Category: Capital Market

Chief Executive Officer, Nigerian Exchange Group (NGX Group), Mr  Oscar Onyema, has said the holding group is investing in newest technologies and businesses across the financing value-chain with a view to positioning itself as the hub for African capital formation.

He said with the demutualisation, the NGX Group is focused on leveraging its position to seize opportunities in all aspects of the financing value chain on the continent.

According to him, NGX Group is investing across the entire capital market value chain and positioning itself as the core infrastructure for facilitating capital raising and efficient deployment to the most crucial needs of the continent.

“Our deployment of technology is the fresh aspect to what we have previously offered. We have the vantage point that we’re almost starting from ground zero so we can deploy the latest technology to support this.

Read Also: NGX Group appoints new chairman

“For example, in MTN Nigeria Communications Plc’s public offering where we crowded in 122,000 new investors to the market is a good example. If you now layer on top of that the fact that Africa is the fastest growing continent demographically with the largest number of young people who are digital natives. You can begin to see the nexus between the problems emerging and the solutions being deployed, one of which is blockchain technology,” Onyema said.

He said the availability of multiple financing options will create much-needed blended finance that can help solve many of the challenges facing Africa.

“What we are finding increasingly is exchanges are plugging into the entire financing value chain and the exciting thing for Africa is blended finance where you go from philanthropy, grants, catalytic financing, impact investing, all the way to your traditional capital markets and by blending them together, we can solve the difficult problems that have exacerbated in Africa; like health, education, infrastructure, energy deficiencies amongst others,” Onyema said.

After losing a whopping N2.8 trillion in October 2022, Nigerian equities saw a modest recovery in the first week of November as renewed bargain-hunting drove the market to net capital gain of N194 billion at the weekend.

Benchmark indices at the Nigerian Exchange (NGX) at the weekend indicated average return of 081 per cent, equivalent to net capital gain of N194 billion for the week. The renewed rally nudged the average year-to-date return to 3.63 per cent, putting Nigerian stocks as the sixth best-performing shares globally.

The All Share Index (ASI)- the common value-based index that tracks all share prices at the NGX closed weekend at 44,269.18 points as against the week’s opening index of 43,912.64 points. Aggregate market value of all quoted equities also rose simultaneously from its week’s opening value of N23.918 trillion to close weekend at N24.112 trillion.

Access Holdings Plc headlined trading activities during the week as the most traded stock, followed by FTN Cocoa Processors and Fidelity Bank. The three most active stocks accounted for 800.622 million shares worth N3.373 billion in 2,051 deals, contributing 56.76 per cent and 21.75 per cent to the total equity turnover volume and value respectively.

The momentum of activities improved considerably during the week with total turnover rising to 1.410 billion shares worth N15.510 billion in 19,025 deals as against a total of 598.817 million shares valued at N14.234 billion traded in 15,859 deals two weeks ago.

The financial services sector led the activity chart with 804.570 million shares valued at N6.300 billion in 9,922 deals; thus contributing 57.04 per cent and 40.62 per cent to the total equity turnover volume and value respectively. Agriculture sector followed with 357.623 million shares worth N287.992 million in 560 deals while conglomerates sector placed third with a turnover of 68.309 million shares worth N97.051 million in 530 deals.

Most analysts were optimistic on the outlook of the market in the meantime. Analysts at Afrinvest Securities said they expected “bargain-hunting activities to drive marginal gains” in the days ahead.

Read Also: Equities’ turnover rises by 48% to N1.97tr in Q3

“Looking ahead, we expect investors to rebalance their portfolios based on an assessment of corporate earnings released for third quarter 2022. However, the increased fixed-income yields may continue to constrain buying activities.

“Consequently, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards stocks with attractive dividend yields amid intermittent profit-taking activities. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings,” Analysts at Cordros Securities stated at the weekend.

