Category: Capital Market

• Foreign inflows outweigh outflow

• Transactions up by 15%

Foreign portfolio investors’ appetite for Nigerian equities is increasing with more transactions on the purchase side than sell side.

The latest foreign portfolio investment (FPI) report showed that FPI inflows outweighed outflows by 27 per cent at the last count. Total transaction by foreign investors at the Nigerian market so far this year was also about 15 per cent higher than the comparable period of 2021.

The FPI report, coordinated by the Nigerian Exchange (NGX), also highlighted a positive trend in the fluctuation of trades this year, with inflows and outflows interchanging on the trend chart at equal rate of four months each.

Total FPI transactions for the eight-month period ended August 2022 stood at N301.37 billion, 14.66 per cent above N262.85 billion recorded in the comparable period of 2021.Total inflows so far in the year stood at N149.97 billion as against N123.46 billion in the corresponding period of 2021, representing an increase of 21.5 per cent. Total outflows however stood at N151.40 billion in 2022 compared with N139.39 billion in corresponding period of 2021, a lesser increase of 8.6 per cent.

The foreign portfolio deficit- the difference between outflows and inflows, thus narrowed considerably from –N15.93 billion in eight-month ended August 2021 to –N1.43 billion by August 2022.

Monthly analysis showed that FPI inflows outweighed outflows in August as more foreign investors staked higher on Nigerian equities compared to those selling. FPI inflows in August 2022 stood at N15.78 billion as against N13.68 billion in July 2022. Outflows dropped from N16 billion in July 2022 to N12.43 billion in August 2022.

The FPI report included transactions from nearly all custodians and capital market operators and it is widely regarded as a credible measure of FPI trend. The report uses two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market and the economy. While inflows and outflows indicate direction of portfolio transactions, total FPI measures the momentum and level of participation.

The recent trend shows a positive outlook and signals a possible break in the overall negative position of FPIs. Nigeria’s FPI had slipped into negative with a net deficit of N66.2 billion in 2018 after a world-leading stock market rally left the country with a surplus of N336.94 billion in 2017. Total foreign inflows in 2018 stood at N576.45 billion compared with outflows of N642.65 billion. Foreign inflows had in 2017 outpaced outflows at N772.25 billion and N435.31 billion.

FPIs in Nigerian stock market had dropped consecutively to lowest levels in recent years.FPIs had dropped by 40.4 per cent in 2021 to its lowest level in five years. Active participation of foreign investors in market declined by 11 percentage points from about 34 per cent of total market transactions in 2020 to about 23 per cent in 2021.

The full-year FPI report had also shown a significant deceleration in FPI transactions and it was the main reason for the 12.4 per cent decline in turnover of activities at the Nigerian stock market in 2021.

Total foreign transactions in Nigerian equities declined to N434.50 billion in 2021 as against N729.20 billion recorded in 2020. Consequently, the percentage participation of FPIs in total market transactions dropped from 33.63 per cent in 2020 to 22.88 per cent in 2021.

The report had, however, shown admirable improvement in the overall FPI deficit as the gap between inflows and outflows narrowed considerably in 2021 compared with 2020, although the country remains with negative FPIs flow.

FPI inflows and outflows stood N204.88 billion and N229.62 billion in 2021, indicating a deficit of N24.74 billion. These compared with inflows and outflows of N247.27 billion and N481.93 billion in 2020, and a deficit of N234.66 billion.

FPIs had also declined by 22.64 per cent to a four-year low to close 2020 at N729.20 billion as against N942.55 billion recorded in 2019. The decline in FPIs in 2020 counteracted the general increase in momentum of activities at the stock market, which saw 12.45 per cent increase in total turnover value.

FPI reports had shown wider gap between foreign portfolio inflows and outflows, implying that foreign investors had divested more than two kobo for every kobo invested in 2020, the worst deficit in recent years.

Total FPIs had increased from N1.208 trillion in 2017 to N1.219 trillion in 2018, before dropping by 22.72 per cent to N942.55 billion in 2019.

FPI reports have shown continuing negative trend in the mix of inflows and outflows, with more outflows than inflows, implying that foreign investors were selling more of their investments than buying more investments. This is known as FPI deficit.

