Forex: Is a further devaluation imminent?

Yesterday, Bloomberg quoted Mr. Ugochukwu Okoroafor, the Special Adviser, Media, to the CBN Governor as saying, “We haven’t seen any reason so far to institute a change in the foreign-exchange policies, the preponderance of foreign currency in the country has led to speculative attacks on the naira. People who have done it in the hope we’ll devalue will be hurt.” This comment comes on the back of more recent calls for the devaluation of the naira as countries like China, Kazakhstan and Vietnam devalued their respective currencies. Read more

Access Bank announces result of rights issue

Yesterday, Access Bank (Buy, target price: N7.69/s, current price: N4.20/s) announced that its one-for-three rights issue concluded early this year, was 79.3% subscribed, leading to an estimated shortfall of N10.9bn (US$54.6m). Following a tier 2 capital raise through its $400.0m seven year debt issue last year, the bank planned to create additional capital buffers through N52.6bn (US$263.2m) rights offering.

At N6.90/s, the rights were offered at a 16.8% premium to the bank’s average share price of N5.9/s during the issue period, and we believe this might have been a disincentive for taking up rights.

The bank reported CAR of 19.6% for Q1 2015, which is comfortably above the regulatory requirement of 16.0%.

President Buhari sacks AMCON Executive

President Muhammadu Buhari has approved the dissolution of the executive management team of the Assets Management Corporation of Nigeria (AMCON) and approved the appointment of Ahmed Lawan Kuru as the new managing director of the corporation. Ahmed Kuru takes over from Mr Chike Obi who has been the Managing Director since the establishment of AMCON. Kola Ayeye, Eberechukwu Uneze and Aminu Ismail were also named as executive directors.

AMCON was established in 2010 to buy the non-performing loans of Nigerian banks with a view to stabilising the banking system. The corporation was governed by Chike Obi, and three Executive Directors – Mr Hewett Adegboyega Benson, Muhammed Abbass Jega and Mofoluke Benedicta Dosunmu.

Ahmed Lawan Kuru who was the former Managing Director of Enterprise Bank Plc (acquired by Heritage Bank in 2014), was also a director in other financial institutions like Keystone bank and Express Discount Limited.

No reasons have been proffered for the dissolution of the executive management team of AMCON. We are of the view that this may signal the possibility of more dissolution of boards of critical parastatals in the financial sector.