Category: Capital Market

The board and management of Industrial and Medical Gases Nigeria (IMG) Plc have set new growth targets for the company as it formally concluded its post-acquisition rebranding at the weekend.

The company, formerly called BOC Gases Nigeria Plc launched its new name: Industrial and Medical Gases Nigeria Plc and unveiled its logo at a ceremony at its head office in Lagos at the weekend.

The Nigerian Exchange (NGX) also confirmed that it has effected the change of name. The change was approved by the company’s shareholders at its annual general meeting June 24, 2021. The company subsequently received a new certificate of incorporation from the Corporate Affairs Commission (CAC).

TY Holdings Limited, the investment holding firm of Lt Gen. Theophilus Danjuma (rtd), had acquired 60 per cent majority equity stake held by BOC Holdings UK-a member of The Linde Group, to increase TY Holdings’ contro0lling equity stake to 72 per cent. It subsequently changed the name of BOC Gases Nigeria Plc to Industrial and Medical Gases Nigeria Plc.

The board and management of the company at the weekend said they have developed a blueprint to strengthen its global competitiveness on a sustainable basis , irrespective of the nature of the operating environment.

Managing Director, Industrial and Medical Gases Nigeria (IMG) Plc, Mr Ayodeji Oseni assured shareholders that the rebranding was a dawn of new era.

According to him, the company is now better positioned to expand its operations, introduce more innovative products and enhance shareholder value.

“We are all very excited about the bold and ambitious commitments that have been made by our new investor, the TY Holdings. These commitments will lead to additional plant procurement with accompanying facilities, strategic development of manpower, growth and development and business expansion within Nigeria and West Africa to name but a few.

“We shall leverage our team of seasoned staff with rich industry experience, modern equipment and quality products and services for optimal performance and generate shareholder value on sustainable basis, grow our businesses and evolve new products and business opportunities,” Oseni said.

Chairman, Industrial and Medical Gases Nigeria (IMG) Plc, Mr Abiodun Alabi, said the rebranding was necessitated by the board’s determination to strengthen the company’s operations, following its acquisition of 60 per cent stake by TY Holdings

“In August this year, The Linde Group sold its controlling ownership of 60 per cent to TY Holdings, a group of company which has several business interests in various sectors of the Nigerian economy. The TY Holding Group is known for astuteness, great vision, and passion to excel in any field that it has presence. The shared vision is to significantly strengthen the number one position of our company in Nigeria and deepen our activities in West Africa.

“Today, as we unveil the new name and logo of our dear company, the collective challenge to all stakeholders is to join hands to endure the success of our new journey. The bane of our industry at present is lack of government regulations and standards to ensure that players provide safe and quality products. I call on the Federal Government to address these challenges without further delay, ” Alabi said.

A prominent shareholder, Sir Sunny Nwosu said the growth outlook of the company has convinced shareholders that the rebranding will lead to better returns.

Another shareholders, Mr Nonah Awoh urged the board and management to focus on sustainable growth of the company in order to ensure steady ad stable returns to shareholders.

Incorporated in 1959, the company was founded in Nigeria as Industrial Gases Limited, (IGL). It became a Public Liability Company and exactly 38 years ago. Its establishment of a relationship with the BOC brand and led to the change of name to BOC Gases Nigeria Plc and shortly after became a member of The Linde Group via acquisition of majority shares by The Linde Group in the BOC entity.

The acquisition of 60 percent holding by TY Holdings marks the end of the company’s 24 years relationship with the Linde Group and the beginning of a new journey as IMG.

TY Holdings had recently launched a takeover bid for equity stakes held by minority shareholders in IMG.  TY Holdings indicated that it secured the approval of the Securities and Exchange Commission (SEC) to proceed with its proposed Mandatory Takeover Offer (MTO).

TY Holdings planned to buy 100,000 ordinary shares held by minority shareholders of IMG N11.65 per share. The MTO represented 0.02 per cent equity stake in the total issued and fully paid up share capital of BOC Gases.  The MTO opened Monday, November 1, 2021 and closed on Monday, 22 November 2021.

Section 131, Part XII of the Investment and Securities Act, No. 29, 2007 and Rule 445 of SEC Rules and Regulations, 2013 make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an mandatory tender offer (MTO) to other minority shareholders. There are however exemptions in few instances.

