Category: Capital Market

Total number of registered mutual funds in Nigeria rose from 76 in 2019 with net asset value (NAV) of N600 billion in 2019 to 102 mutual funds with NAV of N1.43 trillion by February 19, 2021.

A breakdown showed that 56 of the registered mutual funds are listed on the Nigerian Stock Exchange (NSE) with NAV of over N1.24 trillion, representing 88.3 per cent of total NAV.

Divisional Head, Listings Business, Nigerian Stock Exchange (NSE), Mr. Olumide Bolumole, said the fact that the NSE accounts for more than three-quarters of the registered mutual funds confirms NSE as the preferred listing destination for mutual funds.

He said the Exchange will continue to strategically position itself to support the growth of fund managers and other stakeholders.

He spoke during NSE’s digital closing gong ceremony to commemorate the election of Mrs. Tope Omojokun as the President, Fund Managers Association of Nigeria (FMAN).

He commended FMAN for its continuous collaboration in ensuring increased efficiency and investor participation in the mutual funds market.

Bolumole noted that last year, the Exchange admitted two mutual funds; N500 million ARM Fixed Income Fund and $1 million ARM Eurobond Fund on its memorandum listing platform.

He pointed out that the Exchange has also achieved all round increased efficiency in terms of competitive pricing structures, improved turnaround time and enhanced customer experience, which make market participants to continue to look forward to more listings in the coming months.

Omojokun explained FMAN was established to promote the operations of fund managers registered with the Securities and Exchange Commission (SEC) and its objectives include self-regulation and supervision of its members; the enforcement of global best practices in its members’ operations, and most importantly, the education of the public on investments.

According to her, working with the NSE has brought about the trading of listed funds on the Exchange while arrangements underway towards the display of mutual funds prices on the ticker tape of the NSE.

“Furthermore, we are collaborating with the X-Academy to train our members and the public on adopting best investment practices and we look forward to other avenues to work together for the development of the capital market,” Omojokun said.

By Taofik Salako, Deputy Group Business Editor

The Securities and Exchange Commission (SEC) has taken over and appointed an interim management team for the troubled DEAP Capital Management & Trust Plc.

The appointment of the interim management by SEC was sequel to the resignation of the entire board of DEAP Capital Management & Trust. Sources said the resignation of the directors were due to regulatory pressure.

The three-man interim management is expected to oversee the affairs of the company, overseeing both the board’s oversight functions and key managerial decisions.

The three-man team included Mrs Anastasia Braimoh as chairperson, Mr Alhassan Sidi and Mrs Gbemi Adekola.

In a regulatory filing, Company Secretary, Deap Capital Management & Trust, Yetunde Fashesin-Souza, said the interim management team would soon call an emergency general meeting of members of the company to constitute a new board of directors.

The Asset Management Corporation of Nigeria (AMCON) had last week taken over assets belonging to the 14 former directors of Deap Capital Management over alleged indebtedness of some N1.6 billion.  AMCON had purchased the non-performing loan (NPL) of Deap Capital Management & Trust during the first phase of Eligible Bank Assets (EBA) purchases from Zenith Bank and FCMB in 2011.

The seizure was sequel to the order of Justice C. J. Aneke of the Federal High Court, Lagos Division made on January 18, 2021.

AMCON on February 23, 2021 took effective possession of the seven properties listed by the court through its Debt Recovery Agent – Etonye & Etonye.

The court also ordered the freezing of the bank accounts and shares of the company’s directors namely David Ogwu, Anthony Ezeh, Clara Rotzler, Vincent Otiono, Vincent Sankey, Victoria Alo, Hon. Preye Ogriki, Treasure Afolanyan, Chief Nwagwu, Peter Ololo, Gordons Ejikeme, Joe Idudu, Falcon Securities Limited and Rainoil Limited. Rainoil has, however, denied any involvement in any AMCON-related transaction.

The seized properties included properties situated at Plots 14, 15, 16 and 17 in Block 1B, Isolo-Ishaga Area, Mushin, Lagos State; Mile 3 Old Isheri Road, Ikeja, Lagos State; Plot 13, Block 65 Magodo Residential Scheme, Lagos State; No. 73, Femi Kila Street, Okota, Isolo, Lagos State; Plot 22, Block 91, Lekki Peninsula Residential Scheme, Lekki Area, Lagos; Government Land Allocation, Lekki Peninsula Scheme II, Lekki, Lagos State; and 2nd Avenue Estate Extension Ikoyi, Plot No. 11 Eti Osa LGA, Lagos State.