Nigeria recorded FPI deficit of N234.66 billion in 2020, about 125 per cent increase on N104.3 billion recorded in 2019. This implied that foreign investors divested more than two kobo for every kobo invested in 2020.  FPI deficit had stood at N66.3 billion in 2018.

The reports had also shown that the quantum of transactions by foreign investors relative to total transactions at the market decreased from about 49 per cent of total activities in 2019 to about 34 per cent in 2020. Foreign portfolio inflows stood at N247.27 billion as against outflows of N481.93 billion in 2020. Inflows and outflows had stood at N419.13 billion and N523.42 billion in 2019.

Analysts had attributed decline in foreign investment inflows into Nigeria to monetary and fiscal challenges.

Analysts at Cordros Capital said foreign inflows would remain low below the pre-COVID-19 levels over the medium term.

Analysts outlined that three broad factors would continue to fuel foreign investors’ apathy and limit the potential of the country as global destination for investors.

According to analysts, the lack of flexibility in the foreign exchange (forex) management framework and inadequate structural reforms are major factors discouraging foreign investors from the Nigerian market.

Analysts added that foreign investors might also be concerned about the atmosphere of uncertainties amid political risks as Nigeria gradually moves towards the 2023 general elections.

• Three in four stocks falling in Nigeria

• USA, UK, Europe, Asia in red

Three in every four price changes in the stock market closed weekend negative as concerns mounted over possible pullback in share prices.

The tenuous macroeconomic outlook was compounded by global anxieties over negative effect of a seeming coordinated interest rate hikes on future costs and corporate performance.

The benchmark index for the Nigerian equities market indicated average decline of 0.44 per cent last week, equivalent to net capital loss of N119 billion within the five-day trading week.

The All Share Index (ASI) , the value-based index that tracks all share prices at the Nigerian Exchange (NGX) , closed weekend at 49,475.42 points as against its week’s opening index of 49,695.12 points. Aggregate market value of all quoted equities at the NGX also dropped from the week’s opening value of N26.805 trillion to close at N26.686 trillion.

The decline moderate the average year-to-date return for Nigerian equities to 15.82 per cent, driven largely by substantial gain in the oil and gas sector, which posted average year-to-date return of 54.24 per cent.

The slowdown at the market mirrored the global stock markets as investors opened up sell orders over concerns that seemingly coordinated rate hikes by central banks and continuing tensions over the Russia-Ukraine crisis could hurt corporate earnings.

From Americas to United Kingdom, Europe, Asia and Middle East; advanced and emerging markets of reference traded mostly negative. In United States, the Down Jones Industrial Average (DJIA) dropped by 37 per cent while the S & P 500 Index declined by 4.1 per cent. United Kingdom’s FTSE 100 Index dipped by 09 per cent. The STOXX 600 Index, which tracks the broad European market, dropped by 1.3 per cent.

Japan’s Nikkei 225 Index depreciated by 2.3 per cent. China’s Shanghai Composite Index indicated average decline of 3.5 per cent. South Africa’s FTSE/JSE All Share Index dropped by 3.30 per cent. India’s Bombay Stock Exchange Sens Index dipped by 2.2 per cent. The MSCI EM Index, which tracks emerging markets and its twin index, the MSCI FM Index, which tracks frontier markets, dropped by 1.2 per cent each.

The pricing trend at the market left nearly no safe haven for investors with above-average decline across several sectors.

All sectoral indices closed in the red; underlining the negative market-wide sentiment. The NGX 30 Index, which tracks the 30 largest stocks, lost 0.50 per cent. The NGX Banking Index declined by 3.31 per cent.

The NGX Insurance Index declined by 2.58 per cent. The NGX Consumer Goods Index dropped by 0.27 per cent. The NGX Oil and Gas Index and NGX Industrial Goods Index dipped by 0.16 per cent each. The NGX Pension Index, which tracks stocks specially screened for pension funds investments, declined by 1.74 per cent while the NGX Lotus Islamic Index, which tracks stocks that comply with Islamic rules, slipped by 0.03 per cent.

