Brand, Nation and Truth: The Parable of the Apple

Good people, Great nation is the most generic description for a nation that anyone can imagine! It fails the crucial test of differentiation! It is the equivalent of what we refer to as communal properties. Every nation has a right to make that claim.

Continues here

Intercontinental Bank leads in Standard & Poor’s corporate Nigeria rating

Standard & Poor’s (S&P) world’s leading international credit risk rating agency, has assigned ngA+/ngA-1 long and short term Nigeria national scale ratings to Intercontinental Bank Plc, the first to be assigned to any corporate organization operating in Nigeria.

These ratings according to the statement by S & P in London last weekend, affirm Intercontinental Bank’s creditworthiness despite operating in an environment characterized by high economic risks.

S & P had earlier pronounced the bank’s international rating as BB-, which is the highest for any Nigerian bank just as Nigeria’s sovereign rating is also capped at BB-.

According to the statement, Intercontinental Bank’s funding and liquidity profile is robust with a large liquid asset cushion. The loan-to-deposit ratio measured 60% at August 31, 2008 and cash and money market instruments accounted for 40% of total assets.

S&P’s credit analyst, Mathew Pirnie, said “Intercontinental Bank is a Tier 1 Nigerian bank with good presence in the high-end corporate, commercial, public and retail sectors. It was the first bank to reach the Nigerian Naira 1 trillion deposit mark, due to a strong retail deposit portfolio”.

Although the analyst raised concerns about Nigerian economy, he was of the view that Intercontinental Bank’s good capital position, strong market position, and a robust funding and liquidity profile, will mitigate the concerns.

Fitch Ratings had earlier affirmed Intercontinental Bank Plc’s National Long-term ratings at A+. The interpretation according to analysts is that the bank is a low risk financial institution. The agency also affirmed the bank’s international rating at B+, which is the highest for any Nigerian bank as at date.

Intercontinental Bank was declared “Bank of the Year”, recently in London. The Bank emerged tops after rigorous analysis of its financial and business profile along with other banks in Nigeria.

The award is a confirmation of a similar recognition by other reputable international organizations such as African Banker Magazine, and the World Bank/International Monetary Fund Annual Daily which declared Intercontinental Bank African Bank of the Year and Financial Brand of the year respectively, at the spring meeting of the World Bank/IMF in Washington DC, USA

The bank has evolved into one of the largest and most diversified financial services institutions in Nigeria. It also boasts of over 300 branch network spread across the country, linked by cutting-edge IT infrastructure.

Submitted by Emeka Anaeto, Head, Corporate Communication, Intercontinental Bank

NIGERIAN FOREIGN BASED PROFESSIONALS RUSH BACK HOME FOR JOBS

At about this time last year, the average American based Nigerian professional would not give much thought to a proposition for him to come back to Nigeria and pick up a job. The scenario has, however, changed over the last six months. With massive jobs losses arising from an inclement economic storm that suddenly came upon countries in the highest hierarchy of development, foreign based Nigerian professionals are now becoming more receptive to overtures made to them by Nigerian companies to come back home to work.

The option to come back home has actually been embraced by these foreign based Nigerian that have become victims of massive layoffs in the United States of America especially or are being threatened to be laid off.

The job loss statistics don’t seem to favour Nigerians, the Labour Department had announced that this past October was the tenth straight month of job losses with another 240,000 lost in the preceding month.

Companies that once were the stars of the business firmament were losing their shines and declaring losses. Citigroup announced last month it cut 11,000 jobs in the third quarter, bringing the total number of job cuts in 2008 to 23,000. According to Bloomberg, Citigroup aims to shrink its workforce to about 290,000 employees by next year from 352,000 as of Sept. 30.

Fidelity and Mattel have also announced 1,300 and 1,000 job cuts, respectively just as Ford had said it would cut its North American salaried workforce by an additional 10 percent. General Motors Corp., has also reported big losses and figured to be announcing even more job cuts before long.

Regulators, meanwhile, shut down Houston-based Franklin Bank and Security Pacific Bank in Los Angeles, bringing the number of failures of federally insured banks this year to 19. DHL has also said it would significantly reduce its air and ground operations in the United States and cut 9,500 jobs within the country

Still, the Labor Department’s unemployment report provided stark evidence that the economy’s health was deteriorating at an alarmingly rapid pace. The jobless rate was 4.8 percent just one year ago.

