Category: Capital Market

By Taofik Salako, Deputy Group Business Editor

 

Nigerian equities rode on the back of emerging glimpse of an impressive first half performance by several corporates to rally net capital gains of about N376 billion in three trading sessions, the best performance among tracked global stock indices.

There were nearly three gainers for every loser as intense bargain-hunting saw most investors opening up market orders at premium to attract deals.

Benchmark indices at the Nigerian stock market showed a generally bullish outlook at the regular and over-the-counter (OTC) markets.The NGX All Share Index (ASI)- which serves broadly as Nigeria’s national equities index, closed weekend with average gain of 1.90 per cent representing net capital gain of N376 billion within the three-day trading week.

Global stocks meanwhile showed broad but modest gains as renewed optimism about global economic recovery fuelled investors’ appetite for quoted equities. In United States, the Dow Jones Industrial Average (DJIA) rose by 04 percent while the S & P Index appreciated by 0.9 percent. The STOXX Europe Index which tracks European markets rose by 1.0 percent while United Kingdom’s FTSE 100 Index closed flat. Many other indices closed negative with the Japan’s Nikkei 225 Index dropping by 1.6 per cent. The MSCI EM Index- which tracks emerging markets dipped by 1.0 per cent while its sister index, the MSCI FM Index -which tracks frontier markets dropped by 0.4 percent

At the Nigerian Exchange (NGX) Limited, the NGX ASI rose from its opening index of 37,947.18 points to close at 38,667.90 points, representing average gain of 1.90 per cent. Aggregate market value of all quoted equities also rose from its week’s opening value of N19.771 trillion to lose weekend at N20.147 trillion, an increase of N376 billion. The rally moderated the negative average year-to-date return to -3.98 percent.

At the NASD OTC Securities Exchange-where unlisted public limited liability companies are traded, the NASD Security Index (NSI) rose by 0.04 percent to close the week at 754.43 points against 754.11 points recorded as opening index. NASD’s OTC market capitalisation closed the week at N655.73 billion compared with its opening value of N655.45 billion.

The positive performance at the NGX was largely driven by gains recorded in the oil and gas and industrial goods sectors as investors reacted positively to good earnings released by during the week. The NGX Oil and Gas Index jumped by 7.53 per cent while the NGX Industrial Goods Index followed with 4.06 percent The NGX 30 Index which tracks the 30 largest quoted companies also appreciated by 194 percent underlining the rally within the large stocks

With the two-day public holiday that commemorated the Eid el-Kabir celebration, total turnover within the three-day trading week stood at 896.174 million shares worth N5.24 billion in 11,714 deals as against a total of 1.008 billion shares valued at N10.923 billion traded in 17,297 deals two weeks ago.

The financial services industry led the activity chart with 718.570 million shares valued at N3.009 billion traded in 6,223 deals; thus contributing 80.18 percent and 57.48 percent to the total equity turnover volume and value. Consumer goods sector followed with a distant turnover of 46.437 million shares worth N948.489 million in 1,856 deals while conglomerates Industry, with a turnover of 39.798 million shares worth N207.132 million in 366 deals.

Banks remained the most active stocks with the trio of Jaiz Bank Plc, Sterling Bank Plc and Fidelity Bank Plc as the three most active stocks altogether accounted for 369.879 million shares worth N385.516 million in 785 deals, contributing 41.27 percent and 7.36 percent to the total equity turnover volume and value.

Analysts were unanimous that the market performance was driven largely by impressive half year earnings; with Total Nigeria posting 1,601 percent growth in net profit and Unilever Nigeria’s net profit rising by 238 percent.

“In the coming week, we expect the positive momentum to be sustained, as more impressive half year 2021 earnings results are churned out” Afrinvest stated.

Analysts at Cordros Securities stated that investors flocked into the shares of Total on the back of the impressive second quarter 2021 earnings release accompanied with an interim dividend of N4 per share.

“In the week ahead, we believe investors will be focused on the outcome of the Monetary Policy Committee (MPC) meeting to gain further clarity on the movement of yields in the fixed income market.  We also expect the NGX floor to be flooded with corporate earnings as more companies publish their unaudited half-year 2021 numbers, accompanied by dividend declarations. We believe this should provide respite for market performance. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings for corporate earnings” Cordros Securities stated.

