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Soybean appreciates in June trading, overtops others till-date

July 22, 2019

One of the most cultivated leguminous vegetables in Nigeria, Soybean attracted the most gain in agricultural commodities trading on AFEX exchange during June and continued to outstrip paddy rice, cocoa, sorghum, ginger, and maize season-till-date.

The crop gained 3.4 percent week-on-week, moving from an average of 151 points during the first week to 156.50 between 7th and 13th of the month, based on the data obtained from AFEX Commodities Weekly Price Report. The increase drove the soybeans from 2508 percent to 35 percent, followed from a distance by ginger 11.47 percent, maize 11.11 and sorghum 7.79 percent.

The latest AFEX Commodities Index composite – a collection of all commodity indexes averaged together to represent overall market or sector performance- averaged 170.8 points during June, marking a 2.97 point increase from 1.77 percentage point at the beginning due to the closure of markets from the public holidays.

According to the report, the maximizing prices for Maize, Sorghum, Soybean and paddy rice recorded in Shuwarin market in Jigawa state; Oja tuntun, Kwara; Dawanau market, Kano and Mbulatawiwi, Borno state. The minimum price for maize, sorghum, soybeans, and paddy rice were recorded in Sabuwar Kasuwa, Borno state; Leggal, Gombe; Mbulatawiwi, Borno and Kamba, Kebbi state. For ginger, the minimum and maximum price was recorded in Kwoi market Kaduna state.

The report tracked the price movement of commodities traded on the exchange and all executed prices inclusive of logistic costs, covering commodities from the farm gate to the reference delivery point.

During the first week of June, the commodities index composite averaged 167.71 points marking a flat performance over the week due to the closure of markets from the public holidays. All sub-indices of the composite index recorded neutral independent performances for the period with maize falling during the week due to the increase in quantity available in the market without an equal increase in their demand.”

The period saw maximizing prices for Maize, Sorghum, Soybean and Paddy rice in Dawanau market, Kano state; Kwaya Kusar, Borno and Biu, Borno state. The minimum price for maize, Sorghum Soybeans, and paddy rice was recorded in Saba, Kaduna state; Biu, Borno and Burbara, Jigawa state respectively.

Digital platforms on agricultural investments monitored by AgroNigeria show that soybeans deals for July were sold out already. On Farmcrowdy, for instance, a unit of soybeans to be farmed in Jos was offered at N148,000 with 14 percent return on investment in five months. As of July 5th, no units were left.

According to IITA, the demand for soybeans in Nigeria alone is currently estimated at 2.2 million tons while the annual production Is only at 600,000 tons. Although Nigeria remains the largest producer of soybeans in Sub-Saharan Africa, the huge gap between demand and supply makes the crop insufficient for consumption, hence, a need to cultivate soybean.

But according to the United States Department of Agriculture, Nigeria had produced 1.1 million metric tons so far in 2019, rising 4.3 percent from 1.054 million in 2018.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

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Startup VertoFX Raises $2M For African and Emerging Market Currency Trading Platform

July 20, 2019

More startups that are either Africa-based or Africa-focused are really having a good time raising funds to scale their businesses. Indeed, this funding goes to show that even startups with very remote niches can raise funds. VertoFX, the startup that focuses on currency trading and payment for African and emerging markets has just raised a $2.1 million seed round, led by Accelerated Digital Ventures.

Here Are The Funding Details And What This Means For Similar Startups With Remote Niches

The $2.1 million seed round of funding was led by Accelerated Digital Ventures.
The startup is simply a bureau de change for African and emerging market businesses.
The startup will use the round for platform development, expanding the currencies and gaining licenses in new countries. It will also use the round for hiring, primarily in compliance and regulator type roles. VertoFX already has a developer team in India and is looking at local developer talent for its Africa offices.
Although London-based company, with a subsidiary in Lagos, Nigeria, the startup’s platform allows businesses and banks to exchange and make payments in exotic foreign currencies that don’t often convert or trade conveniently across businesses or banks.
For example, South Africa’s Rand is Africa’s most convertible and traded currency — with lower spreads and transaction costs — while currencies of countries such as Ethiopia or Egypt may be difficult or expensive to trade or transact B2B payments.
All around the world, there are around 40 currencies that are considered exotic or illiquid, most of them in frontier markets in Asia, Africa, and the Middle-East, says Oyetayo, VertoFX founder.

“That’s the reason we are utilizing technology to create a marketplace model and price discovery to create liquidity for these currencies,” VertoFX founder Ola Oyetayo said in an interview.

And there’s a revenue opportunity to creating a convenient online marketplace for trading and payments in these currencies.

“Our research says there’s about $400 billion being done by small and medium-scale businesses in Africa alone in transactional volume on an annual basis. If we take 1% of that as a commission or transaction fee, that’s a $4 billion addressable market, just in the continent,” said Oyetayo.

A Look At VertoFX

VertoFX was founded in 2017 by Oyetayo and Anthony Oduwole — both ex-global bankers born in Nigeria. The company was part of Y Combinator’s 2019 winter cohort and processed around $7 million in transaction volume last month, according to Oyetayo.

