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Economy

BMW bets on doubling of luxury car sales to boost margins

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BMW aims to double sales of large luxury cars next year from 2018 levels to help revive profit margins hit by investments in new technologies, Chief Financial Officer Nicolas Peter said on Thursday.

BMW hopes to sell around 135,000 premium models such as the i8, 8-series, X7 and 7-series in 2020, up from around 65,000 in 2018, Peter told reporters in Munich.

“We want to grow in the coming years and we are convinced the premium segment will outperform the overall market – and that we will outperform the market,” he said.

Luxury models deliver higher than average profit margins, and will help BMW to return to an operating margin of between 8 per cent and 10 per cent in its automotive division, Peter said.

The costs of developing smaller cars, including an electric Mini, have eaten into profitability at the German automaker.

In March, BMW warned it expected group pretax profit to fall by more than 10 per cent this year and announced a 12 billion euros (13 billion dollars) savings and efficiency plan to help offset higher technology investments.

BMW has no plans for forced redundancies in 2019 or 2020 among its German full time employees, the carmaker said.

The company will, however, seek cost cuts through early retirements and reducing employees’ annual bonuses.

“The annual payment needs to be recalibrated to a sensible level. It has already been adjusted for the management board,” Peter said, adding the level depended on the outcome of negotiations with worker representatives.

To lower development costs for electric and driverless cars, BMW will pursue alliances, such as a plan to make a low-cost electric car with Chinese partner Great Wall.

“It is easier to build a large electrified vehicle profitably than a small one,” Peter said, adding the project with Great Wall remained on track.

BMW wants to remain in the city car segment with its Mini brand, even though smaller vehicles tend to deliver a lower margin and customers are buying ever-larger vehicles.

“Mini is a strategic part of BMW,” Peter said, adding smaller vehicles were gaining in relevance among urban customers seeking to downsize.

BMW reiterated it would close its Oxford, southern England, plant – where it builds the Mini – on Oct. 31 and Nov. 1 to prepare for potential disruption to trade should Britain leave the European Union without a withdrawal agreement.

“We are prepared for various scenarios,” Peter said, adding that specific vehicle parts had been stockpiled to enable a resumption of production once it became clear whether vehicles would be subject to a 10 per cent tariff after Brexit.

“We will pass on part of the cost of these tariffs to customers,” Peter said, adding Mini prices would be raised.

BMW will gauge the impact of price increases before taking further steps, such as considering a shift in production of vehicles or components to plants outside the United Kingdom.

“It is too early to discuss such steps. We will have to see how demand develops first,” Peter said. (Reuters/NAN)


AOM/SN

Edited by Abdullahi Mohammed/Silas Nwoha

Economy

DMO offers N150bn from 3 instruments

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The Debt Management Office (DMO) on Wednesday offered N150 billion from three Instruments. five- year, 10-year and 30-year bonds for N50 billion each to investors at the auction.

The statement issued by DMO in Abuja indicated that the bond Auction by the DMO which took place on Wednesday, Nov. 20, was highly oversubscribed.

The DMO explained that the total subscriptions received through Competitive bids for the instruments at the Auction was N252.35 billion, indicating a subscription level of 168.23 per cent.

It said that the trend of investors’ appetite for the longer tenored instruments continued with subscription of N115.09 billion or 230.18 per cent for the 30-year Bond.

According to the statement, the successful bids are allotted at the rate of 12.0000 per cent for the 5-year, 12.9300 per cent for the 10-year and 13.3900 per cent for the 30-year Bonds.

“The allotment rates indicated a significant decline from the rates at which the Bonds were issued at the October 2019 FGN Bond Auction.

“The total amount allotted for Competitive Bids was N157.93 billion across the three tenors. In addition, the sum of N95.00 billion was allotted through Non-Competitive Bids for all the tenors at the same rates as the Competitive Bids.

“Overall, the sum of N252.93 billion is allotted to investors at the auction through both Competitive and Non-Competitive Bids” it added.

Edited by Ese E. Ekama (NAN)

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Economy

Customs promotes 2,508 officers to various ranks

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The Nigeria Customs Service Board has promoted 2,508 officers to various ranks.

The Customs’ Public Relations Officer, Mr Joseph Attah made this known in a statement in Abuja on Wednesday.Attah said the board also approved the appointment of DCG David Chikan, ACG Kashim Ajiya, ACG Dinatu Umaru and ACG Yusuf Bashar as members of management.

He said 30 officers were promoted from Deputy Comptroller to Comptroller while 115 Assistant Comptroller were elevated to Deputy-Comptroller.

He further disclosed that  the board also approved the promotion of officers from Chief Superintendent of Customs to Assistant Comptroller and 43 Superintendent of Customs to Chief Superintendent.

According to him, 117 Deputy Superintendent to Superintendent and 565 Assistant Superintendent I to Deputy Superintendent of Customs.

Attah added that 988 Assistant Superintendent of Customs II to Assistant Superintendent of Customs I as well as 505 Inspectors of Customs to Assistant Superintendent of Customs II.

