FBNQuestthe investment banking and asset management arm of FBN Holdings Plc urged private mid-cap companies to carefully explore financing options available in local capital markets.
Ijeoma Agboti, FBNQuest managing director of Funds, said during an interaction with financial journalists in Lagos.
According to Agboti, the economic headwinds currently facing mid-cap companies require business leaders to carefully plan their capital requirements to ensure optimization and defensive positioning.
Importance of fairness: She highlighted the importance of equity and quasi-equity financing as a good source of finance for businesses.
- “Equity and quasi-equity are important sources of funding for mid-cap companies seeking investment for their current operations and expansion initiatives. Equity can be helpful to businesses because business owners can sell stock to investors to fund expansion and growth, with no immediate obligation.
- “Quasi-equity encompasses various loan and convertible loan options whose repayment is tied to future cash flows, but often offers more flexible payment terms than traditional loans,” she says.
Prospects for Nigeria: The interaction included a presentation by Tunde Abidoye, Head of Equity Research Team at FBNQuest, on the outlook for the Nigerian macro economy. He highlighted the outlook for public debt, the exchange rate and inflation. He said:
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- “Businesses and investors are now facing difficult conditions, including growing inflation and exchange rate pressures, limited disposable incomes as well as increasing pressure from the external sector.
- “Given both global and domestic challenges, it is critical that businesses and investors have informed opinions on important macroeconomic variables to minimize business risks and develop a long-term strategy to capitalize on opportunities ahead. as they arise.”
Overall, Ijeoma Agboti said that while the outlook for the business environment remains uncertain over the next 6 months, strong opportunities remain to strengthen capital structures and pursue strategic business prospects.
- “A challenging economic environment provides a good opportunity to redefine strategy and position for recovery. In the process, investors should decipher the attractive opportunities presented by quality issuers,” she says.