Pound could drop even further – to $1.18 – in June: deVere CEO

The pound – this month’s worst-performing major currency – could “easily drop to $1.18” at the end of June, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The warnings from deVere Group’s chief executive and founder Nigel Green come as it is revealed that the British currency shed almost 4% against the U.S. dollar in May and 3% against the euro.

Mr Green comments: “The pound is this year’s third-weakest major currency – just behind the New Zealand dollar and Norwegian krone, which have done even worse.

“The pound has been battered since the Brexit referendum in 2016 and the ensuing years of political uncertainty, losing around 20% of its value since the referendum. 

“The Covid-19 crisis has been another hammer blow for sterling as it promoted a flight-to-safety and ramped-up the search for liquidity.  This situation is a win for the U.S. dollar and, in turn, a loss for the pound.”

He continues: “There are legitimate concerns that the pound has further to fall in the next few weeks.

“It could easily drop to $1.17-$1.18 by the end of June due to renewed and heightened fears of a negative shock due to a no-deal Brexit combined with the far-reaching economic fallout of the pandemic.”

Negotiations between the UK and the EU on their post-Brexit future relationship stalled on Friday with the EU’s chief negotiator Michel Barnier saying the two sides risked reaching a “stalemate.”

The British Prime Minister Boris Johnson has repeatedly threatened to walk away from the talks if insufficient progress has been made by next month’s high-level negotiations. The UK has indicated the alternative of an “Australia-style” deal, a relationship where both sides trade on basic World Trade Organization terms, similar to a no-deal Brexit.

“An even weaker pound will help to reduce people’s purchasing power and a drop in UK living standards. Weaker sterling means imports are more expensive, with rising costs being passed on to consumers,” says Mr Green.
 
“The fall in the pound is good for exports some claim, but it must be remembered that around 50% of UK exports rely on imported components. These will become more expensive as the pound falls in value.
 
“A low pound is, of course, bad news for British expats, amongst others, who receive income or pensions in sterling.
 
“The country’s financial services sector – which represents 6% of all economic activity – will also be adversely affected because it is built on foreign investment that puts its faith in sterling being strong.”

The deVere CEO concludes: “The pound will remain volatile, and is likely to become weaker in the next month.
 
“As such, it can be expected that domestic and international investors in UK assets will be seeking the available international options available to them.”

Global advisory giant to launch major digital finance operation in Dubai

One of the world’s largest independent financial advisory and services organisations is to develop a major digital finance operation from Dubai, confirms its CEO and founder.

deVere Group’s Nigel Green made the announcement on Wednesday as the world readjusts to a post-pandemic new normal.

Mr Green comments: “The world has changed forever in the last few months, the market has changed and client expectations have changed.

“Much of this is being driven by new technologies and the rapid pace of the digitialisation of our lives, including our financial lives. 

“It was a trend that was happening pre-pandemic, but which has been massively accelerated because of it.

“Indeed, this new decade is being reshaped more rapidly and more dramatically than any other.

“To meet these fundamental shifts, we’re developing and building a major digital financial organisation from Dubai.”

There are, says Nigel Green, three main drivers why Dubai has been chosen for this by the organisation that does business in 100 countries worldwide.

“First, we already have had for more than 15 years a considerable footprint in Dubai and across the UAE, with many teams of highly talented individuals.

“Second, Dubai, which is already recognised as one of the most important financial centres in the world, can be expected to become one of the world’s top ten international financial hubs to rival and more aggressively compete with the likes of London, New York and Hong Kong.”
 
He adds: “Dubai is helped in this regard by having an independent regulator, an independent judicial system, a global financial exchange, a stable, pro-business government, a high proposition of high net worth individuals, a dynamic business community, world-class infrastructure, superior digital and telecommunications networks, English as its de-facto business language, and its enviable geographical location and time zone.

“And third is Dubai’s passion for and expertise in innovation. We’ve seen this in real-time as the emirate diversified from oil to become a truly global leader in trade, transportation, finance, tourism, retail and real estate.  

