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Nengi Phil-Ebosie: Who Is Paying You?

Nengi Phil-Ebosie

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Do something today that your future self will thank you for.” Anonymous

The elections are finally over, and with ample clarity in the political space, we expect to see more activities in some sectors of the economy.

With the presidential election and the gloomy uncertainty initially feared by investors out of the way, we expect to see the stock market rebound, as Foreign Portfolio investors (FPI) are likely to return to the market. The Nigerian Stock market has, in the last few years, been an attractive market for Foreign Portfolio Investors (FPI).

It was estimated that Nigeria attracted about $7.8billion of private Equity funds, between 2012 and 2017 (Business Insider) given the attractive risk-adjusted returns inherent in the market. Although 2018 was an exceptional year across the globe including Nigeria, we are optimistic that Nigerian market portends huge opportunities in 2019.

We are getting to the period where we will begin to see quoted companies releasing their 2018 full year results with exceptional numbers and corporate actions expected from quality names. We expect that these numbers would further deepen the market as local and foreign investors take positions to benefit from the price rallies and attractive dividends.

It’s normal to hear people say they can never invest in the stock market. Perhaps, they are frightened by unfortunate past experiences. However, more often than not, knowledge gap and improper analysis was the cause of wrong decision. Notwithstanding, if you are not investing in the stock market, I hope you are somehow making some form of investment that you are comfortable with.

In any case, with the expectations of attractive 2018 full year results, folks who have built investments in these profitable companies will be smiling to the bank. For instance, Tony Elumelu and Jim Ovia are few amongst many, have built resilience and forward looking companies with global competition.
It is reported that Tony Elumelu has respective direct & indirect holdings of 189,851,854 & 2,083,024,416 shares in UBA (UBA Financial 2017). In 2017, the company declared interim & final dividend of 0.85kobo, bringing his total direct gross dividends to ₦161million from UBA alone.

Similarly, Jim Ovia is the single majority shareholder in Zenith Bank, One of Nigeria’s largest banks by Asset Base, owning directly about 2,946,199,395 shares. The Bank’s Board, in 2018, proposed a final dividend of N2.50 per share which was in addition to the N0.25 per share paid as interim dividend in 2018. This takes the total dividend paid for the year to N2.75 (vs. N2.70 in 2017) per share.
As a result, Jim Ovia received a gross dividend of about N8,102,048,366.25 for dividends declared in 2018 by the bank.

These above cases may be extreme because of the volume of shares involved, but imagine if you had been building up a portfolio of stocks, fixed income securities, real estate and in return, receiving regular passive income.

The good thing about investing in securities with strong growth fundamentals and pay-out is the ability to recoup your investment at the earliest possible time.

What portfolio are you building NOW to enable you enjoy passive income TOMORROW.
In conclusion, we pay bills like electricity, telecom provider, cable etc., the question is WHO IS PAYING YOU?

A Chartered Accountant and an MBA graduate of the Bradford University School of Management, UK with over 13 years work experience in Treasury, Corporate Lending, Accounting, Control, Financial management & Planning in the Financial and the Oil & Gas-servicing sector. Nengi has also completed the CFA level 1 exam.

3 Comments

  1. Nengi Phil-Ebosie

    March 8, 2019 at 5:17 pm

    Thank you BellaNaija

  2. Ifiemi

    March 9, 2019 at 7:50 am

    Great write up Nengi

  3. karla

    March 9, 2019 at 10:14 am

    Very insightful. Gives room for sober reflection. Great job.

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