However, with more than two decliners for every advancer, the positive overall market situation was driven largely by gains recorded in the cement segment of the industrial goods sector. Most sectoral indices closed weekend negative, underlining the negative sentiment across many sectors. The NGX Banking Index dropped by 1.87 per cent. The NGX Oil and Gas Index declined by 5.37 per cent. The NGX Insurance Index depreciated by 1.35 per cent. The NGX Consumer Goods Index dipped by 2.32 per cent while the NGX Pension Index, which tracked stocks that meet pension funds investment guidelines, dropped by 0.44 per cent. On the positive side, the NGX Industrial Goods Index rode on the back of gains by Dangote Cement to close with average return of 5.35 per cent. The NG 30 Index- which tracks the 30 largest stocks at the NGX also appreciated by 1.15 per cent while the NGX Lotus Islamic Index- which tracks stocks that comply with Islamic investment rules, gained 2.02 per cent.

There were 20 gainers to 43 losers last week as against 29 gainers and 31 losers recorded in the previous week. FTN Cocoa Processors led the gainers with a gain of 13.33 per cent to close at 34 kobo. Nigerian Aviation Handling Company followed with a gain of 10.47 per cent to close at N5.70 per share. Dangote Cement appreciated by 8.84 per cent to close at N240. Courteville Business Solutions rose by 8.70 per cent to close at 50 kobo. Regency Assurance added 8.33 per cent to close at 26 kobo while NEM Insurance and Trans-Nationwide Express rose by 6.67 per cent each to close at N4 and 80 kobo respectively.

On the negative side, Chams Holding Company led the losers with a drop of 1481 per cent to close at 23 kobo per share. Ikeja Hotel followed with a loss of 12.96 per cent to close at 94 kobo. Cornerstone Insurance dropped by 12 per cent to close at 44 kobo. Sovereign Trust Insurance declined by 10.71 per cent to close at 25 kobo. Livestock Feeds declined by 10.62 per cent to N1.01 while Caverton Offshore Support Group slipped by 10.31 per cent to 87 kobo per share.

 

Access Bank has started Saturday banking as the bank also urged customers to make use of its alternative channels to deposit their existing naira notes in order to beat the rush pending the circulation of new notes on December 15, 2022.

Access Bank stated in a message sent to customers over the weekend through multiple channels urged customers on the need to deposit their existing naira notes, reassuring its customers that there is no need to panic as the bank is closer to every customer.

“With over 600 branches, more than 150,000 Access Bank CLOSA agents and deposit ATMs across our branches, and over 500 BETA agents that are present in over 180 major markets in Nigeria to receive cash from customers, we are just a doorstep away.

“Our customers can deposit their existing naira notes using any of these channels closest to them with ease.  Our branches will be open for longer hours during the week for your convenience, and they will also be open on Saturdays from 10 am to 2.00pm to receive cash deposits,” Access Bank stated.

Read Also: Access Bank acquires majority stake in Angolan bank

According to the bank, with the current number of its Access Closa Agents spread across the 774 Local Government Areas in the country, customers can easily deposit their existing naira notes through an agent near their location to avoid the risk of transporting cash to a far distance to locate a branch.

“Whether you choose to deposit your existing naira notes through a branch, an ATM, or a point-of-sale machine (POS), you can rest assured that your money is safe with us and that you can always rely on our speed, service, and security.

“During this period of receiving your existing naira notes, all cash deposit transactions will be free. You will not be charged for cash deposits. You can also pick up your debit cards for emergency payments on POS terminals and ATM withdrawals.

“We urge all our esteemed customers to prevent the rush and hurry to deposit their naira notes before the deadline of January 31, 2023, when the current naira notes will cease to be legal tender,” Access Bank stated.

Application list for the N112.4 billion bond issue by Dangote Industries Limited closes today.

According to the offer document, application list, which opened last week, will close by the end of business hours today.

