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Structural ChangesMacroeconomic Review and OutlookMacroeconomic Review and Outlook Transactions

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Investor FAQsInvestor FAQs

March 2010Issue 001

2 BGL NewsLetter | March 2010

A POSITIVE OUTLOOKThe 2008/9 Financial Year was a par-ticularly challenging one for the entire economy especially the financial ser-vices industry. Having experienced unprecedented challenges, your com-pany managed to come through 2009 relatively unscathed. I believe that this is a true testament to our enduring values and culture as an institution.

Whilst the uncertainty in the Nigerian economy cannot be over emphasised, we foresee an attractive outlook for the economy and the market in the months ahead. As the political impasse and the sanitisation of the financial system continues to unravel, we expect that by the end of the first quarter, some normalcy would return as the is-sues surrounding our President Umaru Musa Yar’Adua are laid to rest.By the second quarter of the year, the end result of the banking sector

Dear Investorreform should have become clear, the 2010 budget is expected to have been passed and full implementa-tion commenced. We project a better implementation of the budget this year as we draw closer to the 2011 elections. Government would be pushed to spend more on infrastructure devel-opment while spending by politicians would also help to boost liquidity in the system. While the boost in liquid-ity could have an effect on inflation, we expect the increased liquidity to cause a reduction in interest rate and a boost to capital market activities. We project strong activities for both the bond market, the fixed income and equity markets.

The anticipated recovery of the capital market may however be elusive if the capital market related toxic assets are not speedily transferred to the AMCON (Asset Management Company of Nige-

ria) based on over N1 trillion exposure to banks by capital market operators. The intervention of the government would be better appreciated when the AMCON comes on board and acquires toxic assets from the banks. In fact, this would facilitate the CBN’s directive to bailed out banks to recapitalise in order to be more attractive to prospective investors. The benefits of the Asset Management Company cannot be over-emphasised in addressing the financial crisis.

LISTING ON THE NSEThe Board of Directors has directed that the Company’s shares be listed on The Nigerian Stock Exchange by the third quarter of this year. We have put together a comprehensive plan for the listing and are currently working on completing all the required documen-tation and processes for listing. I am

The anticipated re-covery of the capital market may however be elusive if the capi-tal market related toxic assets are not speedily transferred to the AMCON (As-set Management Company of Nige-ria) based on over N1 trillion exposure to banks by capital market operators.

3BGL NewsLetter | March 2010

pleased to inform you that we are fully committed to achieving our target to be listed by the third quarter of 2010.

BGL AND THE PRESSIn the last few weeks, we have wit-nessed some sensational coverage of our activities by the Press. Firstly with the NITEL transaction (see page 7 for a detailed brief on the transaction) and secondly with regards to the class action against BGL by a shareholder group centered around a Co-operative based in South-South Nigeria. Notwith-standing the global meltdown and attendant financial crisis worldwide, your company remains committed to the realisation of its vision for all its stakeholders including its numerous shareholders. I assure you that we have a strong defence against the ac-tion of a few shareholders seeking to evade their margin loan obligation by resorting to litigation against their own company. BGL Plc remains committed to its corporate goals and wishes to

thank all its shareholders for their con-tinued support.

BGL RESEARCH & INTELLIGENCE PUBLICATIONSAmidst the global economic crisis and the ongoing financial system reforms, the BGL Research & Intelligence team, a Strategic Unit of BGL Plc which has consistently delivered high quality research information on the various sectors of the Nigerian economy, em-barked upon detailed analysis of the situation, seeking uncommon value amidst the turmoil. The outcome of the research, four sectoral reports and our quarterly financial monitor, were presented formally to the public on the 5th of March, 2010.

The Banking, Pension and Insurance Reports provide invaluable insight into the current state of the Nigerian finan-cial systems and proffer a roadmap on the way forward. In addition, the Agriculture Report which is the first of

its kind in Nigeria, analyses the Nigerian Agricultural Sector’s sub-optimal state and discusses how this noble sector can be restored to its rightful place as the central contributor to economic development.

We hope you will avail yourselves of these reports which can be down-loaded from our corporate website (http://www.bglplc.com).

CONCLUSIONFinally, we thank you for your custom and unflinching support for the BGL Group and restate our commitment to maximising value for our various stakeholders. In this vein, we will keep you updated on developments in your company as they unfold.