He said the promotion took effect from Jan. 1, 2018.

The spokesperson stated that the Comptroller-General of Customs, Col. Hameed Ali (Rtd) while congratulating the new members of management and the promoted officers, charged them to see their elevations as a call to greater responsibilities.

According to Attah, the customs boss urged them to double their efforts to consolidate on the gains of the on-going Service reforms.

Edited by Olawunmi Ashafa/Ese E. Ekama (NAN)

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Economy

120 SMEs for Lagos MegaCity Fair — Organiser

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No fewer than 120 small businesses from across the country are expected to participate in this year’s Megacity Fair which opens on Friday at Amuwo Odofin Festival Mall in Lagos.

Convener of the Fair, Ifeoma Emenahi, told journalists in Lagos on Wednesday that the three-day event would offer free master classes for women to acquire new skills that would empower them financially.

She said that the 8th edition of the Fair, tagged, ‘Black Friday Sales’, was aimed at supporting vendors and small businesses to network and showcase Made-in-Nigeria products.

“The event this year is not just for the visitors to come and buy, but also for them to come and learn, adding value to themselves.

“We want to empower the women with skills by teaching them how to make headgear like facinators, auto gele and turbans.

“There’s also a master class where they will be taught how to make accessories using Ankara fabrics; all these will be taught for free,” she said.

She added that the Fair would also feature red carpet events, raffle draws, games and bouncy castles to keep the visitors entertained.

“If visitors come to the fair and they find it dull, they won’t come back again but if they are entertained, they’ll be happy to stay,” Emenahi, said.

Edited by Wale Ojetimi (NAN)

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Economy

FAAC: FG, States, LGs share N702.058bn for month of October

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 The Federation Accounts Allocation Committee (FAAC) on Wednesday shared a total of N702.058 billion to the three tiers of government for the month of October.

This was announced in a communique read by Accountant General of the Federation, Mr Ahmed Idris after the FAAC meeting in Abuja.

Idris said that N702.058 billion comprised revenue from Value Added Tax (VAT), Exchange Gain and Gross Statutory Revenue.

He explained that the Federal Government received N295.7billion, the States got N192.697 billion, and the Local Governments received N144.9 billion.

He stated that the oil Producing states received N49.1 billion as 13 per cent derivation revenue and the Revenue Generating Agencies got N19.472 billion as cost of revenue collection.

He, however, disclosed that the gross statutory revenue for the month of October 2019 was N596.041 billion

He added that it was lower than the N599.701 billion received in the previous month by N3.660 billion.

He said the revenue from VAT was N 104.910 billion as against N92.874 billion disbursed in the preceding month with an increase of N12.036 billion recorded.

According to him, the  exchange gain yielded a total revenue of N1.107 billion.

He said as at 20th November, the balance in the Excess Crude Account was 324 million dollars.

He further stated that from VAT, the Federal Government received N15.107 billion, the States got N50.357  billion, the Local Governments received N35.250 billion while the Revenue Generating Agencies had N4.196 billion.

He acknowledged that for the month of October, revenues from Companies Income Tax (CIT), VAT and import duty increased remarkably, while Royalties, Petroleum Profit Tax (PPT), and Excise Duty decreased significantly.

Idris noted that the committee was glad with the increase in revenue and expressed hope for its sustainability.

Edited by Felix Ajide (NAN)

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Economy

Ondo govt cautions communities against destroying bitumen exploitation benefits

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The Ondo State government, on Wednesday, cautioned bitumen producing communities against committing any act of violence capable of destroying the benefit of bitumen exploitation.

The Nigeria News Agency reports that the bitumen producing communities include Orisunmibare/Ilubinrun Camp, Ufara-Moraye (Araromi Obu), Ilubinrun/Ajayi Camp, Mile 2 Camp, Ogunmakin/Odomode Camp, Mulekangbo Camp and Agbabu.

Prof. Bayonle Ademodi, the state Commissioner for Regional Integration and Special Duties, gave the advice during an interactive session with bitumen host communities in Odigbo, Odigbo Local Government area of the state.

Ademodi assured the traditional rulers of the host communities that their views and opinions would be adequately captured and considered as the bitumen development process moved forward.

He added that it was in the interest of the communities to give maximum support to government and investors, who would bring in their funds to invest.

According to him, the state governor, Oluwarotimi Akeredolu, is highly committed to peaceful exploitation of bitumen, saying that the cooperation of the host communities is of top priority.

“The present administration has been working relentlessly to ensure that bitumen is produced in the state and Mr Governor is intent on providing an enabling environment for every genuine investor to do their business in a very congenial atmosphere.

“Please join the efforts of the governor in all ramifications for the successful development of the bitumen resources,” he said.

The commissioner noted that government had been talking to the licensed bitumen companies operating in the state to play by the rules.

“The companies should ensure that provisions of the Nigerian Minerals and Mining Act, 2007, which provide for strict adherence to Community Development Agreement (CDA) and proper conduct of Environmental Impact Assessment (EIA), are observed to the letter.

