The Nation Newspaper

Category: Capital Market

  • Nigerian equities lead global markets with N2.7tr bullish start

    Nigerian equities lead global markets with N2.7tr bullish start

    • NGX rises above world’s downtrend

    Nigerian stock market closed the first trading week of the year with a net capital gain of N2.68 trillion in a major contrarian trading pattern to a sluggish start across several global stock markets.

    Benchmark indices for Nigerian equities closed weekend with average year-to-date return of 6.54 per cent, equivalent to net capital gain of N2.68 trillion. This implies that investors earned additional N2.68 trillion in capital gains in first four trading days of the year.

    The performance of the Nigerian equities market, which closed 2023 among the three best-performing markets globally, was against the general downtrend that marked opening tradings across several world’s markets.

    United States’ benchmark indices- the Dow Jones Industrial Average (DJIA) and S & P 500, closed the week with negative returns of -0.4 per cent and -0.2 per cent respectively. United Kingdom’s FTSE 100 Index recorded average return of -0.1 per cent. Japan’s Nikkei 225 Index posted average return of -0.3 per cent. China’s SSE Index dropped by 1.7 per cent.

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    STOXX Europe, which tracks broader European markets, closed with average return of -0.3 per cent. The MSCI EM Index, which tracks emerging markets, declined by 1.9 per cent while the twin MSCI FM Index, which tracks frontier markets, inched up by 0.7 per cent.

    The All Share Index (ASI)- the common value-based index that tracks all share prices at the Nigerian Exchange (NGX) rose from the year’s opening index of 74,773.77 points to close weekend at 75,990.88 points.

    Aggregate market value of all quoted equities rose simultaneously from the year’s opening value of N40.918 trillion to close the week at N43.594 trillion.

    With more than five out of every six transactions closed at premium, the market performance was driven by widespread positive sentiments across the sectors, especially within the financial services, telecommunications, manufacturing, and consumer goods sectors.

    Most analysts expected the rally at the Nigerian market to continue, citing ongoing positioning for the earnings season and expectations on banks’ recapitalisation.

    Analysts at Afrinvest Securities said they anticipated “an extended positive performance” at the market due to “strong investor sentiment”.

    Cordros Capital said the market would remain positive in the meantime with companies expected to begin declaration of their audited results and dividends this month.

    “In the near term, we believe positioning for 2023 full-year earnings releases and accompanying dividends declarations will continue to support buying activities on the local bourse even as institutional investors continue to search for clues on the direction of yields in the fixed-income market,” Cordros Capital stated at the weekend.

    Analysts, however, advised investors to seek trading opportunities in only fundamentally justified stocks as there are still significant macroeconomic headwinds for corporate earnings.

    All sectoral indices closed positive, led by the NGX Insurance Index, which rose by 14.08 per cent. The NGX Banking Index followed with a return of 10.29 per cent. The NGX 30 Index, which tracks the 30 largest stocks at the market, rose by 6.88 per cent. The NGX Consumer Goods Index, NGX Oil and Gas Index and NGX Industrial Goods Index gained 4.40 per cent, 3.0 per cent and 3.58 per cent.

    The NGX Pension Index, which tracks stocks that meet the investment guidelines for pension funds, rose by 9.70 per cent while the NGX Lotus Islamic Index, which measures ethical stocks that meet Islamic finance rules, closed with average gain of 5.31 per cent.

    There were 88 gainers to 17 losers last week compared with 65 gainers and 24 losers recorded in the previous week. Transnational Corporation led the rally, in percentage terms, with a gain of 46.19 per cent to close at N12.66 per share. Ikeja Hotel followed with a gain of 46.17 per cent to close at N8.77. Unity Bank rose by 45.06 per cent to close at N2.35.

    AIICO Insurance and Linkage Assurance rallied by 43.75 per cent each to close at N1.15 each. DAAR Communications chalked up 43.33 per cent to close at N1.29 while DEAP Capital Management & Trust rose by 39.66 per cent to close at 81 kobo per share.

    On the negative side, C & I Leasing led the decliners with a drop of 39.64 per cent to close at N3.38. SCOA Nigeria followed with a loss of 17.68 per cent to close at N1.63. Champion Breweries declined by 11.81 per cent to close at N3.66. Cadbury Nigeria lost 11.05 per cent to close at N16.90. Mecure Industries dropped by 10 per cent to N10.80 per share while Meyer slipped by 9.75 per cent to close at N3.24 per share.

    The momentum of activities also improved considerably with total turnover of 3.32 billion shares worth N41.755 billion traded in 46,994 deals last week, compared with 1.19 billion shares valued at N31.43 billion swapped in 23,969 deals penultimate week.

    The financial services sector remained the most active with a turnover of 2.4 billion shares valued at N26.05 billion in 22,833 deals; thus contributing 72.25 per cent and 62.40 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with 213.139 million shares worth N2.434 billion in 2,284 deals while the oil and gas sector placed third with a turnover of 163.313 million shares worth N2.054 billion in 3,443 deals.