There were three losers for every gainer at the NGX during the week with 13 gainers against 39 losers last week compared with 22 gainers and 36 losers recorded in the previous week. Red Star Express led the losers with a loss of 12.59 per cent to close at N2.36. Beta Glass declined by 9.96 per cent. Consolidated Hallmark Insurance dropped by 9.52 per cent dropped by 6.0 kobo to close at 57 kobo. Learn Africa depreciated by 8.44 per cent to close at N2.06. FCMB Group dropped by 7.71 per cent to close at N3.23. Tripple Gee and Company dipped by 6.90 per cent to close at 81 kobo while U A C of Nigeria dropped by 6.82 per cent to close at N10.25 per share.

On the positive side, Multiverse Mining and Exploration led the gainers with a gain of 18.64 per cent to close at N2.80 per share. Associated Bus Company rose by 7.14 per cent to close at 30 kobo. Honeywell Flour Mill gained 5.78 per cent to close at N2.38. Cadbury Nigeria rose by 5.77 per cent to close at N13.75 per share. Pharma-Deko appreciated by 5.13 per cent to close at N2.05 while Academy Press chalked up 4.76 per cent to close at N2.20 per share.

The momentum of activities slowed down considerably too. Total turnover dropped to 719.398 million shares worth N8.004 billion in 17,444 deals last week as against a total of 949.819 million shares valued at N9.329 billion traded in 18,525 deals two weeks ago.

The financial services sector led the activity chart with 411.407 million shares valued at N3.943 billion traded in 9,471 deals; thus contributing 57.19 per cent and 49.26 per cent to the total equity turnover volume and value respectively. The information and communications technology (ICT) sector occupied a distant second place with 177.815 million shares worth N955.781 million in 1,573 deals while the conglomerates sector placed third with a turnover of 36.577 million shares worth N2.332 billion in 2,425 deals.

The three most traded stocks were Courteville Business Solutions Plc, Zenith Bank Plc and Access Holdings Plc, which altogether accounted for 278.293 million shares worth N1.984 billion in 3,038 deals, contributing 38.68 per cent and 24.78 per cent to the total equity turnover volume and value respectively.

Also, a total of 2,172 units of Exchange Traded Products (ETPs)  valued at N352,774 were traded in 18 deals compared with a total of 3,952 units valued at N1.692 million traded in 32 deals two weeks ago.

At the secondary debt market, a total of 15,945 bond units valued at N16.238 million were traded in 15 deals last week compared with a total of 219,620 units valued at N243.115 million traded in 30 deals two weeks ago.

Analysts at Cordros Securities said they expected return-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the second quarter earnings season. However, the increase in fixed-income return will continue to be a moderating factor.

According to analysts, the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated.

“Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings,” Cordros Securities stated at the weekend.

Analysts at Afrinvest Securities said the market would witness a “muted performance” in the days ahead in the absence of any major catalytic positive report.

The Nigerian Exchange Group (NGX Group) Plc may pay between 25 per cent and 75 per cent of its net earnings as cash dividends.

As part of its post demutualisation reforms, the board of directors of NGX Group has approved a dividend policy for the group. The dividend policy is a distinctive document for the NGX Group, which had emerged from the conversion of the defunct Nigerian Stock Exchange (NSE) from a not-for-profit mutual organisation to a profit-making public limited liability company.

According to the dividend policy, “the range of dividend payable in cash will range between a pay-out ratio 25 per cent and 75 per cent of the distributable profit of same year to which the dividend is applicable.

The policy also indicated that the group’s board of directors may recommend a scrip or bonus issue in any year and in any ratio as it deems fit for any year through the capitalisation of any undistributed retained earnings.

The policy however, noted that in recommending a bonus issue, the board shall maintain a balance between the paid-up capital and the undistributed retained earnings.

The policy delegated the responsibility for the decision to pay dividends to the board of directors and the annual general meeting (AGM).

“The decision to declare and pay dividend, including the procedure for making dividend payments, shall be approved at the Annual General Meeting (AGM) of shareholders, upon the recommendation of the Board of Directors.

“The Board of Directors may in its discretion declare an interim dividend based on profits arrived at as per quarterly or half-yearly unaudited financial results, noting that where no final dividend is declared, the interim dividend shall be regarded as the final dividend in the AGM,” the policy stated.

