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Nigeria: Union Trustees to Float N4b Mixed Fund
Real estate news By Nkiruka Anene
16 October 2007
Union Trustees Limited, subsidiary of Union Bank Nigeria Plc, has concluded arrangements for the floating of N4 billion mixed trust fund through an offer for public subscription with a completion board meeting in Lagos. The board of the company disclosed at the meeting yesterday that the fund managers are expected to raise through the offer a total of N4 billion with a unit cost of the mixed fund selling for N1 each. The offer, according to the prospectus, will open on October 22 and close on November 28 this year while investors are expected to buy a minimum of 50,000 units.
The proceeds of the offer after deduction of cost and expenses will be invested in Quoted Securities in the stock market to the tune of 35 percent, money market instruments - 40 percent, fixed income securities (Bonds) 10 percent and real estate investment 15 percent. The company is projecting gross earnings from the fund for six months ending 31 March 2008 and year ending 2009 and 2010 in the order of N326.33 million, N715.62 million and N816.25 million respectively. Forecast ratios for the fund indicate a seven kobo earnings increase per 100 kobo share in 2008, 15 kobo per 100 kobo in 2009 and 17 kobo per share earnings in 2010. Also projections on return on investments for the period shows a percentage growth of 7,15 and 17 earnings yield per 100 kobo per share respectively.
In his remarks, the managing director of Union bank, who is also chairman of the subsidiary, Mr. Bartholomew Bassey Ebong, said the company's effort at floating the mutual fund is aimed at satisfying the huge clientele of the bank who needed to be catered for. On why a substantial 40 percent of the fund is to be invested in money market instrument, Ebong explained that the consistent growth on short tenured instruments informed the decision to invest the largest chunk of the fund in money market. Meanwhile, part of the fundamental objectives of the fund is to provide unit holders with growth on their capital over a long time through investment in selected portfolios of securities and instruments.
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