    Banking stocks were the most active with the trio of Fidelity Bank, FCMB Group and Sterling Financial Holdings Company accounting for 767.964 million shares worth N7.289 billion in 4,589 deals, contributing 23.13 per cent and 17.46 per cent to the total equity turnover volume and value.

    The positive performance set the Nigerian market on the path to its fifth year of consecutive positive returns.

    The stock market closed 2023 as one of the three best-performing markets globally. Average return for Nigerian equities in 2023 stood at 45.90 per cent, equivalent to net capital gains of N12.81 trillion.

    With inflation rate at 28.2 per cent, Nigerian equities were distinctive as the best inflation-hedging asset class in the country. Nigeria ranked among the three world’s best-performing markets with the Nigerian market surpassing a historical record of N40 trillion market capitalisation during the year.

    With four consecutive years of positive return, the stock market has shown resilience amidst macroeconomic economic challenges of foreign exchange (forex) scarcity, naira depreciation and spiraling inflation.

    The market had broken its well-known previous cycle of decline in pre-election year to record its third consecutive positive performance in 2022, with full-year average return of 19.98 per cent, equivalent to net capital gain of N4.455 trillion. It had closed 2021 with average return of 6.07 per cent, equivalent to net capital gains of N1.278 trillion. In the throes of the outbreak of COVID-19 pandemic in 2020, it had recorded average return of 50.03 per cent, representing net capital gains of N6.483 trillion.

    ASI closed 2023 at 74,773.77 points as against its opening index of 51,251.06 points for the year. It had opened 2022 at 42,716.44 points.

    Aggregate market value of all quoted equities had also risen from 2023’s opening value of N27.915 trillion to close the year at N40.918 trillion. It had recorded N22.297 trillion as opening value for 2022.

    Total market value of N40 trillion was all-time high for Nigerian equities, the highest point in the over 63 years history of the stock market.

    The overall performance of the equities market has largely been influenced by what the market described as “post-inauguration rally”, referencing the positive sentiments that have trailed the pro-market reforms of the Tinubu’s administration, since May 2023.

    The NGX had stated that experts’ opinions on the strong performance of the market were that the bullish trend was due to “a combination of factors, including investor sentiment influenced by macroeconomic developments such as the formation and swearing-in of the economic cabinet by President Bola Tinubu”.

    The NGX had also attributed the market performance to the “audacious macroeconomic reforms under the new administration” of Tinubu.

    According to the NGX, market operators were of the view that “the policies of the new administration under President Bola Tinubu” had “led to the rise in the fortunes of investors”.

    Afrinvest Securities had said “economy reform optimism” bolstered the market performance, noting that the “the rally in the market followed the promise of critical reforms by the President Bola Tinubu administration”.

    Chief Executive Officer, Crane Securities Limited, Mike Ezeh said the emergence of Tinubu had further energised the market as market participants have hopes in his ability to rejig the economy and implement economy-friendly policies.

    He urged the new government to continue to implement policies that would provide enabling environment for businesses to thrive, noting that this would help boost foreign direct investments (FDIs) and attract issuers to the capital market.

  • Fidelity Bank seeks N32b new equity from shareholders

    Fidelity Bank seeks N32b new equity from shareholders

    Fidelity Bank Plc has concluded plans to raise about N32 billion from its existing shareholders in the first tranche of a recapitalisation that may see the bank raising more than N160 billion in new equity funds.

    The Nigerian Exchange (NGX) at the weekend confirmed that Fidelity Bank has submitted application for its regulatory approval to float a N32 billion rights issue.

    Fidelity Bank will be offering 3.2 billion ordinary shares of 50 kobo each to existing shareholders at N10 per share. The shares will be pre-allotted on the basis of one new ordinary share for every 10 existing ordinary shares held as at the close of business on Friday, January 05, 2024.

    Fidelity Bank closed at the weekend at the NGX at N14.20 per share, representing a premium of 42 per cent on the rights issue’s price. In traditional regulatory process, the NGX notice implies that the new issue may open in the next few weeks.

    In anticipation of the rights issue, investors had opened up orders on the shares of Fidelity Bank in recent trading days, putting the bank as the most active stock at the stock market in the first trading week of the year.

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    Analysts estimated that Fidelity Bank could raise more than N160 billion in a hybrid capital raising plan involving new and existing investors.

    Fidelity Bank had indicated plans to issue 13.2 billion ordinary shares of 50 kobo each to new and existing investors to boost the bank’s capital base.

    Under the plan, the bank had sought to float a public offer of 10 billion shares and a rights issue of 3.2 billion shares.

    At the current market valuation, market analysts estimated that the bank may be able to raise some N160 billion, although the final offer prices may be determined by the market situation.

    Fidelity Bank had outlined that it needed the new capital to sustain its current strong growth trajectory in order to increase profitability, domestic and international expansion and enhancement of its digital capabilities.

    “Advances in technology, the rapid evolution of the business of banking and changes in the operating landscape make it imperative that the bank remains agile, adaptable and properly positioned to respond appropriately to developments, whilst remaining a competitive and forward looking institution,” the bank stated.

