Atta Africa Financial Update

Executive summary for the week of 31-May-16 to 07-Jun-16 (week 23)
SEC and Pencom want more of US$27 billion Nigerian pension fund in capital market.

Securities and Exchange Commission, Pension Commission and industry operators last week agreed Nigeria must begin to invest more of its N5.4 trillion (US$27 billion) pension asset in the capital market to harness domestic potential for growth.

In the booming pension fund sector, there are concerns about constraints on the capital market’s ability to attract additional pension fund asset allocations due mainly to lack instruments that could be invested in.

Data from PenCom shows that Nigerian PFAs invest only 8.16% of their assets in the domestic listed equities market and 1.24% of their assets in foreign equities, the Director-General expressed confidence that all funds mobilised under the contributory pension scheme when invested by the PFAs is guaranteed with the objectives of safety and maintenance of fair returns on the amount invested.

Pencom hopes to unlock up to N1 trillion over the next two to three years to deepen the financial system, create employment and boost market knowledge.

Fact: Aardvark is Afrikaans for earth pig.

Central Bank of Kenya rejects takeover bids by seven suitors of collapsed Dubai Bank

  • Failure to disclose ownership and source of funds has seen the banking industry regulator turn down seven proposals by foreign and local firms that had expressed interest to inject capital and revive the collapsed Dubai Bank
  • The High Court last November ordered the industry regulator to consider proposals by investors to rescue the lender, a position that was upheld by the Court of Appeal in March

Interest in the blue Eagle soars

  • Barclays reportedly received more than a 100 bids for its 12.2 per cent stake in Barclays Africa Group Limited (BAGL) according to David Hodnett, a deputy CEO of Barclays Kenya
  • The full 62.3 per cent stake in BAGL is on the block to be sold over thr next two to three years. 12.2 per cent has already gone to South Africa’s Public Investment Corp and there is now slightly over 50 per cent that is still to be sold
  • Why is the parent selling? At least one reason will be in order to comply with the recent stringent legal requirements in the UK where the company was to pay more levies and meet increased capital adequacy levels

Bank of Ghana outlines new forex rules

  • The Bank of Ghana has introduced new foreign exchange rules that will from July 1 this year require exporters to repatriate all export proceeds to the country, altering several forex requirements of the central bank
  • The measure follows earlier directives last month for mining companies to surrender all their foreign exchange directly to the banks, which hitherto was surrendered to the central bank
  • By these new rules, the 60-day mandatory repatriation of export proceeds will no longer apply and the repatriation period of export proceeds will now be aligned with the terms agreed between trading parties