Yours sincerely,

ALBERT E. OKUMAGBAGroup Managing Director

Mission ‘’BGL will actively seek the best opportunities to bring people and knowl-

edge together to deliver value greater than the sum of its parts’’

Vision ‘’To champion wealth creation that makes a positive impact on society’’

ConnectednessBGL is well connected to its people: clients, employees, commu-nities and partners throughout the global investment banking fraternity. We believe that well connected institutions give their customers access to a wide range of life- transforming oppor-tunities.

Can doBGL’s ambitious, energetic spirit embraces the new: new ap-proaches, new directions, new opportunities, new growth and new wealth creation.

Values

TrailblazingFresh thinking, future focus, impeccable innovation and imagination sets BGL apart. Into Africa and out of Africa, BGL’s footprint is expanding with new products and services to match changing times and to complement the evolving business and investment character of our clients.

4 BGL NewsLetter | March 2010

In December 2009, the Board of Direc-tors of the BGL Group approved study leave for the Group Executive Director, Investment Banking Directorate, Henry Laraiyetan. The study leave, which start-ed in January 2010, is expected to last a period of 18 months. Consequently, Chibundu Edozie, previously Group Executive Director, Capital Management Directorate was appointed Group Execu-tive Director of BGL Plc in charge of all our strategic Business platform .

In March 2010, Bili Odum, previously Managing Director, BGL Asset Manage-ment left the organisation to take up the position of Group Company Secretary at UBA Plc. and Modupe Mujota became the Managing Director of BGL Asset Management Limited. Modupe has over fifteen years Commercial Banking and Asset Management experience. She has a wealth of experience in structuring financial investments and investment planning as well as expertise in real estate investment, development and financing. She is versatile and has distin-guishing skills in Project Management, Business Process Innovation, Turnaround Management and Brand Strategy Devel-opment and Management.

Wale Oluwo, previously the Deputy Managing Director of BGL Securities took over as the Managing Director when Mr. Cornelius Oboh was appointed Chief Marketing Officer of the BGL Group. Wale has over 15 years experience in the financial services industry and has worked with several organisations including Prudent Bank Plc (now Skye Bank Plc), First City Monument Bank, FSB International Bank (now Fidelity Bank),

and Intercontinental Capital Market Limited (a wholly owned subsidiary of Intercontinental Bank Plc).

BGL, as a dynamic institution will con-tinue to constantly adapt to the oper-ating environment. In January, a new corporate structure took effect. The new structure was carefully thought through with the aim of positioning the company to better take advantage of emerging opportunities. In addi-tion to the changes mentioned above, some of the additional changes which took place in your company have been outlined below:

The Group Corporate Strategy Di-vision, another addition to the BGL Group is tasked with the responsibility of scanning the micro and macro busi-ness environment with the objective of adequately informing BGL Plc and its subsidiaries of business opportunities that would direct the group’s growth and development.

Tamunoye Zifere Alazigha is the Head of the Group Corporate Strategy Division. Prior to this he was the Deputy Manag-ing Director of BGL Asset Management. He has over 15 years work experience in core investment banking in first-rate institutions including Bank of America, J P Morgan Chase, Deutsche Bank, BNP Paribas and The Fuji Bank all in New York, and National Westminster Bank in London. He is an accomplished Financial Market Researcher with several publica-tions in New York’s financial press.

Principal Investments, a recent addi-tion to the Investment Banking Group

was set up to manage strategic invest-ments of the BGL Group, with the aim of increasing the market share of BGL in the secondary market in terms of volume and value. It will also serve as a platform for diversifying the income base into areas like real estate and other alternative investments.

Mr. Hilary Uche Eledu is the Head of Principal Investments. He has over fifteen years working experience in Financial Restructuring, Process Reengineering, Business Advisory and Strategy that spans the Manufacturing, Entertain-ment and Financial Services industries. Hilary’s prior assignments include a two year secondment to DAAR Communica-tions Limited where he restructured the finance and operations of the organisa-tion in his capacity as General Manager, Finance.

Investment Banking Sales (IBD Sales), also a recent addition to the Investment Banking Group, is the sales and distribu-tion arm of the Directorate with a main focus on the distribution of products to both Foreign and Local Investors. The team interfaces with the three sub units of the directorate (Corporate Finance, Structured Finance and Public Sector Ad-visory) and provides market feedback to enhance the product development cy-cle. IBD Sales seeks to develop relation-ships with various investor categories (Private Equity, Development Finance Institutions, Fund Managers etc.) to aid in executing capital raising mandates for BGL’s investment banking clients.