The framework also provided guidance on the date for when shareholders should expect to receive dividends stating that “dividend is to be paid on the date in which the AGM holds in the year that dividend is declared or at any other date that the shareholders at AGM shall approve and no interest shall accrue on any unclaimed dividend”.

According to the NGX Group , the dividend policy seeks to guarantee shareholder rights especially as it relates to return on investment as the policy was developed to address issues relating to the determination and payment of dividend.

The NGX Group will apply the policy on an annual basis to develop a transparent and methodological dividend consideration and payouts, which will ensure that NGX Group has sufficient distributable profits and general reserves, as determined by a review of the company’s audited financial statements as well as consideration of other financial factors, prior to any declaration or payment of dividend.

“To this end, the policy will guide the NGX Group in its approach to distributing surplus funds from its distributable profits or general reserves to shareholders, as may be determined by the profit and availability of cash for distribution; operating, and investment needs of the company; anticipated future growth and earnings of the company; and provisions of the company’s Articles of Association, among others,” NGX Group stated.

Nigeria has been appointed unto the board of International Securities Services Association (ISSA); the global body for the securities services industry.

The Zurich-based ISSA announced at the weekend that Nigeria has become part of the apex organ of the association as part of efforts at inclusive participation.

Nigeria is represented by its leading clearing house, Central Securities Clearing System (CSCS) Plc, with CSCS’s chief executive, Haruna Jalo-Waziri, to sit on ISSA board as from this month.

The board of ISSA stated that it had set for itself the ambition of ensuring the association is diverse and fit for the 21st Century, composed of a wide spectrum of firms involved in the securities services value chain globally.

“Welcoming the first African firm as a board member institution reinforces ISSA’ s aim to ensure relevance and leadership in all regions, and particularly in the growing continent of Africa,” ISSA stated.

Chair, International Securities Services Association (ISSA), Phil Brown said CSCS was a great addition to the ISSA board, bringing not only in-depth knowledge of Africa, but also a forward-thinking and technologically advanced perspective.

“ISSA is committed to building its brand on the continent and ensuring the relevance of its products to all market segments – and the presence of CSCS on the Board will ensure that ISSA delivers on this commitment.

“Haruna is a known quantity at ISSA, having served and actively contributed on the Operating Committee. He will undoubtedly bring his skills and personality to the Board, and I am delighted that he will be joining us,” Brown said.

Jalo-Waziri said he was delighted to have the opportunity to bring African and Nigerian perspectives to the efforts towards global capital market development.

He noted that ISSA’s willingness to listen to stakeholders and take proactive actions towards advancing the industry has resulted in concrete positive changes and tremendous knowledge exchange amongst member institutions.

“CSCS joining the board is an honour for us and we are excited that Africa is duly recognised as a critical part of the global market ecosystem, relevant for driving ISSA’s mission to shape the future of securities services,” Jalo-Waziri said.

He assured that he would deepen engagement with ISSA towards advancing its crucial role in the global securities services industry for the mutual interest of all members and more importantly the integrity and efficiency of the market.

“Since becoming an operating committee member, I have more than ever appreciated the real value that ISSA brings to the market and the potentials of its coordination of securities services stakeholders across the ecosystem” Jalo-Waziri said.

Jaiz Bank Plc has offered to empower young entrepreneurs with the requisite skills and funding to become successful.

The bank will be doing so, in conjunction with the Executive Producer of a business and economy television programme MoneyLine, Chief Nancy Nnaji.

The Executive Director, Business Development (North), Jaiz Bank,  Dr Sirajo Salisu made this known in Abuja over the weekend at the maiden edition of the Personal and Business Acceleration Masterclass.

The event was attended by the Managing Director, Cowry Asset Management Limited, Johnson Chukwu; the Chief Operating Officer of Cosgrove, Elizabeth Taylor; Chief Executive Officer, Brave Icons Global Ltd Fife Banks and a former President candidate,  Dr Tope Fasua.

Salisu said Jaiz Bank is aware of the importance of entrepreneurship to the economy, as such the bank has agreed “to provide the required technical and financial support to graduates of the Masterclass programme with good business plan”.

In addition, Suraju, who is also the Managing Director-designate of Jaiz Bank, has pledged to “personally take over the mentorship of five of the graduands of the Masterclass programme”.

