Category: Capital Market

The financial services sector accounted for more than two-thirds of transactions at the stock market with three banking stocks accounting for more than one quarter of the total transactions at the stock market.

Three banking stocks – FBN Holdings, Sterling Bank and United Bank for Africa (UBA) – were the major drivers of activities at the market as investors upped demand for the banking groups.

Most analysts said investors’ appetite for banking stocks was driven by stable third quarter earnings and recent transactions in FBN Holdings, which signaled a considerable investor’s confidence in the group.

FBN Holdings, which is under regulatory review against the background of recent acquisitions of 5.07 per cent equity stake in the group by Mr. Femi Otedola, was still the most active stock, fuelling speculations of continuing attempts to mop up shares of Nigeria’s oldest surviving banking group.

Trading reports at the weekend indicated that the three banking stocks account for 402.92 million shares worth N3.06 billion in 3,208 deals, contributing 28.22 per cent and 24.76 per cent of the total equity turnover volume and value respectively.

The financial services sector led the activity chart with 1.01 billion shares valued at N7.99 billion in 12,208 deals; thus contributing 70.75 per cent and 64.60 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with 94.729 million shares worth N207.829 million in 878 deals while consumer goods sector placed third with a turnover of 62.779 million shares worth N1.326 billion in 3,814 deals.

Total turnover at the Nigerian Exchange (NGX) last week stood at of 1.43 billion shares worth N12.37 billion in 23,987 deals as against a total of 3.0 billion shares valued at N34.55 billion traded in 25,932 deals two weeks ago.

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Also, a total of 252,857 units of exchange traded products valued at N3.830 million were traded last week in 31 deals compared with a total of 186,360 units valued at N3.251 million traded in 16 deals penultimate week.

At the secondary debt market, a total of 32,626 bond units valued at N33.332 million were traded last week in 16 deals compared with a total of 47,577 bond units valued at N50.350 million swapped in 32 deals two weeks ago.

Meanwhile, the market closed weekend with a marginal decline of N12 billion as profit-taking transactions moderated equities’ seven weeks of consecutive rally. Benchmark indices at the NGX showed average marginal decline of 0.06 percent, equivalent to net capital depreciation of N12 billion.

The All Share Index (ASI) – the value-based common index that tracks all share prices at the market dropped from its week’s opening index of 42,038.60 points to close weekend at 42,014.50 points. Aggregate market value of all quoted equities also slipped from its week’s opening value of N21930 trillion to close weekend at N21.926 trillion.

There were 23 gainers against 43 losers last week compared with 47 gainers and 25 losers recorded in the previous week. Regency Assurance was the highest gainer in percentage terms, with a gain of 18.9 per cent to close at 44 kobo. Multiverse Mining and Exploration followed with a gain of 10 per cent to close at 22 kobo while S C O A Nigeria ranked third with a gain of 9.47 per cent to close at 1.04 per share.

On the negative side Eterna led the decliners with a drop of 15.49 percent to close at N7.31 per share. Unilever Nigeria followed with a drop of 14.42 per cent to close at N13.35 while Courteville Business Solutions placed third with a loss of 11.36 per cent to close at 39 kobo.

Securities and Exchange Commission (SEC) has called on state and local governments to issue green and sustainable instruments in the capital market as part of viable measures to finance laudable prophets with social-impact.

SEC Director-General,  Mr. Lamido Yuguda stated this during the Environmental, Social and Governance Roundtable with the theme: Unlocking value through ESG Investing organised by the CFA Society Nigeria.

Yuguda said beyond the federal government and corporate issuers, sub-nationals can also take advantage of the growing appetite to issue bonds to finance relevant environment-friendly projects, especially those that are revenue generating and with reasonable social impact.

“Companies will also need to continuously disclose relevant information on their adoption of ESG principles. Such information will be critical for the investing public to make informed decisions about available investment choices and guide their asset allocation.

“Another important step in the journey of promoting sustainable investment principles is the development of robust sustainability ratings and indices to track companies’ ESG performance. This will further assist ESG conscious investors in making their investment choices.”