“This is exemplified by Expo 2020 Dubai’s theme, ‘Connecting Minds, Creating the Future’; as well as Sultan Al Mansoori, the UAE Economy Minister, saying recently that the new economy will now be built around digital.”

The deVere CEO says that the Dubai-based digital financial organisation will consolidate and “significantly further develop and expand” the organisation’s pioneering global Contactless Finance service and its world-leading fintech apps, which allow people to access, use, save, invest and manage their money 24/7, on-the-go, anywhere in the world.

Nigel Green concludes: “Our new Dubai-based model is designed for the new world with, as always, the client experience, and expectations and outcomes front and centre of mind.”

Negative interest rates are coming, investors taking action: deVere CEO

Negative interest rates are coming and investors will now be looking to bolster their portfolios to ‘get ahead of the curve and build wealth’, says the CEO and founder of one of the world’s largest independent financial advisory organisations.

deVere Group’s Nigel Green is speaking out after rate options, which gauge monetary policy forecasts, implied on Monday a 23% likelihood that the key federal funds rate will drop below zero by the end of 2020, according to BofA Securities data.

It’s not just the U.S., the world’s largest economy, which is moving towards this scenario.

On Tuesday, the Deputy Governor of the Bank of England also suggested that the UK may be headed toward negative interest rates.

Mr Green comments: “A new global era of negative interest rates would have been unimaginable even a few months ago.  But this has now changed due to the coronavirus.

“As central banks around the world grapple to control the economic impact, it can be reasonably expected that more and more of them will take a dramatic change of policy course and take rates to below zero – like their peers in Europe and Japan.”

He continues: “There is legitimate debate about the efficacy of negative interest rates on boosting economies. 

“They could turn out to be a masterclass in the law of unintended consequences as they could be viewed by consumers and investors that the underlying economies are in a perilous position and, as a result, prompt a drop in consumer and investor demand.”

Whilst the debate on whether negative interest rates help the ‘real economy’ or not will continue, there is no doubt that they help boost financial asset prices.
 
“With this firmly in their minds, market-wise investors will know be looking to bolster their portfolios before the next round of cuts and the likely subsequent price increase. They are taking advantage of the lower entry points now before the next major rally,” notes Nigel Green.
 
He goes on to add: “In addition, those with savings in the bank are already getting no return thanks to the ultra-low interest rates.  Negative rates will offer them more reason to increase their exposure to equities, for example.”
 
The deVere CEO concludes: “The question mark remains on whether cutting rates from their already low levels will solve the issues created by the coronavirus outbreak.
 
“I believe, due to the economic situation and the hints from central banks, that there are more rate cuts on their way as they know it’s not sustainable to just keep printing money.

“This ‘direction of travel’ will push up financial asset prices and, as such, many investors are now looking to get ahead of the curve and build wealth.”

Bitcoin halving highlights crypto is part of mainstream finance: deVere CEO

Bitcoin’s historic halving event on Monday underscores that the “long-term future of cryptocurrencies is secure”, says the CEO and founder of one of the world’s largest independent financial advisory organisations.

The comments from deVere Group’s Nigel Green come as the world’s supply of Bitcoin was forever slashed on Monday. The highly anticipated halving event, occurring only every four years, means that less and less Bitcoin – which is limited to 21 million units – will now been mined.

Monday’s was only the third ever halving. In 2012, the number of new Bitcoins issued every 10 minutes fell from 50 to 25. In 2016, it went down from 25 to 12.5. Now, in the 2020 halving, it will drop from 12.5 to 6.25.

The halving happened on block 630,000.

Nigel Green says: “The historic Bitcoin halving event has demonstrated in two ways that digital assets’ long-term future is secure.

“First, the price had been rising steadily ahead of the highly anticipated event – almost three-fold in the last three months – and then dropped back just before and after it took place.

“This shows that there has been increasing retail demand for Bitcoin as investors see and understand the growing influence and huge opportunities of digital currencies in an increasingly tech-driven world.

“With this in mind, large cryptocurrency investors, known as ‘whales’, accumulate crypto at much lower prices then start a sell-off to capitalise on this sustained growing demand.”