Suraju said before the end of this year, the number of Jaiz bank branches would have increase to 50.

In her address, Chief Nancy Nnaji said that the idea behind the Masterclass programme is to bring young Nigerians and  empower them with business insights and wisdom to thrive.

Nnaji to the entrepreneurs present that her desire is to “help you through taking action beyond today”.

“My vision for this is that beyond the conversation, we want to see businesses that will be assisted so that in a year’s time when we have this programme, we will be able to guage and measure that these are the businesses that we have been able to assist since the last Personal and Business Acceleration Masterclass”.

Speaking on MoneyLine’s involvement in the mentorship programme, Nnaji stated that “going beyond television where we speak about the economy, business, finance and the rest, we want to hand-hold people and teach them what they need for their businesses to grow”.

According to Nnaji, “it’s like me giving back after so many years. I created this because many of us don’t focus on the bottom of the pyramid, a lot of us focus on the big people.

She said through the Masterclass Programme, “experts would be able to provide entrepreneurs with the required knowledge to make their businesses bankable”.

“They don’t have simple record keeping, you cant just go to the bank to take a loan, you must be able to have adequate record keeping, put fundamental business processes in place and that is why I am also doing this.

Nnaji accused Banks of not doing enough to help small businesses arguing that “banks don’t assist MSMEs as they should, you will see a lot of stringent collateral conditions and some of these businesses don’t have enough information to equip themselves”.

“We are grateful to Jaiz Bank for making that commitment at assisting people both technically and financially. We want to teach the small business people how to put this in place”.

FSDH Merchant Bank and Lagos State Government will continue to expand the scope of existing partnership between them to unlock more innovative financing solutions for the development of the healthcare sector.

Public and private sector experts, who spoke at a breakfast meeting on financing healthcare agreed that there is an urgent need for intervention and growth in Nigeria’s healthcare system.

Through the past few decades, the health sector in Nigeria has experienced continuous disruptions. With the drawbacks from traditional practices to the emergence of new technologies all around the world, more organsations are beginning to drive their support for the industry through investments.

Speaking at the event themed “Financing healthcare in Nigeria” and hosted by FSDH Merchant Bank, Commissioner for Health, Lagos State, Prof Akin Abayomi, acknowledged the importance of concerted efforts by all stakeholders in improving the healthcare sector.

He said the government of Lagos would continue to drive polices to make healthcare and health insurance more accessible and favourable to citizens.

Managing Director, FSDH Merchant Bank Limited, Mrs. Bukola Smith said  the bank’s array of financial solutions could boost revenue and promote financing in the healthcare sector.

He assured that FSDH Merchant Bank would continue to lend their voice to drive remarkable change and innovation in the healthcare sector.

Addressing how the bank will impact health businesses and grow the economy, Group Head, Corporate Banking and Branches, FSDH Merchant Bank, Stella-Marie Omogbai said the bank had identified the healthcare industry as an area of interest, and put together a team of doctors and professionals who understand the business of healthcare finance.

“We set up a health desk manned by some of the most experienced doctors and practitioners and since then, we have gone ahead to finance healthcare projects, support several hospitals, HMOs as well as partnerships with the private and public sectors including the Lagos State Government,” Omogbai said.

Omogbai who gave an overview of the global healthcare industry remarked that, “healthcare in most of Sub-Sahara Africa remains the worst in the world. Despite decades of foreign assistance, few countries in the region are able to spend even the $34-$40 per person specified by the World Health Organization (WHO) for basic health care.”

According to her, studies conducted by International Finance Corporation (IFC) with the assistance of McKinsey & Company estimates that over this decade, $25-$30 billion in new investment is needed in healthcare assets, including hospitals, clinics and health distribution services to meet the growing health care demands.

At the event were also  Mrs. Fola Laoye, Founder Iwosan Investments Limited, Prof Emmanuel Jeje, Medical Director Marigold Hospital, Mrs. Clare Omatseye, Managing Director JNC International, Dr. Biodun Aluko, Medical Director Premier Specialist Hospital, and other top professionals in the health ecosystem.

In her keynote address, Mrs. Fola Laoye, noted that banks need to play a key role as industry catalysts by providing financing and understanding how MSME financing could be applied to the healthcare sector.

