of the NSE Pension Index that appreciated by 0.08 per cent, while the NSE ASeM Index closed flat.
Further analysis of the weekly transactions showed that a total turnover of 2.940 billion shares worth N27.924 billion in 28,570 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 4.426 billion shares valued at N24.236 billion that exchanged hands the previous week in 29,573 deals.

The Financial Services Industry (measured by volume) led the activity chart with 2.174 billion shares valued at N17.033 billion traded in 19,013 deals; thus contributing 73.96 per cent and 61.00 per cent to the total equity turnover volume and value respectively.

The Services Industry followed with 232.482 million shares worth N216.990 million in 734 deals. The third place was occupied by Conglomerates Industry with a turnover of 170.422 million shares worth N499.400 million in 1,578 deals.

Trading in the top three equities namely – Linkage Assurance Plc, Skye Bank Plc and FCMB Group Plc (measured by volume) accounted for 809.798 million shares worth N1.130 billion in 2,551 deals, contributing 27.55 per cent and 4.04 per cent to the total equity turnover volume and value respectively.

Thirty equities appreciated in price last the week, higher than 23 of the previous week. Forty-eight equities depreciated in price, lower than 64 equities of the previous week, while 94 equities remained unchanged higher than 85 equities recorded in the preceding week.

Also traded last week were a total of 25,586 units of Exchange Traded Products (ETPs) valued at N3.004 million executed in 11 deals, compared with a total of 1.200 million units valued at N6.951 million that was transacted the previous week in 10 deals.

A total of 2,785 units of Federal Government Bonds valued at N2.627 million were traded last week in 16 deals, compared with a total of 14,779 units valued at N14.050 million transacted the previous week in 18 deals.

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‘IEFX window, CBN’s most important policy in 2017’

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As the Central Bank of Nigeria (CBN) continues to receive commendation from various quarters for the stability of the naira in recent months, analysts at Financial Derivatives Company Ltd have attributed the positive development to the apex bank’s introduction of the Investors and Exporters’ Forex (IEFX) window, its consistent intervention in the forex market as well as higher oil prices and production.

In a note obtained by New Telegraph last weekend, the analysts also stated that the upward trend in capital importation into the country especially in Q3 2017 was mainly fuelled by the implementation of the IEFX window.
The experts said : “The introduction of the IEFX window in late April 2017 is arguably the most important policy implemented by the CBN in 2017. Prior to the introduction of the IEFX, foreign portfolio investors, particularly those repatriating funds from Nigeria, were concerned about the multiple exchange rates in the country.

There was a huge gap between the official exchange rate and the parallel market exchange rate, plus an opaqueness in the foreign ex-change management system (which caused uncertainty), and the acute scarcity of hard currency.

“Consequently, there was an exodus of foreign capital and little or no new investments into the country. However, foreign portfolio investors returned with the opening of the IEFX. Prior to this, investors were of the view that the naira was overvalued and not at a market-determined level. The IEFX window, higher oil prices and production, and the CBN’s consistent intervention in the forex market are the main drivers of the stability and the convergence of exchange rates in Nigeria today.”

They, however, argued that while the CBN Governor, the Director-General of the Debt Management Office (DMO) and other top government officials believe that the forex shortage in the country is over and that the naira will continue to gain traction, “ the fragile stability will disappear if there is any significant oil price or production shock or if sentiment moves against emerging market assets.”

According to the analysts such sentiments could include the US Federal Reserve [US Fed] raising interest rates in 2018, and with the 2019 elections coming up, a new spate of attacks on oil infrastructure.
“ In the event of an oil price or production shock, the CBN will have to choose between defending the naira with its reserves and letting the naira float freely,” the analysts stated.

The Governor of the CBN, Mr. Godwin Emefiele, disclosed last October that the foreign exchange inflows into Nigeria through the IEFX Window had reached $10 billion since the window was launched in April 2017.
Also, latest data obtained from the FMDQ OTC Securities Exchange, shows that the window recorded approximately $26billion transactions in 2017.

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