He continues: “Second, history teaches us that after this post-halving drop in price, there is a subsequent bull run. 

“Previous Bitcoin halving events have prompted impressive price climbs. The 2016 halving triggered a 300% jump in the value of Bitcoin. 

“There is no reason to believe this time the market will not respond with a longer-term upward trajectory.

“Indeed, the rally which is likely on its way could potentially be even more dramatic because there is more mass awareness than ever before of the long-term use of and need for digital currencies.”

The deVere CEO adds that in these unusual times, central banks have increased monetary supply and this will further drive prices of cryptocurrencies such as Bitcoin.

“Traditional currencies are devalued and inflation fears rise on the back of the mass printing of money, the likes of which we have recently seen in the U.S., where the nation’s central bank has added trillions of dollars to the money supply,” he says.

“Such measures will inevitably encourage even more investors to consider decentralised, non-sovereign digital currencies.”

Mr Green concludes: “Looking ahead beyond the halving event, cryptocurrencies are increasingly becoming regarded as the future of money due to the real-world issues they address and growing mass adoption.”

Demand for financial advice surges 24% as priorities shift in new era

As individuals, households and businesses readjust and look ahead to a new era and recovery, demand for financial advice is up by almost a quarter, reveals one of the world’s largest independent financial advisory organizations.

deVere Group, which operates in 100 countries worldwide, says the number of enquiries from new clients was up 24% in April, compared to the previous month.

Of the findings, Nigel Green, the founder and chief executive of deVere Group, observes: “Disruption and dislocation have hit entire economies and businesses of all sizes and in all sectors.

“This has had a very real and very immediate impact on the finances of individuals, households and businesses around the world.

“Suddenly, unexpectedly, many have realised that they didn’t have sufficient money behind them, they didn’t have contingency plans.

“This, as they know, could have consequences for the lifestyles and life opportunities of themselves and loved ones and, for those in business, for the long-term sustainability of their firm.

“With financial matters back in sharp focus, for many ‘I should have’ becomes ‘I need to have.’ 

“This most unusual situation has dramatically underscored that no-one really knows what is around the corner. Now more than ever people are seeking to be as financially prepared as they can for any eventuality.”

He continues: “The same thing happened following the 2008 financial crash. That too served as a wake-up call to many people to ensure that they become financially secure and there was a subsequent increase in demand for advice.

“Even then – when confidence in financial institutions, especially traditional banks, was at an all-time low – people understood that as the world evolves, your financial planning strategies might need to also.”

This, says Nigel Green, is driving the increasing demand. But in this tech-driven era, how do people want this advice delivered? 

According to a poll carried out by deVere amongst existing and prospective clients, 52% said ‘face-to-face, 42% said they prefer videocall platforms like Zoom, and 6% answered ‘by telephone.’ 

“Given the circumstances and how much things have changed, I quite was surprised that the preferred option for the delivery of financial advice remains face-to-face.

“But video communication is only 10% behind, which is quite something as it is a new platform for most people.  

“The survey underscores that increasingly people want bespoke financial advice combined with innovative technology.”

Mr Green goes on to add: “We can be in no doubt that the world has already fundamentally changed – and it will do so more and maybe at a faster pace.”

This was highlighted by the deVere poll which revealed that 72% of client respondents feel the world has changed permanently.

In addition, 80% said that in a similar way to after the 2008 crash, new companies will emerge and the same ones that were successful in the past were not guaranteed to succeed again.

“With these shifts impacting people’s finances, the majority of our new clients are seeking advice on savings plans, investments, foreign exchange, pensions and retirement planning and tax planning,” he notes.

The deVere CEO concludes: “2020 has been a year of change.  For an increasing number, this includes a change in the way we prioritise, with long-term financial security for ourselves and our loved ones ever-more important.”

Bitcoin’s coming of age? May’s historic halving taking place in a new era

The Bitcoin price will hit ‘at least $10,000’ even before the four-yearly ‘halving’ event taking place in two weeks, predicts the CEO of one of the world’s largest independent financial advisory organisations. 