Structural Changes

5BGL NewsLetter | March 2010

Macroeconomic Review and Outlook

Contrary to the experience of most world exchanges which recorded positive re-turns in 2009 after a daunting 2008, the Nigerian capital market suffered a 34% fall in the market index. However, the market stability experienced since the beginning of the year gives fresh hopes that despite economic uncertainty due to the political logjam and the negative effect of the current banking reform, 2010 could bring market recovery after we have established market stability.

While the economic outlook for 2009 was grim and analysts worldwide projected an upside growth of between 4‐4.5% for Nigeria, an estimated actual growth rate of 6.9% is very impressive. Although there is a possibility of the growth rate being restated downward, it surpass-ing the projected upside is a notable achievement. In 2010, we expect oil output and revenue to be volatile due to the unresolved issue of the Niger‐Delta restiveness. We expect increased spend-ing as the nation prepares for election in early 2011 to put pressure on inflation; thus remaining in double digits. The exchange rate will fluctuate in response to oil prices; however we expect it to be between N150‐N160 to a US Dollar. On the positive, we expect the quick completion of the banking sanitisation and resumed lending by banks to bring down interest rates.

Outlook for the Capital MarketThe capital market will respond to the development in the economy and the reform in the banking sector. By the second half of 2010, the political impasse is expected to have been resolved; the economic direction would be clearer while the increase in liquidity (due to

government spending) and reduced interest rates would boost activities on the nation’s capital market.

There will be increased interest in equity stocks especially those in the real sector (food and beverages, building materials and breweries) who would be the ben-eficiaries of the debt capital to be raised by some top banks. In the end we project an average return of about 10% for the equity market in 2010.

However, the positive outlook for the capital market for the year 2010 is sub-ject to quick conclusion of the banking sanitisation and the resumption of bank lending, which would improve liquid-ity and boost investors’ confidence. We are also positive of a quick economic and market recovery due to the huge presence of non‐traded stocks in the economy, and the contribution of agri-culture and oil & gas to the GDP. The NSE has not achieved optimal depth due to the non‐representation of these stocks on the exchange.

Furthermore, investments in Nigeria’s capital market are not in synthetic or complex instruments, and so the road to recovery is quicker. Investor inertia is based on dwindling confidence in the market, precipitated by the global finan-cial crisis and not the performance of the underlying corporations. The ‘boom and burst’ trend has also shown that discern-ing investors should take advantage of the cut in share prices during the ‘burst’ periods and exit, if they so desire, during the ‘boom’ periods. New investors should have a longer‐term focus as capital ap-preciation is inevitable.

While the economic outlook for 2009 was grim and analysts worldwide projected an upside growth of between 4‐4.5% for Nigeria, an estimated actual growth rate of 6.9% is very impressive. Although there is a possibility of the growth rate being restated downward...

BGL’s CSR Initiative

This CSR initiative was borne out of the loss incurred by investors due to the global financial meltdown. Active Lis-tener means that BGL is committed to providing answers to investors’ queries on any aspect of the capital market.

One of the thematic areas of BGL CSR is health. This year, BGL staff joined the fight against colon cancer by observing the Dress In Blue day (A day set aside to create awareness for Colon Cancer). Staff members came to work dressed in blue, made financial contributions to the treatment of a colon cancer patient in Nigeria and distributed information on colon cancer to the general public.

Active Listener

BGL Dress in Blue day

6 BGL NewsLetter | March 2010

Although the sub-national bond issu-ance programmes is not a new phe-nomenon in the Nigerian capital mar-ket, the last two years have witnessed significant activity in this regard. Con-sequently, the BGL Group has emerged the leading player, participating in three of the four programmes which hit the market over this period.

The resurgence of this sector of the securities market has been largely due to the significant decline in FAAC rev-enues and the consequent creation of a gap in funding requirements for the achievement of key infrastructure and developmental targets of the States.

BGL played several key roles on the issues released last year. BGL was a co-issuing house on the Imo State N18.5 billion bond issue under the State’s N40 billion bond programme. The primary use of the offer proceeds was to finance construction of water delivery schemes, development of tourism, and improve-ment of road network in the state.

In the Kwara State bond, a N17 billion issue under the state’s N30 billion bond programme; BGL participated as joint issuing house and joint underwriter. The bond was meant to finance infrastruc-ture from educational, agricultural and other commercial facilities.

The Niger State development bond was a N6 billion issue in which BGL was again a joint issuing house and a lead underwriter. The proceeds of the of-fer were exclusively intended for road construction in the state. . While BGL Plc was the investment bank acting in issuing house capacity, BGL Se-curities participated as receiving agents on all these offers; thereby reiterating the group’s capabilities.