Dangote Industries Limited (DIL), the investment holding company of Africa’s richest man, Alhaji Aliko Dangote, had last week opened application list for the second tranche of its N300 billion bond issuance programme with a target to raise N112.416 billion under this tranche.

The capital raising, being raised through DIL’s special purpose vehicle, Dangote industries Funding Plc, is being undertaken through a book building method; a specialised offering method targeted at high networth investors and investment firms.

Dangote will use the net proceeds of the bond issue to part-finance capital cost items for the Dangote Petroleum Refinery Project.

Dangote is offering a 10-year bond with a pricing or coupon range of between 15.50 and 15.75 per cent. Minimum subscription is N10 million.

DIL is one of the leading, diversified and fully integrated conglomerates with operations in Nigeria and Africa across a wide range of industries, including cement, sugar, salt, condiments, packaging, energy, fertiliser and petrochemicals.

Read  Also: Less than 1% credit channelled to manufacturers, says Dangote

The group’s core business focus is to provide local, value-added products and services that meet the “basic needs” of the African populace through the construction and operation of large-scale manufacturing facilities in Nigeria and across Africa.

The group stated that its focus is on building local manufacturing capacity to generate employment, reduce capital flight from Africa and increase local value additions.

Through its subsidiaries, Dangote Industries has 11 distinct business lines, with the cement, sugar and salt businesses currently contributing a majority of its earnings. These subsidiaries are industry-leading players with strong brand values, underpinned by a long operational track record, diverse customer base, ongoing investments in capacity expansion and control over their respective value chains.

The group also has two project companies, Dangote Oil Refining Company Limited (a 650,000 b/pd integrated crude oil refinery and petrochemical plant, which is expected to be Africa’s largest oil refinery) and Dangote Fertiliser Limited (which is expected to be Africa’s largest granulated urea fertiliser manufacturing facility, with a production capacity of up to 2.8 Mtpa), who (together with Dangote Industries) will serve as co-obligors on the offer.

Dangote Industries is currently rated AA+ by GCR and AA (ngr) by Fitch Ratings and plans to utilise the net proceeds from the Series 2 bond issuance to part-finance the capital cost items for the Dangote Petroleum Refinery Project which is currently scheduled to commence operations in the first half of 2023.

 

 

Nigeria’s premier and largest non-interest bank, Jaiz Bank Plc, has projected that it would pool about N10 billion as gross earnings in the last three months of this year

Fourth quarter 2022 forecast submitted by the management of the bank at the Nigerian Exchange (NGX) showed that the bank will record gross earnings of N9.749 billion within the three-month period ending December 31, 2022. Financing income is estimated at N9.186 billion while net revenue from funds is expected to close the period at N7.142 billion.

With these, net operating income is projected at N6.705 billion while pre and post tax profits are expected to close the period at N1.580 billion and N1.422 billion respectively.

The fourth quarter forecast comes on the heels of improved performance in the third quarter as the bank continued to sustain double-digit growths across key performance indicators.

Key extracts of the interim report and accounts of Jaiz Bank for the nine-month period ended September 30, 2022 showed that the bank’s total income rose by 23 per cent from N13.03 billion in third quarter 2021 to N16.03 billion in third quarter 2022. With the inflationary trend, total expenses increased from N9.76 billion to N12.12 billion. Profit before tax thus rose by 19.6 per cent from N3.27 billion in third quarter 2021 to N3.91 billion in third quarter 2022. After taxes, net profit grew by 14.4 per cent to N3.33 billion in third quarter 2022 as against N2.91 billion in comparable period of 2021.

The balance sheet of the non-interest bank also emerged stronger with appreciable growths in customers’ deposits. Total assets rose by 16.4 per cent to N325.06 billion by September 2022 as against N279.28 billion recorded at the end of the year ended December 31, 2021. Customers’ deposits rose from N111.56 billion in December 2021 to N118.11 billion in September 2022.