Analysts at Cowry Asset Management stated that they expected the equities market to trade positive as investors position ahead in stocks of companies which are expected to pay interim dividend.

 

Global structured finance new issuance volume increased 60 per cent to approximately $685 billion in the first half of 2021 and could rise to $1.4 trillion by the end of 2021.

In its half-year outlook released yesterday, S & P Global Ratings raised its 2021 forecast for global structured finance issuance by about 15 per cent to slightly over $1.4 trillion, following a more active than expected first half.

The report stated that conditions would remain favorable for structured finance issuance this year as credit outlooks remain largely stable, though there are still some pockets of distress in certain sectors and regions due to the pandemic.

The report noted that new issuance volume increased by 30 perent in first half 2021 compared with the same period in 2019, robust growth that reflects ongoing recovery from the COVID-19 pandemic and higher-than-expected economic growth, as well as low available yields and low benchmark rates driving demand for structured finance products.

“We believe conditions remain favorable for structured finance issuance through year-end as the recovery from the pandemic progresses. The negative effects of the pandemic appear to be subsiding in most structured finance markets, but new variants and infection waves pose credit and issuance risks. Structured finance ratings have held up relatively well overall, even though the aggregate ratings migration turned negative” the report stated.

The report stated that European investor-placed new issue securitisations could end the year close to €100 billion after bouncing back from the market disruption caused by the COVID-19 pandemic. Volumes increased more than 60 per cent year over year to €52 billion in the first half of 2021. Although 2020 may be a flattering basis for comparison, issuance through June 2021 was also almost on a par with the post-financial crisis record set in 2018.

The report pointed out that central banks’ ongoing large-scale provision of cheap term funding for credit institutions in response to the COVID-19 pandemic continues to stifle bank-originated structured finance supply. However, non-bank issuance more than doubled year over year in the largest European subsector, and the leveraged loan CLO market has also seen solid growth.

S & P Global Ratings outlined that most ratings have been resilient to the effects of the pandemic such that in the 12 months ended June 2021, the global rating agency only lowered  about three perent of its ratings on European securitisations.

However, the report expected that credit performance could remain under pressure through the end of the year. For sectors backed by lending to consumers, the underlying borrowers have benefited from both income support and debt payment deferral schemes. As these support measures come to an end, collateral performance could begin to deteriorate in line with rising unemployment.

For corporate-backed transactions, rising credit distress among underlying borrowers could pose some credit risk. For example, we expect the annualised default rate for European speculative-grade corporates to remain elevated at over five per cent through March 2022, and this prolonged period of higher defaults could have a knock-on effect for European CLOs.

FSDH Merchant Bank (FSDH MB ) Limited has launched three tranches of commercial papers to raise about N23.6 billion with yields ranging from 8.74 per cent to about 12.75 per cent.

FSDH MB, a subsidiary of FSDH Holding Company Limited, is offering Series 3, Series 4 and Series 5 of its commercial paper issuance, under its N40 billion commercial paper programme.

Under Series 3, FSDH MB is offering 116-day commercial paper with implied yield of 8.7360 per cent and discount yield of 8.5000 per cent.

Series 4 is a 188-day issuance with implied yield of 11.1003 per cent and discount yield of 10.5000 per cent.

The net proceeds of the issuances will be used to fund short-term working capital requirements and for general corporate purposes

Under Series 5; the wholesale bank is offering 270-day papers with implied yield of 12.7487 percent and discount yield of 11.6500 percent.

The maturity dates for the three issuances are Tuesday, November 16, 2021; Thursday, January 27, 2022 and Tuesday, April 19, 2022.

The bank is rated A by Agusto and A- by Global Credit Rating.

Minimum subscription to the issuances is N5 million and thereafter in multiples of N1, 000. Notably, the commercial papers are free of withholding taxes

Application list for the issuances will close on Wednesday July 21 2021 with funding date slated at Friday July 2 2021

FSDH Holding Company Limited is a private limited liability company duly licensed by the Central Bank of Nigeria to carry on services offered by commercial banks and services that can only be offered by merchant banks in Nigeria.

Afrinvest described FSDH MB  as a well-recognised brand and “A” rated entity which has consistently delivered strong financial performance, with its asset base and shareholders’ funds at N159.44 billion and N30.81 billion respectively, as at December 31, 2020.