“The state government has taken it upon itself to ensure that people at the community level are not short-changed and made to suffer.

“At the ministry’s last meeting with the licensed bitumen companies on Oct. 16, the five local government chairmen within the bitumen belt of Ondo State were present.

“And I am pleased to inform you that the Chairman of Odigbo Local Government, Hon. Margaret Akinsuroju, was one of the five chairmen present and her contributions were far-reaching,” he said.

Ademodi recalled that similar interactive sessions had been successfully carried out in Irele and Okitipupa local councils to avoid unhealthy community/investors relationship.

The commissioner promised that their contributions would be critically assessed and factored into the bitumen development policy of the state.

He, however, said that nobody would give money to anybody, but that there would be opportunities for job and good infrastructure.

“There must be patience and cooperation, because there may be environmental challenges in the course of exploitation of the bitumen,” the commissioner said.

Similarly, Mr Ebenezer Ogunsanmi, the Permanent Secretary of the ministry, said that the meeting was to know the host communities’ roles in ensuring peace and tranquillity in the exploration and exploitation of bitumen in the areas.

Ogunsanmi noted that development of bitumen would create employment opportunities for indigenous youths and provide good infrastructure to the communities by the bitumen investors.

He enjoined the communities not to create the impression that the state was not safe for investment.

Oba Rufus Akinrinmade, the Orunja of Odigbo kingdom, tasked the communities to shun sentiment and speculations, which were inimical to the exploitation exercise.

He urged them to be patient and allow peace to reign, as no investors would come to crisis-prone areas, adding all would benefit from the gains of the bitumen.

Mrs Margaret Akinsuroju, the Caretaker Chairman of Odigbo Local Government, said bitumen exploitation was a welcome development, urging the communities to be united and cooperate with the bitumen companies.

Mr Rashidi Giwa, a community leader from Olokuta and Mr Babatunde Oni, a graduate of mining geology, asked for equitable distribution of gains and benefits by the bitumen companies and the government.

According to them, cheating often orchestrates violence in any society.

Mr Kayode Zaccheaus, a youth representative from Odigbo council area, asked the bitumen companies and the government to give youths their dues and have listening ears, even as he pledged their cooperation and support.

Edited by Abdullahi Mohammed and (NAN)‘Wale Sadeeq

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Economy

NSE market indicators maintain positive position, up 0.14%

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Activities on the Nigerian Stock Exchange (NSE) maintained positive trend on Wednesday with crucial market indices growing further by 0.14 per cent.

Specifically, the market capitalisation inched by N18 billion or 0.14 per cent to close at N12.923 trillion against the N12.905 trillion achieved on Tuesday.

Also, the All-Share Index, which opened at 26,739.44, rose by 36.71 points or 0.14 per cent to close at 26,776.15.

The upturn was impacted by gains recorded in medium and large capitalised stocks of Nigerian Breweries, Conoil, UBA, FBN Holdings and Access Bank.

Consequently, the Month-to-Date return increased to +1.60 per cent, while the Year-to-Date loss moderated to -14.81 per cent.

Commenting on market performance, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that the market would continue to experience mixed performance.

“We expect mixed performance to continue, profit-taking and repositioning in value stocks as market players digest the rising inflation and its impacts on investment returns,” Omordion said.

He said that the changing sentiments in expectation of improved liquidity as interest rates drop in the money market ahead of the MPC meeting should guide investors.

According to him, the current undervalued state of the market offers investors opportunities to position for short and medium-to-long-term.

The Nigeria News Agency reports that the market breadth closed positive with 24 price gainers and price 10 losers.

Chams led the gainers’ chart in percentage terms, appreciating by 10 per cent, to close at 33k per share.

LearnAfrica followed with a gain 9.48 per cent to close at N1.27, while Conoil increased by 9.47 per cent to close at N18.50 per share.

Cornerstone Insurance garnered 9.38 per cent to close at 70k, while NPF Microfinance Bank appreciated by 9.09 per cent to close at N1.20 per share.

Conversely, NASCON led the price losers’ chart in percentage terms with a loss of 5.72 per cent to close at N14 per share.

Lasaco Assurance followed with a decline of 3.57 per cent to close at 27k, while Wapic Insurance dipped by 2.86 per cent to close at 34k per share.

Unity Bank lost 2.78 per cent to close at 70k, while AIICO Insurance shed 2.74 per cent to close at 71k per share.

Meanwhile, the total volume of shares traded decreased by 32.22 per cent to 267.31 million valued at N3.05 billion in 4,074 deals.

Access Bank was the most traded stock with an exchange of 63.53 million valued at N643.70 million.

UBA followed with a total of 44.86 million shares worth N338.65 million, while Zenith Bank traded 24.09 million shares valued at N451.63 million.

FBN Holdings accounted for 16.82 million shares valued at N119.31 million, while Guaranty Trust Bank transacted 14.26 million shares worth N414.07 million.

Edited by Tajudeen Atitebi (NAN)

Edited by Tayo Ikujuni (NAN)

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