The Nation Newspaper

Category: Equities

  • Union Bank outlines three-year strategic plan to drive growth

    Union Bank of Nigeria (UBN) Plc yesterday outlined a three-year strategic plan that will further consolidate the bank’s growth towards being Nigeria’s most reliable and trusted banking partner.

    At the annual general meeting yesterday in Lagos, the board and management of the commercial bank has made commendable progress and has been positioned to take advantage of emerging opportunities in the economy.

    Chairman, Union Bank of Nigeria (UBN) Plc, Mr Cyril Odu, said with the successes recorded in 2018, the bank will now focus on executing its 2019-2021 strategic objectives.

    He noted that in 2018 the bank strengthened its retail and transaction banking offerings and launched the first Local Letter of Credit to support local trade as well as launched the inaugural N13.5 billion bond issue and adopted the Robotic Process Automation (RPA) technology, making history as the first Bank to do so in Nigeria.

    According to him, the bank will over the next three years optimise its assets to deliver higher values to stakeholders, increase its digital footprints and position itself for a sustainable future.

    “We have positioned Union Bank to take advantage of the emerging opportunities in the economy and remain optimistic about the future of the Bank. We will execute our 2019-2021 strategic objectives – sweating our assets, digitizing our bank, and positioning for the future – towards being Nigeria’s most reliable and trusted banking partner,” Odu said.

    He said the bank would focus on embedding disciplined cost management as well as mining synergies across business segments and functions to improve the profitability of its business and deliver value to all its stakeholders including shareholders, customers, business partners and employees.

    He said the bank remains confident that Nigeria has a potentially robust economy with a large consumer market, abundant natural resources and a productive population.

    “2018 has been a year of good progress for our bank and we are well positioned to execute our short to medium term strategy,” Odu said.

    Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa added that the priorities of the bank in 2018 were three including enhancing productivity across board; tightening up loan portfolio especially by resolving key large exposures which drove non-performing loans up significantly and optimising the bank’s capital and funding base.

    “I am pleased to report that we made significant strides in each focus area. Notwithstanding a depressed economic environment and a challenging operating landscape, our efforts to optimise productivity delivered results.

    In 2019, we will double-down on our productivity efforts to deliver our financial targets. We are harnessing synergies across our business segments to ensure we maximize opportunities across entire value chains, while centralising key business and operational functions for better efficiency, and prioritizing customer experience across all our touchpoints,” Emuwa said.

    He outlined that the bank will seek to deepen its customer base through new customer acquisition and retention, leverage digital banking to improve sales and productivity, diversify its businesses and customers, improve operational efficiency and harness synergies across its business to maximize opportunities across its entire value chains and ecosystems.

    According to him, following the successful execution of the bank’s debut local currency bond issue to raise N13.5 billion and the tightening up of its loan portfolio, Union Bank is well positioned to continue executing key business priorities in 2019 and beyond.

    Key extracts of the audited report and accounts of Union Bank for the year ended December 31, 2018 showed that gross earnings dropped by 11 per cent from N163.8 billion in 2017 to N145.5 billion in 2018. Net interest income declined by 17 per cent from N66.7 billion to N55.4 billion while non-interest income also dropped from N39.3 billion to N35.2 billion.

    With 113 per cent reduction in credit impairment, net income after impairments increased by 16 per cent from N80.64 billion to N93.5 billion. Profit before tax thus increased by 33 per cent from N13.9 billion to N18.5 billion. Profit after tax also rose from N13 billion to N18.1 billion.

    Earnings per share however declined by 11 per cent from 72 kobo in 2017 to 61 kobo in 2018.

    The bank’s group balance sheet increased marginally by one per cent from N1.455 trillion in 2017 to N1.464 trillion in 2018. Customers deposit rose by seven per cent from N802.4 billion to N857.6 billion.

    Non-performing loan ratio for the bank improved from 20.8 per cent in 2017 to 8.1 per cent in 2018. Shareholders’ funds however dropped by 34 per cent from N337.7 billion in 2017 to N225.6 billion in 2018. Net asset value per share thus reduced from N11.79 in 2017 to N7.75 in 2018.

  • SUNU Assurances assures shareholders

    SUNU Assurances Nigeria Plc has assured shareholders that recent corporate changes will lead to better performance in the years ahead.

    At the annual general meeting yesterday in Lagos, directors of the insurance company said the rebranding of the company and appointment of new management reflected the company’s commitment to long-term growth.

