Nigeria Content Online

While stock market operators may not directly be affected with
the proposed three-day warning strike by government workers, some finance
analysts said the performance of trading activities at the capital market may
further suffer decline during the industrial action.

Investors at the Nigerian Stock Exchange (NSE) already recorded
loses of over N116 billion in the past one week due to profit taking
activities.

However, Detola Olukorede, head, equity research team at
Investment Option, a fund management firm, said the value of equities at the
NSE “may further depreciate this week due to the high selling pressure the
market will witness.” Mr. Olukorede said, “When workers are embarking on a
nationwide strike of this magnitude, it is expected that investors, especially
retail investors will start ordering for the sales of some of their stocks to
enable them have cash at hand during the strike.”

Johnson Chukwu, chief executive officer of Cowry Asset
Management, a stock broking firm, said institutional investors may also want to
see the outcome of the industrial action before taking position in the market.

Analysts said all these “cautious reactions” by investors are indicative
of a market that will further plunge in worth due to the warning strike.

The Nigeria Labour Congress and the Trade Union Congress are to
embark on a three-day warning strike from Wednesday over the proposed N18, 000
minimum wage.

Market indices down

Meanwhile, the decline witnessed at the NSE last Friday
continued at the close of trading session on Monday. The Exchange’s market
capitalisation lost N23 billion on Friday’s figure of N7.919 trillion, to close
at N7.896 trillion, a 0.29 per cent decrease.

The All-Share Index was also down by 0.29 per cent, shedding
72.39 units from the 24,800.47 basis points recorded on Friday, to close
yesterday at 24,728.08 basis points.

A total of 20 stocks appreciated in price on Monday while 36
stocks depreciated. Oando and United Bank for Africa topped the price gainers’
table with an increase of N1.95 and 35 kobo on their initial prices of N64.05
and N8.60 per share, respectively.

On the flip side, Cadbury Nigeria and PZ Cussons led the price
losers’ chart with a loss of 67 kobo and 50 kobo respectively, from their
opening prices of N29.56 and N33.00 per share.

Most active

Five banks -FinBank, Oceanic, Bank PHB, Zenith, and United Bank
for Africa -were the most traded stocks yesterday.

The Banking subsector led the most active subsectors’ chart with
352.013 million volumes of shares, valued at over N1.684 billion. Volume in the
subsector was driven by banks that led the most traded stocks’ chart.

Trading activities in the Insurance subsector followed, with
24.230 million shares valued at N16.640 million. Deals in shares of Lasaco
Assurance largely boosted volume in this subsector, followed by Aiico Insurance
and NEM Insurance.

The Food/Beverages subsector was third in the chart. Investors
in this sector exchanged 11.231 million shares, worth N191.795 million. Volume
in the subsector was driven by deals in the shares of Dangote Flour Mills and
Dangote Sugar.

The Board of the Asset Management Corporation of Nigeria (AMCON)
yesterday swung into business, swiftly rolling out three major policy
decisions.

In its first formal meeting concluded late last night in Abuja,
the board announced that AMCON will value non-performing loans (NPLs) backed by
shares of listed companies at an implied premium of approximately 60 percent on
the 60-day average of recent prices ending November 15th 2010, while those
backed by other perfected collateral would be accepted at the most current
estimate of the loan value supplied by the institution, but for this category,
AMCON put a caveat, “there must be a post-transaction adjustment agreement that
allows AMCON to independently value the loan as of the transaction date of
November 15th 2010.”

According to the corporation, all unsecured loans or loans with
ineligible collateral will be valued at 5 percent of the principal value.

Explaining the underlying assumptions for the valuation, which
it said is solely for the purpose of buying the NPLs and not for
recapitalisation of the banks, the Board said that it could be that “a fair
value ascribed for the purposes of buying the NPLs would be two times book value
and this premium approximates that value.”

Besides, it said the estimate for the valuation must be based on
current market analysis of the collateral and a written guarantee of good faith
by the institution. The valuation methodology, the Board said, has been
consented to by the Minister of Finance, Segun Aganga, the Central Bank of
Nigeria (CBN) governor, Sanusi Lamido Sanusi, and the affected banks.

Reiterating its mission to acquire non-performing loans across
the banking industry, recapitalise the rescued banks, and manage the acquired
assets, the board also announced its approval of the purchase of all the margin
loans in the banking sector and all the non-performing loans of the rescued
banks, totaling in excess of N2.2trillion.