Founded in 2002, Deap Capital is a fund management and investment banking firm quoted on the Nigerian Stock Exchange (NSE).

AMCON had last July enforced on properties belonging to the chief promoter of the company, Mr. Emmanuel Ugboh.

However, due to the lack of adequate collateral, AMCON had to commence asset tracing on the company’s directors, an exercise, which revealed the seven properties the corporation now enforced upon.

AMCON’s action is in line with Section 61 of the AMCON Act, 2010 and Section 49 (1) & (2) of the AMCON Act 2019 (As Amended).

The Investment Committee of the African Energy Chamber has met for the second time to set an agenda that will facilitate capital raising for energy projects in Africa.

The committee acknowledged the increased difficulty of raising capital for energy projects in a post-COVID-19 era but agreed that African Energy projects remain extremely profitable, when tackled with the right investment structure.

According to the World Economic Forum, Africa’s urban population is expected to nearly triple by 2050, to 1.34 billion. Consequently, there is an important need for investment in energy to cater for their needs, to facilitate the development of industry and the generation of much needed revenue and jobs.

The discussion focused on solutions to the lack of investments. “The traditional way of investing is changing,” said Nosizwe Nokwe-Macamo, Executive Chairman & Founder of Raise Africa Investments.

“The African Energy Chamber must look to tap into non-traditional funding streams and look further afield than the usual geographical hotspots for investments,” she added.

Similarly, Chief Commercial Officer, Mixta Africa, Rolake Akinkugbe-Filani, emphasised: “To begin with, we need to be able to articulate clearly what the need is for energy across the diverse African countries and what the different opportunities are. Where possible and appropriate, we must tap into local sources of funding as well as other largely unexplored sources of funding, such as pension funds. There is appetite for African infrastructure projects but we must think of encouraging innovation to meet multiple objectives. Developing infrastructure and traditional energy sources, while also furthering transition to renewable energy. The Chamber, its partners, members and wider network must connect opportunities to funding opportunities.”

Chief Executive Officer (CEO) Mahube Infrastructure Gontse Moseneke,  added: “We must use this current situation to uncover where new opportunities arise. Our natural resources need to be translated into permanent capital and it takes bodies like the Chamber to be bold enough to facilitate the provision of energy needed for that. On the energy transition he said this was an opportunity for Africans to restructure, with the understanding that localisation is key.”

Vice President for Africa, ION Folarin Lajumoke, stressed: “Governments have a critical role to play in the quest to raise much needed capital to fund oil and gas projects. Recent events make for a very globally competitive landscape. To drive investors towards Africa, fiscal terms would need to be reviewed with a potential investor or explorer’s ROI in mind. Many fiscal terms are no longer fit for purpose in light of the emerging trend in energy transition. Funding for hydrocarbons in Africa will compete not only with similar opportunities in other continents but also with other sectors such as agriculture, technology and renewables.”

In a bearish market, the fiscal terms and policies in place could swing an explorer/investor from one geological basin to another. Hard-line bureaucracy on exploration is another major challenge. Exploration helps de-risk geology thereby attracting investment. Unattractive fiscal terms, coupled with bureaucratic excesses towards exploration, is toxic for capital raise. Furthermore, African NOCs have an important role to play by becoming full-cycle energy companies which seek opportunities outside their own countries. A diversified NOC such as Qatar Petroleum or Petronas is better placed in raising capital for growth/expansion than one which isn’t. It is also politically strategic for the much-needed growth in intra-Africa trade. ”

“It is with this in mind that the African Energy Chamber will call on interested investors and projects sponsors to approach the chamber and benefit from its network of partners and members to facilitate project implementation.

“We will continue to build partnerships with the private sector and governments worldwide to attract critical funding to energy projects” said Samantha Raoult, Director of International relations at the chamber.

The agricultural sector has received a major boost with the raising of N5.12 billion by Valency Agro Nigeria Limited. The new capital is the first tranche under the company’s  N20 billion commercial paper programme.