    At the meeting, shareholders ratified the appointment of Mr Samuel Ogbodu as the Managing Director of SUNU Assurances Nigeria and Mr. Adeleke Hassan as Executive Director, Technical and Operations.

    “This is in line with the company’s vision of growing its business consistently over the next five years to become one of Nigeria’s 10 largest underwriting companies,” the company stated.

    The company’s rebranding activities involved both internal and external communication strategies to inform stakeholders and the general public of the change of name and to raise awareness of the introduction of the SUNU Group’s presence in Nigeria.

    According to the company, the rebranding not only included a change in the company’s aesthetics but also in critical service functions and delivery as the company is focused on leveraging technology to provide quality insurance offerings to its various customers reflecting its pan African presence as a full-fledged member of the SUNU Group.

    The company stated that the rebranding was strategic and designed to align with the exemplary brand of the parent company, SUNU Group.

    It is worthy to note that SUNU Group is a foremost Pan-African Insurance Group with asset base of over $623 Million and operations in 14 African Countries and 23 office locations spanning West and Central Africa.

    “SUNU Assurances Nigeria Plc is therefore positioned to leverage on SUNU Group’s vast network of knowledge capital, financial strength and technical resources in our quest to differentiate its offerings and service standards in the Nigerian marketplace,” the company stated.

    In addition to strengthening the company’s Balance sheet, the partnership with SUNU Group is expected to provide SUNU Assurances Nigeria with critical organizational capabilities and competencies which would be harnessed to create and deliver value to its esteemed clients.

    SUNU Assurances Nigeria reassured shareholders of its commitment to keep providing tailor-made products and better service on which SUNU Group have built their reputation across Africa.

     

  • Equities open with tight trading

    Nigerian equities reopened yesterday on a tit-for-tat trading as bargain hunters and profit-takers held the equities market to almost a balance. With an advancer for every decliner, the inclusion of the two leading banks-Guaranty Trust Bank Plc (GTB) and Zenith Bank International Plc among the decliners tilted the market to a marginal net capital depreciation of N6 billion.

    The All Share Index (ASI)- the main index that tracks share prices, dropped by 0.05 per cent to close at 29,196.87 points as against its opening index of 29,212.00 points. Aggregate market capitalisation of quoted equities dropped by N6 billion to close at N10.973 trillion as against its opening value of N10.979 trillion. Average year-to-date return inched up to -7.11 per cent.

    With 14 gainers and losers each, sectoral indices showed mixed performance with selloffs in banking sector counterbalanced by gains in the insurance sector. The NSE Banking Index dropped by 0.68 per cent. The NSE Industrial Goods Index dipped by 0.51 per cent while the NSE Oil & Gas Index declined by 0.15 per cent. On the positive side, the NSE Insurance Index appreciated by 2.35 per cent while the NSE Consumer Goods Index rose by 0.10 per cent.

    Beta Glass and Dangote Cement led the gainers with a gain of N1 each to close at N57 and N181 respectively. Dangote Flour Mills rose by 65 kobo to close at N17.75. NEM appreciated by 22 kobo to close at N2.43 while United Capital added 6.0 kobo to close at N2.58 per share.

    On the losers’ list, 11 Plc, formerly Mobil Oil Nigeria, led the decliners with a drop of N2 to close at N175. Cement Company of Northern Nigeria followed with a drop of 55 kobo to close at N15.30. GTB lost 45 kobo to close at N33. Ikeja Hotels and UACN Property Development Company dropped by 15 kobo each to close at N1.60 and N1.53 respectively while Zenith Bank and Union Bank of Nigeria lost 10 kobo each to close at N20.90 and N7 respectively.

    Total volume traded went down by 23.93 per cent to 271.08 million shares valued at N1.49 billion in 3,814 deals. Japaul Oil & Maritimes Services was the most active stock with 58.61 million shares valued at N23.4 million.  United Bank for Africa (UBA) followed with 36.997 million shares worth N244.78 million while Courteville traded 30.68 million shares valued at N7.36 million.

    “In our view, the sustained sell-offs in the Nigerian equities market is overdone compared to peer markets. This provides a basis for the ASI to recover in the absence of further downside risks. Beyond the obvious, we believe that the blend of positive macroeconomic fundamentals and compelling valuations supports our view of a near term recovery,” Cordros Capital stated.

