CBN revokes licences of 766 BDCs
A total of 766 Bureaux De Change have lost their operating licences and will no longer be funded by the Central Bank of Nigeria during its twice-weekly sale of dollars.
The 766 BDCs lost their licences for failing to meet the July 31, 2014 recapitaisation deadline set by the CBN.
The CBN had, in a bid to reposition the foreign exchange market, in June released new capitalisation guidelines for the BDCs in the country.
In the guidelines, the central bank had increased the capital base for the BDCs from N10m to N35m, and asked them to make a caution deposit of N35m, among other requirements.
In a circular dated July 7, 2014, the Director, Financial Policy and Regulation, CBN, Mr. Kelvin Amugo, had said the BDCs that failed to meet the new guidelines by July 31 would cease to be recognised and funded by the central bank.
In a new circular posted on its website on Friday, the central bank released a list of 2,442 BDCs that met the new recapitalisation guidelines.
By the development, 766 out of the total 3,208 BDCs registered by the CBN have lost their licences.
Amugo also said that all the BDCs that met the requirement would be engaged as agents by licensed international money transfer operators for inbound and outbound money transfer business in Nigeria.
In addition to those already registered, the central bank has applications from 1,417 prospective bureaus de changes awaiting its approval.
This means that additional 1,417 prospective failed to meet the deadline.
The CBN officials had said that if the central bank had granted them the licences, the country would have 4,625 licensed BDCs operating in the country to which the central bank must sell $50,000 on a weekly basis.
This, they said, would raise the CBN’s funding of the BDCs to $12bn per annum. This, they noted, would provide an avenue for the depletion of the nation’s foreign reserves.
The BDC operators’ association had clashed with the CBN over the introduction of the new guidelines.
The Governor of the CBN, Mr. Godwin Emefiele, had, however, said the implementation of the guidelines would help to stem the depletion of the country’s foreign reserves from unproductive transactions.
However, the Acting National President, Association of Bureau de Change Operators of Nigeria, Alhaji Aminu Gwadabe, argued that dollar sales to the BDCs were not responsible for the depletion of the external reserves, saying the amount sold to the sub-sector was negligible.
Stock Exchange wants oil & gas companies to explore capital market
The Nigerian Stock Exchange (NSE) has urged oil & gas companies to explore the opportunities which the capital market offers their businesses for fund.
This was the focus at recently organised quarterly CEO Dinner of the NSE which is part of its commitment to developing key sectors of
the nation’s economy.
This quarter’s dinner with the theme: “The Role of the Capital Market in Unlocking Value in the Oil and Gas Sector,” was sponsored by
Oando plc, FBN Capital, Stanbic IBTC Capital, Eterna plc and Seplat Petroleum Development Company plc.
Haruna Jalo-Waziri, executive director, business development, NSE reiterated at the event the commitment of the NSE to providing enabling environment for the development of all the sectors of the economy.
Also, Oscar Onyema, CEO, Nigerian Stock Exchange, noted that the major idea behind the CEO Dinner is to get policy makers, prospective companies, listed companies nd other stakeholders together to discuss issues that are common to a particular sector and see how such can be advocated for.
Onyema also highlighted the reasons why prospective companies should list on the NSE and the benefits they stand to gain.
Tinubu: In Oando, We are Pursuing Aggressive Upstream Plan
Group Managing Director/Chief Executive, Oando Plc, Mr Wale Tinubu, in this interview with Festus Akanbi, spoke on the company’s acquisition of Conocophillips Nigerian operations, the value to the company’s stakeholders and other industry issues
There was controversy generated due to an allegation that the Oando Plc and ConocoPhillips’ tried to arm-twist the federal government into signing off the $1.55 billion oil assets acquisition without due diligence on the transaction?
Oando has an excellent relationship with the Federal government of Nigeria. Due to the unprecedented size of the transaction and the vastness of the assets being acquired, the due diligence process took longer than usual. OER is a TSX listed company and as such it is required to update the market at every stage of the transaction; from signing the SPA to completing financing, to receiving the consent of the HMPR. Due to the reporting requirements, the Federal government felt this was pressure on them to approve. We have since received consent and maintain a sound relationship with the FGN. When we signed in December 2012 we asked for nine months to complete the deal, and we were supposed to close in September 2013.
Capital Market Recovery Sustainable, Say Operators
As the Nigerian capital market consolidates on its recovery, market players say the trend is sustainable provided on-going efforts to further deepen the market is equally sustained, reports Festus Akanbi
From all indications, the relative lull which has pervaded the Nigerian stock market will soon give way to increased activities as various sectors of the economy explore the market to raise additional capital.
Although, a number of companies cutting across various sectors of the economy have availed themselves of the opportunity inherent in the nation’s stock market in recent times, market watchers pointed out that those emerging challenges, especially in the banking industry, have necessitated a return to the capital market for more funds.
Rising Appetite by Banks
For instance, the Central Bank of Nigeria (CBN) had a fortnight ago announced a change in the way regulatory capital for banks would be calculated. In the new dispensation, regulatory risk reserves will be excluded from any assessment of capital adequacy. Tier 2 capital will be limited to 33.3 per cent of Tier 1 capital. Impaired loans and receivables will be deducted from capital. In addition to these announced measures, the capital adequacy ratio for systemically important banks has increased.
According to Managing Director, Head, Africa Macro Global Research, Standard Chartered Bank, Razia Khan, the overall effect of the new regulation will be to increase the capital-raising of banks.
Noting that Tier 2 debt issuance has already increased, with an increasing number of banks able to raise their USD funding, she said more foreign exchange-denominated issuance is still anticipated. “Moreover, the cap on Tier 2 capital will mean – potentially – more equity capital raising, encouraging more long-term, ‘stickier’ inflows,” she explained.
To show it has what it takes to accommodate the impending ‘siege’ by banks and other sector players, the Nigerian Stock Exchange was able to generate N365.87 billion which was the value of the capital raised by six companies from its primary market segment between January and July 2014.
Sale of Mainstreet, Enterprise Banks in Final Lap
AMCON sticks to September 15 date
As the Asset Management Corporation of Nigeria (AMCON) restated its resolve to unveil successful bidders for two of the bridged banks-Mainstreet and Enterprise Banks on September 15, financial analysts believed sticking to the timetable this time will add credibility to the entire process, and provide the needed template for the sale of Keystone Bank, the third bank in the category, reports Festus Akanbi
Business as usual
As at last Tuesday when our reporter visited No 51/55 Afribank Plaza, Broad Street headquarters of Mainstreet Bank Limited, it was business as usual for security personnel manning the lobby as well as a handful of the bank’s staff making their way into the 19-floor building.
Even transactions in the headquarters branch of the bank on Broad Street and few others in different locations in Lagos, as witnessed by the reporter, were devoid of anxiety and confusion usually associated with the operations of institutions ready to change ownership.