The prediction from the chief executive and founder of deVere Group, Nigel Green, comes as the price of the world’s largest cryptocurrency suddenly soared by more than $1,500 on Thursday, moving it to its highest value since February.  It peaked at $9,400.

It comes ahead of May’s highly anticipated halving event. Occurring every four years, halving means that less and less Bitcoin – which is limited to 21 million units – will be mined.

In 2012, the number of new Bitcoins issued every 10 minutes fell from 50 to 25. In 2016, it went down from 25 to 12.5. Now, in the 2020 halving, it will drop from 12.5 to 6.25.

Mr Green says: “We see the cryptocurrency market already significantly picking up pace ahead of the historic event in May.  

“Investors are now increasing their exposure to Bitcoin as the halving – only the third in its 11-year history – will push up prices sharply due to the dramatically lower supply combined with a steady demand and increasing awareness of digital currencies.”

Previous Bitcoin halving events have prompted impressive price climbs. The 2016 halving triggered a 300 per cent jump in the value of Bitcoin.  

But the 2020 one could be even more remarkable, believes the deVere CEO.

He notes: “May’s event could herald Bitcoin’s coming of age. 

“It will, of course, drive prices higher – but, in my opinion, the jump could be even more impactful due to these unprecedented times.

“The digitalisation of our lives is accelerating at a faster pace than ever before. We’re in an exciting new era driven by technology.

“This new world needs new ways of doing things to fit the new normal.  Clearly, one of those things which is needed now more than ever, as the world becomes ever-more digitalised and globalised, is digital and global currency, such as Bitcoin.

“This will not have gone unnoticed by investors who are increasingly piling into cryptocurrencies.”

Mr Green continues: “Also, these unusual times have forced central banks to increase monetary supply. By printing never-seen-before amounts of money, traditional currencies are devalued and inflation fears rise.

“This will also drive investors towards decentralised, non-sovereign digital currencies.”

Mr Green concludes: “The excitement of the forthcoming rare halving event, together with the new era we’re in, will drive the price of Bitcoin exponentially and sustainably.

“I believe we can expect it to hit at least $10,000 before the May event itself.  

“Beyond that, we could see an explosion in the price of Bitcoin due to real-world issues it addresses and increasing adoption.”

The Volvo Group and Daimler Truck AG to lead the development of sustainable transportation by forming joint venture for large-scale production of fuel cells

Sharing the Green Deal vision of sustainable transport and a carbon neutral Europe by 2050, two leading companies in the commercial vehicle industry, Daimler Truck AG and the Volvo Group, have signed a preliminary non-binding agreement to establish a new joint venture. The intention is to develop, produce and commercialize fuel cell systems for heavy-duty vehicle applications and other use cases. Daimler will consolidate all its current fuel cell activities in the joint venture. The Volvo Group will acquire 50% in the joint venture for the sum of approximately EUR 0.6 billion on a cash and debt free basis. 

“Transport and logistics keep the world moving, and the need for transport will continue to grow. Truly CO2-neutral transport can be accomplished through electric drive trains with energy coming either from batteries or by converting hydrogen on board into electricity. For trucks to cope with heavy loads and long distances, fuel cells are one important answer and a technology where Daimler has built up significant expertise through its Mercedes-Benz fuel cell unit over the last two decades. This joint initiative with the Volvo Group is a milestone in bringing fuel cell powered trucks and buses onto our roads,” says Martin Daum, Chairman of the Board of Management Daimler Truck AG and Member of the Board of Management of Daimler AG.

“Electrification of road transport is a key element in delivering the so called Green Deal, a carbon neutral Europe and ultimately a carbon neutral world. Using hydrogen as a carrier of green electricity to power electric trucks in long-haul operations is one important part of the puzzle, and a complement to battery electric vehicles and renewable fuels. Combining the Volvo Group and Daimler’s experience in this area to accelerate the rate of development is good both for our customers and for society as a whole. By forming this joint venture, we are clearly showing that we believe in hydrogen fuel cells for commercial vehicles. But for this vision to become reality, other companies and institutions also need to support and contribute to this development, not least in order to establish the fuel infrastructure needed,” says Martin Lundstedt, Volvo Group President and CEO. 

