Business
MTN Nigeria takes control of MoMo PSB, buys out minority shareholder
MTN Nigeria takes control of MoMo PSB, buys out minority shareholder
MTN Nigeria has bought out the minority shareholder in MoMo Payment Service Bank (MoMo PSB) for N6.95 billion.
According to a corporate disclosure on the NGX website, MTN Nigeria has completed the acquisition of the 7.17% stake in MoMo PSB held by Acxani Capital, thus making MoMo PSB a wholly-owned subsidiary of MTN Nigeria.
MoMo PSB is the fintech solution of MTN Nigeria which was licensed in 2022 by the CBN. MTN Nigeria had an 80% stake in the company, while Acxani Capital held a 20% stake.
Acxani proposed the disposal of their 20% stake in MoMo in May 2024, however, the stake was diluted to 7.17%.
MTN Nigeria and Acxani Capital came to a N6.95 billion agreement for the 7.17% stake. The purchase led to a N12.97 billion decline in the MTN’s “Other Reserves”, as the group spent N16.35 billion on the acquisition of the minority stake, while it acquired assets worth N3.38 billion from Acxani Capital.
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The N16.35 billion spent as purchase consideration included the N6.95 billion paid to Acxani and N9.4 billion spent as investment on MoMo.
At the end of the second quarter of 2024, it was reported that MoMo PSB’s active wallet hit 5.5 million, reflecting an increase of 701,000 from the first quarter.
In the first half of 2024, MoMo PSB recorded a revenue of N48.6 billion, marking an 11% growth from the N43.6 billion revenue recorded in H1 2023. MoMo’s growth was driven majorly by Xtratime, the airtime lending service.
The company’s agents also increased by about 498,000 to 239,000 within the half-year, while transaction volume increased by 33.4% year-on-year within the half-year.
In H1 2024, the cash held for MoMo PSB customers declined by 72% to N2.15 billion, from N7.6 billion as of FYE 2023. The company has a liability of about N26.6 billion to MTN Nigeria as of H1 2024, while it paid N11.2 billion to the group during the half year.
MTN Nigeria takes control of MoMo PSB, buys out minority shareholder
Business
Fresh trouble over supply volume in Dangote refinery petrol
Fresh trouble over supply volume in Dangote refinery petrol
LAGOS — More controversy has emerged in the execution of a sale-purchase deal on premium motor spirit, otherwise known as petrol, between the Nigerian National Petroleum Company Limited, NNPCL, and Dangote Refinery.
NNPCL last weekend said Dangote could only deliver 16.8 million litres out of the 25 million litres it initially agreed with NNPC.
A source at the NNPCL also told Vanguard, yesterday that the refinery is struggling to deliver the 16.8 million litres it promised.
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But with the latest delivery figure it disclosed, Dangote must have significantly surpassed its promised delivery as well as the national demand put at over 40 million litres per day.
This also means that Dangote can make further petrol importation unnecessary.
But against the backdrop of this latest development, Vanguard learned that importation by NNPCL may have intensified with several consignments, totalling over 135 million litres, within three weeks from September 27, 2024, with the latest import arriving Friday.
This also implies a sudden excess supply of petrol barely a few days after the country was suffocated by acute shortage of the product, resulting in a sharp rise in the price.
Speaking to Vanguard on the development, the Group Chief Branding and Communications Officer of Dangote Refinery, Anthony Chiejina, stated: “We have already loaded 111 million litres of petrol and the exercise is ongoing.
“We are refining and have no reason not to load. So, loading is ongoing and we would continue to provide the product to the market.”
Fresh trouble over supply volume in Dangote refinery petrol
Business
$900m FG bond: United Capital leads with 180% subscription
$900m FG bond: United Capital leads with 180% subscription
United Capital Group has successfully led the issuance of Nigeria’s first-ever Domestic FGN US Dollar Bond, securing more than $900 million in funding with over 180 per cent subscription. The bond program, with a 9.75 per cent yield, attracted significant interest from local and international investors, including Nigerians in the diaspora, institutional investors, and non-resident Nigerians, highlighting confidence in Nigeria’s economic growth potential and financial markets.