     

  • Forte Oil offers power, upstream businesses for sale to unknown firms

    Forte Oil Plc has entered into share sale and purchase agreements to sell its power and upstream businesses in continuation of complicated divestment programme involving its major shareholder and Chairman, Mr. Femi Otedola.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) at the weekend, Forte Oil stated that it has entered into share sale and purchase agreement with Calvados Global Services Limited for the sale of its power distribution company, Amperion Power Distribution Company Limited.

    Forte Oil has also entered into share sale and purchase agreement with Gbonka Oil and Gas Limited for the divestment and sale of its shares in Forte Upstream Services Limited.

    The two new agreements came as the indigenous energy group confirmed that it had concluded divestment of its shares in AP Oil and Gas Ghana Limited to Cobalt International Services (Ghana) Limited.

    Forte Upstream Services Limited, AP Oil and Gas Ghana Limited are wholly-owned subsidiaries of Forte Oil while the indigenous energy group holds majority equity stake of 57 per cent in Amperion Power Distribution Company Limited. Amperion Power Distribution Company Limited holds the majority equity stake in the lucrative Geregu Power Plc.

    General Counsel, Forte Oil, Mr. Akinleye Olagbende, stated that the two new share purchase and sale agreements were however subject to the fulfilment of relevant conditions as specified in the respective agreement, including obtaining relevant contractual and regulatory approvals.

    In February, this year, shareholders of Forte Oil approved major resolutions authorising the sale of the company’s subsidiaries to Mr Femi Otedola, the majority core investor in the company. Otedola holds 75 per cent majority equity stake in Forte Oil.

    At the Extra-Ordinary General Meeting (EGM) in Lagos, shareholders approved a resolution authorising the company to enter into discussions with Otedola or any company representing him in connection with assets to be divested.

    In the weekend’s regulatory filing, the company was however silent on the relationship between the bidding companies and Otedola. Global search for identities of both Calvados Global Services Limited and Gbonka Oil and Gas Limited did not provide any links to the companies. A market source said the two companies might be newly incorporated firms or special purpose vehicles formed for the purpose of the acquisitions.

    Otedola had also in December 2018 announced that he planned to sell his 75 per cent majority equity stake in Forte Oil to Prudent Energy. The December 2018 announcement came after shareholders had in May 2018 approved a restructuring plan pushed by Otedola-led board of directors aimed at restructuring the group’s operations by divesting from its upstream services and power generating businesses and the sale of its downstream business in Ghana. Shareholders had authorised the board of the company to sell its stakes in Forte Upstream Services Limited, Amperion Power Distribution Limited and AP Oil & Gas Ghana Limited.

    In the explanatory statement on the Forte Oil-Otedola divestment deal, the company had indicated that the highly lucrative Geregu Power Plc was the immediate focus of Otedola’s acquisition. However, the resolutions at the EGM broadly covered all assets under divestment.

    In an explanatory statement signed by Olagbende, the company explained that Otedola showed interest in acquiring the Geregu Power Plc after a public tender sale organised by the board failed to produce acceptable offer.

    According to the statement, upon review of the tender sale process, the management of the company saw unexpectedly low interest in the bidding process while the offers were below expectation and the bidders unable to demonstrate adequate financing capability and capacity.

    The statement assured that the sale process to Otedola, who abstained from voting yesterday, would be subjected to rigourous scrutiny by management and independent financial adviser to ensure that the terms are based on normal commercial terms and not prejudicial to the interests of the company and its shareholders.

    The company stated that the divestment would provide adequate funding for additional investment in its downstream business.

    “The proceeds of this restructuring exercise will enable your company to compete more favourably and achieve its planned expansion objectives within the downstream subsector. This will also reduce our finance cost significantly and increase distributable earnings for the benefit of our shareholders,” the company stated.

    Chairman and majority shareholder,  Otedola had in December 2018 announced that he had reached preliminary agreement to sell his entire 75 per cent majority equity stake in the company.

    Forte Oil confirmed that Otedola was selling his “full 75 per cent direct and indirect shareholding in the company’s downstream business”. The downstream business accounts for more than three-quarters of the Forte Oil Group, although the power generation business has consistently delivered higher margins.

    Olagbende stated that Otedola was divesting his majority equity stake to Prudent Energy team, which would be investing through Ignite Investments and Commodities Limited.