In addition, the board approved a funding model for AMCON, based
on conservative estimates of recovery rates and return on managed assets,
pointing out that with the agreement already reached with the banks to
contribute to a sinking fund, AMCON board is satisfied that the Federal
Government guarantee will not need to be invoked at the end of its expected ten
year life span.

While expressing optimism that AMCON would reach agreements with
the selling institutions regarding pricing of the NPLs by November 15th, 2010,
the Board said AMCON aims to settle these transactions on or before December
30th, 2010, to allow the institutions to obtain the necessary Board and
Shareholders approval, whilst also giving AMCON the time to establish the
necessary operational structures to settle these purchases.

Industry reacts

For Tope Fasua, a Dubai, UAE-based investment management
specialist, taking over bank assets that were secured with equities at 60
percent of original value will, in reality, be more than what those shares are
currently worth, considering that the value of most of the distressed loans
secured with shares declined by over 90 percent.

“Valuing such loans at 60 percent is, therefore, quite
magnanimous. The capital market is likely to receive that news most favourably,
because such shares would generally be growing to the value placed on them by
AMCON. People would naturally buy bank shares, insurance shares, since the
AMCON has put its money on those shares at much above their current values,” he
said.

On loans secured against landed property, Mr. Fasua said the
problem usually associated with it is that because of the nature of valuations
in Nigeria, they are often ‘fictitious’, adding that the value people usually
put on a property is at best mere conjecture.

According to him, a property is only worth N1billion when one is
able to sell such a property and realise the money, notwithstanding what the
estate valuers, rating agencies, bank managers, or even AMCON, says, predicting
that the new policy will create a new market for those who are ‘experts’ at
valuing properties.

“Some will dispute the values already placed on such properties,
while some will reach a ‘compromise’ at the end of the day. AMCON can only find
out if their ‘evaluation’ of a property is wrong and ‘adjust afterwards’, if
and only if, it sells such properties and compares the value received with the
value on paper,” he said, noting that in Nigeria, those scenarios are rackets.

Six companies including Swiss logistics firm Panalpina (PWTN.S) and Royal Dutch Shell (RDSa.L) have agreed to settle foreign bribery investigations and will pay some $236 million in criminal and civil penalties, the Obama administration said on Thursday.

A Panalpina unit has agreed to plead guilty, admitting to paying at least $27 million in bribes to officials in at least seven countries including Nigeria, Brazil and Russia between 2002 and 2007 on behalf of its oil and gas industry clients.

“They did so in order to circumvent local rules and regulations relating to the import of goods and materials into numerous foreign jurisdictions,” the Justice Department said.

Those customers, which included Shell’s Nigeria unit, a unit of Transocean Ltd (RIG.N), Tidewater Inc (TDW.N), Pride International (PDE.N) and Noble Corp (NE.N), admitted to approving or condoning bribes on their behalf, the Justice Department said.

Pride’s French unit is also pleading guilty in the case while the others reached deferred prosecution agreements with the Justice Department. The companies also settled related bribery charges by the Securities and Exchange Commission.

Collectively they will pay $236 million in criminal and civil penalties and disgorgement, with Panalpina paying the largest amount, almost $82 million. Shell will pay almost $48.2 million, according to the Justice Department and SEC.

Shell’s Nigerian unit agreed to settle charges and pay $30 million in criminal penalties, the Justice Department said.

The settlement is the latest in a series by the Obama administration as authorities try to crack down on corporations paying bribes to foreign officials in violation of the U.S. Foreign Corrupt Practices Act (FCPA).

Nigerian women
should take up active roles in business, move to relevant positions,
and be the change they want to be, Jesse Jackson, former United States
special envoy for Africa said in Lagos on Thursday.

“Men cannot leave
women at home. We need full partnership. There is nothing women cannot
do. Women are now heading major corporations. What we need now is
business education. If an African American can become the president of
America, then a woman can become the president of Nigeria,” Mr Jackson
added.

He spoke at the 9th Annual conference of the Women in Management and Business (WIMBIZ) with the theme ‘Impact your world’.

WIMBIZ, a
non-profit organisation started in 2001 with a mission to be the
catalyst that elevates the profile of women in management and business.
The organisation just completed the maiden phase of her mentoring
programme as promised, where 72 young women were attached to mentors
for a period of four months in two batches. Its annual conference is a
gathering of women in commerce and corporate Nigeria, attracting
international delegates from different parts of the world.

Nigeria’s structure is problematic

Ben Murray-Bruce,
the chairman, Silverbird Group, and keynote speaker at the event, said
the major problem facing Nigeria is the nation’s political structure.