Meanwhile, interim report and accounts of Industrial and Medical Gases Nigeria Plc for the third quarter ended September 30, 2021 showed considerable growths across key performance indices.

Turnover rose from N2.35 billion in third quarter 2020 to N2.76 billion in third quarter 2021. Profit before tax doubled from N288.74 million to N430.37 million while profit after tax rose to N322.37 million in third quarter 2020 as against N194.29 million in third quarter 2020.

 

The Independent Shareholders Association of Nigeria (ISAN) has recommended that the Central Bank of Nigeria (CBN) pay interest on banks’ mandated deposits as a way out of the Cash Reserve Requirement (CRR) stalemate imposed on banks and to avoid policy incapacitation of the national economy.

Speaking at an emergency meeting held at the weekend in Lagos, Chairman, ISAN Universal Academy, Sir Sunny Nwosu said the shareholders are concerned about the state of commercial banks and the protection of local portfolio investors’ investments.

According to them: “After serious evaluation of the CRR and current AMCON scam, ISAN insists that CBN should pay interest to banks on restricted deposits to enhance banks obligation to the real sector. In the alternative, the apex bank should the CRR to 15 percent to enable banks declare meaningful dividends that will encourage domestic investments.

“We urge CBN to seriously have a rethink on CRR and among other things to enhance the performance of the financial sector of the economy. The challenging character of the Nigerian economy makes it imperative for CBN to pay interest on restricted deposits.

“Banks restricted deposits with CBN are idle funds. We argue that if these funds are with banks, certainly it will enhance their earnings, loans to the real sector, and returns for shareholders.

“If CBN can pay at least three percent interest on the mandatory CRR deposits, it will go a long way in driving the real sector and the payment of robust dividends to shareholders,” ISAN argued.

Sir Nwosu said the Central Bank of Nigeria (CBN) Cash Reserve Requirement (CRR) positioned to complement the open market operation (OMO) in managing excess liquidity in the banking system in recent times has failed to effectively serve the purpose for which it was intended.

He also advised that the government should declare a state of emergency to enable key financial industry regulators to unlock the broad-based financial services growth amid the financial inclusion thrust policy of the nation.

“That the recent increase of CRR by five percent to 27.5 percent as against 22.5 percent have not also yielded the desired economic results after the first phase of Covid-19.

“That available data showed that 10 banks were cumulatively debited N4.95 trillion and N7.78 trillion respectively in CRR between 2019 and 2020 alone.

“That analysis of some bank’s CRR debit showed that Zenith Bank Plc’s restricted deposit with CBN rose from N680.26 billion in 2019 to N1.33 trillion in 2021, while FBN Holdings Plc’s restricted deposit hit N1.32 trillion in 2020 from N843.44billion in 2019.

“FBN Limited and FBN Quest Merchant Bank Limited had also restricted balances of N1.3 billion and N39.37 billion respectively with CBN as at December 31, 2020.

“Access Bank Plc CRR deposit with CBN also grew to N1.31trillion or an increase of 54 percent from N848.85billon in 2019 while Guaranty Trust Holdings Plc (GTCO) reported N1.03trillion mandatory reserve with CBN in 2020 from N443.65 billion reported in 2019.

“United Bank for Africa (UBA) mandatory reserves with CBN also increased to N1.10 trillion in 2020 as against N832.11 billion in 2019. That CRR is a forced replication of what the Asset Management Corporation of Nigeria (AMCON) earlier did in the banking sector where six commercial banks paid N155.45 billion into an idle sinking fund between 2015 and 2017. Banks also have continued to pay.

“That the AMCON January 1, 2011, sinking fund agreement with banks requiring CBN to contribute N50 billion and banks an equivalent of 0.5percent of their total assets as annually for ten years has elapsed on January 2, 2021. That continuous contribution of a non-refundable levy to AMCON by all banks in Nigeria, despite the difficult business operating environment any without ownership interest, rights or obligations on the contributor amounts to institutional scam,”

He continued: “That ISAN which had previously opposed the sinking fund, still opposed the failed policy project and urged the federal government to liquidate AMCON and enhance shareholders returns and the economy.