Managing Director, Jaiz Bank Plc, Dr. Sirajo Salisu, has assured that the bank would build on its enviable pedigree as it seeks to consolidate its leadership in the non-interest financial services industry.

Salisu, who took over in a seamless transition from Mr. Hassan Usman, whose tenure ended after retirement on October 15, 2022, said the growth trajectory of the bank would remain upward.

Read Also: Jaiz Bank disburses N1b loans to MSMEs

“As we look ahead into the next phase of our bank, we will continually show our best, and meet the challenges of our world so that we can build a future in which we thrive together,” Salisu said.

Salisu, a former executive director at the bank, assured all stakeholders of his commitment to building on the achievements of the bank over the past 10 years.

Jaiz Bank has already secured shareholders’ approvals to raise not less than N150 billion in new capital through Sukuk issuance and to implement a holding company structure that will see the bank engaging in other ancillary financial services.

Jaiz Bank’s planned N150 billion Sukuk will be the largest non-interest bond issuance in the Nigerian capital market.

Shareholders have also mandated the board of directors to take all necessary steps and transactions that would enable the bank to achieve its short to long-term growth objectives as well as greater competitiveness. These steps and transactions may include acquisitions, new investments, restructuring; expansion, capital raising and other business arrangements that enhance the bank’s growth trajectory.

Until his appointment, Salisu had held several senior executive positions in the bank including regional manager for southern operations, chief risk officer and executive director, business development for the northern region. He was credited with providing key strategic direction that led to the growth of the bank’s business in the northern region.

Prior to joining Jaiz Bank in 2016, Salisu had served as the managing director of Arab Gambian Islamic Bank (AGIB) for six years.

Salisu is a 1991 BSc. Economics graduate from Bayero University Kano. He has an M.Sc. in Monetary Economics from the University of Port Harcourt and Ph.D. in Agricultural Economics from Abubakar Tafawa Balewa University, Bauchi. He also obtained another Master’s Degree in Islamic Banking and Finance from Bayero University, Kano. He is a Fellow of the Institute of Credit Administration (FICA) and Honorary Senior Member of the Chartered Institute of Bankers of Nigeria (CIBN).

Stakeholders in the Nigerian financial markets have called for the use of the nation’s growing alternative finance market for the development of amenable housing schemes in order to bridge the country’s huge housing gap.

Experts said the alternative finance or non interest segment of the capital market has the potential to finance the housing sector which will lead to better well-being of the citizenry as well as general performance of the other sectors of the economy.

Speaking in a webinar on: “the Non-Interest Capital Market as Panacea to Mortgage Financing in Nigeria”, experts said that financing residential and commercial real estate to enhance societal well-being and unlock economic opportunities remains a global challenge.

Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, Yuguda said a World Bank study estimated that Nigeria’s housing sector requires an investment of about N59.5 trillion to bridge the 20 million housing deficit that is increasing yearly.

He said the extent of housing deficit shows a huge untapped investment opportunity in the nation’s real estate sector.   

He noted that governments at both federal and state levels, and businesses in Nigeria have been tapping various available sources of financing, including capital market products for funding real estate developments. The methods of finance have various associated costs, some which are deemed to be high.

He emphasised that the Nigerian capital market provides a platform for mobilizing long-term funds for real estate investments to complement the mortgage funding sources by commercial banks, primary mortgage institutions, non-governmental organizations, cooperative societies and international finance institutions.

“The capital market creates investment opportunities to enhance the flow of low-cost, long-term funds to the real estate sector through investment vehicles such as Real Estate Investment Trust Schemes (REITs) and Mortgage-Backed Securities. These instruments are usually traded on recognised Exchanges.

“I am delighted to inform you that some corporate entities have started taking advantage of the Non-Interest Capital Market. In 2021, Family Homes Funds Limited, a social housing initiative promoted by the Federal Government, issued a N10 billion Sukuk to finance residential houses across the six geopolitical zones of the country and it was oversubscribed by over 200%. The company also recently raised another N10 billion from the market. This development was a strong indication of the readiness of the capital market and corresponding investors’ appetite for non-interest mortgage instruments.