The bond will be listed on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange and proceeds from the issuance will be used to fund key infrastructure projects in critical sectors of the economy.
Commenting on the achievement, Chief Executive Officer of United Capital Group, Peter Ashade, said, “The successful issuance of Nigeria’s inaugural Domestic FGN US Dollar bond is a significant milestone for both the country and United Capital. This transaction aligns perfectly with our vision of transforming the African financial landscape. By providing access to innovative investment opportunities, we are empowering investors and contributing to Nigeria’s economic growth.”
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On his part, the Managing Director of Investment Banking at United Capital Gbadebo Adenrele, described the transaction as a “landmark moment for Nigeria’s capital market.” He added, “As a pioneer in this class of transactions, United Capital has laid the foundation for more significant capital raises by the Nigerian Government, other African sovereigns, and major corporate issuers.”
United Capital was the Lead Issuing House and Coordinator for the transaction, with Africa Finance Corporation serving as the Global Coordinator. Other firms involved include Meristem Capital, Stanbic IBTC Capital, Vetiva Advisory, and several other financial institutions and legal advisers.
This bond issuance reinforces United Capital’s position as a leading player in Africa’s financial markets, following recent successes like the listing of Transcorp Power on the Nigerian Exchange Limited and the issuance of Sierra Leone’s first local currency corporate bond.
$900m FG bond: United Capital leads with 180% subscription
Business
Naira loses N100 to US dollar at official market
Naira loses N100 to US dollar at official market
The Naira lost more than N100 against the U.S. dollar at the official window, despite a slower headline inflation rate in August.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) highlighted that the local currency was sold at N1,656/$1, higher than the N1,546/$1 recorded on Monday.
However, in the parallel market, the Naira appreciated by N5, trading at N1,660/$1 compared to the previous rate of N1,665/$1.
This marks the second consecutive month of lower headline inflation, attributed to reduced food prices during the harvest season.
According to the Nigerian Bureau of Statistics (NBS), headline inflation for August was 32.15%, down from 33.40% in July. Food inflation also decelerated, reaching 37.52% compared to 39.53% in July 2024.
U.S. Dollar Index Gains Momentum Ahead of Fed Meeting
On Tuesday, the U.S. dollar appreciated against most currencies, including the Naira, as higher-than-expected U.S. retail sales data was released, raising the possibility of a less aggressive Federal Reserve.
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The U.S. Dollar Index, which tracks the dollar against a basket of six currencies, showed a slight increase, recovering from earlier lows this year. While some market pricing suggests a 50-basis point rate cut, most analysts predict a more modest 25-basis point cut.
The U.S. labor market continues to strengthen, suggesting that further relaxation of monetary policy could support economic growth. However, this high optimism may indicate that the Federal Reserve might continue raising interest rates, albeit at a slower pace.
The U.S. Commerce Department reported a modest 0.1% rise in retail sales in August, fueling hopes that the economy has stabilized through much of the third quarter.
Investors are now awaiting the Federal Reserve’s decision on interest rates, expected at the conclusion of its policy meeting later today. The last time the Fed cut rates was in response to the COVID-19 pandemic in March 2020.
While Nigeria is expected to see foreign capital inflows later in the year, it is unlikely the Federal Reserve will make aggressive rate cuts, given the current market conditions.
The dollar index, which measures the dollar against major currencies like the yen and euro, increased by 0.199% to 100.90 on Tuesday.
Fed funds futures currently reflect a 63% chance of a 50-basis point rate cut, up from 30% a week ago, while the likelihood of a 25-basis point cut is at 37%. These probabilities have shifted after reports reignited discussions of potential aggressive easing measures.
Other U.S. economic data released on Wednesday suggest that the Federal Reserve may find it challenging to implement aggressive rate cuts. U.S. business inventories increased by 0.3% in July, and factory production rebounded in August.
Present fundamentals indicate that the market is already pricing in some rate cuts over the next several months, though some analysts warn that the market may be moving ahead of itself.
Naira loses N100 to US dollar at official market
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