It will also simplify for investors and other stakeholders the process of analyzing information disclosed by issuers on sustainable finance,” Yuguda said.

 

According to him, given the global interest in ESG and the quantum of finance available to corporates and countries adopting the relevant principles, Nigerian issuers, governments and corporates, regulators, exchanges and other key stakeholders need to collaborate more to develop and issue necessary instruments to attract additional foreign capital into the country.

“With the enhanced focus on ESG considerations, much effort is now geared towards preservation of biodiversity, climate change mitigation and adaptation, inclusiveness, reduced inequality, human capital and communities’ development, among others. Given the important position of the financial sector in the economy, one can understand why these issues are accorded high priority in the sector and why the sector has begun to consider sustainability in its practices.

“Sustainable finance has become a global brand as the world stands strongly together to promote the transition to a low-carbon, more resource efficient economy and to build a financial system that spurs sustainable growth across nations.

“As we are all aware, finance has an enormous influence on sustainability; with players in the financial sector acting as catalysts for redefining the natural and business environments. They help support the transition from exploiting nature to restoring and maximizing nature’s valued gifts. Investing in sustainable instruments therefore has far-reaching benefits, further justifying why ESG advocacy and practices are gaining more popularity,” Yuguda said.

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He said that as a regulator, whose core mandate is to ensure investor protection, by maintaining fair, efficient and transparent markets and reducing systemic risks, the Commission believes this role can further be harnessed through sustainable finance; and pledged to continue to strongly support the adoption of ESG principles and collaborate with relevant stakeholders to drive sustainable finance initiatives.

“I am really pleased and encouraged by the interest shown in ESG by the CFA Society Nigeria. I am also glad to inform you that the Commission will be willing to collaborate further with the Society on ESG and other relevant issues. With the quality of the membership of the Society and the resources available to it, I am confident that such collaboration will result in positive outcomes for the Nigerian capital market and the economy as a whole.

“I have no doubt that collectively we will chart a common course for sustainable finance in the country that will be beneficial to the economy and the Nigerian people,” Yuguda said.

In her address, President of the CFA Society Nigeria, Ibikun Oyedeji said the webinar was organized in continuation of the Association’s mandate of promoting global best practices for the investment industry, and to serve as a stimulus to advocate and promote awareness in Nigeria and Africa as a whole for the incorporation environmental, social and government factors in business decisions and product development.

Oyedeji stated that the Webinar also provides an opportunity to accelerate the progress and demonstrate the purpose through responsible investing and aimed at equipping the practitioners and other stakeholders within our community with the right tools to navigate this evolving terrain.

“The theme of the round table “unlocking value through ESG investing” implies that an untapped opportunity exists in business beyond profitability. Our clarion call today to the investment management industry is to put measures in place to ensure that product and services contribute to the sustainable development of our environment, employee working conditions, labour right, diversity discussions become our forefront while transparency and openness provide long term benefit for shareholders and our stakeholders are widely impressed.

“ESG factors have become increasingly important to institutional investors and there is a rising need for us invested professionals, regulators and other stakeholders to build a capacity in ESG focus investing which will remain relevant. This round table serves as a foundation for building the sustained effort in developing our local capacity in ESG investing,” Oyedeji said.

Oyedeji said the CFA institute through the principle of responsible investing has created best practice report and regions specific report that focuses on the Nigerian region to help investors understand how they can better integrate ESG factors into their equity, corporate funds and even the sovereign debt portfolio.

 

Jaiz Bank Plc, Nigeria’s premier non-interest bank, 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 was a reaffirmation of the bank’s continuous growth trajectory as the clear leader in Nigeria’s non-interest banking space and its growing brand 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 last month 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.

Interim report and accounts of Jaiz Bank for the half-year ended June 30 2021 showed that profit after tax rose by 70.6 per cent from N1.17 billion in June 2020 to N1.99 billion in June 2021. Total Income had grown by 42.1 per cent from N6.23 billion in first half 2020 to N8.86 billion in first half 2021.