The FMDQ Securities Exchange has approved the quotation of the N5.12 billion Series 1 Commercial Paper (CP) on its platform.

Executive Director, Valency Agro Nigeria Limited, Mr. Sumit Jain, said Valency Agro’s debut commercial paper issuance comes at a time the economy is bedeviled with soaring food prices, amid challenges of insecurity.

According to him, the agricultural sector and its attendant transformation agenda have never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

He explained that the proceeds from the issue would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

“We are thankful to our investors towards showing their faith in our agenda to grow the agriculture focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria. We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry,” Jain said.

Head, Capital Markets, FBNQuest Merchant Bank Limited, Mr. Oluseun Olatidoye said the success of the issue reiterated the bank’s effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

” We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success,” Olatidoye said.

FMDQ noted that the timely admission of the issuance and in general, securities on FMDQ Exchange, is a testament to the efficient processes and integrated systems through which FMDQ Holdings Plc, through its wholly owned subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited – has continued to create unique value for its diverse stakeholders during this peculiar time and beyond.

“In keeping with its commitment to the development of the market, FMDQ Exchange shall sustain its efforts in supporting issuers with tailored financing options to enable them achieve their strategic objectives, deepen and effectively position the debt capital market for growth, in support of the realisation of a globally competitive and vibrant economy,” FMDQ stated.

The ongoing conversion of the Nigerian Stock Exchange (NSE) from a not-for-profit, member-owned, mutual organisation to a profit-based public limited liability company will create many benefits and improve investor’s confidence.

Executive Chairman, Federal Inland Revenue Service (FIRS), Alhaji Muhammad Nami, at the weekend, expressed support for the conversion, otherwise known as demutualisation, describing it as noteworthy development that is beneficial to the market.

He spoke at the weekend during engagement with the capital market community, during which he was honoured with the digital closing gong ceremony at the NSE.

According to him, the FIRS has been keenly following activities and the developments at the Exchange which bear mutual benefits to both institutions.

“Noteworthy is the demutualisation of the NSE which will undoubtedly promote access to diverse investment opportunities and strengthen investors’ confidence in the capital market,” Nami said.

He added that there was an evidence that the policies being put in place by the management of the Exchange were yielding positive results given the impressive performance of the equities market in 2020 despite the COVID-19 pandemic and harsh social and economic conditions.

“I assure you that the FIRS will continue to support the positive initiatives of the NSE to improve its operations, achieve its goals and deliver on its mandate,” Nami said.

Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema said the FIRS was saddled with assessing, collecting and accounting for tax and other revenue accruing to the Federal Government.

He commended the FIRS for its internal revenue assessment and collection efforts for the benefit of economy, even in these challenging times.

“As responsible corporate citizens, we at the NSE are proud to be associated with the FIRS and will continue to strengthen our relationship even as we look ahead to our post-demutualisation phase,” Onyema said.

He noted that the Exchange has remained resolute in its commitment to provide a platform for stakeholders to engage with the capital market community, pointing out that since the activation of its business continuity plan last  March, which led to remote trading and working from home, the Exchange has transitioned many of its events to digital formats – including the closing gong ceremony – and continues to maintain seamless operations almost a year later.

Shareholders of Chemical and Allied Products (CAP) Plc and Portland Paints and Products Nigeria (PPPN) Plc have approved the merger of the two paints company, a development that will significantly alter the competition in the paints industry.

At the court-ordered meeting (COM) in Lagos, which was also hosted virtually online, shareholders of the two paints companies approved the scheme of merger for the business combination, setting the final phase of the merger on its concluding processes.

According to the scheme of merger approved by the shareholders, shareholders of PPPN will receive one CAP share for every eight ordinary shares of PPPN or a cash consideration of N2.90 for every PPPN share. The cash consideration represents 41 per cent premium on the last trading price of PPNN on October 23, 2020, being the last trading day before the announcement of the merger. Subsequently, PPPN will be dissolved without being wound up, delisted from the NSE and its shares registration at Securities and Exchange Commission (SEC) withdrawn.

Managing Director, Chemical and Allied Products (CAP) Plc, Mr David Wright, has said the business combination with scale up post-merger CAP from its second position in the paints industry to the first position.