    According to the bank, the new hybrid capital raising is aimed at ensuring that the bank can take advantage of emerging business opportunities and secure long term profitability and competitive advantage, while ensuring increased shareholder value.

    Managing Director, Fidelity Bank Plc, Mrs. Nneka Onyeali-Ikpe said the bank was growing in leaps and bounds and needed to expand its capital base to take advantage of emerging opportunities.

    “We will also use the additional capital to enhance our technology infrastructure to enable us to serve more customers,” Onyeali-Ikpe said.

  • Investors scramble for banks’ shares

    Investors scramble for banks’ shares

    • Shareholders eye discounts on rights

    • Bankers see no disruptions

    Shareholders and new investors are opening up market orders to buy available banking shares at premium as expectations on the planned banking recapitalisation and earnings results pushed several banking stocks to their highest prices.

    Banking stocks have been the most active stocks and one of the highest gainers at the market in early tradings of the year.

    Three banking stocks – Fidelity Bank, FCMB Group and Sterling Financial Holdings Company-  were the most active so far, accounting for 767.964 million shares worth N7.289 billion in 4,589 deals. This represented nearly a quarter of the 3.32 billion shares traded so far this year at the Nigerian Exchange (NGX).

    Transactions on banks’ shares led the financial services sector to a turnover of 2.4 billion shares valued at N26.05 billion in 22,833 deals; representing about 72.3 per cent of the market’s total turnover.

    The NGX Banking Index, the most active and influential stock index at the NGX, closed weekend with average year-to-date return of 10.29 per cent, 3.75 percentage points above the market’s benchmark return of 6.54 per cent.

    The All Share Index (ASI) – the value-based common index that tracks equities at the NGX, closed weekend with average return of 6.54 per cent.

    Banking sector’s return was the second highest so far this year, trailing low-priced NGX Insurance Index, which gained 14.08 per cent. The NGX 30 Index, which tracks the 30 largest stocks at the market, had risen by 6.88 per cent. 

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    Two banking stocks were among the 10 highest gainers so far this year, underlining the positive sentiment driving the sector. Unity Bank has risen by 45.06 per cent to N2.35 per share while Sterling Financial Holdings Company has seen a gain of 34.50 per cent to close at N5.77 per share.

    Market pundits  agreed that there had been increase in open market orders for banking stocks. An open market order is a mandate to a stockbroker to buy or sell a stock at prevailing market price.

    Where the demand for the stock is more than the supply, otherwise known as a seller’s market, open market orders heighten price appreciation. Conversely, where the demand is low and supply is more, a buyer’s market, it quickens price depreciation.

    Price changes at the stock market is based on effective demand with price movement tied to minimum volume of shares and on-the-table, immediate order for the trading. As such, the automated trading system (ATS) seamlessly outlines trading patterns- buyers’ market, sellers’ market and balanced market among others, providing trading guidance to discerning investors.

    Market analysts were unanimous that the demand for banks’shares were in anticipation of the release of the details of the planned banking recapitalisation by the Central Bank of Nigeria (CBN).

    Analysts noted that investors were staking on expectation that the recapitalisation would deliver greater returns, citing bullish outlook at the market.

    Most companies raising funds at the market in recent period, including banks, have shown tendency towards rights issue, a provisional allotment of shares which traditionally offers discounts to existing shareholders.

    The NGX provides window for shareholders to trade on their fully or partially renounced shares at the secondary market, thus taking advantage of the usually higher prices at the secondary market.

    For instance, Wema Bank’s rights issue of 8.572 billion ordinary shares of 50 kobo each at N4.66 per share represents a significant discount to the market price of N7.38 per share. Fidelity Bank at the weekend also indicated it planned to offer a rights issue at N10 per share as against its price of N14.20 per share.

    Trading rules at the NGX allow continuous price movement during the offer period, enabling  shareholders to unlock greater value in a stock with strong demand.

    Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the scramble for banks’shares was being driven by fundamental consideration and investors’ perception of the banking recapitalisation.

    According to him, while there is expectation that banks will deliver very good earnings reports for fiscal 2023 and make bumper dividend payments, there are indications that investors are taking positions ahead of the recapitalisation plans.

    “We can’t also ignore the fact that some shareholders are positioning themselves ahead of the CBN recapitalisation exercise that could include issuance of additional shares to existing shareholders,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS) said.

    Managing Director, APT Securities & Funds Limited, Mallam Garba Kurfi, said investors were being proactive in taking positions in banking stocks, with many banks still trading below their fair price.

    He pointed out that banks’ results have shown impressive performance, partly driven by foreign exchange (forex) gains, with expectations that the impending release of results will translate into similarly higher returns to shareholders.

    Kurfi noted that banks were already in the mood for the recapitalisation, citing banks like Fidelity Bank,  Wema Bank,  Jaiz Bank and FBN Holdings, which had launched share issuance processes.