    According to the company, Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximize business opportunities in refining and petrochemicals. Otedola is a close friend of Alhaji Aliko Dangote, Africa’s richest man, whose multi-billion Naira refinery is billed to commence operations within the next 25 months.

  • Mutual Benefits raises N1.59b as rights issue

    Mutual Benefits Assurance Plc has raised about N1.586 billion in new equity funds from its shareholders, 20.7 per cent or N414 million below the insurance company’s target of N2 billion.

    Mutual Benefits Assurance had offered four billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share. The rights issue was provisionally allotted on the basis of one new ordinary share of 50 kobo each for every two ordinary shares held as at the close of business on November 1, 2017.

    At the listing of the rights issue’s shares at the weekend, the company indicated it was able to raise N1.586 billion through subscription to about 3.173 billion ordinary shares of 50 kobo each at 50 kobo per share. The rights issue was thus 79.3 per cent subscribed.

    The additional shares of 3.173 billion were subsequently listed on the main board at the Nigerian Stock Exchange (NSE).

    With the listing of the new ordinary shares, the total issued and fully paid up shares of Mutual Benefits Assurance has increased from eight billion to 11.173 billion ordinary shares of 50 kobo each.

    The rights issue, which was initially scheduled to close on Friday September 14, last year, was extended to Friday September 28, last year. The rights issue had opened on Monday, August 6, last year.

    The board of the insurance company has said the net proceeds of the rights issue would be used to deepen the capital base of the company and enhance its ability to create more wealth for shareholders.

    Mutual Benefits Assurance Plc Chairman Dr. Akin Ogunbiyi said the net proceeds of the rights issue would be used to finance the company’s growth plan including provision of additional working capital and expansion of information and communication technologies to support the company enlarged operations.

    He said the strategic goal of the company is to become the number one insurance company in Nigeria in terms of growth and profitability.

    He assured that new investments in technologies would help the company to eliminate delay in its processing and focus more on customer satisfaction.

    Ogunbiyi reassured shareholders of the commitment of the board and management of the company to sustainable growth, in line with its five-year strategic plan.

    In 2017, Mutual Benefits Assurance   started the implementation of a five-year strategic plan to reposition it for future opportunities and challenges.

    The plan focused on four key areas of the group’s business, including deepening market penetration and customer acquisition, customer service delivery excellence, transformation of its people and culture and operational effectiveness.

  • Capital market’s chiefs call for overhaul of financial system

    Capital market leaders have called on the government to urgently undertake a comprehensive overhaul of the financial system to engender a virile financial sector that can sustain stable economic growth.

    Experts said the government needs to address gaps within the system while also calling on operators to embrace synergistic cooperation to achieve the necessary scale and expertise to play meaningful roles in the financial system.

    At a dinner organised for past presidents of the Chartered Institute of Stockbrokers (CIS), capital market leaders said resolving the current challenges militating against the market should be a major concern to government and other stakeholders.

    NASD OTC Securities Exchange Plc Chairman Mr Tola Mobolurin said the government should overhaul the entire financial system without further delay in order to reposition the financial system as a linchpin for national development.

    According to him, government needs to take urgent actions to boost domestic savings base, drive investments and unleash the creativity of the financial system.

    “We must create savings institutions immediately. We are in dire need of private equity fund and hedge fund in Naira in the national interest. We need institutions that have deep pockets. There should be an end to dichotomy between banks with capital market operations and banks with non-capital market operations. We must reactivate the bond market which we pushed away because of lack of interest. Thriving capital market is needed to build the economy, “ Mobolurin said.

    He noted that the crash of Nigerian stock market from 2007-2008 was largely due to complacency of the government, capital market regulators, stockbrokers and investors.

    Mobolurin, who is also the Vice Chairman of Capital Bancorp Plc, noted that if each stakeholder had played by the rules of the game, there would not have been laxity that led to regulatory failures with attendant market crash in the past.

    Securities and Exchange Commission (SEC) Acting Director-General, Ms Mary Uduk said stockbrokers need to engage the government on policies that would revive the market through advocacy.

    She noted that SEC had enjoyed the support of many stockbrokers who had served on various committees of the institution.

    Chapel Hill Denham Chief Executive Officer Mr Bolaji Balogun urged stockbroking firms to consider the option of business combinations as a strategy to remain in business.

    According to him, such a step would bring about synergy and enormous benefits as against the current situation where many houses are inactive.