The Volvo Group and Daimler Truck AG will be 50/50 partners in the joint venture, which will operate as an independent and autonomous entity, with Daimler Truck AG and the Volvo Group continuing to be competitors in all other areas of business. Joining forces will decrease development costs for both companies and accelerate the market introduction of fuel cell systems in products used for heavy-duty transport and demanding long-haul applications. In the context of the current economic downturn cooperation has become even more necessary in order to meet the Green Deal objectives within a feasible time-frame.

The common goal is for both companies to offer heavy-duty vehicles with fuel cells for demanding long-haul applications in series production in the second half of the decade. In addition, other automotive and non-automotive use cases are also part of the new joint venture’s scope. 

To enable the joint venture, Daimler Trucks is bringing together all group-wide fuel cell activities in a new Daimler Truck fuel cell unit. Part of this bundling of activities is the allocation of the operations of “Mercedes-Benz Fuel Cell GmbH”, which has longstanding experience in the development of fuel cell and hydrogen storage systems for various vehicle applications, to Daimler Truck AG. 

The joint venture will include the operations in Nabern/Germany (currently headquarters of the Mercedes-Benz Fuel Cell GmbH) with production facilities in Germany and Canada.

The signed preliminary agreement is non-binding. A final agreement is expected by Q3 and closing before year-end 2020. All potential transactions are subject to examination and approval by the responsible competition authorities.

Facts: Fuel cells and hydrogen as fuel
•  A hydrogen fuel cell converts the chemical energy of the fuel, in this case hydrogen, and oxygen (in the air) into electricity. The electricity powers the electrical motors that propel an electrical vehicle. 
•  There are two main ways to produce the hydrogen needed. So-called green hydrogen can be produced locally at the gas station, using electricity to convert water into hydrogen. Blue hydrogen is expected to be produced from natural gas, utilizing carbon capture technology to create a carbon neutral fuel.

2020-04-21

For further information, please contact:
Claes Eliasson, Volvo Group Media Relations, +46 31 323 72 29
Florian Martens, Daimler Trucks & Buses Media Relations +49 160 8687552

Finding the standard size of your trading account

Very few traders pay attention to the size of their trading account. In most cases, the traders are biased in favor of leverage and they are enjoying the high-risk trading environment. But leverage is only for the expert Singaporean traders who know the risk management policy from the core. They often find it hard to manage the leverage trading account. The best practice is to use 1:10 leverage (maximum) while trading the real market. You can say that without using the leverage, you won’t be able to support your family. Well, it depends on the size of your account. If you invest $1000, it’s very obvious you are not going to make a significant profit from this market.

This content is not going to be like a traditional article. We are going to give you some key metrics that will allow you to manage the risk in trading. Most importantly, it will help you to find the amount of money which you must have to live your life with trading business.

Your family needs

First of all identity your family needs. Calculate the basic costs of your family life so that you know the minimum amount of money you need to make per month. In most cases, rookies don’t believe in such an approach. They become fairly aggressive with the trading method and try to earn money without having any goal. But such things are not going to work. This is not how the professionals place their trade in real life. They have specific sets of goals and for this reason, they can make a decent profit from this market. Being a new trader in the Forex market, it will be tough to trade with goals. Without developing these skills, you won’t be able to know the amount of money which you must invest in trading.

Depends on your win rate

The success rate of retail traders in the exchange traded funds greatly varies. You have to know your success rate by using the demo account. Those who have a high success rate can effectively use leverage. So, they will require a small amount of money. On the contrary, those who don’t have a high success rate must trade with a low leverage account. For them, leverage is like a time bomb. They will never know when it costs them a fortune. So, work hard on your trading strategy so that you can have a great win rate in trading. Never try to deal with the market with a low win rate as it makes the trading process much more complicated.