“That the continuous debit of banks under CRR by CBN is putting the banking sector under serious threat and compelling impotency toward sustainable intervention in the real sector. That the 27.5 percent CRR impact on active 4.9 million retail shareholders has resulted in dismal dividends, banks’ net interest income, and the general economy.

“That CBN debiting of banks frequently, so far, has no known impact in curbing speculation against the Naira and the noticeable shortages of foreign exchange. Given the dire need to stimulate the economy after the international and national adversities created by the Covid-19 pandemic, the industry’s restricted cash reserves exceeded N9.5 trillion in 2020 and translated to an effective CRR of 37 percent.

“That as Nigeria garner reputation as the country with the highest reserve requirement in sub-Saharan Africa, we consider the sterile new CRR policy unproductive and an elitist tool to keep most Nigerians, particularly retail investors down. That the cumulative restricted deposits of banks so far as 2020, if invested in treasury securities at five percent, would have N482 billion added to the Industry’s profit before taxation. The industry’s return on average equity (ROE) would have increased by between 11percent and 31.6 percent as of December 2020.

“That as portfolio investors’, most senior citizens who took to portfolio investment are compelled to endure the effects of poor monetary policy instrument. That CBN has been highly interventionist compared with its peers like South Africa and Kenya that toed global trend of giving banks more room to lend. Sticking with a CRR that compels lenders to park, the additional five percent CRR increase amounts to N1.2 trillion warehoused by the “government.

“ISAN is seriously worried about the health of domestic banks and the economy in the long term when juxtapose against what AMCON foist on commercial banks. CBN warehousing of about N1.2 trillion out of the banking system since raising the CRR by 5 percent to 27.5 percent coupled with the AMCON sinking funds calls for serious concerns by all stakeholders.

“Worried by currently debilitating state of the nation’s banking sector, the fulcrum of economic growth, stability and wealth creation, ISAN suggests that government should declare a state of emergency to enable key financial industry regulators to unlock the broad-based financial services growth amid financial inclusion thrust policy of the nation,”

 

FMDQ Securities Exchange Limited (FMDQ Exchange) has approved the registration of NECIT Nigeria Limited’s N20 billion commercial paper (CP) issuance programme on its platform.

With the registration, NECIT Nigeria, an indigenous manufacturer of car lubricants and engine oil as well as the importation and sale of base oil, will be able to raise short-term finance through CP issues within the approved CP programme limit. Such issuances will subsequently be quoted on FMDQ Exchange for visibility of the issue and issuer, and the desired transparency for investors.

Managing Director, NECIT Nigeria Limited, Mr. Emmanuel Iheagwazi said the registration of the N20 billion CP programme was a major boost to its business plan.

According to him, as a leading indigenous player in the lubricant blending industry in Nigeria, access to short-term funds is critical to meeting the company working capital needs.

“The approval of this CP programme by FMDQ Exchange represents a major milestone in our near-term growth aspirations and with this support, our capacity to unlock value for all stakeholder has been further enhanced,” Iheagwazi said.

Managing Director, Boston Advisory Limited, Mr. Rotimi Balogun, the sponsor of NECIT Nigeria CP programme, said his firm remained committed to an all-inclusive development of the Nigerian debt capital market; a market where the vast majority of bankable companies in Nigeria will have equal access to short term funds at cheaper rate.

“We ultimately seek to be a frontliner in arranging growth, expansion capital for mid-tier companies, and we are indeed delighted to work with NECIT in making this a reality,” Balogun said.

FMDQ Exchange noted that the Nigerian CP market has continued to receive the much-needed boost from corporate entities seeking to raise finance for their short-term funding needs.

FMDQ Exchange pointed out that with its integrated securities registration, listing and quotation process, it has continued to avail corporates and government entities alike, a secure and reliable platform for the issuance of their short-to medium and long-term debt securities.

“In keeping with its commitment to develop the Nigerian debt capital market, FMDQ Exchange will continue to sustain its efforts in supporting issuers with tailored financing options to enable them achieve their strategic objectives, deepen and effectively position the Nigerian debt capital market for growth.