    Chartered Institute of Stockbrokers (CIS) President, Mr Adedapo Adekoje emphasised the need for unity of purpose among stockbrokers in order to strengthen their advocacy role.

    He pointed out that the pending Chartered Institute of Securities and Investment (CISI) bill would reflect the enormous functions of stockbrokers and urged members at various levels, including other trade groups to co-operate in making the bill a reality.

    “I would like to remind us that we still have the Chartered Institute of Securities and Investment (CISI) bill pending with the National Assembly, and this also requires substantial resources to push through. Our plan therefore is to urge all of us to support, both financial and otherwise, to pursue this noble cause of our institute,” Adekoje said.

  • Jaiz Bank grows Q1 profit by 244%

    Jaiz Bank Plc recorded well-rounded performance in the first quarter of this year as Nigeria’s pioneer non-interest commercial bank continued to improve its cost efficiency and risk management.

    Key extracts of the three-month report for the period ended March 31, 2019 released yesterday at the Nigerian Stock Exchange (NSE) showed that gross earnings rose by 38.7 per cent while pre and post-tax profits jumped by 225.08 per cent and 244.19 per cent respectively. Earnings per share rose by 190 per cent.

    The three-month report indicated that gross earnings rose to N2.59 billion in first quarter 2019 as against N1.87 billion in first quarter 2018. Gross profit grew by 51.9 per cent increased from N1.39 billion to N2.11 billion. Profit before tax jumped from N146.57 million to N476.46 million. After taxes, net profit rose to N428.68 million in first quarter 2019 compared with N124.58 million in first quarter 2018. Consequently, earnings per share increased to 1.45 kobo in first quarter 2019 as against 0.50 kobo in corresponding period of 2018.

    The first quarter performance further consolidated the growth trajectory of the alternative banking pioneer and raised strong prospect of Jaiz Bank substantially surpassing its full-year performance in 2018 in the current business year. The net profit in first quarter 2019 is more than half of the full-year net profit recorded in 2018.

    Jaiz Bank recently released its audited report and accounts for the year ended December 31, 2018, showing 55 per cent growth in net profit to N834.37 million.Gross earnings rose by 11 per cent from N7.86 billion in 2017 to N8.74 billion in 2018. Profit before tax increased from N894.01 million to N897.70 million. After taxes, net profit rose from N537.12 million to N834.37 million.

    The balance sheet showed stronger underlying strength during the period. Total assets rose by 24 per cent from N87.31 billion to N108.46 billion. Deposits also grew by 25 per cent from N68.12 billion in 2017 to N85.03 billion in 2018. The non-interest bank expanded its financing and investment activities by 37 per cent to N69.36 billion in 2018 as against N50.79 billion in 2017. Jaiz Bank, as a non-interest bank, makes profit basically from profit-sharing on investments and gains on trading activities.

    Key underlying ratios showed improvements in returns and operational strength of the bank. Return on assets rose by a quarter from 0.6 per cent in 2017 to 0.8 per cent in 2018. While cost-to-income inched up from 85.84 per cent to 87.28 per cent, return on equity improved from 6.54 per cent to 6.85 per cent. Capital adequacy remains considerably above regulatory threshold at 21.13 per cent while liquidity ratio increased by 50 per cent from 18.64 per cent to 27.94 per cent. Staff strength and number of branches also increased by 6.0 per cent and 16 per cent respectively.

    Managing Director, Jaiz Bank Plc, Mr. Hassan Usman, said the 2018 results further demonstrated that the bank has the capacity to grow sustainably in line with its strategic vision of becoming the leading non-interest bank in Sub-Saharan Africa by 2022.

    He assured that while maintaining steady focus on elements that contributed to improved performance in 2018, the bank shall work harder to optimise its potential in order to deliver better returns in 2019.

    He noted that the bank had in 2017 crafted a strategic plan to build on its pioneer status in Nigeria into becoming the leading non-interest bank in Sub-Saharan Africa over the next five years.

    According to him, the bank has since been working hard across its business towards the strategic milestones set out for the years while maintaining steady focusing on its business growth.

    “The commitment and dedication of our people make me confident that the attainment of this goal is assured. 2018 is the year we demonstrated we have the capacity to grow safely and sustainably. We used a number of measures to spark progress in this regard, some of which include our commitment to the development of micro, small and medium enterprises, focus on unserved markets and the financially excluded, institutional alliances, nimble workforce as well as effective performance tracking amongst others,” Usman said.