Currently, BGL has over five mandates on proposed state bonds with leading roles in a number of them and ancillary roles to be executed by its subsidiar-ies.

Bond Transactions

TransactionsKey

Q: Mr Oluwo, our investors/clients have heard a lot about a variety of BGL Notes. As the person overseeing these products, please tell us a little about them.

A: We have the GCN (Guaranteed Consolidated Notes), AGN (Aspire Guaranteed notes) and AFN (Apprenticeship Freedom Notes). These products provide high returns on investments in the short, medium and long term with guaranteed security of invested capital and returns too.

Q: What is the origin of these notes?

A: The notes were created to provide alternative investment opportunities for our clients, especially those who do not want to trade in the equity market just yet as a result of the huge losses incurred by some equity investors during the market downturn.

Q: How do investors differentiate between these notes? What are the key features of each note?

A. The products differ with respect to minimum capital requirement, duration and rates. For example, while GCN has a minimum invest-ment of N500,000.00, AFN starts from as low as N10,000.00. Minimum investment for AGN is N100,000.00. The duration of the investments also vary with the minimum investment period ranging from 60 days for GCN to 90 days and 180 days for AGN and AFN respectively. Each product offers felixble and superior rates of return, with longer deposits typically attracting higher rates.

Q: It sounds like these Notes are targeted at different audiences. Can you break this down for us; tell us who you had in mind when each of the Notes was created?

A. i. The GCN was created for high networth individuals and corporations to provide an avenue for investment in the short to medium term as well as to guarantee their capital. Also to avoid erosion as that can occur with direct equity exposure. ii. The AGN was created for the middle class and encourages capital investment with high returns on investment in the short to medium term. Its duration is longer than the GCN. iii. The AFN was created for the lower income earners to encourage savings and it provides the best returns on their minimum investments.

Q: Ok, having helped us understand the products better, can you tell us what their major benefits are? Why should people invest in them?

A. i. They provide higher than average investment returns with the benefit of zero charges. ii. Flexible structures with variable durations. iii. Swift conversion to full primary and secondary investments. iv. BGL offers competitive/above average interest rates. v. You can invest in the Apprenticeship Freedom Notes (AFN) with as low as N10, 000.00 which makes it affordable to almost all.

Q: Sounds pretty good but we know nothing is perfect. What penalties, etc. exist with these products?

A. Investments terminated before maturity could attract a penalty of 15% on the returns.

with Wale Oluwo, MD, BGL Securities LimitedInterview

1. When is BGL’s next Annual General Meeting?

BGL’s last AGM was held on Janu-ary 30, 2009. The next AGM will be held soon after the results for the 2008/2009 financial year have been audited and approved.

2. When is BGL’s financial year end? BGL’s financial year end was recently

moved from the 30th of June to the 31st of December. The financial year therefore currently runs from January to December.

3. Who is BGL’s independent auditor? Our current auditors are: Akintola Williams Deloitte (Chartered

Accountants) 235 Ikorodu Road Ilupeju, Lagos Nigeria

4. Who is BGL’s Registrar? Unity Registrars Limited Unity Bank building Plot 1683 Sanusi Fafunwa Street Victoria Island, Lagos Nigeria

5. Does BGL pay dividends? BGL as a good corporate citizen is

committed to increasing the wealth of its shareholders and we believe that a consistent dividend policy is a critical measure of shareholder satisfaction. To this end, even as we place emphasis on the reinvestment of earnings, we are also committed to delivering good returns to share-holders in the form of dividends and capital appreciation.

6. When will BGL shares be listed on the Nigerian Stock Exchange?

In line with the company’s objective to ensure the highest possible value is created for our shareholders, BGL shares would be listed on the NSE in the second or third quarter of 2010.

7. Who do I contact if I haven’t received my share certificate or dividend payment, if I want to buy or sell BGL shares, or for any other related issues?

For investor related enquiries, please call Yvonne Edozien on 01-4622613 or send an email to investorrela-tions@bglgroupng.com.

8. How do I get information on or participate in a stock or bond that BGL is underwriting?

Contact customer care on 01-2805544 or visit our website: www.bglplc.com.

9. How can I get a copy of BGL’s an-nual report or details of its quar-terly results?

As an unquoted company, BGL is not required to publish quarterly results. You can however call 01-4622613 or email investorrelations@bglgroupng.com to receive a copy of the annual report.

10. Who do I contact if I would like to receive BGL’s Financial Monitor, BGL’s Sectoral Reports or other research reports?