“The political
structure of the country does not allow talent in any administration,
because of issues such as zoning, ethnic balancing and so on. For
instance, if we have five smart people from Edo state, politically, I
can’t appoint all five of them, so I have one smart guy from Edo state
and four dumb guys from other places. As long as the right talents are
not in government, this is not going to work,” Murray-Bruce said.

Murray Bruce also
said that if you put someone in an environment where there is free
money, “there can’t be creativity, because there is no need to be
creative to earn that money, it is already there. And then the money
needs to be spent, but then, we cannot think and be creative to invest
in technology that is futuristic, because that requires thinking.
Instead, we spend it on a technology that is obsolete.”

People have impacted in my life, and that is why I can also make an
impact in people’s lives. “We may be free, but we have a slave
mentality. In Nigeria today, we may not have to fight for the right to
vote, but we must fight for the right to live. Why can’t we do anything
without bringing someone in from abroad? If our people don’t know how
to do it, why can’t we teach them? You can be somebody if you choose to
be somebody” he said.

Last week, this
column addressed the issue of consumer promotion, which is to reward
consumer loyalty and sustain brand affinity. In that piece, the
differences between consumer and sales promotion were clearly
identified.

Sales promotion is
a direct inducement that offers extra values and incentives to the
consumer. Its major goal is to maximise sales volume and quicken the
sales process.

It comes through
reduction, discounts, commissions, and free sampling. It is an activity
that appeals more to the consumer’s purse, to make immediate purchase
decision of a specific brand.

Since it generates
sales that cannot be achieved by other means, it is important for brand
custodians to evolve a strategic action plan that deepens relationship
with the consumers. This is important because I have discovered
overtime that some companies embark on sales promotion without any
relationship with the consumer. I will give an example to illustrate.

I am a customer of
a highbrow fashion outlet, though I must state here that the outlet has
a good data base of customers, but it all ends there. My other details
such as birthdays, wedding anniversary, and others should have been
documented as well.

My case here is
that it should not only be during sales promotion that I receive text
messages. Sales promotion should be a coherent branding strategy that
is hinged on a beneficial relationship with the consumers. This way,
brand loyalty is sustained. When all these happen, sale promotion would
definitely achieve desired objectives, as the brand becomes the
property of the consumer.

Sales promotion and consumer insights

While it is true
that not all consumers can be captured, a sampling method could be
adopted which can represent the views of an average consumer.

The role of
consumer insights here is to generate leads that can make the sale
promotion succeed. Some of the key insights are to ask probing
questions about consumer preference in terms of incentives, the nature
of the promotion, timing, and brand perception. All these go a long way
to make the sales promotion succeed.

This is because
today’s consumers are more concerned about an offer or extra incentives
given by the brand, and not only a brand promise. The sales promotion
activity should build customer equity, deliver worthwhile experiences,
and deepen relationships. It is indeed a call to action to connect
directly with consumers.

The incentive in
any sales promotion should be one that would motivate the consumers,
who should derive maximum benefits. They feel the burden in their
purses and this should translate to enormous gains for them. They
should gain extra value for what they have invested in – the brand.

The issue of
negative perception should also be addressed right from inception of
the sales promotion. An error can occur along the line and this may not
be deliberate on the part of the company. It becomes important to put a
mechanism in place to proffer immediate response in order to avoid
negative perception. Several brands have been negatively projected due
to the lack of a pro-active communication.

Sales promotion
offers a veritable platform to build brand image and as a result, a lot
needs to be ensured to eliminate any form of negative perception. It is
also not a period to offer expired products for sale. Consumers have
been ripped off through such acts and that is why the Consumer Advocate
Forum has taken up the gauntlet to checkmate these act.

Any brand that
fails to live up to its promise will be dismissed and destroyed. The
only way to engage in genuine bonding and connection with consumers is
to develop long term relationship built on trust, respect, and mutual
benefit. Sales promotion is that springboard to build an enduring
relationship with consumers.

A new fellow of APCON

Tunji Olugbodi, a
versatile professional, is set to become a Fellow of the Advertising
Practitioners Council of Nigeria (APCON). Mr. Olugbodi is a credible
brand in the industry and one of the few professionals with integrity,
who practices according to the rules. Surely, he deserves the honour,
as he stands tall as a professional to the core. He has put in over two
decades in the marketing communications industry.

He started his own
agency, Verdant Zeal, in 2007, after 15 years with Prima Garnet Ogilvy,
where he was a factor in its success story, rising to become executive
director (brand management).