Profit factors

You might be thinking about how much money you can earn from this market. The professional usually makes 5-10%+ profit per month. So, use the simple mathematical calculation and find out how much money you need to support your family. If the number of too big, you must increase the size of your capital. But this should be done professionally. Borrowing money from other people to trade the market is a very big mistake. This is one of the most common reasons why rookies are losing money in trading.

The rookies might not be able to earn so much profit for the first few years. They should be happy with a 2-3% profit per month. Once they become good at analyzing the profit factor, they can easily scale up the size of their account balance.

Conclusion

There is no fixed rule to investing money at trading. But stop investing money that you can’t lose in trading. If we talk about the rule of thumb, it is imperative to invest at least $2000 at the initial stage. Anything less than that will force you to overtrade. Once you start overtrading, you are going to have a very long journey towards success.

How to Achieve Living Debt Free Quickly

Nowadays, households in Great Britain owe a sum of around £15,000.

If you find yourself struggling with debt, it can feel like a never-ending slog to pay back each and every penny. 

But, if you’re interested in living debt-free and are ready to put in some hard work and diligent dedication, then luckily it’s possible to completely change your life.

Aside from paying off your high-interest debt first, here are a few more methods for helping you live a debt-free life faster: 

1. Create an Accurate Budget 

In the UK, 10% of people admit that they are terrible with money. But, it’s impossible to pay back debt if you don’t know exactly how much your lifestyle costs you. 

Work out everything from how much you spend on food every week, how much your rent and bills cost, and how much you need for expenses such as travel or childcare. 

Next, work out how much you spend on luxury expenses, such as clothing, going to the cinema, or eating out. 

There are many budget tracking methods including apps, such as Monzo, or simply writing everything down with pen and paper.

Now, budget how much you can spend on monthly debt payments. Don’t overestimate this figure, it needs to be precise to give yourself peace of mind.

2. Take Things Slowly 

Pummelling all of your earnings into paying off your debt is simply not sustainable. You’re likely to give up completely. 

Instead, consider your debt payments as a slow but sustainable practice. Set yourself realistic goals, such as a year or two to pay off your debts. 

Although it’s a good idea to cut down on luxuries, it’s still worth planning when and how you’ll treat yourself. Don’t let your entire working life be spent trying to pay down debt. 

3. Learn to Love the Free Things in Life

There is no point in paying off your debt only to start spending again. You need to develop interests that are free. 

Luckily, there are many free activities nowadays. Join a free running club with other locals, sign up to free trial classes, visit museums, and go to lectures.

You’ll be amazed by how much there is to do for free when you start looking. Regularly attending free events in your hometown is a great way to meet other people with similar interests and avoid those with expensive tastes!

4. Find a Mentor 

Are you struggling to keep up the motivation to pay off your debts? Find someone who has travelled along this path before you to help keep you motivated. 

This could be someone you know in your personal life or it could simply be a celebrity. There are hundreds of podcasts dedicated to finances and living debt-free. 

You’ll find untapped expertise and knowledge that will help you improve your own circumstances. 

For example, read this post by Giles Coghlan, chief currency analyst at HYCM, explaining the secret to trading on the financial markets!

5. What’s Your Reason Why?

Crippling debt has regularly been linked to depression. This is a good reason why you should sort out your finances. 

But, if you aren’t struggling with a mental health issue, then perhaps this isn’t a good enough reason for you. Instead, find your own reason why you want to live debt-free. 

Develop your own mantra that you repeat to yourself whenever you want to make an impulsive purchase. 

6. Leave the Credit Cards Behind 

Figure out why you are in debt. If you are simply an overindulger and spender, then there are many ways for you to trick yourself into avoiding spending money. 

For example, taking only the exact amount of cash you need with you whenever you go out can stop you from spending too much on nights out.  

However, if you are a struggling, single-parent, then speak to your local authorities and even your bank who may help you reduce your monthly payments. 

Analyse your circumstances and the reasons for being in debt to help you avoid this situation in the future and repeating the same behaviour. 

7. Generate More Income

This is an aggressive method for paying off debt that simply isn’t available to everyone. But, it can certainly help you get out of debt quicker. 

