FBNQuest, the investment banking and asset management business of FBN Holdings Plc, has urged private mid-cap companies to explore the capital financing options available in the local financial markets.
The Managing Director of FBNQuest Funds, Mrs Ijeoma Agboti, gave the advice at a media parley on Thursday in Lagos.
According to her, the current economic headwinds facing mid-cap businesses place a demand on business leaders to carefully plan their capital needs with a view to optimisation and defensive positioning.
Agboti said while the outlook for the business environment remained uncertain over the next six months, there were strong opportunities to bolster capital structures, and to pursue strategic business prospects.
“A difficult economic environment provides a good opportunity to re-strategise and position for recovery,” she said.
She, therefore, urged investors to decipher attractive opportunities presented by quality issuers.
Equity and quasi-equity capital are important sources of financing for mid-cap companies seeking investment for their current operations and expansion initiatives.
Equity capital can be helpful to businesses because business owners can sell shares to investors to finance expansion and growth, without immediate obligation.
Quasi-equity encompasses various loan and convertible loan options for which repayment is linked to future cash flows, but often provides more flexible payment terms than traditional loans.
Mr Tunde Abidoye, Head of the Equity Research team of FBNQuest, who made a presentation on the prospects for Nigeria’s macroeconomics, highlighted the outlook for public debt, exchange rate and inflation.
Abidoye said, “Businesses and investors now face difficult conditions including mounting pressures on inflation and exchange rate, constrained disposable income as well as growing pressure from the external sector.
“Given the challenges on both the global and domestic fronts, it is essential for businesses and investors to have informed views on important macroeconomic variables in order to minimise business risks and to develop a long-term strategy to take advantage of opportunities as they arise,” he said.
FBNQuest delivers a wide range of financial services through various businesses: corporate and investment banking, investment management, among others.