He said the merger would lead to many benefits for the company and its stakeholders including expanded product offering, increased owned brand portfolio, diversified revenue base and broader distribution capabilities, all which will enhance customer satisfaction and lead to greater returns to shareholders.

According to him, the merger is a value-maximizing opportunity to shareholders as well as holding out enormous opportunities for customers and other stakeholders.

He pointed out that the enlarged CAP will control about 15 per cent of the Nigerian paints market, the largest by any company in the highly fragmented sector while enhancing its leadership with 26 products offerings, an all-inclusive product portfolio that includes decorative, industrial, marine and protective paints as well as distribution network of 91 stores across 32 states of the federation.

He noted that CAP, which plays in the premium and standard paints and coatings with globally recognised brands such as Dulux and Caplux, has enviable track record as a pioneer, having pioneered the colour centre concept in Nigeria in 2005, alongside other innovations.

He expressed optimism that the merger between CAP and PPPN, which was announced in the fourth quarter of 2020, would be concluded before the end of this quarter, having received all preliminary regulatory approvals.

He added that the completion of the merger will impact substantially on the post-merger CAP with access to more capital, opportunity to invest in its human resources, a stronger balance sheet and stronger footing as a leading paints company in Africa.

Wright said CAP will continue to explore opportunities for future growth through different routes including internal growth drives and acquisitions, assuring that the company is well positioned to maintain its leadership.

Managing Director, Portland Paints and Products Nigeria (PPPN) Plc, Mrs Bolarin Okunowo, said the company supported the merger because of the value offerings including shareholder value creation, enlarged entity, enhanced decorative paints business and increased retail footprints.

She noted that PPPN holds a 35-year record of manufacturing and selling industrial, marine, decorative and protective paints for the construction and oil and gas industries in Nigeria, pointing out that the company’s flagship, Sandtex, is renowned for its exceptional quality for residential commercial and industrial buildings.

According to her, the merger will create opportunities for shareholders and stakeholders on both sides as the two companies have complementary synergies that would lead to greater returns.

She explained that the business combination will lead to an enlarged and a formidable paints and coatings company with larger brand portfolio including Dulux, Sandtex, Caplux and Hempel with the broadest distribution channels and retail footprint in Nigeria.

T he Nigerian Stock Exchange (NSE) has upgraded Africa Prudential (APR) Plc from low-priced stock to medium-priced stock following recent appreciation in the share price of the share registration and investors’ relations company.

The Exchange indicated that the reclassification, which took effect from February 15, 2021, was after a review of share price of APR over the most recent six months.

According to the NSE, the review of APR’s 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.

“Africa Prudential Plc stock price appreciated above the N5 price level on 5th October 2020 and traded above N5 up till close of business on 8th February 2021. This indicates that Africa Prudential Plc stock price has traded above N5 in the last 6 months. Resultantly, Africa Prudential Plc will be reclassified from the Low Priced Stock Group to the Medium Priced Stock Group with effect from 15th February 2021,” NSE stated.

The NSE 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, has said the proposed delisting of its shares from the Nigerian Stock Exchange (NSE) will enable the company to implement strategic plans that will improve the overall performance of the downstream oil company.

Explaining the rationales for the delisting to shareholders, 11 stated that delisting will enable the company 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 upon delisting, it will 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 noted that the delisting will 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.

Under the delisting arrangements, shareholders who prefer to remain with the company as unlisted public company will continue with the company but those who indicate their dissent will be paid exit consideration. Dissenting shareholders shall be paid off.

Upon the expiration of the March 01, 2021 deadline for dissent, 11 will set aside sufficient funds and provide evidence of funding to the Exchange, to demonstrate that it has the financial resources to settle any dissenting shareholder.

The interest of dissenting shareholders shall be bought by the company for a consideration of N213.90  per ordinary share, being the highest price at which 11 shares have traded, six months preceding the notice of the AGM at which the resolution to delist was deliberated, as provided by the rules of the NSE.

Once the transaction is approved by both the Securities and Exchange Commission (SEC) and the NSE, the shares of the company shall be expunged from the daily official list of the Exchange. Furthermore, all dissenting shareholders would be settled and cease to be shareholders of 11.

The board of 11 said the delisting have taken into consideration the benefits of shareholders based on the terms and conditions of the proposed delisting.