Smart Investing with Nosa

All that we are as individuals are a result of a combination of the choices that we have made throughout our lives, our environments and the experiences that we have had since childhood. We do not get to choose who our parents are or what families we are born into; the genes we inherit; the colour of our eyes; the colour and texture of our hair; our nationalities at birth; the religions we are born into; and so many other apparently important factors or conditions which shape us into the people we become. We do, however, get the chance to make choices, to make decisions, on a daily basis. Some internet sources estimate that the average adult makes around 35,000 remotely conscious decisions daily, with about 226.7 of those decisions relating to food alone. That is a lot of decisions for an activity that is, on average, performed two to four times daily. For many of us, a lot of our trainings and education, whether in sciences, arts or humanities, have focused on helping us make good,

“Without prejudice to subsection (1) of this section, any employee who disengages or is disengaged from employment before the age of 50 years and is unable to secure another employment within four months of such disengagement may make withdrawal from his retirement savings account in accordance with the provisions of section 7(2) and (3) of this Act” – Pension Reform Act, 2014. I have not had to quote the provisions of any Acts or Laws since I made the switch from being an International Tax consultant to being a Strategy and Transactions (M&A / Corporate Finance) advisor in 2016. It feels like a lifetime ago, and it was only about 13 months after the switch that I left Lagos for Stuttgart. Amidst the thoughts of uncertainty that plagued me as I prepared to leave home in August 2017, for a country where I did not know anyone or speak the language, I also wondered “what would happen to my pension when I leave?”. I managed to convince myself to deal with the present and onl

In the spring of 1997, Thailand spent billions in defending its currency (the Thai Baht) against speculative attacks, finally capitulating and devaluing the Baht in July 1997. This triggered moves throughout the region to defend currencies against speculators. Ultimately, these efforts were not successful and many countries abandoned the effort and allowed their currencies to float freely. The Philippines, Indonesia, and South Korea abandoned their pegs against the US dollar. The currency crisis resulted in each of these four countries having negative GDP growth in 1998, as follows: Thailand (-7.63%) Philippines (-0.58%) Indonesia (-13.13%) South Korea (-5.47%) By the following year (1999), all of these countries experienced positive GDP growth, and in the 10 years that followed (2000 to 2009) average GDP growth rates were as follows: Thailand (4.32%) Philippines (4.46%) Indonesia (5.11%) South Korea (4.68%) Granted, the average GDP growth rates before 1997

On Friday 29 th May, 2020, one of Africa’s biggest banks, United Bank for Africa Plc (UBA), issued a notice of early redemption to investors, exercising the call option attached to the bond at the issue date, thereby informing investors that the bond will be redeemed on 30 th June, 2020. The bond has a principal amount of N30.5 billion (around $84 million, at an exchange rate of N365 to a dollar), coupon or interest rate of 16.45%, and was issued for a 7-year term with a maturity date of December 2021. In this piece, I will explain the meaning of an early bond redemption, the mechanism which makes it possible for a bond issuer to redeem the bonds before the initially agreed redemption date as well as the implication for investors. What is a Bond? A bond is a fixed income instrument representing a loan made by an investor to a borrower (issuer), with the issuer promising, in writing, to make an agreed stream of periodic coupon (interest) payments, as well as to return

“‘Tatty’ (thirty) billion for the account…”. It is fair to say that these words made the famous song “If” by Nigerian afro-beats sensation, Davido, the success that it was. In hip-hop, R&B and afro-beats, where bragging about riches and success is by far the most popular theme, there have not been many songs or musicians who have been able to express this theme as effortlessly as Davido did in “If” (Don’t be dismayed if you do not know the song. Here’s a YouTube link for your listening pleasure). The video to the song was published on YouTube in February 2017. At that time, if Davido truly had 30 billion naira in his bank account – which he has confirmed he did not have -, it would have been worth around 99 million US dollars. Today, that same sum would only be worth around 77 million dollars and is likely to be worth a lot less in another three years. I do not plan on writing about the devaluation of the naira today, besides, I already shared some of my views on this topi

As promised in my last article, Investing during a global recession , today we will explore one of the most important investment vehicles for individuals and institutions – mutual funds. Despite their popularity, mutual funds are often misunderstood or understood only in a limited extent, even by many individuals with mutual fund assets. What are mutual funds? Mutual funds are comingled or pooled investment vehicles through which investors gain access to securities like stocks, bonds, money market instruments and other assets. In a mutual fund, each investor has a pro-rata claim on the income and value of the fund, referred to as net asset value. What are pooled investment vehicles? A pooled investment vehicle is one in which many different investors (individuals, pension funds, corporations, university endowments, etc.) contribute money to the pool to be managed, often by professionals, to achieve specific investment goals or strategies. There are various types of