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Nigeria’s capacity to attract investment enormous: Hamda Ambah

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Nigeria is a massive country with a projected population of over 180 million people and diverse natural resources. The human capital is highly mobile and very enterprising, resilient and ready to take up challenges if given the slightest opportunity and the necessary infrastructure. However, the country is overwhelmed with infrastructure deficit which has slowed the developmental process over the years. Nowadays, these challenges are becoming good investment windows for ingenious and astute investors both from within and outside the country. Currently, a new set of corporate organizations are springing up to change the narrative and drive the much needed impetus to take the country and indeed the African continent to the high point of economic development. Some of these companies were recently recognized by the London Stock Exchange Group, and tagged; “Companies to inspire Africa 2019’’.

FSDH Merchant Bank Limited, a leading merchant bank in the country and one of the companies recognized by the LSEG, led by Mrs Hamda Ambah, is one of the companies making Nigeria proud and inspiring others to stand out. Commenting on the LSEG recognition the FSDH boss said it’s a vote of confidence in the bank’s operational model.

“I think what is important for us in FSDH is – because there are many banks, many financial institutions and ultimately we are all trying to deliver financial services to our clients – that there is need to differentiate ourselves. What sets us apart is the focus that we put on integrity and for us, integrity is not just about ‘not stealing’ (obviously integrity precludes us from stealing), it is also about being truthful to the client and putting the client first. What do I mean by that? If the clients ask for our advice on transactions which we consider not to be in their interest to do, even though there’s an opportunity to do something that can make us a lot of money at that time, we will tell them not to do the transactions. We may be a small firm, but we value relationships. Our customer outlook is fostering a relationship that will be retained for years, so we don’t have to try and collect every kobo today. If the relationship lasts, the value of a long term relationship will always be much more than a
transactional relationship. So for me it’s important for our client to trust us. In our environment, trust doesn’t come naturally, because people and situations will test you”, she said.

Over the years, the FSDH Group has become a financial services supermarket that delivers expert financial services in the Nigerian market to its select clientele, thereby assisting them to create long term sustainable wealth.

On innovations the bank has brought to fore, Mrs Ambah revealed that her firm structured its balance sheet differently in a manner that gives room for liquidity. This, she said, makes it easy for asset conversion to raise liquidity. She pointed out that “securitizing assets is very important because it makes the balance sheet liquid and enhances our ability to do more transactions. Then our assets and liability management has to be second to none. We are constantly watching the numbers, so we are not running undue risks. But ultimately success comes from satisfying our customers. We have a belief that it is the customers that guarantee our continued existence and ultimately, our view is that it’s not about getting deposits, it is finding out what your customers’ needs are, finding out what proposition or products you have to satisfy that need. Once you have the customer with you, the deposits will come”, she said reassuringly.

To her, Nigerians are very enterprising people blessed with ability to work and be diligent, stressing that this strong signal tells the world that Nigeria as a country is open for business.

“We have huge capacity; we are a country with huge potential also with our variety of cultures and natural resources. The one thing that is going for us is we have the population; depending on how we treat it, it should be strength but if we are not careful it could become a weakness” she pointed out.

Referencing MTN’s investment in Nigeria as evidence of the business opportunity offered by Nigeria, Mrs Ambah said, “I am very proud to recall that when they came to Nigeria, FSDH as a discount house then, was a member of the first syndicate that funded their start-up operations. When we reviewed the projections, they were amazing and let us give credit to MTN because when those licenses were auctioned at $285 million, it took a lot of guts to invest that kind of money. Other foreign companies dropped out because they had a negative perception of the country. Guess what?, in the first six months of operating in Nigeria, we asked them if they were having any problems; they said the problems they were having were not the ones we were anticipating. Their problem was that if they put a base station on ground today by 10am, by 2pm it is congested! So the equipment they thought would last them one year was overstretched within three months. The demand was far in excess of the most optimistic projections. That is th
e type of problem any business person would love to have. They have succeeded in making money but had to be bold to make that investment in the first place”, she said

FSDH Merchant Bank’s journey to becoming a merchant bank started when the Central Bank of Nigeria revoked all universal banking licenses in 2009 and created a new banking structure in the country. Under the new structure, banks were categorised as commercial or merchant banks. Prior to the creation of the new structure by the CBN, FSDH had – through its subsidiaries – developed the structures required to offer the full range of merchant banking services (to the extent permitted by regulation).