    President, Association of Corporate & Marketing Communications Professionals in Banks (ACAMB), Mr. Rasheed Bolarinwa  said banks were in good stead for the recapitalisation and there would be no disruptions in the industry.

    In his outlook for the year, Bolarinwa said data and interactions within the industry underlined a stable and robust outlook for the banking sector.

    According to him, the banking sector is on a solid ground as can be seen from the financials and the pole position of the major banks across the continent.

    “Some of those things that will shape the banking sector are known already. We have a new CBN team that is implementing many reforms, so we expect changes in banking regulations. The question to ask is: are banks in good position, what effects will the changes have?

    “Yes, the banks are in good position, and as canvassed variously by analysts, to meet both the macroeconomic and sectoral targets, and the changes won’t have any negative effect, rather we’d see improved banking performance. We expect the details of the banking sector recapitalisation to be out and we will see activities around that. From all prognosis, and as advanced by some experts, the CBN is likely to follow the macroeconomic principle of a well-regulated, but free economy that is the cardinal outlook of this administration and progressive economy worldwide.

    “As such, we expect a risk-capital based approach to banking recapitalisation in such a way that banks are encouraged to grow their capital given the robust expectation of economic growth, without actually a disruptive knee-jerk order that could create unnecessary losses of jobs and institutions. You can’t possibly be creating an enabling economy for MSMEs; while closing the financing end by shutting down the small to mid-end of the financing system through a one-size-fits-all recapitalisation.

    “So, the expectation, is to see a seamless recapitalisation process where banks raise funds to boost their businesses. Many banks already indicated plans to raise funds this year, and we will likely see more of that. And I think the capital market is in good position to support the system. Nigerian banks’ valuations remain attractive and that should help the recapitalisation process,” Bolarinwa stated.

    He noted that the outlook for the  economy remains largely positive, although ongoing reforms could still pose some challenges.

    “The economy is in a reform mode, and we expect quite a bit of continuation of the consequences we had seen in the past year; but surely there will be more stability this year. Inflation will come down, we’d see greater stability and liquidity in the forex market, the overall economic growth, GDP, will be higher than previous year and we should see considerable improvement in the oil and non-oil sectors.

    “We expect some early gains of the key policy reforms to kick in this year. We are already seeing this with the budget process and outline, and we think the implementation will be better, in terms of actual percentage of implementation and evaluation. So, for the economy, we can’t wish away the pain points of the reforms, but definitely we will see glimpses of the benefits,” Bolarinwa stated.

    Governor of Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso had recently outlined major reforms and his priorities at the helms of the apex bank. These included plans to recapitalise the banking sector, stabilise the foreign exchange (forex) market, improve access to amenable credits, refocus the apex bank on its core mandate of price stability away from the previous foray into unrelated quasi-fiscal activities, curb inflation and improve living standards through new well-coordinated monetary-fiscal policy measures, engender stable policy thrusts for macroeconomic stability and safeguard the integrity and autonomy of the apex bank.

    “Considering the policy imperatives and the projected economic growth, it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is not just about the stability of the financial system in the present moment, as we have already established that the current assessment shows stability. However, we need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1.0 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action. Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital,” Cardoso had said.

    Most experts agreed on the need for recapitalisation of the banking industry, although there were divergence on the timeline and extent of recapitalisation. Many experts supported a “gentle push” towards recapitalisation, with the apex bank using its regulatory tools like capital adequacy ratio (CAR) and single obligor limit to drive banks to add up more capital as their businesses and economy expand.

  • Standard Chartered sells Côte d’Ivoire’s banking business to Coris Bank

    Standard Chartered sells Côte d’Ivoire’s banking business to Coris Bank

    Standard Chartered has entered into an agreement with Coris Group for the sale of its consumer, banking business in Côte d’Ivoire.

    Subject to Regulatory approvals and the transfer of business, the agreement marked the completion of the divestment process from various markets, first announced by Standard Chartered in April 2022.

     The agreement was announced by Sunil Kaushal, Chief Executive Officer, Standard Chartered Africa and the Middle East (AME), and Idrissa NASSA, Coris Group Chairman.

    Kaushal said the agreement marked a milestone in Standard Chartered’s journey in the AME region towards streamlining the business and providing further impetus to delivery of best-in-class services and expertise to its clients.

    According to him, the successful conclusion of the bank’s strategic divestments will see it double-down on growth opportunities in AME by leveraging our long track record in the region.

    “Alongside Coris Bank International, we are confident that this transition will be executed seamlessly as part of our commitment to prioritise the satisfaction of retail customers, the wellbeing and stability of our people,” Kaushal said.   

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    He said Standard Chartered Bank will maintain its presence in Cote D’Ivoire with focus on its corporate, commercial and institutional banking business where the bank will continue to deliver best-in-class services to its clients.

    NASSA welcomed the finalisation of the noting that the acquisition of Standard Chartered Bank’s retail segment in Côte d’Ivoire is strategic to further strengthen Coris Bank International’s positioning in the emerging country.