The first half performance placed the bank in good stead to surpass its full-year projections for 2021. Jaiz Bank had in a five-year projection made available earlier to the investing public forecasted that it would grow its income and profitability consecutively over the five-year period, with pre-tax profit for the period expected to be about N15.86 billion.

The management of the bank had outlined the five-year growth plan of the pioneer non-interest bank, with an assurance that it would sustain year-on-year growth over five-year period.

Usman had explained that the overall vision of the bank was to become the leading non-interest financial institution in Sub Saharan Africa.

He said the bank has been positioned to sustain its growth trajectory, pointing out that the bank has the necessary resources to achieve its growth targets.

According to the five-year financial forecast, total income was expected to be about N81.17 billion while profit after tax was projected at N11.09 billion for the five-year period. Gross income was expected to rise to N10.07 billion in 2018 and subsequently to N12.59 billion, N15.73 billion, N19.27 billion and N23.51 billion in 2019, 2020, 2021 and 2022 respectively.

Profit before tax was projected to rise to N1.33 billion in 2018 and grow consecutively to N2.03 billion, N3.01 billion, N4.03 billion and N5.47 billion in 2019, 2020, 2021 and 2022 respectively. After taxes, net profit would rise to N927 million in 2018 and grow further to N1.42 billion in 2019. Profit after tax was projected to jump to N2.11 billion in 2020 and rise consecutively to N2.82 billion and N3.83 billion in 2021 and 2022 respectively.

Balance sheet of the bank was also expected to increase over the years. Total assets was projected at N123.61 billion in 2018 and subsequently to N150.5 billion, N182.6 billion, N220.02 billion and N262.80 billion in 2019, 2020, 2021 and 2022 respectively. Deposit was projected to rise consecutively to N88.55 billion, N113.34 billion, N142.81 billion, N177.09 billion and N216.05 billion in 2018, 2019, 2020, 2021 and 2022 respectively. Shareholders’ fund was projected to rise to N28.6 billion in 2018 and grow consecutively to peak at N35.23 billion by 2022.

Shareholders’ return was also expected to grow over the years. Return on equity was expected to firm up to 4.39 per cent in 2018 and improve consecutively to 4.87 per cent, 6.92 per cent, 8.79 per cent and 11.22 per cent in 2019, 2020, 2021 and 2022 respectively.

The Nigerian Exchange (NGX) has upgraded Okomu Oil Palm from a medium-priced stock to high-priced stock following recent appreciation in the share price of the agricultural company.

In a circular, the Exchange stated that the reclassification, which took effect from November 03, 2021was after a review of share price of Okomu Oil Palm  over the most recent six months.

According to the NGX, the review of Okomu Oil Palm’s price trade over the most recent six month period provided the basis for reclassifying the security from the medium- priced stock group to the high-priced stock group. The reclassification also necessitated the attendant change in the tick size change from 5.0 kobo to 10 kobo, in line with Rule 15.29: Pricing Methodology, Rulebook of the Exchange, 2015.

“Okomu Oil Palm Plc stock price appreciated above the N100 price level on June 8, 2021 and traded above N100 up till close of business on October 22, 2021. ‘’

This indicates that Okomu Oil Palm Plc stock price has traded above N100 in at least four months out of the last six months,” NGX stated.

The NGX classifies quoted companies into three categories-high-priced, medium-priced and low-priced stocks, based on their market price. A company must have traded for at least four out of the most recent six month period within a stock price group’s specified price band to be classified into the category.

The high-priced stocks consist of large-cap equities that are priced at N100 per share or above for at least four of the last six trading months, or new security listings that are priced at N100 or above at the time of listing on the Exchange.

The medium-priced stocks  consist of medium-priced equities that are priced at N5 per share or above but less than N100 per share for at least four of the last six months, or new security listings that are priced at N5 per share or above but less than N100 per share at the time of listing on the Exchange.

The low-priced stocks, where majority of listed companies fall, consist of equities that are priced at one kobo per share or above but below N5 per share for at least four of the last six months, or new security listings that are priced at one kobo per share or above but below N5 per share at the time of listing on the Exchange.