FSDH Merchant Bank Limited, formerly First Securities Discount House Limited, was one of the first merchant banks to be awarded a merchant banking licence in Nigeria following the repeal of Universal Banking in 2010. FSDH was incorporated in 1992 as First Securities Discount House Limited. It commenced operations in 1993 as a discount house with its core competence being the issuance and trading of Financial Securities. In November 2012, FSDH obtained approval from the CBN to operate as a merchant bank and officially changed its name from First Securities Discount House Limited to FSDH Merchant Bank Limited in December 2012. FSDH commenced its merchant banking operations in January 2013.

FSDH provides a one-stop shop for financial services in Nigeria as it offers corporate and investment banking and wealth management services to its clientele. These include asset management, fixed income and foreign currency trading, equities trading, wealth management, corporate banking and other investment banking services which it offers through the bank and its three independently managed subsidiaries: FSDH Asset Management Limited, FSDH Securities Limited and PAL Pensions Limited.

 

 

United Capital Plc recorded impressive growth in the bottomline in the first half with pre-tax profit rising by 65 per cent.

Key extracts of the interim report and accounts for the first half ended June 30, 2021 showed gross earnings of N6.85 billion while profit before tax rose to N3.74 billion. Earnings per share stood at N1.05 cent.

Group Chief Executive Officer, United Capital Plc, Mr. Peter Ashade, said the organisation was in a growth phase, and its strong financial performance is a testament of its unwavering commitment to increasing value creation for all its clients amid the harsh socio-economic environment and lingering effects of the devastating pandemic.

“I am excited to inform our stakeholders that United Capital recorded a very impressive half-year 2021 result following a record year performance in 2020. We ended the first half of the year on a very high note as reflected in our earnings growth and strong financial performance,” Ashade said.

According to him, in the remaining half of the year, the group will focus on its transformation agenda by deepening value propositions to different market segments especially mass affluent and the underserved mass market clients, while driving phased automation of its business processes.

He noted that the group’s bespoke affluent segment propositions, including private trusts, and wealth management solutions, are curated to increase, preserve, and transfer wealth for its fast-growing affluent customer base.

“Furthermore, our best-in-class digital platforms remain central to our purpose of transforming lives and promoting financial inclusion across Africa by providing easy access to collective investment schemes and micro loans while promoting socio-economic development.

Our stakeholders can be assured of our commitment to delivering superior returns. More importantly, we will continue to work with our regulators and other capital market operators on structural reforms to deepen the capital market as the domestic economy continues the path to recovery,” Ashade said.

He reiterated that 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.

Listed on the Nigerian Exchange Limited (NGX), United Capital is at the forefront of becoming the financial and investment role model across Africa by leveraging innovation, technology, and specialist skills to exceed client expectations, while creating more value for stakeholders.

 

The capital market remained resilient in the first half, with more than N5 trillion in capital raising. The completion of the demutualisation of the stock exchange system highlights paradigm shifts in operating environment, but a far-running bearishness at the secondary market leaves investors with gaping holes. Improvements in regulatory environment, new product development and technologies provide a balance view of a reassuring outlook. Deputy Group Business Editor, Taofik Salako reports

 

The capital market was a mixed-grill in the first half with increased primary market activities and improved operating environment counterbalanced by a trillion-dragging bearishness in the secondary market.

Riding on the back of market-wide advancement in technologies, which allows almost full remote operations of the market, the capital market continued to operate unhindered, despite the continuing COVID-19 restrictions.

 

Supporting growth

Preliminary reports indicated that some N5 trillion were raised during the six-month period by governments and companies, more than a double of total capital raising in 2020.The capital raiser cut across several asset classes including debts and equities and from several issuers, including the Federal Government, state governments and companies. A breakdown of the fund-raising entities showed five broad categories- Federal Government, state governments, quoted companies, fund management finds and special purpose vehicles (SPVs).  The first half 2021 primary market performance further illustrated resilience of the capital market to continued to provide critical funding in debts and equities to governments and companies, after the market braced the COVID-19 lockdowns and disruptions in 2020 to pool more than N2 trillion funding.

The domestic debt market has been most supportive of the government’s efforts to bridge deficit financing, in the face of fluctuating revenue and foreign investors’ apathy. Every month, the federal government issued its Federal Government of Nigeria Savings Bonds (FGNSBs), providing a predictable pattern of debt capital inflow. With other short-term to long-term issuances, the Federal Government accounted for the largest part of new issues.