VertoFX is registered as a payment services provider with the U.K.’s Financial Conduct Authority. Current clients include several undisclosed banks and San Francisco-based payment venture Flutterwave.

VertoFX doesn’t release revenue figures but confirmed it earns a commission, or spread, on each transaction processed on its platform. There are currently 19 currencies on the platform and the ability to settle in 120 countries, including China and the U.S.

VertoFX is also moving into offering market research — toward potential subscription services — on the currencies it trades, according to Oyetayo.

On the possibility of becoming acquired by a big bank, VertoFX isn’t so interested, according to Oyetayo.

“We both come from big banks and if we’d wanted to go down that route we’d have developed this more like a software as a service platform,” he said.

“We’re playing the long game here, and I don’t think the acquisition is the end game,” he said.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

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Airtel Africa Initiates IPO On The London Stock Exchange, Public Trading Still July 4

June 29, 2019

Airtel Africa has had its Initial Public Offering ( IPO ) in both London and Nigeria, but the real IPO, in which the general public may be able to buy Airtel’s shares begins from the 4th of July, 2019. Right now, it appears, Airtel Africa is selling to investors below what they were initially priced, on the London Stock Exchange.

Airtel’s stocks on the London Stock Exchange fell as much as 15 percent to 68p after Africa’s second-largest mobile operator listed on the London Stock Exchange, knocking £500m off its opening valuation to give it a market capitalization of around £2.6bn.

Here Are The Facts

The IPO is for institutional investors and high net worth individuals only
The general public may be able to deal in Airtel’s shares by July 4.
For the IPO, Airtel is backed by SoftBank an issuing house and had priced its initial offering at 80p per share, but this poor IPO in London saw the company perform below what it secured in two recent private funding rounds.
The African subsidiary of Indian telecoms giant Bharti Airtel had priced its shares at 80p, at the bottom of its previously announced 80–100p price range.
This means that its current valuation now stands at around £3.1bn (NGN 1.4 trillion or $3.9 billion). This is already significantly below the valuations implied by earlier funding rounds.
Airtel Africa secured $1.25bn from a consortium of investors including private equity house Warburg Pincus, Singapore’s Temasek, SoftBank and Singapore Telecommunications at a valuation of around $4.4bn, in October last year.
A $200m investment by the Qatar Investment Authority earlier this year put its valuation closer to $5bn.
From the combined Nigerian and London IPO, Airtel Africa — which operates a telecoms and mobile money business across 14 African countries — raised £595m.
The whole of the shares issued in the IPO represented 19 percent of Airtel’s total stock.

“This is a proud moment for the team that has built Airtel Africa into the second-largest mobile operator in Africa. We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”

Airtel’s IPO is For Institutional Investors. Ordinary Nigerians and the General Public Can Begin To Trade In Airtel’s Shares By July 4 On Both The London And The Nigerian Stock Exchanges

“The offer consists of an institutional offer only. Ordinary Shares will be offered pursuant to the Global Offer (a) to certain institutional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S, (b) in the United States only to those reasonably believed to be Qualified Institutional Buyers, QIBs in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and pursuant to the Nigerian Offer © in Nigeria to Qualified Institutional Investors and High Net Worth Investors as defined in Rule 321 of the Nigerian Securities and Exchange Commission, SEC Rules pursuant to a book building process (the “Nigerian Offer”)” the prospectus stated.

Why The Nigerian Stock Exchange and Not The Johannesburg Stock Exchange, Which Is The Largest In Africa, Was Chosen For The African Listing

According to the prospectus of the offer, Nigeria represents the Airtel’s largest single country subscriber base, comprising 37.6 percent of the Group’s total subscribers as at 31 March 2019, with 43.4 percent of subscribers in East Africa and the remaining 19.1 percent in the Group’s Rest of Africa segment.

In the year ended 31st March 2019, revenue in Nigeria was $1.1 billion (representing 35.9 percent of the Group’s revenue in the year) and the underlying Earnings Before Interest Tax Depreciation and Amortisation, EBITDA was $550 million.

In Nigeria, revenue attributable to mobile voice services in the year ended 31st March 2019 was $739.8 million

The prospectus said the company wants to raise money so it can use it to pay down some of its crushing debts.

Why Airtel’s Shares Are Worthy Of Public Subscription

Airtel reported revenues of $3 billion for the year ended March 2019 compared to $2.9 billion the year before.

The company also reported a profit of $450 million in 2019.

Airtel posted losses of $134 million and $769 million in 2016 and 2017 respectively.

Timelines For The Offer

The offer closes June 28 and allotment of new ordinary shares to the shareholders begins June 29, 2019, while the crediting of ordinary shares to accounts start July 3, 2019.

The Nigerian admission and start of unconditional dealings on the Nigerian Stock Exchange, NSE is expected from July 4, 2019

Click here to download and read Airtel Africa ’s IPO prospectus.

Here is a list of stock brokerage firms in Nigeria through which you may be able to purchase or sell shares on the Nigerian Stock Exchange.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.