Experts have advocated  early presentation as a key first step towards the prevention and cure of breast cancer.

They gave the advice at a webinar organised by Polaris Bank in Lagos. The event was part of activities by the bank to commemorate the breast cancer awareness month themed: “The brave conversations: diagnosis and remedy.”

The webinar focused on the objective of creating a heightened awareness of breast cancer to stimulate conversations around the scourge.

Group Head, Products and Market Development, Polaris Bank, Mrs. Adebimpe Ihekuna, who moderated the session, noted that the womenfolk have to be intentional about regular and consistent check-ups as outlined by experts.

She noted that it is through such process they could detect early enough lumps in their breasts – which could either be benign or cancerous – for early intervention and treatment.

“Health is wealth, therefore we should take our health and well-being very seriously and as a matter of fact be intentional and deliberate with regular check-ups.

“While there are technological advancements and innovations in the treatment of breast cancer, creating awareness remains a veritable tool in helping to prevent and reduce the occurrence of the disease,” Ihekuna said.

The session featured three speakers, leading authorities in breast cancer awareness and treatment and a survivor. The speakers were Dr. Anthonia Sowunmi, a pioneer clinical and radiation oncologist in Nigeria; Chief Executive Officer,  Care Organisation Public Enlightenment (C.O.PE), Mrs. Ebunola Anozie,  and Mrs. Semira Oguntoyinbo, a cancer survivor.

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In her paper, Sowunmi described cancer as one of the leading causes of death and tasked women to invest in their personal hygiene, be conscious of their body and not repeat wearing of same bras.

“It should be one bra per day,” she emphasised.

“One of the risk factors aside lifestyle choices are for women to take the issue of hygiene to heart. And because the breast area generates lots of heat and sweat, medical experts advise that women should wear clean bra every day and not otherwise,” Sowunmi said.

Anozie, reminiscing on how she lost both her parents to cancer, thanked Polaris Bank for their support for COPE over the years. She noted that Polaris Bank right from inception, provided COPE with the necessary equipment including the provision of scanning machines and the sponsoring of free screening for women.

She also stressed the importance of support groups for patients to enable them build and regain their self-esteem.

Oguntoyinbo provided insight into her own personal experience as a survivor. As a mother of two teenagers, her journey to conquering breast cancer started in 2014 when she first noticed a lump in her left breast.

“Between then and now, I have had six chemotherapies and also enjoyed the invaluable contributions of very supportive family members and the breast cancer support group I belong,” Oguntoyinbo said, thanking COPE and Polaris Bank for their various levels of support.

The bank in addition to pledging its continued support to the fight against breast cancer also announced that as part of marking this year’s breast cancer awareness campaign, Polaris bank will through its women focused product, Polaris Pearl provide hundreds of its customers and non-customers free cancer screening service. This will be done through its NGO partner COPE.

According to a GLOBOCAN report, there were 18.1 million new cases and 9.6 million cancer deaths in 2018 alone. One in every five men and one in every six women will die from cancer before age 75.

 

The Chartered Institute of Stockbrokers (CIS) has appointed Mr Josiah Akerewusi as its Registrar and Chief Executive, following the retirement of Mr Adedeji Ajadi .

The former registrar, Ajadi retired after meritorious service, spanning over one decade

The institute’s President, Mr Olatunde Amolegbe, described Akerewusi as an accomplished professional with robust industry experience.

Prior to his appointment, the multiple award-winning finance expert, was the institute’s Assistant Director and Chief Finance Officer.

Akerewusi, a chartered stockbroker, chartered accountant, and Mobil Producing Unlimited’s scholar, brought into his new position, over three decades of industry experience in banking, insurance auditing, accounting, taxation, information management systems, management and financial advisory services as well as stockbroking.

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He holds a Master’s Degree in Business Administration (MBA) from Ladoke Akintola University, Diploma in Management Information System at University of Ibadan, Higher National Diploma in Accountancy from The Polytechnic, Ibadan and a doctoral student of Business Administration at Unicaf University, Cyprus.