Congratulations to a worthy senior colleague and a professional par excellence.

Ayopo, a public relations specialist is the CEO of Shortlist Limited shortlistprspecialists@gmail.com

Since oil companies gained dominance of the world economic
system, literally driving the engines of industrialisation and modern fossil
civilisation, they have taken several steps that have endangered humanity. The
massive burning of fossil fuels, such as oil and gas, have contributed
immensely to the stoking of the atmosphere with greenhouse gases responsible
for global warming.

The sector is also known to have been responsible for environmental
and human rights abuses in the world. The presentation of their commodity as
the cheapest form of available energy has been sustained over a century by cost
externalization to the voiceless, whose environments have been heavily
assaulted. The energy wars that are sometimes masked as war on terror are also
well known. The contribution of oil companies to human misery is well
documented.

Although the leopard may not change its spots, the companies
have not been blind to the woes they generate. One of the steps they have taken
to cushion the impact of their harm has unfortunately been nothing more than
hogwash. One subtle way this has been done has been to plant into public minds
that they are not oil, but energy companies. The difference may be subtle, but
it seeks to erode the stink that the former name carries. We insist on calling
them by the name that best describes them and to avoid grouping them in the
same slot as clean energy producing companies.

Apart from change of nomenclature, the fossil fuel sector has
etched some oxymoron into public minds, making people accept clearly
contradictory terms as being logical. Take the example of clean coal. What is
that? There are others, but this is not our focus in this discussion today.

Voluntary Principles on
Security and Human Rights (VPs)

Some oil companies, including Shell and Chevron, have signed up
to what is known as Voluntary Principles, by which they solemnly declare how
they would change their corporate practices in the area of security and human
rights. See the principles at http://www.voluntaryprinciples.org/.

The question this raises is whether the endorsement of these
voluntary and non-binding principles has brought about any positive change. The
VPs are not even known to be in existence by many. We will touch briefly on
some key areas of the principles. You are urged to ask how those principles are
applied in Nigeria oil fields.

The companies say they will report payments made to security
forces or, in our case, to the Nigerian government for supply of security cover
for company operations. If such records were properly kept, it would be
possible for such companies to be held accountable where funds are tied to
incidents that resulted in human rights abuses. If a company pays money to the
military, for example, and the funds support an assault on a community, the
link should be transparently traceable for this clause to make sense.

A look at the Voluntary Principles appears to start from the
premise that oil company security depends on the actions of the country’s
security forces. This thinking has maintained the relationship with the
Nigerian military and police and continues to encourage abuse. It also often
precipitates clear acts of mayhem. Oil companies sometimes review their
security arrangements to determine if the relationship they have built with the
security forces has been a credit or a liability.

A review conducted by Chevron in 1999 found that Nigerian
security forces were actually more of a liability than a benefit, and that they
were prone to cause great harm both to Delta residents and company employees.
Shell, on its part admitted in a 2003 security review, that it had contributed
to the rise of conflict and corruption in the Delta region through its
relationship with security forces. The question is, what changes have they
made?

We submit here that if the official security forces provide a
safe atmosphere for ordinary citizens, corporate citizens would also enjoy the
same. Moreover, if oil companies maintain their equipment, operate with the
same standards they apply in their home countries, and respect community
rights, there would be no need for special security arrangements that must be
eating into their resources.

The voluntary principles also require that oil companies
communicate effectively on Human Rights Principles to security forces and
ensure proper training, and screening of known human rights abusers.

Security officers of corporations and public security forces are
often tied together in mutually dependent arrangements, whereby governments
take primary responsibility for security and the private entity provides
resources and logistical support. To what extent have the guidelines provided
in the Principles been used to ensure that the conduct of the forces abides by
human rights law?

Holding Individuals
Accountable

It is known that oil companies do keep security logs showing
records of security incidents as they occur at their facilities. They should
also be required to keep full records of incidents in which local residents are
injured or killed in confrontations with government security forces, acting to
secure the interest of the companies. Such incidents should also be reported
promptly and publicly. Individuals indicted should be held accountable.

The Voluntary Principles provide an opportunity for the Nigerian
legislative houses at the state and federal levels to take their provisions,
review, and enact them into law. The oil companies may have endorsed the
principles as a way of beefing up their public image and presenting the face of
companies that care about human rights.

Enacting same into law will encourage the companies to implement
them by making them mandatory principles. It will also help the companies to
bridge a part of the huge deficits they have accumulated in terms of
transparency in their activities.