    “We will continue the satisfaction of this privileged clientele through our offers reinforced with new products and innovative services. The third largest banking group in the WAEMU, the Pan-African banking group Coris, aims to accelerate growth in its areas of presence, and this acquisition is an opportunity for us to offer our best quality of service. We reassure our new clients of our institution’s ability to preserve and strengthen the quality of service,” NASSA said.

    Expected to reach completion in the next few months, the sale of Standard Chartered’s consumer banking business in Côte d’Ivoire is the last in a series of strategic divestments announced in Zimbabwe, Lebanon, Angola, Cameroon, Gambia, Sierra Leone, Jordan, and the consumer banking business in Tanzania since April 2022.

    The divestments come as part of the bank’s global strategy aimed at delivering efficiencies, reducing complexity, and driving scale in its presence across AME. The transaction in Jordan was successfully completed, with the business officially transferred to the new buyer in August 2023, and the migration of other businesses to their respective buyers is proceeding as planned.

  • First Registrars’ CEO bags CIS fellowship

    First Registrars’ CEO bags CIS fellowship

    The Board of Fellows of Chartered Institute of Stockbrokers (CIS) has conferred Fellowship on Dr Bayo Olugbemi, the Chief Executive Officer of First Registrars and Investor Services Limited, the highest rank of a certified stockbroker.

    In his opening remarks, the Chairman of the CIS Governing Council, Oluwole Adeosun, described Olugbemi  as a “quintessential Nigerian finance professional”.

    “ Dr Olugbemi, is an authority in registrar and investor support functions in the capital market. His work career since 1982, has been intertwined between banking and the capital market. He is an undisputable leader. in the share registration service,”  Adeosun said.

    He noted that Olugbemi’s impact had been felt in no less than four registrar service companies in Nigeria, thereby underscoring the importance of the sector to the Nigerian economy.

    Receiving the fellowship, Olugbemi, a former president of Chartered Institute of Bankers of Nigeria (CIBN), appreciated the institute for considering him worthy of the honour.

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    He assured that he would foster positive relations between the Institute of Capital Market Registrars (ICMR) and CIS.

    “To God, I give glory for my journey in life and the capital market as I ascend to a higher level in my career today. I express gratitude to the Institute of Stockbrokers. My 41 -year journey in the financial sector services has been a rollercoaster of growth and experiences culminating in this esteemed recognition at the very right time,” Olugbemi said.

    He tasked the younger generation to have integrity, honesty and diligent as virtues. He said these were the virtues to achieve tremendous feats.

    Speaking on the sidelines of the event, Adeosun said that Olugbemi’s investiture was not a honorary title but a professional one after he had scaled the Institute’s integrity tests examinations.

    He said that the CIS was working hard to engage millennials through comprehensive  investor literacy education. According to him,  recently, CIS created a course- Securities and Investment, which the National Universities Commission (NUC) recent approved for tertiary institutions. Only two schools in Nigeria, Nasarawa State University, in Keffi and Mountain Top University,  in Ogun State currently offer the courses. The CIS’ President, said talks were ongoing to spread the courses to other universities.

  • Ogun woos foreign investors

    Ogun woos foreign investors

    Ogun State Governor, Prince Dapo Abiodun has called on foreign businesses to make the state, especially the Special Economic Processing Zone, the destination of choice while considering investing in Nigeria.

    Abiodun, while speaking as guest on CNBC Africa at the weekend on the sidelines of the Intra-African Trade Fair, put together by Afreximbank, in Cairo, Egypt, said Ogun State has put everything in place to host any business venture.

    He said Ogun State has the required infrastructure, including accessibility, access to power, and a youthful and educated population to make it investor-friendly.

    “We like to refer to ourselves as the Gateway State. We are the gateway to Nigeria’s prosperity. We are the industrial capital of Nigeria. By all accounts, we have well over 5,000 industries. We are the number one in non-oil revenue in Nigeria because we have large mineral deposits, particularly limestone.

    “That explains why we have Lafarge, Dangote, and many other cement factories. The biggest cement factory in Nigeria is in Ogun State.

    “Now, why are we here (Cairo)? We are here to attract more investors to our state, particularly as we pride ourselves as having the required infrastructure, be it road, rail, or air. We have a new airport, unarguably one of the best airports in Nigeria.

    “Our airport is situated in our Special Economic Processing Zone. The zone is being supported by Afreximbank and being operated and constructed by a private sector player called Arise LLP.

    “Today, we want people to know about the zone, to come and establish processing  concerns and factories in that zone, referencing the 5,000 other industrial activities that exist in Ogun State,” Abiodun said.

    He noted that companies coming to invest in the state would take advantage of its vast agro produce like rubber, cassava, which Ogun is the number one producer in the world, palm oil, cashew, cocoa, cotton, eggs and poultry.

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    “We are trying to attract investors to this processing zone, more so because we have gas, which allows them to access power. So, you are sure that your major cost of production, which could be power in most instances, is already mitigated.