About 10.1 million people were unemployed in October, the most since the fall of 1983. With employers slashing jobs every month so far this year, some 1.2 million positions have disappeared, over half in the past three months alone. Factories, including auto makers, construction companies, especially home builders, retailers, mortgage bankers, securities firms, hotels and motels and educational services, all cut jobs. Private companies cut 263,000 jobs, the most since the country was beginning to emerge from the 2001 recession. It marked the 11th straight month of such reductions.

All the economy’s woes — a housing collapse, mounting foreclosures, hard-to-get credit and financial market may have set a new tone for Nigeria’s gain as some banks and other corporate organizations feverishly woo the foreign based Nigerian professionals.

Just last week, one of the many foreign based that are taking positions in Nigerian banks and other companies resumed at a new generation bank head office in Lagos. He had opted out of Arthur Anderson’s Illinois office for the new job in Nigeria. His reasoning is that business was shrinking for the audit practice of the company because most of the companies on the audit list of Arthur Anderson were more or less folding up.

Another returnee told FORTUNE&CLASS that there is a resurgence of hope in the economic development of Nigeria in the rank and file of Nigerian communities abroad. For this returnee, like another one that spoke with FORTUNE&CLASS the remuneration offered foreign based Nigerian professional to move back to the country are quite better than what their total package in the USA for instance.

Another attraction for Nigerian based foreign professional to start heading back home is the contemplation of his freedom to interact with his or her kith and kinsmen back home in Nigeria.

Obama will be a good president

Obama: Head or tail, history made

Away from our beleaguered stock market and the yet roiling global financial markets. At least, a little bit of sanity is returning to the Nigerian stock market though not by way of positive market activities, thankfully, the management of the Nigerian Stock Market has finally discerned the wisdom that informs free market activities by removing the one percent down limit on stocks price depreciation. Good enough, prices are stumbling; curiously, most hurt in the crashing prices are stocks of banks and insurance companies. The manufacturing sector is curiously holding steady, prices of UAC Nigeria, UAC Property and even those in the health sector; especially the pharmaceuticals have managed to hold their own at relative sliding rate. Does this tell a story?

 

I think it does, the power of any economy is a function of its real and active sector. Investors seem to have decidedly held faith with companies that are producing goods and products they can relate with and have turned their backs on the services of the financial sector with the average fall in price of stocks in that sector calculated at more than 50 percent. I guess it all about fears and negative sentiment. Yet, I can still dare to propose that in that sector lies the redeeming prospect of the market. Why?

Financial sector players understand the Nigerian economic market, perhaps, much more than any other sectoral player, and of course, they know how to get things done. They have been at the commanding height of the economy since the military inspired economic structural adjustment programme as influenced by the International Monetary Funds. Nigerian banks and bankers had survived much turbulence since 1993 when we first witnessed the first wholesale crash of the national banking sector and had returned stronger and better.

  So if First Bank is selling for less than 30 per cent of its peak price in 2008 at N20 plus and Access at less than 100 per cent of its high this year, I am tempted to go searching for value in the finance sector.

Please, excuse me, the stock market was not supposed to be in focus this week. I am very sure, the most discussed issue that would be discussed the whole of this week will be the USA presidential election while the most mentioned name any where in the corners of the globe this week will be Barrack Obama, that genteel, lithe figure that suddenly happened on the American political scene and had since captured the imagination of American across age, gender and other persuasion.

It’s natural to expect an opinionated African to canvass an Obama presidency, isn’t it natural? Of course, to my mind, this is the final resolution of the opposites that had defined relationship among people across the world, and for once, an indication that Africa, will, despite the interface of all morbid attributions in national leadership of countries across the black African continent, is where ultimate civilization and prosperity is headed. This may not be more than 50 years, I feel a reordering of the global economic space, an Obama USA presidency will be the beginning of the process.

Is this some fanciful thought? I don’t know, but it’s not every time that an individual, seemingly unqualified for a position just suddenly start marshalling the most effective strategies to beat political institutions in the United States.

The fact that Obama, a black-white man, or put properly, a white-black man (still wonder why they still primarily describe him as a black man as if the white gene and pigmentation of his mum were of no consequence) subsumed the Clintons and veteran John McCain in the opinion of people across the USA should convince anybody that Obama will be a good president.

No need to cajole logic and other persuasive argument about the worthiness of Obama, he has proved this by taking the battle to republican states and even competing on favourable numbers in McCain’s Arizona. And even more interesting, he turned the institution of the republican into a bleary eyed pumpkin mask only suitable to be laughed at during Halloween. Obama is that awesome.

So, can we be practical enough to stop all those talks of a McCain miraculous come as he had done before in those other elections into the senate. This is a different ball game; we are talking here about a phenomenon who is just being introduced to the world stage. Something tells me the world will not be the same after four years of Obama…but that will be if he survives the first term. Now, that’s talk for another day.