She also recommended mergers and acquisitions and public private partnerships (PPP) financing to help create business partnerships and market consolidation that will deliver economies of scale, equipment financing and technical assistance to support healthcare clients to address their bankability factors and key issues of interest rates and foreign exchange availability.

In his presentation on the importance of digitization in the health sector, Dr Neto Ikpeme CEO of Wella Health Technologies touched on the adoption of technology for healthcare professionals in driving efficiency. He also said that this adoption would save time and help businesses provide better services.

There was also an interactive panel session leveraging the expertise of key players like Dare Odumade, CEO Chekitt Technologies, Dr Neto Ikpeme, CEO Wella Health, Mr. Bolaji Odunsi, Chairman Marcelle Ruth Cancer Centre and Dr Pamela Ajayi, President Health Federation of Nigeria to discuss the endless opportunities of emerging trends in the sector, health insurance and how businesses can access adequate funding.

Fidelity Bank Plc plans to raise new equity funds through the issuance of about 3.04 billion ordinary shares of 50 kobo each to select investors.

Fidelity Bank will undertake a private placement to issue its unissued authorised share capital to carefully identified private investors in a transaction that may add some N10 billion new equity funds to the bank.

Fidelity Bank’s share price closed at the weekend at N3.65 per share, days after it announced the receipt of Central Bank of Nigeria (CBN)’s preliminary approval to acquire 100 per cent equity stake in Union Bank UK Plc, a spin-off and former subsidiary of Union Bank of Nigeria (UBN) Plc.

The Board of Directors of Fidelity Bank has scheduled an extraordinary general meeting of shareholders by the end of this month to consider and approve the 3.04 billion shares private placement.

Under the resolutions, shareholders are expected to waive their pre-emptive rights to the unissued shares to be allocated to select private investors and to approve that such issued shares to private investors shall rank in all respect equally with the existing ordinary shares of the bank.

Shareholders are expected to pass five sub-joined special resolutions mandating the issuance of the new shares in compliance with extant laws and rules guiding corporate and capital market’s transactions.

The Board of the bank indicated that the it was adopting the proposed private placement option to comply with provisions of Section 124 of the Companies and Allied Matters Act, 2020 and the Companies Regulations 2021, and pursuant to Paragraphs 9 and 10 of the Articles of Association of the company.

Recent changes in corporate laws disallow keeping subsisting unissued shares, leaving companies with the option of cancelling current unissued authorised share capital or issuing out such shares.

Directors of Fidelity Bank indicated that the new private placement shall not be more than 30 per cent of the company’s existing issued shares and paid up capital, outlining the potential share dilution impact of the proposed new offer.

Fidelity Bank had two weeks ago announced that it had entered into a binding agreement to acquire 100 per cent in Union Bank UK Plc, a transaction that will make the London-based retail and wholesale banker a wholly-owned subsidiary of Fidelity Bank. The transaction is, however, still subject to the approval of the UK’s Prudential Regulatory Authority (PRA).

Managing Director, Fidelity Bank Plc, Mrs. Nneka Onyeali-Ikpe has said the acquisition aligned with the bank’s strategic plan of expanding its service touchpoints beyond the Nigerian market as well as providing straight-through services that meet and exceed the needs of its growing clients.

“The diverse service bouquet and business model of Union Bank UK offered a compelling strategy and we hope to build on the capacity to create a scalable and more sustaining service franchise that will support the wider ecosystem of our trade businesses and diaspora banking services,” Mrs Onyeali-Ikpe said.

Union Bank UK commenced operations in London in 1983. Its banking services include personal banking, trade finance, treasury management and structured trade and commodity finance.

Key extracts of the audited report and accounts of Fidelity Bank for the six-month period ended June 30 2022 showed that gross earnings rose by 37.9 per cent from N112.30 billion in first half 2021 to N154.84 billion in first half 2022. Profit before tax grew by 21.6 per cent to N25.08 billion in first half 2022 as against N20.6 billion in first half 2021. After taxes; net profit rose by 20.7 per cent from N19.31 billion to N23.31 billion. Earnings per share thus stood at 80 kobo in first half 2022 as against 67 kobo in first half 2021. The board of the bank has declared an interim dividend of 10 kobo per share to all shareholders on the register of the bank as at the close of business today  with the interim cash dividends payable on September 20 2022.