    “And I believe that we’ve managed to convince a lot of our listeners that Ogun State, the industrial capital of Nigeria, the education capital of Nigeria with reserve of youthful population is ready to receive you and as a government, we’ve provided a lot of reforms and policy initiatives to further increase our rating on the ease of doing business index,” Abiodun said.

    He also spoke on the significance of the African Quality Assurance Centre (AQAC), which has been established at the Special Economic Processing Zone, a development that he said, is bound to make Nigeria get value for her agro-produce.

    He noted that Nigeria, before now, was sending her agro-produce meant for export to neighbouring countries like Ghana to be certified as fit-for-purpose.

    But with AQAC in Ogun State, and within the agro-processing zone, Abiodun said agro-produce from Nigeria can now be certified fit-for-purpose in line with world best practices.

    “And now, what they do in AQAC is, they don’t wait until you have grown or you have harvested. They intervene from the point of your inputs, from the point of how you have planted,  from what type of fertilisers you have used, from what type of fertilisers you were meant to use to ensure thar by the time they are stamping your agro-produce, it is certified fit-for-purpose.

    “Hitherto, when goods will have to go to Ghana or any other country to be exported, it means that those agro-produce would probably have been undervalued. So, from now on, Nigeria can now export its agro-produce at the right value because it is stamped fit-for-purpose from Nigeria,” Abiodun said.

  • Cardoso lays out policy directions

    Cardoso lays out policy directions

    Governor of Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso will this weekend examine the macroeconomic direction and outlook for the Nigerian economy, a major event expected to provide guidance to key decision-makers.

    Cardoso will address bankers and other public and private sector stakeholders at the Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) on Friday, at Eko Hotels & Suites, Victoria Island, Lagos.

    Christened ‘’The Governors Day’’, the event provides the CBN Governor the opportunity to address stakeholders on the economic and financial markets development during the year as well as the economic outlook for the coming year.

    The CIBN will also hold the grand finale of its 60th anniversary celebration, underscoring six decades of its commitment to professionalism, integrity, innovation and ethics in the banking and finance industry.

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    The dinner and 60th anniversary celebration is expected to draw assembly of over 500 leaders from the banking industry, influential business leaders, and senior government officials.

    Vice President, Federal Republic of Nigeria, Senator Kashim Shettima, and Governor, Lagos State, Mr. Babatunde Sanwo-Olu are expected to deliver the goodwill messages while Dr. Ken Opara, President of CIBN will give the welcome address.

    The 60th grand finale of the CIBN will draw to a close at the dinner.

    CIBN stated that the remarkable journey that it has undertaken over the six decades was a testament to the resilience, dedication, and vision of the banking community in Nigeria.

    “The institute looks forward to years filled with inspiration, collaboration, and focus on the future,” CIBN stated.

  • Nigerian equities net N144b gain amid global rally

    Nigerian equities net N144b gain amid global rally

    Investors in Nigerian equities closed weekend with net gain of N144 billion as positive global sentiments quickened investors’ appetite across the markets.

    Benchmark equities indices indicated that Nigerian stock market recorded average return of 0.37 per cent last week, equivalent to net capital gain of N144 billion.

    The All Share Index (ASI) – the value-based common index that tracks all share prices at the Nigerian Exchange (NGX), closed weekend at 71,112.99 points as against the week’s opening index of 70,849.38 points. Aggregate market value of all quoted equities meanwhile rose from its opening value of N38.925 trillion to close at N39.108 trillion.

    The rally nudged the average year-to-date return for Nigerian equities to 38.75 per cent, one of the highest returns globally.

    The performance of Nigerian equities followed global optimism on macroeconomic outlook. Global stock market indices showed a generally positive outlook across the advanced, emerging and frontier markets.

    In United States, the Dow Jones Industrial Average (DJIA) appreciated by 1.9 per cent while the S & P 500 Index rose by 2.1 per cent. United Kingdom’s benchmark, FTSE 100 Index, posted average return of 0.7 per cent. Japan’s Nikkei 225 Index rallied by 3.1 per cent while China’s SSE Index inched up by 0.4 per cent. STOXX Europe, which tracks the broad European markets, rose by 1.8 per cent. The MSCI EM Index, which tracks emerging markets, closed with average return of 3.6 per cent while the MSCI FM Index, which tracks the frontier markets, appreciated by 2.0 per cent.

    Total turnover at the NGX however dropped to 2.025 billion shares worth N27.693 billion in 32,763 deals last week as against 2.525 billion shares valued at N45.297 billion traded in 32,815 deals two weeks ago.

    The financial services sector led the activity chart with 1.202 billion shares valued at N11.481 billion traded in 12,775 deals; thus contributing 59.38 per cent and 41.46 per cent to the total equity turnover volume and value respectively. The oil and gas sector followed with 328.656 million shares worth N3.163 billion in 4,713 deals while the services industry placed third with a turnover of 131.249 million shares worth N539.745 million in 2,263 deals.