Other public sector issuers included Lagos State Government and Kogi State Government. Corporate issuers included BUA Cement, Fidelity Bank, Flour Mills of Nigeria, Transcorp Hotel and Sunu Assurances Plc. There were also many maiden issues by companies including debt issuances by Me cure Industries and Emzor Pharmaceuticals.

 

Bears on prowl

Rising inflation, declining disposable incomes and consumer purchasing power, currency risk and foreign investors’ nervousness, however, stoked a sell-off that saw investors in quoted equities losing N1.24 trillion within the six-month period ended June 30, 2021. Benchmark indices for Nigerian equities showed average negative return of -5.869 per cent, equivalent to net capital depreciation of N1.24 trillion. The first half performance counteracted average full-year return of 50.03 per cent recorded in full-year 2020, when investors netted capital gain of N6.483 trillion.

The benchmark All Share Index (ASI) of the Nigerian Exchange (NGX) Limited, which s widely regarded as Nigeria’s sovereign equity index and a barometer for measuring pricing trend and investors’ mood, closed the first half down by 2,363.44 points to 37, 907.28 points, as against the year’s opening index of 40,270.72 points. Expectedly, aggregate market value of all quoted equities at the NGX also declined from 2021’s opening value of N21.057 trillion to close the six-month period at N19.760 trillion, representing a drop of N1.297 trillion or 6.16 per cent. The difference between the ASI and market value was due mainly to unadjusted impact of delisting of some quoted companies during the period.

There were fewer safe havens for investors across the sectors of the economy. The two highly influential sectors of banking and industrial manufacturing underperformed the overall average value index.  The NGX Industrial Goods Index and NGX Banking Index recorded six-month returns of -8.09 per cent and -6.92 per cent. Nigeria’s largest and most active stocks are listed under the industrial goods and banking sectors. The NGX  Lotus Islamic Index- which tracks the emerging alternative Islamic finance market, depreciated by 5.53 per cent while the NGX Consumer Goods Index, which tracks major consumer goods manufacturers dropped by 0.31 per cent.

With running apprehension over Central Bank of Nigeria’s (CBN) currency management amid sundry emerging market risks, foreign portfolio investors continued to show apathy to Nigerian securities, continuing the running deficit of more outflows than inflows. Total foreign portfolio outflows of N107.22 billion, for the five-month period between January and May 2021, the latest available figures, outpaced foreign portfolio inflows of N91.32 billion during the period. The naira depreciated by an average of N34.08 or about 7.5 per cent against the dollar while the country’s foreign exchange (forex) reserves declined by about $3 billion within the six-month period. The naira dropped from its opening rate of N380 per dollar, at official market, to close first half at N410.16 per dollar, a depreciation of 7.3 per cent. Expectedly, it simultaneously depreciated from N465 to dollar to N503 to dollar at the parallel market, a drop of 7.6 per cent. Foreign exchange (forex) reserves which stood at $36.37 billion on December 31, 2020 closed June 28, 2021 at $33.4 billion.

The decline at the secondary equities market was also partly driven by gradual recovery at the fixed-income markets, luring inflation-scare investors to the safety of increasingly attractive sovereign issuances and other fixed-income assets. Inflation rose from 15.75 per cent last December to 17.93 per cent this May.

Most analysts attributed the decline to the tough global and national macroeconomic conditions, with national reforms tracking below expectations.

Chief Executive Officer, Sofunix Investment and Communications, Sola Oni, said the performance of the stock market in the first half year was moderated by foreign investors’ apathy following devaluation of the naira and inflationary pressure as well as insecurity.

“The extent to which the challenges of the first half are addressed will determine transaction mode of the second half. But discerning investors who seek professional advice from their securities dealers will always recoup his investment, regardless of the nature of the operating environment,” Oni said.

Managing Director, Highcap Securities Limited, Mr. David Adonri, said the stock market was on self-correction in first half after the rally last year.

“That rally was baseless and provoked by expansionary monetary policies of CBN and NESP. With recovery in the debt market, there has been a sustained correction in equities despite improving macroeconomic conditions.

“This correction will fizzle out in due course but the ambitious debt financing program of FGN can truncate this expectation,” Adonri said.