“CPs quoted on FMDQ Exchange benefit from the commendably efficient CP registration process, in addition to continuous provision of invaluable information and price formation as part of the Exchange’s commitment to organise, govern and enforce transparency in the Nigerian fixed income market space,” FMDQ Exchange stated.

The Nigerian capital market is set for a new vista with the launch of West Africa’s first central counterparty (CCP), a major linchpin for commencement of trading in derivatives.

A CCP facilitates the clearing and settlement of derivatives and other securities as well as the management of counterparty credit risk.

Derivatives are super secondary financial instruments built on other assets or related indices. They help to deepen market portfolio and provide alternative options to hedging risks and pooling returns.

NG Clearing Limited, the first CCP in West Africa, formally launched its operations in a ceremony hailed as a new threshold for the capital market.

Managing Director, NG Clearing Limited, Mr. Tapas Das said the emergence of NG Clearing underscored the maturity of the Nigerian financial ecosystem.

According to him, with Nigeria’s capital market maturing into offering advanced capital market products such as futures derivatives, it is only ideal to establish a CCP, in line with global best practices.

“The emergence of NG Clearing is not only an indication of our collective growth as a market but also a marker of the forward-looking intent of the Nigerian capital market.

“Our vision is to become Africa’s most trusted CCP. With this vision in mind, we have left no stone unturned in ensuring that we offer world-class infrastructure, transparent and resilient processes, with an experienced team of worthy professionals,” Das said.

Chairman, NG Clearing, Mr. Oscar Onyema said the firm was borne out of a firm commitment to position the Nigerian capital market as a stable and resilient market that offers local and foreign investors sound opportunities without compromising global standards.

“On this premise, we took steps to identify the gaps that inhibit our market from attaining this positioning. One of the gaps we identified was the absence of the financial market infrastructure known as a CCP,” Onyema said.

Minister of Finance, Dr. Zainab Ahmed noted that NG Clearing’s emergence will contribute to the post-COVID-19 recovery of the Nigerian economy.

According to her, a door of new possibilities has been opened for growth and development of the Nigerian economy with the impending commencement of derivative trading.

Minister of Industry, Trade and Investment, Otunba Adebayo Adeniyi said NG Clearing emergence redefines Nigeria’s financial landscape, creating endless possibilities for products that can be developed and deployed.

Director-General, Securities and Exchange Commission (SEC), Dr. Lamido Yuguda pointed out that the launch of NG Clearing as a CCP is historic as the services of NG Clearing will help in deepening the market while placing it on the right path to achieving the required sophistication, depth, and breadth in terms of products and service offerings.

He assured that SEC will continue to deliver on its mandate of ensuring the Nigerian capital market is safe, orderly, and built on integrity.

Deputy Governor, Financial Systems Stability Directorate, Central Bank of Nigeria (CBN), Mrs. Aisha Ahmad noted the important roles of NG Clearing in driving stability in the ecosystem.

She also stressed the need to adopt sustainable approaches that contribute to the combating of climate change.

Governor of Lagos State, Mr. Babajide Sanwoolu and Governor of Edo State, Mr. Godwin Obaseki congratulated the board and management of NG clearing on the laudable feat of establishing the first CCP in West Africa.

Incorporated in 2016, NG Clearing received SEC’s approval to begin operations in June 2021. The launch was a climax of a long journey towards the creation of a world-class- post-trade services provider with a focus on advanced capital market offerings.

 

INVESTORS seeking competitive and stable returns should consider a portfolio of value stocks in financial services, oil and gas, manufacturing, telecommunications and agriculture.

In its latest “Top Picks”, FSDH Capital, an investment banking group, selected 10 stocks that provide reasonable assurance of returns as the full-year earnings cycle draws near.

The model portfolio by analysts at FSDH included United Bank for Africa (UBA), Access Bank, Jaiz Bank, United Capital, Fidelity Bank, Transnational Corporation of Nigeria, Total Energies, Guinness Nigeria, Okomu Oil Palm and MTN Nigeria Communications.

The top 10 stocks were selected after careful consideration of several variables including current price, historic pricing trend, price-to-book value and dividend yields, among others.

Analysts noted that despite headwinds and globally tepid market condition there are opportunities for investors in the Nigerian stock market.

