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Wednesday, October 27, 2021

Foreign investors buying up local units shares on dollar shortage

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By Samuel Bankole

Faced with difficulties in buying dollars to repatriate their dividends back to their home countries, more foreign shareholders are converting their payout into buying more shares in their local units.

Nigeria is currently facing a dollars shortage as the Central Bank of Nigeria (CBN) ratio foreign currency to endusers in the face of dwindling forex earnings from crude oil exports.

Foreign Portfolio Investors have not been able to get their funds out of the country since March as the CBN urge them to wait till things improved and the country earns more dollars to meet its obligations.

Many firms and offshore portfolio investors have been in the queue to buy dollars to enable them to repatriate their funds back to their own countries for months now without success.

After weeks of frustrations, many of the foreign shareholders in the local units are now investing back such dividends in the shares of the companies in a bid to reduce loss and erosion of their money due to the rapid depreciation of the local currency.

Nigerian naira has lost about 18 percent in value since March when the CBN officially devalued the naira on its window and follow up with another devaluation last month in its bid to conserve foreign reserves that have plummeted by as much as 22 percent since last year and lost more than 6 percent this year alone.

On Friday, Heineken Brouwerijen B.V, majority shareholders in the Nigerian Breweries Plc increased its stake in the brewer with the purchased 72,500 shares at N36.00 per unit.

READ ALSO: Unilever Overseas Increases Stake In Local Unit By N1.05 Bln

Heineken Brouwerijen B.V., is the single largest shareholders in Nigerian Breweries with 37.73 percent stake.

The parent company of the local unit had on Monday bought 274,542 shares at an average price N35.76 per unit of the Nigerian Breweries from the local bourse.

Also on Monday, Unilever Overseas Holdings B.V increased its stake in the local unit of household products maker as it bought total shares worth N842.37 million on the floor of the Nigerian Stock Exchange (NSE).

Unilever Overseas Holdings, which controls 70 percent majority stake in the local unit in the previous week purchased shares worth N204.28 million in the company through the trading floor of the local bourse.
READ THIS: GTB Holds Back Dividends For GDRs Holders Due To Dollar Shortage

Guaranty Trust Bank (GTB) on Tuesday said payment of dividends to holders of its Global Depository Receipts (GDRs) has been delayed due to difficulties in sourcing dollars.

The lender said in a note to GDR holders that its registrar – the company which maintains lists of bond and shareholders – was in a queue with the Central Bank of Nigeria (CBN) to purchase dollars to enable it pay the dividends to the GDRs holders.

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