Chief Executive Officer, NGX Regulation Limited (NGX RegCo), Tinuade Awe, has said the company is deploying resources toward promoting regulatory technology in the capital market.

Awe spoke during the 26th Annual Chartered Institute of Stockbrokers’ conference in Benin City, the Edo State capital.

During her presentation on the panel session themed “Capital Market Regulation in the Digital Age”, Awe said  NGX RegCo, which serves as the self-regulatory arm of the Nigerian Exchange(NGX),  had launched five technology-driven innovations, namely, X-Issuer, X-Whistle, X-BOSS, MOS and the SMART Self-Assessment Form.

“The X-Issuer platform is a secured, electronic, real-time means of delivery of Issuer information to the market while the X-Whistle is a secure, online portal for reporting possible violations of market rules on an anonymous basis.

“X-BOSS, on one hand, automates the regulation of Trading Licence Holders and the MOS initiative includes minimum technology requirements that Trading Licence Holders are expected to implement.

“Newest, in addition to the innovation, is the SMART Self-Assessment Form that provides NGX RegCo with an opportunity to project a 360o view of their compliance status,” Awe said.

According to her, the future of regulatory technology  in the capital market is dependent on cognitive systems and Artificial intelligence, data analytics, machine learning, robotic process automation and biometrics.

“We would need to effectively manage regulatory compliance and cut compliance-related costs. Regulators and firms can build data repositories that could be a one-stop shop for information and lead to better decision-making,” Awe said.

She added that NGX RegCo continues to align with the best practice in delivering a fair and compliant Nigerian capital market to all stakeholders.

Flour Mills of Nigeria (FMN) Plc has received the most critical and primary statutory approval to begin a massive restructuring that may lead to unbundling of the component businesses and assets of one of the largest conglomerates in the country.

The group also received similar approval to raise up to N200 billion  in support of its growth plan and the restructuring.

FMN’s finance costs had jumped by 79.12 per cent to N8.150 billion in the year from N4.55 billion last year; contributing to the marginal increase in profitability recorded during the period.

In a regulatory filing at the weekend, the Board of Directors of the group affirmed that it has received shareholders’approval to undertake certain restructuring of the group’s businesses and to raise additional new capital.

The approvals enable the group to remove or separate its manufacturing businesses as well as the power assets of the company.

The regulatory filing was signed by the company’s managing director, Mr. Omoboyede Olusanya  and Company Secretary, Joseph Umolu.

While the structure of the emergent company post-unbundling is still sketchy, market analysts said FMN may adopt a holding company structure, which allows it to optimise the potential of each segment of its businesses and assets and reduce substantially the risks of grouped liabilities.

Incorporated in 1960, FMN is a vast food and agro-allied company with operations in flour milling; production of pasta, noodles, edible oil and refined sugar; production of livestock feeds; farming and other agro-allied activities; distribution and sale of fertilizer; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials; operation of Terminals A and B at the Apapa Port; customs clearing, development of real estate properties for rental, forwarding and shipping agents and logistics.

Flour Mills had recently acquired 71.69 per cent stake in Honeywell Flour Mills (HFM) at a total enterprise value of N80 billion. HFM is a separate quoted entity on the Nigerian Exchange (NGX).

Key extracts of the first quarter results of FMN for the three-month period ended June 30, 2022 showed that turnover rose by 45.3% per cent to N339.601 billion in 2022 as against N233.703 billion recorded in comparable period of 2021. The top-line saw appreciable increases in all business segments with the food business rising to N213.166 billion from N146.925 billion while/ the agro-allied business grew to N65.652 billion as against N47.588 billion. Profit after tax however inched up to N5.495 billion in June 2022 from N5.446 billion in June 2021.

FMN’s turnover had hit the N1 trillion mark in the immediate past year ended March 31 2022. The audited report showed that group turnover rose by 51 per cent from N772 billion in 2021 to N1.16 trillion in 2022. Gross profit stood at N108 billion as against N106 billion in the previous year. Profit after tax was almost flat at N7.328 billion in 2022 as against N7.261 billion in 2021.