    The trio of Japual Gold and Venture Plc, Fidelity Bank Plc and Jaiz Bank Plc were the most active stocks, jointly accounting for  488.181 million shares worth N1.967 billion in 3,136 deals, representing 24.11 per cent and 7.10 per cent of the total equity turnover volume and value respectively.

    Read Also: Mecure Industries lists N12b shares on NGX

    Also, a total of 36,548 units of Exchange Traded Products valued at N4.610 million were traded in 95 deals compared with a total of 32,861 units valued at N4.458 million traded in 143 deals penultimate week.

    On the secondary debt market, a total of 87,570 bond units valued at N80.851 million were in 54 deals compared with a total of 62,233 units valued at N65.981 million swapped in 16 deals two weeks ago.

    Further analysis of pricing trend showed that there were 54 gainers against 30 losers last week compared with 37 gainers and 43 losers recorded in the previous week.

    Deap Capital Management & Trust led the gainers with a gain of 54.84 per cent to close at 48 kobo per share. C & I Leasing followed with a gain of 49.55 per cent to close at N4.98. Mecure Industries placed third with a gain of 46.17 per cent to close at N5.73. Omatek Ventures Plc appreciated by 35.94 per cent to close at 87 kobo while Northern Nigeria Flour Mills rose by 32.78 per cent to close at N23.90 per share.

    On the negative side, Japaul Gold & Ventures led the decliners with a drop of 14.14 per cent to close at N1.70 per share. Beta Glass followed with a loss of 9.92 per cent to close at N54. The Initiates dropped by 9.80 per cent to close at 92 kobo. Red Star Express declined by 8.54 per cent to close at N3 while Mutual Benefits Assurance dipped by 7.69 per cent to close at 48 kobo per share.

    Most analysts expected the market direction to be determined by the decisions at the meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), scheduled to start today.

    Analysts at Cordros Capital said they believed investors would closely monitor the results of the MPC meeting to gain further clarity on the movement of yields in the fixed-income market.

    “As a result, we anticipate cautious trading on the local bourse. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings,” Cordros Capital stated.

    Analysts at Afrinvest Securities expected “modest gains” at the equities market “as investors react to the outcome of the MPC meeting”.

  • Mecure listing: Indian investors net 93.6% gain in two weeks

    Mecure listing: Indian investors net 93.6% gain in two weeks

    The three major Indian investors in Mecure Industries Plc have netted about N11 billion in net capital gains since the listing of the healthcare management group at the Nigerian stock market.

    Mecure Industries Plc was listed at the Nigerian Exchange (NGX) by way of introduction on Wednesday November 8, 2023, with the admission of 4.0 billion ordinary shares of 50 kobo each to the Growth Board of the NGX at N2.96 per share. This implied listing market capitalisation of N11.84 billion.

    Market value analysis at the weekend showed that the stock has appreciated by 93.6 per cent over the past two weeks, with current market value standing at N22.92 billion, representing net capital gain of N11.08 billion.

    Mecure Industries’ share price had risen by 32.43 per cent in the first week of listing, rising from N2.96 per share to close at N3.92 per share. This implied increase in market capitalisation from listing value of N11.84 billion to N15.68 billion.

    The company also made the top gainers’ list at the weekend with a gain of 46.17 per cent to close at N5.73 per share, thus increasing its market value to N22.92 billion.

    The Udanis own 96.87 per cent majority equity stake in Mecure Industries with Mr. Samir Udani, Avni Udani and Mr Arjun Udani holding 32.29 per cent equity stake each, according to the latest regulatory filing by the company. Anderline Dukor, a Nigerian pharmacist holds 0.68 per cent equity stake while other sundry shareholders hold the remaining 2.45 per cent equity stake.

    By virtue of its listing method, the shares being traded primarily belonged to existing shareholders who are required to make available shares for trading purpose.

    Read Also:Why investors ditched real estate for bonds

    Listing by introduction is a method of listing where the company making initial listing of its shares has no subsisting offering of its shares or securities to investors and no additional capital is being raised from the market at the time of listing.

    Under the rules at the NGX, companies seeking to list by way of introduction or any other method at the Exchange must make available shares or securities for trading on the day of listing as well as provide the investing public with updated financial statements and other material information.  

    On the day of listing of equity securities excluding public offerings, a company is expected to make available for trading a sufficient amount of shares, within the range of at least one per cent of its outstanding shares, or such volume or value of shares as may be determined by the Exchange, to activate secondary trading on the shares.

    “When non-Nigerians come into our country, invest in our country, build businesses in Nigeria, and can list them on the exchange. I think it’s a model that I would like to encourage others to adopt,” Chief Executive Officer, Nigerian Exchange (NGX), Mr. Temi Popoola said on the listing of Mecure Industries.

    Chairman, Mecure Industries Plc, Mr. Samir Udani, said the listing was a major  development for the company.

    He said as the company transformed from a private company to a public one with hopes of achieving more visibility and expansion.

    “It’s a very significant move on the part of the company and the board members because a family-run management now is in the eyes of the public. Very important because this is going to get us visibility and also bring the responsibility to all of us. So yes, we have some good expansion plans which we will try to actualize by listing on the stock exchange,” Udani said.