Kindly visit our website www.bglplc.com to download these reports. You can also email investorrelations@bglgroupng.com or research@bgl-groupng.om to be added to the mailing list.

Investor FAQs

The consortium put together by G-Cell Wireless (“G-Cell”) as Promoter and BGL Private Equity Limited (“BGL PE”) along with thirteen others pre-qualified and was among those selected to submit a Technical and Financial bid for the acquisition of NITEL. The need for a joint venture was identified following proper assessment of the challenge involved in turning NITEL around. This led to the creation of the New Generation Con-sortium Ltd, an SPV incorporated under the laws of Nigeria for the purpose of acquiring a 75% equity stake in the bundled NITEL. Partners in the Consor-tium include Minerva Group (“Minerva”) as Lead Financial Partner, China Unicom

(Europe) Operations Limited as Techni-cal Partner, G-Cell Wireless Limited as Co-technical Partner and BGL Private Equity Limited as Financial Partner.

In order to ensure a holistic delivery of quality telecommunications services to the Nigerian populace New Generation Consortium explored collaborations and signed MOU’s with a number of co-technical operators and ancillary service providers including FiberHome Technologies

Limited, Huawei Technologies Co. Limit-ed, Mass Telecom Innovation Plc (“MTI”), GIT Affinalia / Ringsouth Europa, Xtra

Telecom / The Phone House Group, and Operators of National Rural Telephony Program in Nigeria.

In February, 2010 the new generation consortium emerged as the preferred bidder.

The NITEL transaction is a very impor-tant transaction for us and we believe that its successful conclusion will be a launching pad to several other high profile transactions in the Public and Private Sector.

The NITEL Transaction

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Return to: The Investor Relations OfficerBGL Plc, Millennium House12A Catholic Mission Street, Lagos Island.

BGL Photo News

Dear Investor/Shareholder

Formal Presentationof BGL R&I Publications

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BGL Meeting with Infrastructure Concession Regulatory Commission

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From left, Albert Okumagba (GMD BGL Plc), Hon Mohammed Kumalia (Partner PPP Trans Consulting), Suraj Yakubu (Partner PPP Trans Consulting), Ibrahim Alkali (SA to the GMD BGL Plc).

From left, Hon Mohammed Kumalia (Partner PPP Trans Consulting), Suraj Yakubu (Partner PPP Trans Consult-ing), Albert Okumagba (GMD BGL Plc), Mansur Ahmed (Director General ICRC)

From left, Albert Okumagba (GMD BGL Plc), Mansur Ahmed (Director General ICRC)

From left, Mansur Ahmed (Director General ICRC), Albert Okumagba (GMD BGL Plc), Chidi Izuwah (Execu-tive Director PPP Resource Center ICRC)

Mohammed Kumalia (Partner PPP Trans Consulting), Suraj Yakubu (Partner PPP Trans Consulting), Mansur Ahmed (Director General ICRC), Albert Okumagba (GMD BGL Plc), Chidi Izuwah (Executive Director PPP Resource Center ICRC)

From left, Hon Mohammed Kumalia (Partner PPP Trans Consulting), Suraj Yakubu (Partner PPP Trans Consult-ing), Albert Okumagba (GMD BGL Plc)

1. Mr. Bili Odum, Head, Capital Management Directorate, BGL Plc2. Mr. Tosin Runsewe, MD, GT Assurance3. (Left - Right) Mr. Osato Osainde, Mr Edward Osainde and a guest4. A cross section of guests at the event5. Chief C. Oranika, Hajia Fatima Isa Wali(Director, BGL Plc), Dr. Mansur Mukhtar ( Hon. Minister for Fi-nance), Mr. Albert Okumagba (GMD/CEO BGL Plc), Mr. Odein Ajumogobia,SAN(Honorable Minister of State for Petroleum), Prince Nicholas Okoye

(President & Chief Executive, Anabel Group), Mr Ifie Sekibo (Executive Vice-Chairman, IEI)6. Mr Albert Okumagba, Chief Dennis Odife (Founder, CentrePoint Group), Prince Lekan Fadina (Financial Consultant), Mr. Obi Ugo-chukwu, Mr. Robert Mbonu7. Professor Sylvester Monye (Executive Sec-retary, National Planning Commission), Mr. Chichi Okonjo (Managing Director, George-town Consulting), Prince Chibudom Nwuche8. Dr. Mansur Mukhtar

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Tuesday February 9, 20107.30 am March 5, 2010