“As a result, we believe December could present opportunities to investors to take positions in the Nigerian equities market, particularly as we approach the dividend announcement season in first quarter 2022,” FSDH stated.

The report, however, pointed out that in the Nigerian market; investors continue to be averse to risk-taking with a safe approach driving investors into cash and money market securities.

FSDH noted that the foreign investor community remains uninterested due to unfavourable exchange rate policies while domestic investors continue to retain their stand-offish approach.

According to the report in November 2021, equity markets across the globe witnessed a volatile month as wild swings in sentiments kept investors on their toes through the month.

“Looking ahead, the global equities market remains in a precarious state as countries continue to react by placing travel restrictions in bid to curb the spread. In addition, it remains unclear how monetary policy decision makers and other key economic managers will shape their policy outlook given a recurring tightening stance in the past weeks. That said, we anticipate investors will try to buy the dip in the coming trading days, particularly on value stocks that have witnessed significant sell pressures in the last weeks” FSDH stated.

Jaiz Bank, Nigeria’s premier non-interest bank, had sustained its strong growth trajectory in the third quarter with double-digit growths across major performance indices.

Key extracts of the interim report and accounts of Jaiz Bank for the nine-month period ended September 30, 2021 showed that gross earnings rose by 32 per cent while pre and post tax profits grew by 53 per cent and 45 per cent respectively.

The report indicated that gross income rose from N14.24 billion in September 2020 to N18.78 billion in September 2021. Profit before tax also jumped from N2.1 billion to N3.3 billion. Net earnings per share increased from 6.28 kobo in third quarter 2020 to 9.09 kobo in third quarter of 2021.

The balance sheet also witnessed considerable improvement. Total asset grew by 22 per cent from N210 billion in September 2020 to N256 billion in September 2021. Shareholders’ funds also rose by 14 per cent from N17.85 billion in 2020 to N20.31 billion in September 2021.

Managing Director, Jaiz Bank Plc, Hassan Usman, said with the third quarter results, the bank has continued to deliver consistently remarkable results in the last three years and the whole of the three quarters in the current year.

According to him, the third quarter performance is a reaffirmation of the bank’s continuous growth trajectory as the clear leader in Nigeria’s non-interest banking space and its growing branding franchise among its stakeholders and the general banking public.

He pointed out that the bank was able to achieve these feats, through a number of strategic initiatives which include investment in information technology infrastructure, better customer engagement at all levels and strategic cost management.

He expressed appreciation to the bank’s teeming customers, shareholders, regulators and other stakeholders for their immense support while urging the general public to explore the opportunity of alternative banking represented by Jaiz Bank.

Jaiz Bank had recently formally completed a N3.3 billion private capital raising. The bank sold 5.077 billion ordinary shares of 50 kobo each at 65 kobo per share. The private placement increased Jaiz Bank’s issued shares from 29.46 billion to 34.54 billion ordinary shares of 50 kobo each.

Market pundits said the injection of additional capital of N3.3 billion in new equity funds showed the confidence of the investing public in the bank and the commitment of the board and management to the long-term growth of the bank.

The third quarter performance further strengthened the returns outlook of the bank after it recorded impressive growth in profitability in the first half.

Also, United Capital had witnessed impressive growths in the top-line and bottom-line in the third quarter with pre-tax profit rising by 72 per cent to N7.09 billion within the nine-month period.

Key extracts of the interim report and accounts of United Capital for the third quarter ended September 30, 2021 had shown that gross earnings rose by 60 per cent from N7.07 billion in third quarter 2020 to N11.32 billion in third quarter 2021. Profit before ta leapt to N7.09 billion in third quarter 2021 as against N4.12 billion recorded in comparable period of 2020. After taxes, net profit rose from N3.46 billion to N5.97 billion. With this, earnings per share increased from 77 kobo in third quarter 2020 to N1.33 in third quarter 2021.

Group Chief Executive Officer, United Capital Plc, Mr. Peter Ashade, said it was commendable that the company ended the third quarter with another outstanding performance.

He said United Capital remains a leader in the financial and investment services space, with a mission to provide bespoke and innovative value-added services to its clients.

According to him, the group aims to transform the African continent by providing innovative and creative investment banking solutions to governments, companies, and individuals.