Market Analyst and Stockbroker, Calyxt Securities Limited, Mr. Tunde Oyediran  said the market might witness further decline, in the absence of any coordinated policies to address the challenges.

“Except for deliberate government policies and actions that will address the lingering security challenges and its attendant problems, the market may experience further drop. But towards the year end we may experience market recovery,” Oyediran said.

 

Paradigm shifts

The completion of the demutualisation of the defunct Nigerian Stock Exchange (NSE) from a mutual, member-owned company to a public limited liability company highlighted major changes in the operating environment in the first half. Under the demutualisation, a new non-operating holding company, the Nigerian Exchange Group Plc (NGX Group) was born with three operating subsidiaries: Nigerian Exchange Limited (NGX Limited), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulation company; and NGX Real Estate Limited (NGX RELCO), the real estate company. The first half saw the momentous completion of the final stages of the demutualisation; including allotment and listing of shares and the effective take off of the new operating structure.The demutualisation process was launched in 2002 with the approval-in-principle of the conversion by the council of the Exchange. On the back of the successful demutualisation, NGX Group launched a campaign to project its new positioning and commitment to the African financial markets. Themed, The stock Africa is made of, the campaign amplified NGX Group’s new brand identity and spotlight the growth potential of the African continent.

Group Chief Executive Officer, NGX Group Plc, Mr. Oscar Onyema, said the campaign was designed to reinforce the message that the Exchange is fully equipped and better positioned to champion the development of new and improved experiences for the benefit of domestic, regional and foreign stakeholders.

The NGX had earlier launched a full automated securities listing system that allows submission and processing of application for securities listing, in a major effort that enhances the liquidity and cost efficiency of the market. The e-filing portal, known as X-Filing, came on the heels of recent upgrade to the NGX Issuers’ Portal, X-Issuer. X-Filing is a fully integrated, secure web interface designed to enable the submission and processing of securities listing applications online. The portal provides stockbrokers and other accredited sponsors with a simple, efficient and convenient way to submit securities listing applications on behalf of issuers as well as enable the Exchange to process the applications online, saving time and resources.

The Securities and Exchange Commission (SEC) also granted NG Clearing Limited approval to launch clearing and settlement of Exchange traded derivative products, as the financial markets’ Central Counterparty Clearing House (CCP). NG Clearing’s role as a CCP in Nigeria’s financial ecosystem is to ensure safety of the market by managing counterparty credit risk, which in turn, reduces systemic risk in the Nigerian capital market, by guaranteeing settlement of trades. NG Clearing was promoted by the NGX Group and Central Securities Clearing System (CSCS) Plc along with key stakeholders including Nigeria Sovereign Investment Authority (NSIA), Access Bank Plc, Consonance Kuramo Special Opportunities I, Coronation Merchant Bank Limited, Greenwich Trust Limited, Union Bank of Nigeria (UBN) Plc, United Bank for Africa (UBA) Plc and Association of Securities Dealing Houses in Nigeria (ASHON).

The emergence of CCP paved way for the forthcoming launch of West Africa’s first Exchange Traded Derivatives (ETDs) in Nigeria. A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset or group of assets. Common underlying instruments include bonds, commodities, currencies, interest rates, market indices and stocks.

Nigerian Exchange Limited has received approval for seven derivatives contracts from the SEC towards the end of the period. The approved contracts included Access Bank Plc Stock Futures, Dangote Cement Plc Stock Futures, Guaranty Trust Bank Plc Stock Futures, MTN Nigeria Communications Plc Stock Futures, Zenith Bank Plc Stock Futures, NGX 30 Index Futures, and NGX Pension Index Futures. With these approvals, NGX is inching closer to launch West-Africa’s first Exchange Traded Derivatives supported by NG Clearing in risk management.

Chief Executive Officer, NGX, Mr. Temi Popoola, said the launch of the derivatives market aligns with commitment to build a market that thrives on innovation and responds to the needs of stakeholders in accessing and using capital.

“We are, therefore, excited about the prospects of deepening Africa’s position in the global financial markets through ETDs, as well as enhancing liquidity and mitigating against price, duration and other financial risks that may arise from sophisticated financial transactional activities,” Popoola said.

SEC also directed existing investment crowdfunding portals and digital commodities investment platforms to register their operations with the Commission or cease operations by June 30, 2021.