    Udani explained that 30 per cent of the company’s products are only manufactured in the country while 70 per cent are imported.

    “So there’s a lot of scope for local producers to expand and grow, especially when we have challenges like foreign exchange (forex). We can create jobs here and make sure that we conserve as much of forex as possible by producing locally,” Udani said.

    Popoola said the addition of the healthcare manufacturing company to the Growth Board would impact on the exchange and the country.

    “When you look at our exchange today, one of the things that is notably absent is the number of healthcare companies that you can invest into in our exchange. So to have a company that, I would say, sits at that intersection of manufacturing on one hand, and manufacturing towards the healthcare sector, we welcome that very much, because then of course it broadens the scope of the investable assets for us at the exchange. It also demonstrates what I would call the core value that the capital markets bring.

    “We can’t overemphasise the importance of healthcare to our country, Nigeria. So to find a company manufacturing, you know, healthcare related products that has now the opportunity of the capital markets to raise capital, to amplify its visibility as an example, to help it build more sustainable businesses, is one that certainly does gladden our hearts,” Popoola said.

    According to him, listing by introduction offers a good model for companies to make entry to the stock market.

    “So we’re starting this today, it’s a listing by introduction, and we’ve seen that as a model that has worked quite well over the past few years in our capital markets. We’ve seen very big companies list by introduction, and then they do not too long after that a follow on offer. And we’ve seen some smaller companies also do the same,” Popoola said.

  • Nigerian Breweries stakes N7b on Heineken’s acquisitions

    Nigerian Breweries stakes N7b on Heineken’s acquisitions

    Nigerian Breweries (NB) Plc has launched a bid to acquire two Nigerian subsidiaries of Heineken with a value of about N7.01 billion in a bid to consolidate the operations of Heineken and its subsidiaries in Nigeria.

    NB, which is owned majorly by Heineken B.V, is seeking to acquire 80 per cent shareholding in Distell Wines and Spirits Nigeria (DWSN) Limited and 100 per cent import business from Heineken Beverages (Holding) Limited.

    Following the conclusion of the transaction, DWSN will become a subsidiary of NB while the operations of NB will be expanded to include importation, marketing and distribution of wines, spirits and cider products.

    The board of directors of NB stated that it would be recommending the proposed acquisitions to shareholders, after it reviews showed that the terms were fair and the acquisitions were in the interest of the company.

    Shareholders of NB are scheduled to meet next month to consider and approve resolutions authorising the acquisitions. 

    According to the company, the proposed acquisition aligns with its strategic objective of expanding its current product offerings beyond beer to include, wines, spirits, and flavored alcoholic beverages.

    “It also provides the company with growth opportunities and long-term profitability,” NB stated.

    Under the transactions, the acquisition of DWSN gives NB 80 per cent of the economic interest, voting and other rights in DWSN while the 100 per cent acquisition of the import business gives NB an exclusive right to import all Heineken Beverages’ wines, spirits and ciders brands from South Africa, as well as the licence to market and distribute the products in Nigeria, including the right to locally produce any of the imported brands.

    Read Also: Nigerian Breweries posts N57b loss in Q3

    DWSN, which commenced operations in 2018, engages in local manufacturing, marketing and sales of a portfolio of wines and ready-to-drink (RTD) beverages. DWSN’s leading brands are produced, marketed, and distributed in Nigeria under licence from Heineken Beverages.

    Heineken Beverages owns 80 per cent equity stake in DWSN, while the other 20 per cent is held by Next International Limited and Ekulo International Limited, which hold 10 per cent stake each. Heineken Beverages’ 80 per cent equity stake is held in the name of Distell International Holdings Limited.

    Heineken Beverages’ import business in Nigeria comprises importation, marketing and distribution of an extensive range of wines, spirits and RTD beverages from South Africa through distributors appointed locally.

    In the full year ended June 30, 2023, DWSN generated a net revenue of N4.9 billion, and an earnings before interest taxation, depreciation and amortisation (EBITDA) of N667 million.

    The board of NB stated that the acquisition would provide the company with access to a complimentary multi-category portfolio of fast-growing brands in the wines and spirits market segment and capture the significant growth opportunities in that market.

    It noted that the transaction would also eliminate any potential conflict between two controlled subsidiaries of Heineken in Nigeria.

    “It provides Nigerian Breweries with a complimentary multi-category portfolio and strengthens the company’s market share in the wider beverages market as it expands its product offerings to a wider consumer segment.

    “It enhances Nigerian Breweries’ long-term profitability through the addition of new product categories such as wines, spirits and flavored beverages, which are projected to grow at a higher rate than the lager, malt and stout categories.

    “It would accelerate the growth of DWSN’s portfolio through Nigerian Breweries’ wide and strong route-to-market capabilities.

    “Migrating part of the imported portfolio to local production on Nigerian Breweries’ platform presents an opportunity for expedited volume growth as well as growing the local production of wines and spirits,” the board stated.