He outlined that during the period under review, United Capital successfully listed three series commercial papers (CPs) worth N19.72 billion on FMDQ Securities Exchange.

“The CPs were issued under the company’s N50 billion commercial paper issuance programme. This has further positioned us as a company to provide a wider range of wholesale financing solutions to our clients and complement funding base and support for all our businesses.

He pointed out that another remarkable point to note was the NGX’s reclassification of United Capital shares from low price stock group to medium price stock group in August 2021 driven by steady growth in the company’s share price over the past months due to our consistent impressive performance over the years.

“I want to assure our stakeholders that we are optimistic on sustaining this exciting performance in the last quarter of the year and beyond. We remain focused on our transformation agenda and to continue to provide best-in-class solutions to all client segments. We are also committed to deliver superior returns as we seek to always delight our shareholders,” Ashade said.

ABC Transport Plc has launched a process to raise about N394.53 million new equity funds from its existing shareholders as the transport company seeks to strengthen its balance sheet.

ABC Transport plans to float a rights issue of 1.127 billion ordinary shares of 50 kobo each at 35 kobo per share. The rights issue will be pre-allotted on the basis of 68 new ordinary shares for every 100 ordinary shares held as at the close of business on Tuesday, November 30 2021.

Shareholders of ABC Transport had at their annual general meeting last year authorised the board of the company to raise up to “N1.4 billion additional capital for the company through rights issue and bond from existing shareholders and the open market, upon such terms and conditions that the directors may deem fit in the interest of the company, subject to obtaining the approvals of relevant regulatory authorities”.

They also increased the authorised share capital of the company from N1 billion to N2.5 billion by the creation of 3.0 billion additional ordinary shares of 50 Kobo each, ranking paripassu in all respects with the existing shares in the company’s equity.

The meeting subsequently mandated the board of directors to amend the memorandum and articles of association of the company to reflect the increase in the authorised share capital.

ABC Transport commenced operation in road passenger transportation on February 13, 1993 as an off-shoot of Rapido Ventures with a view to running a modern road transportation system in Nigeria.

In March 2003, Capital Alliance Private Equity (CAPE) acquired 30 per cent equity stake in ABC Transport. With the acquisition, Capital Alliance (Nigeria) became stakeholders in ABC TRANSPORT, a partnership that re-positioned the company for greater performance.

ABC’s operations within and outside Nigeria are carried out in terminals, with lounges in various cities like Lagos, Aba, Owerri, Port-Harcourt, Abuja, Enugu, Onitsha, Umuahia, Jos, Mbaise, Bolade, and Accra, Ghana.

Companies are increasingly turning to existing shareholders to source new equity capital amidst considerable apathy at the general primary market.

FTN Cocoa Processors Plc also recently launched a process to raise N850 million from its shareholders as the agricultural company started a major effort to restructure its balance sheet and reposition for growth.

FTN plans to issue 1.7 billion ordinary shares of 50 kobo each at par value of 50 kobo per share to existing shareholders of the company. The rights issue would be pre-allotted on the basis of 17 new ordinary shares for 22 ordinary shares held as at the close of business on Tuesday, November 09, 2021.

The new equity capital raising is part of efforts of the board and management to improve the depleted balance sheet of the company and support a turnaround process aimed at returning the company to profitability

 

The Lagos Commodities and Futures Exchange (LCFE) has partnered with Heritage Bank Plc to create a structure for trading on wheat contracts and its allied products, in a major move expected to drastically cut Nigeria’s annual wheat import of $2 billion.

Addressing members of the commodity ecosystem operators at the weekend, Managing Director,  Lagos Commodities and Futures Exchange (LCFE), Mr Akin Akeredolu-Ale  said the Exchange’s primary function was to create a structured platform for fungible tradable instruments that are de-risked by way of forward contracts through commodities products in agriculture, mineral resources, oil, and gas where issuers can also write an array of contracts.

He commended the Central Bank of Nigeria and the Securities and Exchange Commission (SEC) for the current initiative on wheat production and creation of enabling environment for development of the commodities ecosystem respectively.

According to him, LCFE is delighted to have a partner in Heritage Bank for the development of the commodities ecosystem.