He is also a Fellow, Chartered Institute of Stockbrokers (FCS), Fellow, Institute of Chartered Accountants of Nigeria (FCA), Associate Member, Chartered Institute of Taxation of Nigeria (ACIT) and Associate, Nigerian Institute of Management (ANIM). Associate Chartered Institute for Securities & Investment- (ACSI -UK).

He had worked in various top management positions at UC Marine Ltd, Arian Capital Management Ltd and GEM Assets Management Limited.  He was also the Managing Director of Marimpex Finance & Investment Limited from May 2014 to July 2015 before he joined the institute.

Akerewusi acted as the institute’s Registrar and Chief Executive from September 2016 to September 2017, when the  Registrar was on study leave and was commended for his excellent performance.

He is a golfer and he is happily married with children.

The immediate past registrar, Ajadi, a Chevening Scholar, was instrumental to many policy initiatives that enhanced the Institute’s growth and development during his tenure.

 

TY Holdings Limited, the investment holding firm of Lt.-Gen. Theophilus Danjuma (rtd), has launched a takeover bid for equity stakes held by minority shareholders in the former BOC Gases Nigeria Plc after the investment firm of the former Minister of Defence acquired majority stake in the industrial gas company.

TY Holdings 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.

In a regulatory filing at the weekend, TY Holdings indicated that it has secured the approval of the Securities and Exchange Commission (SEC) to proceed with its proposed Mandatory Takeover Offer (MTO).

TY Holdings will be buying 100,000 ordinary shares held by minority shareholders of BOC Gases Nigeria Plc at N11.65 per share. The MTO represents 0.02 per cent equity stake in the total issued and fully paid up share capital of BOC Gases.

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The MTO opens today, Monday, 1 November 2021 and will close on Monday, November 22, 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 at the weekend 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.

 

Union Bank of Nigeria (UBN) Plc recorded stable earnings in the third quarter with customers deposit rising by 14 per cent to N1.3 trillion by September 2021.

Key extracts of the unaudited report and accounts of the bank for the nine-month period ended September 30, 2021 showed gross earnings rose by three per cent from N118.8 billion in third quarter 2020 to N121.8 billion in third quarter 2021. Profit before tax improved marginally from N15.9 billion to N16 billion.

Net operating income after impairments had increased by three per cent N71.2 billion in 2021 as against N69.3 billion in 2020, driven by stronger non-interest income. Non-interest income had also grown 26 per cent to N42 billion in 2021 compared with N33.4 billion in 2020, supported by growth in fees and commission from e-business, credit and trade transactions as well as debt recoveries.

The balance sheet showed that customer deposits rose from N1.1 trillion in December 2020 to N1.3 trillion in September 2021, which the bank attributed to gains from its marketing drive for low-cost deposits and deepened customer loyalty. On the back of increased deposits,  gross loans jumped 16 per cent from N736.7 billion in December 2020 to N855.7 billion in September 2021, indicating increased lending to growth sectors of the economy.

Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Emeka Okonkwo said the bank continued to demonstrate the resilience of its business despite the volatility in the macro-economic environment as reflected in stable earnings.

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“This stability is underpinned by our strategic focus on deepening our customer engagements and meeting their needs as we grow our core business,” Okonkwo said.

He noted that the bank has achieved stronger transaction volumes across its businesses and channels, driving growth in fees and commissions, while it ensured robust cost controls.

“As we approach the end of the year, we are focused on building on our efficiency and optimising our core business while deepening our relationships with customers,” Okonkwo said.

Chief Financial Officer, Union Bank of Nigeria (UBN) Plc, Joe Mbulu reiterated that the bank remained focused on executing its plans for revenue diversification, driving strong growth in transaction volumes while continuing strong debt recovery initiatives.

According to him, these key initiatives are mitigating the on-going impact of relatively low risk asset margins.

“With our capital adequacy ratio at 15.8 per cent, above regulatory requirements and good asset quality with non-performing loans (NPLs) at 4.7 per cent despite continued growth in our loan book, we are focused on further optimising our capital structure to support our growth plans as we look towards 2022 and beyond,” Mbulu said.