WILL THE STOCK MARKET EVER RECOVER?

Many investors have sat and watched in bewilderment as the value of their stocks plummeted, a reason I have been asked over and over if the stock market will ever recover from the losses that have been accumulated over the past eight months. To be specific, investors have lost nothing less that three trillion naira in terms of paper losses alone. I said paper losses because the losses you see in your portfolio are not real until you give a sell order to your stock-broker, stocks are volatile assets whose value can change within a few trading days.

REASONS FOR THE PERSISITENT DECLINE

 1.   LOW INVESTOR CONFIDENCE: The bearish market which started in March has eroded the confidence of many investors, especially, those who entered into the stock market within the past two years. The peculiar thing about these new investors is the fact that a lot of them see the stock market as quick money making venture, and as you know, some of them have never witnessed such a long bearish period as we have witnessed within the past few months. It is also noteworthy that several investors had just begun to recover from the losses they sustained from wonder banks like Nospetco, Sefteg, etc; in 2007. I remember that such investors were condemned for being too greedy by stock analysts and they were admonished to limit their investment to stock market alone. So, at the beginning of 2008, we experienced a massive exodus of investors from the wonder banks to the stock market, but alas, the stock market has been crashing which have made such investors to resign from the investment world. This is no good news for all stakeholders in the market because all over the world, the confidence that investors have in a market determines how successful that market is since they are the ones who move the imaginary hand of demand and supply at all times.

 2.   POOR IMPLEMENTATION OF POLICIES: Our regulatory agencies should take one or two punches for the current situation of things because they have been slacked in their approach to recent developments in the market. A stakeholders meeting was finally called on the 26^th August to find solutions to the current situation after six months of a bearish market. Since then some of the policies that were identified have either not been implemented or simply relegated to the background. The most important of this is the creation of a stabilization fund to stem the bearish trend whenever necessary, I don’t know how you look at it, but from my point of view, I think this issue should have taken priority over other policies because without funds that are needed to buy stocks, the stock market can simply not move, it’s as simple as that.

Dear friends, gone are those days that fundamentals count and investors are motivated to buy shares because of good quarterly and audited results published by companies. Investors are not moved by results again and if you want to contradict this argument, check what has happened to the likes of Fidelity Bank, Oceanic Bank, etc; since they declared their fantastic results. The truth is, things are not normal and desperate situations require desperate actions. In addition to this, the authorities have not addressed the investing public since August 26. I have reasons to respect the American spirit better within these past few weeks that the Americans have been hit by an unprecedented financial crisis. Within two weeks, the president of the USA, the Senate president, speaker and federal reserve chairman have addressed the American public four good times trying all they can to update Americans on the situations of things and the way forward but it’s not like that here, investors are always left guessing.

Another controversial policy is the introduction of a minimum one per cent drop in prices while allowing stocks to gain a maximum five per cent in a day; this has caused what some investors call a slow motion in the stock market, a situation that has made the sale of stocks even more difficult than in the past, this was supposed to be a temporary measure but I think it’s here to stay. The list of the number of inefficiencies from our regulatory agencies cannot be exhausted in one piece of article, it is better left as it is.

3.   GLOBAL FINANCIAL CRISIS: the Nigerian crisis actually preceded the ongoing global financial crisis which started in the USA with the collapse of big banks like the Lehman Brothers, Merrill lynch and WAMU. Stock markets all over the world are currently taking the beating of their lives. As a matter of fact, the Russians had to shut down their stock exchange for two trading days in September in order to arrest excessive decline in stocks. Last Thursday afternoon, I saw some investors protesting in the legislative house in Hong Kong because of the losses they have made on their portfolio. Don’t mind the CIBN and CBN which recently came out to say that we are immune to the global financial crisis; the truth is that we are not immune and I will state my reasons.

First, recall that we had touted the entry of foreign institutional investors who were planning to come into the Nigerian market as one of the factors that will lead to a bullish market in 2008, but at present, the JP Morgan, Merryl Lynch, or Barclays of these world won’t come into the Nigerian market for now because they have serious problems to contend with back at home. In fact, Charles Soludo, Governor of Central Bank of Nigeria recently shifted the blame for the recent market drop to some of these foreign investors who have pulled their funds out of the Nigerian stock market.

Despite all these challenges, it is not all gloomy for the Nigerian market because there is always light at the end of the tunnel, this market will definitely recover soon and the road to recovery will form the central theme of my article in the next edition. Watch out for it.