In a tough regulatory action, the apex capital market regulator took over and appointed interim management team for the troubled DEAP Capital Management & Trust Plc. The appointment of interim management by SEC was sequel to the resignation of the entire board of DEAP Capital Management & Trust.

During the period, the NGX also started the implementation of an amended regulatory framework with unequivocal and tougher rules and sanctions against diversion of investors’ funds, unauthorised use of investors’ deposits and mingling of investors’ funds with other operational funds.

The delisting of four companies: Evans Medical Plc, Nigerian-German Chemical Plc, Roads Nigeria Plc and Unic Diversified Holdings Plc over poor corporate governance and failure to comply with extant rules at the stock market also showed illustrated the market’s focus on investors’ protection. The four companies were removed from the daily official list of the NGX with effect from Monday, June 14, 2021. The companies were delisted under the compulsory delisting window of the Exchange.  However, many companies also sought voluntary delisting, underlining the clamour for additional incentives to encourage listing.

The transition of Nigeria’s largest financial services institution, Guaranty Trust Bank (GTBank) to a holding company structure highlighted a new competitive trend in the banking industry, with many other major banks awaiting final transition to the holding structure.

For the Nigerian capital market, the first half showed resilience but it was a mix of ups and downs, reflecting the ever-changing market cycles.

 

 

Market analysts have said the share price of Vitafoam Nigeria Plc still has considerable headroom for appreciation as the foam-manufacturing stock is adjudged to be underpriced relative to its intrinsic value.

Following heated demand,  the  company’s share which opened at N12.40 per unit on Monday rose steadily by N1.85 to close weekend at N14.25, an increase of 15 per cent despite  market volatility. The capital gain within one week was significant, compared to the Monetary Policy Rate (MRR) of 11.5 per cent.

“Vitafoam has been doing very well over the years but the market didn’t reward it accordingly. It is glaring that the company’s share is undervalued, compared with its consistent outstanding performance. With Earnings Per Share (EPS) of N2, why should Vitafoam be trading at N8? The company’s share price has the capacity to move higher. This, I believe, has triggered demand for the stock by discerning investors,” Mr Kanmi Osobu, the Executive Director, Reading Investment, said.

The manufacturer of rigid foam,  furniture and other household equipment  which recorded an outstanding financial performance last year also  posted a net profit after tax of N1.11 billion in the first quarter of this year. Already, the group is showing sustained improvements across key performance indicators.

Managing Director, Network Capital, Mr Oluropo Dada explained that Vitafoam had always maintained a stable board and management structure with seamless succession plan.

Dada noted that Vitafoam enjoyed the premier position of being the only company listed in its sector.

According to him, the company has remained resilient in the wake of the ongoing tough environment.

“A good company operates under a stable board and management. Succession plan in Vitafoam is seamless. The company has always rolled out innovative products. But the company’s performance has not really reflected in the pricing of its shares in the secondary market. There is no doubt that undervaluation of the stock is fast attracting investors into the company at the moment,” Dada said.

Vitafoam’s Group Managing Director, Mr Taiwo Adeniyi had earlier noted that the company placed premium on innovative human capital, product and services.

“As a matter of corporate policy, we do continuous improvement on our products. We sell high margin products. We are highly connected with our customers. We know their different needs and as such our products always gain acceptance in the market. Our  foams and other products meet specific needs.

“We launched Buy Rights, last year, when our research revealed that different weights require different types of foams. We do not just sell to customers, we offer health counselling to advise on the specific foam for individual customers. This has greatly endeared us to our customers.’’

“Vitafoam is not just about only rigid foams. We have strong footing in furniture and other household equipment such as Sandwich Panels, Insulation Board and Spray Foam. Quality product is our second name. Our current performance was not driven by sales due to COVID-19. The margin from this is insignificant and we even donated foams to Lagos State government as our corporate support,” Adeniyi said.

He stated the performance in recent period was not by accident as every performance demandsg that a lot of work has gone behind it.

“Our pride as shown by our financial results for the year 2020 is the fact that we never rested on our oars; we are resilient. We had also decided not to give-in to excuses of what was going on in the country because if you look at it, you will realise 2020 was one year belaboured with a lot of activities that had negative impact on economy and businesses. It started with COVID-19 shock. Just within that same period, we had #ENDSARS protests and before you knew what was going on, the nation was on lockdown and the year 2020 closed. Even at that, Vitafoam has been able to weather the storm by coming out with the impressive financial results for the year 2020,” Adeniyi said.

