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BusinessDay 12 Apr 2018

32 BUSINESS DAY Thursday

32 BUSINESS DAY Thursday 12 April 2018 GARDEN CITY BUSINESS DIGEST Groups lie in wait for FG’s new oil & gas policies •Point out areas of attention to government •Prepare action plan to win more deals for communities and citizens IGNATIUS CHUKWU Civil Society Organisations (CSOs), oil-based trade unions, and media groups have formed an alliance to press for proper implementation of the new oil and gas policies approved by the Federal Government in June 2017. The alliance emerged in Port Harcourt after two days of brainstorming to understand the pitfalls in the two bulky documents at the strategic workshop sponsored by FOSTER (Facilitator for Oil Sector Transformation). The experts numbering over 24 picked out major policy gaps especially in the area of gas pricing and infrastructure and resolved to press for stricter implementation and drawing FG’s attention to areas that needed fine-tuning. The new alliance worked out ways to drive an activist crusade to make a difference henceforth. The workshop was convened by Adejumobi Fashola and Louis Brown Ogbeifun (PhD) from AfriTAL. Experts came from organizations such as Foundation for Environmental Rights, Women Environmental Programme, Divine Youth Initiative, NUPENG, PENGASSAN, KIF, NAGGOND, GASEN, etc. It was recalled that in June and July 2017, the Federal Executive Council approved the National Gas Policy and the National Petroleum Policy (NPP) which incorporated some broad-based economic growth and efficiency considerations. In addition, the two chambers of the National Assembly have passed the Petroleum Industry Governance Bill (PIGB). It is also anticipated that the fiscal framework for the industry is being contemplated in a new bill expected soon. It was agreed that to successfully bring about the policies into laws and subsequently implement them, CSOs have a vital role to play in the natural resource governance process. It was however realized that the capacity for CSOs to influence policy enunciation, formulation and implementation in a highly technical area such as oil and gas also depends on their understanding of the key technical issues within the sector. The participants were drawn from various advocacy backgrounds including the Media, Labour Unions and Non Governmental Organizations. They were split into two groups to brainstorm, tease out advocacy issues and engagement strategies to accomplish the tasks assigned. The two groups are: Oil Policy Group and the Gas Policy Group. The Oil Policy Group came up with mission strategies to advocate for the enthronement of an Oil Sector governed in a way for the benefit of the generality of Nigerians. Its key objectives include improved corporate relations between host communities and oils firms. The deliverable is to get every oil operator within the host community to design an inclusive business model. Ibe Kachukwu They believe that peace in the oil communities would create stability in the industry for maximum profitability. The activist group outlined activities to carry out in order to meet the objectives as advocacy to Ministry of Petroleum Resources (MoPR) for the renegotiation of new terms in the industry; to advocate for competitive, transparent and accountable contractual systems; set five months advocacy timeline to achieve group roadmap. Others include to ensure that the Ministry of Petroleum Resources is developing a communication strategy with the communities; engage with the National Assembly to pass the Petroleum Host community Bill; visit the community; engage the media; facilitate consultative meetings between the communities and the IOCs; examine contractual terms for disclosures that would allow stakeholders ask relevant accountable questions. These are aimed at pressing for fiscal regime that is progressive, transparent and accountable to encourage investors’ interest; ensure royalty is paid on offshore operations; press for contractual processes are open and competitive because it is a major area that corruption thrives. The group frowned at policy inconsistencies and somersaults, demanding for advocacy for strong institutions, demand for the passage of the new policies into laws, advocate for the industry to be made to run commercially and professionally, and press for passage of the Petroleum Industry Administrative Bill (PIAB). The group saw the need for citizens’ ability to demand accountability, and that there should be accountability scorecards by the communities over government actions. They said creating a scoring system for what the government has done from time to time could do this. “There would be capacity building for sensitization to enable the citizens to be effective in demanding for accountability. We need to set up community accountability networks”. Highlights of the Gas Policy Group showed that there is no serious or bankable reference to host communities. “Therefore, there is the need to identify Community liaisons that should be properly trained for the assigned tasks.” They observed that there is need for transparency in the Gas Flare policy to, for instance, show who is buying and where? “There is need for infrastructure mix and who should take responsibility for infrastructure. Leaving it to investors would add so many burdens on them.” On Gas Flaring, they observed that the policy aimed at ending gas flares should not be profit-based, but rather focused on job creation and acting as a catalyst for industrial growth. “It should not just be to pay for gas flared. Government can give five-year tax-free incentive to gas-ending investments. Gas is not as innocent as it looks. The gas policy must demand for plan for disposing toxicity waste to the end.” They noted that gas flare-out incentives