“We strongly believe that the operationalisation of the Non-Interest Pension Fund (Fund VI) and the recent amendment of the Pension Act to facilitate withdrawals from RSA for down payments of equity contributions for mortgage will increase the quantum of low-cost long-term investible funds to the Mortgage Industry by unlocking the untapped capital in the economy,” Yuguda said.

 Managing Director, Federal Mortgage Bank of Nigeria Mr. Madu Hamman said that the non interest financial products have gained a lot of interest by investors in Nigeria and globally and could aid housing finance sources and expand the frontiers of home ownerships through non interest finance sources.

He added that the adoption of non-interest finance would go a long way in giving the capital market the needed boost to unbundle funds that were hitherto not accessible to Nigerians adding that it is obvious that the Nigerian economy is on the verge of experiencing a tremendous transformation in this regard.

According to him, sourcing of non interest funds from the capital is very necessary for seamless operations as funds sourced from interest based facilities cannot be leveraged to deliver on non interest mortgage transactions.

“We are committed to linking the mortgage market with the Nigerian capital market and thereby ensure sustainable long term funding for the housing and mortgage sector. The non interest capital market is therefore one area for such sustainable long term funds that can be assured,” Hamman said.

Managing Director, Nigerian Mortgage Refinancing Company, Mr. Kehinde Ogundimu said there was no way the nation can meet the housing deficit without having the non interest services sector actively participating in it.

He commended SEC for its developmental initiatives noting that continuous engagement among stakeholders would further facilitate the development of the alternative finance.

Shareholders of Conoil Plc at the weekend unanimously approved 66.7 per cent increase in cash payouts as the energy company reassured on its commitment to enhance shareholders’ value.

At the annual general meeting in Lagos, shareholders approved increase in dividend payout from N1.04 billion paid for the 2020 business year to N1.73 billion for the 2021 business year. This implied a dividend per share of N2.50 for the 2021 business year.

Key extracts of the audited report and accounts for the year ended December 31, 2021 showed that gross profit grew by 13.7 per cent to N11.16 billion in 2021 as against N9.82 billion in 2020. Turnover rose by 7.9 per cent to N126.73 billion. After taxes, net profit jumped by 114 per cent from N1.44 billion in 2020 to N3.08 billion in 2021.

Chairman, Conoil Plc, Dr. Mike Adenuga, in his address, assured shareholders of the company’s commitment to continue to deliver strong and sustainable performance that would enhance returns to the shareholders.

He said the company’s five year growth strategy had started yielding dividends, leading to the impressive performance recorded in the 2021 financial year despite the tough operating environment.

He assured that the company remains motivated in creating excellent value for its shareholders.

“Much ground was covered and major strides taken in 2021 as further investments have been made in strengthening the Company’s Retail Network, and important progress recorded on all fronts for the benefit of all other stakeholders.

“Conoil Plc plans to consolidate on the progress made in the previous years to deliver a strong and sustainable performance that enhances returns to our shareholders. The company has strategically positioned its business to take advantage of key opportunities in the execution the growth strategy.

“Our overriding goal is to ensure the continued delivery of excellent services to our customers and ultimately ensuring that our shareholders are rewarded,” Adenuga said.

He assured the shareholders that while the challenges experienced during the financial year in review, persist even in 2022 and beyond, with economic recovery from the Covid-19 pandemic still fragile across the globe, Conoil is well positioned to improve on its operating margin and grow volumes across all its operating locations.

“We acknowledge the challenges that may be posed by the rapidly changing geopolitical and social economic dynamics hence, we will concentrate on the strategies that have given us the greatest dividend. The company will grow its earnings, improve profitability and asset quality and deliver competitive returns to its esteemed shareholders,” Adenuga said.