“We are committed to partnering with the bank to develop the wheat value chains by aggregating farmers, their commodities, and data for the overall development of the wheat Value Chain. Our involvement is in the primary input. The Exchange would continue to provide the necessary support to Heritage Bank through the alignment of various stakeholders and partners,” Akeredolu-Ale said.

Former Executive Director, Lake Chad Institute of Research, Dr Oluwasina Olabanji lamented that Nigeria spends $2 billion annually on wheat importation due to insufficiency in commercial quantities and poor quality of primary input.

According to him, given the diverse uses of wheat, any country that lacks capacity to produce the commodity for consumption and sales is bound to face balance in trade challenges.

He however expressed optimism that the apex bank’s intervention would address the challenges facing wheat production, boost investment opportunities in agriculture, enhance foreign exchange earnings and provide jobs for the country’s teeming unemployed youths.

Divisional Head, Agribusiness, Natural Resources and Project Management, Heritage Bank Plc, Mr Olugbenga Awe said d to promoting development of agricultural value chains in Nigeria.

According to him, the bank’s involvement in the sector dated back to many years ago and it has always been at the forefront of ensuring overall growth and development of commodities products in Nigeria.

“The CBN’s Governor recently announced the apex bank’s N41 billion intervention in wheat production in Nigeria for commodity associations and anchor companies. Heritage Bank is pleased to work with CBN and other stakeholders such as wheat farmers association of Nigeria, wheat farmers, processors and marketers association of Nigeria, lake chad research institute and other development partners, flour mills of Nigeria and several seed companies and others to support over 100,000 farmers in wheat production. We are glad to work with LCFE to ensure its sustainability and deepen investment opportunities in agricultural commodities, solid minerals and energy space,” Awe said.

He said Heritage Bank will expand its  footprints to other commodity value chain during the next planting season and the bank is currently evaluating and reviewing expressions of interest from interested parties according to Awe.

 

NG Clearing Limited, the first central counterparty (CCP) in West Africa, will formally launch its operations this week.

The launch of NG Clearing precedes the trading of the first exchange-traded derivatives in the Nigerian capital market and opens new opportunities for investors, stakeholders, and other players in Nigeria’s capital market.

A central counterparty is a critical financial market infrastructure that facilitates the clearing and settlement of derivatives and other securities as well as the management of counterparty credit risk.

NG Clearing will facilitate the clearing and settlement of exchange-traded derivatives, manage counterparty risk, reduce systemic risk, and promote the safety and integrity of Nigeria’s capital market.

Chairman, NG Clearing Limited, Mr Oscar Onyema, noted that since its incorporation in 2016, NG Clearing has achieved many milestones including the development of a world-class clearing and settlement system to enable seamless and safe clearing of derivatives across multiple asset classes and trading venues.

NG Clearing also obtained approval from the Securities and Exchange Commission to provide CCP services in Nigeria. Recently, as an affirmation of the company’s global outlook, NG Clearing joined CCP12, the global association of central counterparties.

Onyema said NG Clearing’s emergence as a CCP in Nigeria and the first out of West Africa is an epochal achievement, one that all stakeholders should be proud of as it represents the maturity and transition of the Nigerian capital market to a new era of clear possibilities.

Speaking of NG Clearing’s role as a CCP, Chief Executive Officer, MG Clearing Limited, Mr. Tapas Das explained that across the world, CCPs have emerged to strengthen financial markets, propelling them to growth and reinforcing existing layers of market safety.

“We have left no stone unturned in ensuring that Nigeria’s first CCP is positioned to become the most trusted CCP in Africa,” Das said.

He pointed out that as part of the build-up to the launch of NG Clearing; the company has been engaging capital market stakeholders on derivatives clearing and settlement, and the role of a CCP.

Chief Operating Officer, NG Clearing Limited, Mr. Ayokunle Adaralegbe, said that the company understands that there is a knowledge gap in the market and the core of its strategy is stimulating the market with high-level training sessions that demystify derivatives clearing.

He also noted that the company will expand the training engagements to the public soon.

 

Nigerian equities closed weekend with net capital depreciation of N595 billion in a major reversal triggered by portfolio realignments and profit-taking transactions.