At FSDH, this change was recognised as an opportunity to expand the scope of operations while retaining a focus on the core activities in order to serve customers better. As a result, the company applied for a Merchant Banking license from the CBN which was granted in November, 2012. FSDH Merchant Bank Limited was one of the first merchant banks to be awarded a license in Nigeria in this new era.

“I think I’m very fortunate to have a very capable and professional team here. This refers to the staff and the board of directors. The tone that is set by the board of the directors is such that everyone is in support of the direction that has been determined and we are all working collectively to achieve the lofty aspirations of the bank.

Source: Vanguard

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Safaricom post-IPO investor wealth rises to Sh1.3trn peak

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The Safaricom stock hit a historic peak recently, closing at a high of Sh32.80 per share on Friday, thereby swelling investor wealth eightfold since its listing on June 9, 2008, inclusive of dividends.
Shareholder wealth as measured by market capitalisation has now touched Sh1.314 trillion, representing an increase of a whopping Sh1.114 trillion from the time the company listed 40 billion shares at Sh5 a share 11 and a half years ago.
When the company’s cumulative dividend pay-out totalling Sh301.2 billion over the 12-year period is added, Safaricom investors have enjoyed a return of 708 percent on initial investment of Sh200 billion. The dividend alone has been enough to allow investors to recoup their capital at listing and remain with an additional Sh101.2 billion balance.
The gains last week also pushed the company valuation as a share of the entire market to 50.4 percent and underlined its dominance on the stock market. Crossing the 50 percent threshold means Safaricom’s market worth is now more than the combined valuation of all the other 61 listed companies.
Analysts have attributed the rally in the last one year to sustained foreign demand, with the growth in dividends being a key factor in driving its attractiveness to investors who have few other options to make money in the market.
“The feel-good factor surrounding Safaricom has spilled over into the New Year, on bullish sentiments by foreign investors,” said Standard Investment Bank analysts in a note.
Last year, the stock led the market in net foreign inflows at Sh4.6 billion, which backed a share price gain of 42 percent to Sh31.50 between January and December 2019. During the year, foreign investors accounted for 75.4 percent of total traded volumes on the counter.
Since the beginning of this year, the stock has gained 4.1 percent. The company’s ability to continue to generate record profits — combined with a generous dividend policy that sees it pay out 80 percent of net earnings to shareholders — helped maintain demand through a bear run that gripped the NSE between 2015 and mid last year.
Safaricom has managed to make large capital investments in telecommunications infrastructure, introduce new services and pay incremental dividends with minimal debt and without seeking additional funding from shareholders.
The firm has therefore been able to build up cash reserves quickly, culminating in two special dividend pay-outs in the past four years.
In the year ended March 2019, the company declared a final dividend per share of Sh1.25 and an additional special distribution of Sh0.62 per share, bringing the total to Sh74.92 billion.
M-Pesa
It had also paid a special dividend of Sh0.68 per share during the financial year ending March 2017, on top of an ordinary dividend of Sh0.97 a share.
Driven by growth in M-Pesa revenue, the firm’s net profit for the year ending March 2019 rose by 14.7 percent to Sh63.4 billion.
In the six months to September 2019, its profits recorded a similar margin of growth — 14.4 percent to Sh35.65 billion — again on strong M-Pesa and mobile data revenue performance.
Egyptian investment firm EFG Hermes Holding said in their 2020 yearbook markets report that the rise in profitability and market capitalisation of Safaricom and large banks, while the rest of the market lags behind, will see their dominance become more entrenched at the NSE.
These are the stocks most likely to benefit from an expected return to the equities market by local institutional investors, who have in the past three years tended towards the fixed income segment. “Local institutions remained invested in fixed income for most of 2019, but the impact of the rate cap repeal on local rates and monetary easing could force more local institutional money back into equities in 2020,” said EFG Hermes in the report.
Safaricom’s influence on the market has, however, had the effect of skewing the performance trends of the main indices, depending on whether they are weighted on price or market capitalisation.
The market cap weighted NSE All Share Index is currently at a 16-month high of 171.36 points, reflecting the positive effect of the huge weight that Safaricom has on the index due to its valuation.
On the other hand, the price weighted NSE 20 share index, where blue chips with a high nominal price (such as BAT Kenya, Bamburi, EABL and Standard Chartered) carry more weight, has benefitted less from Safaricom’s gain.
It closed at 2,701 points on Friday, which is below its 2020 high of 2,707 points recorded on January 3.