 

The Nigerian Exchange (NGX) Limited has upgraded BOC Gases Plc from low-priced stock to medium-priced stock following recent appreciation in the share price of the industrial gas company.

In a circular, the Exchange stated that the reclassification, which took effect from June 16, 2021,was after a review of share price of BOC Gases  over the most recent six months.

According to the NGX, the review of BOC Gases’price trade activity over the most recent six month period provided the basis for reclassifying the security from the low priced stock group to the medium priced stock group. The reclassification also necessitated the attendant change in the tick size change from one kobo to five kobo, in line with Rule 15.29: Pricing Methodology, Rulebook of the Exchange, 2015.

“BOC Gases Plc stock price appreciated above the N5 price level on 16th November 2020 and traded above N5 up till close of business on 17th March 2021. This indicates that BOC Gases Plc stock price has traded above N5 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.

 

 

11 Plc, formerly known as Mobil Oil Nigeria Plc, and Capital Bancorp Plc at the weekend started trading on the NASD OTC Securities Exchange, opening up new window for secondary market transactions.

The NASD OTC Securities Exchange is the government-approved over-the-counter (OTC) platform for trading in unlisted public companies.

NASD assured of an orderly and transparent market for shares to be traded, noting that once there is transparency, investors have some comfort in the type of transactions taking place.

“NASD can also, by its structure and rules open securities to trade between 24 and 48 hours, with its only requirement being that the securities being introduced are registered at Securities and Exchange Commission (SEC) and complies with the capital market regulations,” NASD stated.

NASD pointed out that OTC platform has been created for securities that are not listed on any other securities exchange providing a secure regulated platform for Investors to trade on them.

11 had delisted its shares from the Nigerian Exchange (NGX) Limited, ending its 42-year listing on a regular stock exchange. The high-profile delisting shaved off more than N82 billion from the market capitalisation at the NGX.

11 had opted for voluntary delisting after its new owners pushed through shareholders delisting programme as part of restructuring of the downstream oil company.

The NGX stated at the weekend that it delisted the entire share capital of 11 from its Daily Official List in line with the approval of the shareholders of 11 to delist the petroleum company.

NIPCO Investments Limited, a  subsidiary of NIPCO Plc, had in March 2017 taken over the 60 per cent majority equity stake of ExxonMobil Oil Corporation in Mobil Oil Nigeria Plc in a $301 million acquisition deal. It subsequently changed the name of the company to 11 Plc, pronounced as double one. The name change was sequel to the resolution passed by the company’s shareholders at its annual general meeting held on May 24, 2017.

ExxonMobil and Nipco had, in October 2016, executed a sale and purchase agreement (SPA) to sell the former’s majority equity stake of 60 per cent in Mobil Oil Nigeria (MON) to Nipco, an indigenous oil and gas company.

Explaining the rationales for the delisting to shareholders, 11 stated that the delisting of its shares from the NGX would enable the company to implement strategic plans that will improve the overall performance of the downstream oil company.

The company stated that the delisting would enable it to explore strategic opportunities, alliances and collaborations that can bolster earnings and synergised benefits with little or no regulatory obligations.

According to the company, delisting will lead to greater focus and impact on the performance of its performance while it will not have any material changes on its operations, staff and board compositions.

“11 Plc will be able to focus on revenue generation, consider strategic opportunities, alliances and collaborations; and tremendously shift from regulatory, administrative, and financial reporting regulations that companies listed on the Nigerian Stock Exchange must adhere to,” 11 stated.

The company stated that while its shares will no longer be available for trading on the NSE, now NGX, upon delisting, it would continue to operate as an unlisted public company. This raises possibility of its shares being listed and traded on the NASD OTC Securities Exchange –the over-the-counter platform for trading of unlisted public companies.

The company had noted that the delisting would not have any impact on the existing employment contracts of its staff as well as the composition of the board of directors.

Shareholders of 11 had at their annual general meeting (AGM) on October 14, 2020 approved a resolution to delist the entire 360.6 million ordinary shares of 50 kobo each of 11 from the NSE.