By picking up a second job for a few months, you’ll drastically increase how much you earn. But, don’t ever put your mental health at risk by overworking yourself.

Only take a second job if you feel that you feasibly have the time and energy to do this.

Alternatively, consider other ways of making money such as selling unwanted clothes, furnishings, jewellery and kitchenware online. If you have a spare room, then consider renting out your room. 

8. Build a Savings Account for Emergencies

As well as focusing on paying off debt, a good idea is to build an emergency fund. By doing this, you’ll have an out when something doesn’t go to plan. 

By building up this fund of a few thousand pounds, you will have the peace of mind that you don’t have to stay in a job you hate, or that you can afford rent somewhere else if your tenancy is pulled from under your feet. 

While paying off debt and building your savings account, be kind to yourself. Not everything is going to go right every month. 

Can You Imagine Living Debt Free?

Picture how great you will feel when you are debt-free and have some savings in the bank. Living debt-free requires dedication and time.

When you’ve paid off your debts, you need to make sure that you don’t slip into your old ways and spend more than you earn. If you’re struggling to pay off your debts, then consider speaking to a financial advisor or make an appointment at your bank.

Are you interested in learning more about finance? Check out the dedicated section of our blog for more information.

Nigerian bank DLM on the move delivers at all levels – with exciting plans in the pipeline

DLM Capital Group – a developmental investment bank that supports economic and social infrastructure projects with the aim of driving GDP growth and improving lives. 

Founding chairman and group CEO of investment firm DLM Capital Group , Sonnie Ayere
Founding chairman and group CEO of investment firm DLM Capital Group, Sonnie Ayere

DLM Advisory Partners (DLMAP), formerly Dunn Loren Merrifield Advisory Partners, is the advisory and capital-raising arm of DLM Capital group. The principal services provided by DLMAP include financial advisory, debt capital-raising, equity capital raising, mergers and acquisitions, and company set-up advisory.

DLMAP has played a leading role in structured finance and securitisation within Nigeria. “We have acted as sole arranger to more than 80 percent of structured finance transactions in Nigeria, and 100 percent of all securitisation transactions in the market,” says CEO Sonnie Ayere.

Most Innovative Transaction of 2019

In 2019, DLM executed the first Bus Rapid Transit (BRT) securitisation in Nigeria, working with the sponsor, Primero Transport Services Limited (PTSL). The system caters to residents of the country’s most densely populated city, Lagos. DLM raised ₦16.50bn ($45.8m) through the securitisation of the company’s BRT tickets receivables. The sponsor is licensed to operate the longest BRT route in West Africa, 35.3km, with its 434-bus fleet.

DLM Capital Group

A feasibility study conducted put the daily passenger carriage at about 226,300 passengers per day. Due to working capital pressures, the company was only able to serve an average of 135,000 daily passengers before the securitisation transaction in 2019.

The ₦16.5bn 17 percent Series 1 Fixed Rate Bonds issued were primarily used to refinance all pre-existing commercial banking loan facilities on the books of the sponsor. The transaction provided the company with savings in interest, shaving the cost of funds from 27 percent per annum to 17 percent. At the same time, it extended the tenor of the company’s debt from three years to seven.

With this transaction, DLM was able to provide the company with up to 10 percent savings in interest, reducing the cash required to service debt and improving the company’s working capital. DLM also advised on the restructuring of the company’s balance sheet by moving the operating assets into a new vehicle and eliminated the strain of depreciation charges.

Focus for 2020

DLM is in discussions with industry stakeholders and umbrella bodies to establish proprietary funding conduits across key sectors of the Nigerian economy. It intends to include microfinance, agriculture, education, health care and a continuation of other funding programmes for the mortgage, real estate and transportation sectors.

Working with a DFI partner, the company recently concluded the design of an aggregation vehicle aimed at providing local currency, wholesale funding solutions to micro-lenders in Nigeria by way of loan book securitisation.

A similar platform to provide financing to primary users of agriculture commodities is currently being developed.