Source:Business Daily

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Rolls-Royce announces highest annual sales of 5,152 cars in 2019

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Rolls-Royce Motor Cars has achieved the highest annual sales in 2019 with a global performance unequalled in the company’s 116-year history, the luxury car company announced recently.
According to Torsten Müller-Ötvös, Chief Executive Officer, Rolls-Royce Motor Cars, a total of 5,152 cars were delivered last year to customers in over 50 countries, an increase of 25% on the previous high set in 2018.
With these historic results, Rolls-Royce continues to make a meaningful contribution to the overall performance of its shareholder, BMW Group.
Rolls-Royce sells 5,152 cars in 2019, records best-ever sales in 116-year history
“This performance is an altogether different magnitude to any previous year’s sales success. While we celebrate these remarkable results, we are conscious of our key promise to our customers, to keep our brand rare and exclusive.
“We are pleased and proud to have delivered a growth of 25% in 2019. Worldwide demand last year for our Cullinan SUV has driven this success and is expected to stabilise in 2020. It is a ringing testament to the quality and integrity of our products, the faith and passion of our customers and, above all, the skill. The dedication and determination of our exceptional team at the Home of Rolls-Royce at Goodwood and around the world is part of our success,” Müller-Ötvös said.
Meanwhile, the car company disclosed that it recorded growth in sales across all regions during the year, which was driven by strong customer demand for all Rolls Royce models.
However, North America retained top status with one-third of the car maker’s global sales followed by China and Europe.
Rolls-Royce Motor Cars, through a global network of 135 dealerships sold in more than 50 countries, and as part of its long-term commitment to sustainable growth, the company announced two new dealerships Rolls-Royce Motor Cars Brisbane and Rolls-Royce Motor Cars Shanghai Pudong.
Rolls-Royce Motor Cars is expected to launch later in the year a flagship dealership in London, which would double the size of the previous location.

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Hyundai plans to invest $87 billion into producing 44 new electric vehicles

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Hyundai Motor Group is set to invest $87 billion in the production of electric vehicles and autonomous driving. This was announced by the company’s Executive Vice Chairman, Chung Eui-sun.
The $87 billion investment would be put to work over the course of 5 years in future mobility technologies like the planned production of new electric models.
Speaking during the Hyundai new year ceremony held at the company’s head office in Seoul, Eui-sun announced that the company plans to expand its electric line-up to 44 models, including 23 battery EVs and 14 hybrids, and two fuel-cell EVs. He said the first new battery EV would be launched next year.
He further said, “To consolidate our leadership in vehicle electrification, we plan to operate 44 electrified models by 2025, including 11 dedicated battery EV models, by bolstering the development of EV platforms and core components.
“In particular, in our fuel-cell electric vehicle business, where we boast the world’s top technological competitiveness, we will hit our stride by providing fuel-cell systems to customers not only in the automotive industry but also in other sectors”.
Eui-sun further revealed that the company is also big on self-driving commercialisation as it aims to develop an autonomous driving platform by 2022 and to start operating self-driving vehicles in 2023 before commercial production the next year.
As part of its self-driving commercialisation plan, Hyundai invested $2 billion last year into a joint venture with Ireland-based autonomous vehicle startup Aptiv.

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