were not clearly outlined in the new gas policy and that there was need for guarantees from the government on amortization on local currency fluctuations. “There is need for gender-inclusion without the lowering of standards.” On pricing, it was noted that there is the need to do cost-reflection in Naira instead of only in US Dollar. “At the moment, what goes to gas suppliers is only 30 per cent of what the DISCOs generated. There is need for risk guarantee to gas suppliers. There are lots of redundant infrastructural facilities in the country whereas there is the existing Trans-West Africa pipelines which should be maximized to reduce cost. There is no provision for funding and PPP clauses.” The group noted that it was absence of clear national policy that saw to the $2Bn spent in laying pipes to Abuja/ Kaduna/Kano where there are no industries for the uptakes, whereas there is a shortage of gas in the South with so many industries. “There is a ‘silos’ mentality instead of leveraging industrial assets. There should be proper identification of stakeholders and allies. There is however, the need to know opponents that could be turned into allies.” Actions plans lined up by the CSOs include creating massive awareness on the new gas policy and review competences of those expected to operate the campaigns. Is Ifeanyi Ararume the strongest guber force for Imo 2019? Port Harcourt by Boat With IGNATIUS CHUKWU Ifeanyi Ararume buried his father inlaw in Amike area of Nkwerre last two weekends but it turned into a huge political rally. The crowd was simply too large. Most bigwigs in Imo politics struggled fuse to return it. So it was that the PDP had primaries just a day to submission deadline to INEC. It ended in a deadlock with Ararume. Udenwa and his party decided to ‘dash; the slot to Mike Ugwu, former minister of Industries believed to be Obj’s man, contrary to the laws of the PDP. Udenwa gave to the loser and Ararume went from court to court until the Supreme Court ordered it back to Ararume. This was in the era of great impunity of the powerdrunk ruling party where Obj was emperor. Udenwa struck by to put up presence there. Emmanuel Iwuanyanwu, was present and this spoke volumes. Achike Udenwa, who ensured Ararume never became governor in 2007, was announced with huge reaction by the crowd. Udenwa was an important factor in how Ararume and the PDP gave their banana to the ‘monkey’ and have never been able to retrieve it to this day. Those who give their bananas to monkeys for safekeeping usually find out that the monkey would climb to the top of trees and removing the PDP machinery to the highest buyer, Ikedi Ohakim, then of PPA. Their belief was that the ticket would return soon. To their surprise, the ticket has never come back but poverty has struck the party for years. From Ohakim, Rochas Okorocha stormed the state and took it away to APC. Let’s forget that Ararume had to support Rochas against Emeka Ihedioha of PDP in 2015, thus also helping to push the banana further into the monkey kingdom. Now, all hands seem to be on deck to win back the lost paradise. If Ararume expected whatever deal he must have had with the governor to work, he may be discovering that he needs to fight Okorocha to get it back because the governor seems bent on handing it back to his family through his son in law. It seems all the losers now want to unite at last. This must explain the loud presence of Ihedioha at Ararume’s home It seems the politicians are beginning to realize that one per cent of something is better than 100 per cent of nothing. The presence of Madumere, the deputy governor to Okorocha, who thought he was the chosen one but is just finding out the truth, spelt volumes too. The biggest presence but not for Imo politics was that of the Alabo from Rivers State, Tonye Graham-Douglas, many times minister and the biggest influence in politics in the south-south at the moment, with his large entourage of chiefs and titled men and top women. It was as if Ararume is the new force and the rallying force in Imo if power must leave

Thursday 12 April 2018 C002D5556 BUSINESS DAY 33 Live @ The Stock Exchange Top Gainers/Losers as at Wednesday 11 April 2018 Market Statistics as at Wednesday 11 April 2018 GAINERS Company Opening Closing Change BETAGLAS N75.7 N71.95 -3.75 FO N38.6 N37.5 -1.1 PZ N23.45 N23 -0.45 REDSTAREX N6 N5.7 -0.3 DANGFLOUR N13.45 N13.15 -0.3 LOSERS Company Opening Closing Change MOBIL N185 N183 -2 DANGFLOUR N15.2 N13.75 -1.45 ETI N17 N16.35 -0.65 FLOURMILL N37.3 N36.8 -0.5 NASCON N21.5 N21 -0.5 ASI (Points) 40,846.24 DEALS (Numbers) 4,462.00 VOLUME (Numbers) 367,215,254.00 VALUE (N billion) 5.328 MARKET CAP (N Trn 14.754 Stock market gains N125bn as investors raise bet on Mobil, Dangote Cement, others Iheanyi Nwachukwu The Nigerian stock market advanced by N125billion on Wednesday as investors raised wagers on equities of Mobil Oil Nigeria Plc, Dangote Cement Plc, International Breweries Plc, Lafarge Africa Plc, and Unilever Nigeria Plc. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.86percent, while the Year-to-Date (Ytd) return stood at 6.81percent. After trading on April 11, 2018, twenty-seven (27) stocks gained against 19 losers. Mobil Oil Nigeria Plc led the gainers table after its share price increased from N178.5 to N192, up by N13.5 or 7.56percent; Dangote Cement Plc rose from N255 to N260, up by N5 or 1.96percent; while International Breweries Plc advanced from N51.5 to N54, up by N2.5 or 4.85percent. The share price of Beta Glass Plc declined most, from N75.7 to N71.95, down by N3.75 or 4.95percent; Forte Oil Plc followed after its share price declined from N38.6 to N37.5, down by N1.1 or 2.85percent; while PZ Cussons Plc declined from N23.45 to N23, down by 45kobo or 1.92percent. The All Share Index (ASI) closed at 40,846.24 points as against the preceding day close of 40,499.04 points while Market Capitalisation closed at N14.754 trillion against preceding day close of N14.629 trillion. The volume of stocks traded decreased by 5.42percent, from 388.27million to 367.21million, while the total value of stocks traded increased by 26.59percent, from N4.209 billion to N5.328 billion in 4,462 deals. Zenith Bank Plc, Skye Bank Plc, Access Bank Plc, GTBank Plc, and UBA Plc were actively traded stocks on the Nigerian bourse on Wednesday. The Financial Services sector led the activity chart with 307.43 million shares exchanged for N4.45 billion; followed by Conglomerates with 16.83million shares traded for N41billion. CPMI, IOSCO issue guidance on supervisory stress testing of central counterparties The Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO) on Tuesday published the framework for supervisory stress testing of central counterparties (CCPs). The framework provides authorities with guidance to support their design and implementation of supervisory stress tests for CCPs. In April 2015, the G20 finance ministers and central bank Governors asked the Financial Stability Board to work with the CPMI, IOSCO and the Basel Committee on Banking Supervision to develop a workplan for identifying and addressing gaps and potential financial stability risks relating to CCPs that are systemic across multiple jurisdictions and for enhancing their resolvability (the joint CCP workplan). Since then, the committees have published guidance to enhance CCPs’ resilience, recovery and resolvability. The report published today addresses another key aspect of the joint CCP workplan. The CCP supervisory stress testing framework is designed to support tests conducted by one or more authorities that examine the potential macro-level impact of a common stress event affecting multiple CCPs. Among other things, such supervisory stress tests could help authorities better understand the scope and magnitude of the interdependencies between markets, CCPs and other entities such as participants, liquidity providers and custodians. This type of supervisory stress test is different from, yet may complement, other stress testing activities conducted by authorities seeking to evaluate the resilience of individual CCPs. In June 2017, the CPMI and IOSCO published the Consultative report: Framework for supervisory stress testing of central counterparties (CCPs). During the consultation period, they held an industry workshop with representatives from various market sectors and authorities from different jurisdictions. AIICO Insurance gross premium up 19% to N32.1bn …set to pay 0.5kobo dividend Modestus Anaesoronye Underwriting firm, AIICO Insurance Plc has reported a gross premium income of N32.1 billion for the financial year ended December 31, 2017, a growth of 19 percent from N27.96 billion in 2016. Its life business grew 15 percent from N18.8 billion to N21.6 billion in 2017, and was driven by the increased popularity of her traditional life products, while the general business also grew from N7.6 billion in 2016 to N8.7 billion in 2017, a 15 percent increase, which according to the company was as result of its improved re- lationship with agents, brokers and various intermediaries during the year under review. Speaking on the Company Financial Management Commentary ‘Facts Behind The Figure’ for 2017, the Managing Director/CEO, Edwin Igbiti said “We experienced significant growth as a company in 2017” “We had to significantly increase our capacity and improve our processes to meet up with customer demands. Over the next few years, we have plans to grow our businesses, and this means we must invest in technology and people to ensure our processes are more efficient to increase customer service levels.” During the year under review, AIICO Insurance Plc paid claims amounting to N23.3 billion, an increase of 55 percent from N14.9 billion in 2016. This according to the Company was due largely to the increase in benefits payments in the life business, which rose from N6.1 billion or 53 percent to N17.6 billion in 2017. “Our life business is dominated by contracts with our clients that stipulate payouts at pre-determined times. It is therefore logical that as the business grows, payouts grow accordingly. Critical activities are cash and investment management, and these we keep a very close eye on.” Claims in the non-life and health management also increased by N1.1 billion each. The Company also grew its investment and other incomes by 92 percent in 2017 to N15.1 billion from N7.8 billion in 2016. “We continue to pursue an active investment strategy to take advantage of market conditions and improve our investment performance. The relatively lowinterest rate environment provided an opportunity for the company to make some gains through trading. This was responsible for net realized gains of N5.3 billion compared to N336 million in 2016.” Meanwhile, profits after tax declined to N1.3 billion from N10.2 billion in 2016, while total comprehensive income, however increased to a profit of N2.4 billion from a loss of N655 million in 2016., presenting shareholders opportunity for 0.5kobo dividend as against 0.2 kobo divided the past year. According to the management, “The company’s financial position remains robust, remains an area of focus for the company and is an indicator of our capacity and strength. Assets remain adequately matched to liabilities and legacy concerns have been appropriately addressed. Value has been created over the last 5 years”, the Company stated. Total assets grew 19 percent to N92 billion in 2017 from N77.5 billion in 2016, while shareholders’ equity also grew 25 percent to N10.9 billion in 2017 from N8.7 billion in 2016.

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