Benchmark indices at the Nigerian Exchange (NGX) at the weekend showed average decline of 2.67 per cent for the week, equivalent to net capital depreciation of N595 billion. The stock market traded all through the week in the negative, its worst performance in recent period.

The All Share Index (ASI)- a common value-based index that tracks all share prices at the NGX, closed weekend at 42,167.91 points compared with the week’s opening index of 43,308.29 points.

Aggregate market value of all quoted equities also closed the week at N22.003 trillion compared with the week’s opening value of N22.598 trillion.

The concurrence between the face-value market capitalization and the weighted benchmark index implies that the depreciation was due to decline in share prices rather than changes in volume of shares due occurrences such as delisting, consolidation of shares and redenomination among others.

With 49 losers to 18 gainers, the market was overwhelmed by sell sentiment. All sectoral indices closed negative with the exception of the NGX Insurance Index, which posted a surprising gain of 2.97 per cent.

The momentum of activities at the market also slowed down with turnover of 1.278 billion shares worth N17.340 billion in 21,052 deals last week as against a total of 3.435 billion shares valued at N30.915 billion traded in 21,109 deals two weeks ago.

The financial services sector remained atop the activity chart with 984.543 million shares valued at N10.247 billion traded in 11,029 deals; thus contributing 77.01 per cent and 59.09 per cent to the total equity turnover volume and value respectively. Consumer goods sector followed with 78.724 million shares worth N2.328 billion in 3,137 deals while the conglomerates sector placed third with a turnover of 48.730 million shares worth N69.840 million in 647 deals.

The three most active stocks were FBN Holdings Plc, Guaranty Trust Holding Company Plc and Access Bank Plc. They accounted for 470.731 million shares worth N6.571 billion in 3,887 deals, contributing 36.82 per cent and 37.90 per cent to the total equity turnover volume and value respectively.

Most analysts remained cautious about the outlook of the market.

“In the coming week, we expect the hunt for bargains to drive positive performance in the market,” Afrinvest Securities stated.

Analysts at Cordros Securities said they expected bearish sentiments to remain predominant citing absence of any positive triggers to turn the tide for Nigerian equities.

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

Cowry Asset Management Limited expected the “stock market index to trade sideways as investors turn some of their shareholdings to cash ahead of the yuletide season. Nevertheless, we feel this move would create ample opportunity for medium to long-term investors to buy cheaply”.

The Federal Government   has listed its latest issuances under its Federal Government of Nigeria Savings Bond (FGNSB) on the Nigerian Exchange (NGX) Limited. The listing of the two tranches of the FGNSB issued earlier this month paved the way for bondholders to trade on their holdings.

The government had offered a 2-Year FGN Savings Bond due November 10, 2023 at a coupon of 7.376 per cent per annum. It also simultaneously offered a 3-Year FGN Savings Bond due November 10, 2024 at coupon of 8.376 per cent per annum. The July 2021 offer was the 53rd tranche of the savings bond, introduced in 2017.

Regulatory documents showed that the government raised about N418 million under the savings bonds in November 2021.

A total of 133,407 units of the two-year bond valued at N133.41 million were listed at par value of N1,000 while a total of 285.44 million units of the three-year bond valued at N285.44 million were listed at par value of N1,000.

The coupon payment dates for the bonds, which pay interest rate quarterly are February 10, May 10, August 10 and November 10 respectively.

The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilisation of savings and investments. Minimum subscription to the FGNSB is usually N5, 000 while the bond pays coupon or interest rate on a quarterly basis.

Usually, the minimum subscription to the bonds, offered at N1,000 per unit, is N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

GTI Securities Limited, one of the authorised distribution agents for the FGNSB, noted that the savings bonds help to deepen national savings culture while providing opportunity to all Nigerians irrespective of income level to contribute to and benefit from national development.

According to the stockbroking firm, FGNSB enables all Nigerians opportunity to participate in and benefit from the favourable returns available in the capital market.

GTI Securities noted that the savings bonds are acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity.

The bonds are usually listed on the stock exchange for trading, thus providing liquidity for investors who want to exit before maturity.

Savings bonds are good for savings towards retirement, marriage, school fees and house projects among other targets while assuring on its safety as the bonds are backed by the full faith and credit of the Federal Government of Nigeria.