    He added that Jaiz Bank, as the leader in alternative financing, is committed to ensuring that its engagement with the financially excluded remains boldly innovative as well as transformative.

    Jaiz Bank was created out of the former Jaiz International Plc which was set up in 2003 as a Special Purpose Vehicle (SPV) to establish Nigeria’s first full-fledged non-interest bank. The bank is owned by some 27,000 shareholders including the Islamic Development Bank (IDB). It obtained a regional operating license to operate as a non-interest bank from the Central Bank of Nigeria (CBN) on November 11, 2011 and began full operations as the first non-interest bank in Nigeria on January 6, 2012. In 2016, it obtained the national banking license from the CBN and started to rapidly spread its network across the country.

    Jaiz Bank recorded another milestone on February 9, 2017 as the first non-interest financial institution to be listed on the Nigerian Stock Exchange (NSE) with the admission of the entire issued share capital of the bank to the main board of the Exchange.

    Under its five-year growth plan, Jaiz Bank projects to grow its income and profitability consecutively. According to the five-year financial forecast, total income is expected to be about N81.17 billion while profit after tax is projected at N11.09 billion for the five-year period.

     

     

  • Notore grows operating profit by 4,251% to N4.6b

    Notore Chemical Industries Plc drew on top-line efficiency to grow its operating profit to N4.63 billion in the first six months of this business year but increased financing cost negatively impacted the bottom-line.

    The interim report and accounts of Notore for the six-month period ended March 31, 2019 showed that operating profit leapt by 4,251 per cent to N4.63 billion in 2019 compared with N110 million recorded in the corresponding period of 2018. Turnover dropped to N12.68 billion in March 2019 compared with N15.17 billion in March 2018, indicating a decline of 16.03 per cent.

    The company attributed the decline mainly to plant downtime during the period as a result of the Turn-around maintenance (TAM) programme activities. The TAM programme is expected to be completed by first quarter of   2020, after which the plant will operate at its nameplate capacity. Cost of sales reduced from N11.404 billion to N9.636 billion, while cost of sales margin variation over the two periods, was minimal at 0.80 per cent increase, because natural gas, which constitutes 90 per cent of the input cost, excluding plant depreciation, has a fixed unit price under a 20 year gas contract.

    Despite the growth of 4,251 per cent in operating profit, Notore ended the period with a loss of N1.942 billion due to net finance cost. Net finance cost rose from N5.14 billion to N6.57 billion. The net loss of N1.94 billion in 2019 represented a considerable improvement on the loss of N4.52 billion recorded in the corresponding period of 2018.

    Notore remained optimistic on the outlook for its business noting that Nigerian fertilizer demand is quite robust and is expected to continue to grow because of the federal government’s agenda to use agriculture as one of the keys to unlock the diversification of the Nigerian economy.

    According to the company, the domestic fertilizer market is yet to reach its full potential as the consumption of fertilizer per hectare of arable land in Nigeria is below 10kg compared to the 200kg recommended by Food & Agriculture Organisation. Furthermore, the demand for urea and compound fertilizers, such as NPK, from the West African markets and Sahel African states is also quite significant. Notore sold all the urea that it produced during the period under review.

    The company stated that it would exceed its 2018 full-year urea production figures in 2019 as the current federal government policies in the fertilizer space and demand for NPK and NPK specialty blends are quite favourable for its business.

    “Consequently, Notore will be producing a significant quantity of NPK and NPK specialty blends this FY to boost its revenues as well as diversify it from urea fertilizer. To enhance profitability, Notore is working on financial initiatives to reduce its finance cost considerably,” Notore stated.

    Notore, formerly known as O-Secul Fertilizer Company Limited, was established in 2005 to acquire the core assets of the National Fertilizer Company of Nigeria (NAFCON). Notore had on August 2, 2018 listed its entire paid up share capital on the NSE, opening up the agro-allied company to the general investing public 13 years after it was privatised by the Federal Government.

    Notore, a vertically integrated agro-allied, chemical and power group based in Onne, Rivers State, has six subsidiaries including Notore Supply & Trading Mauritius Limited, Notore Power Limited, Notore Seeds Limited, Notore Foods Limited and Notore Industrial City Limited.

  • April slump worsens investors’ loss to N2.65tr

    Nigerian equities suffered a major contraction in April as the bearishness at the stock market defied earnings reports and dividend recommendations. Quoted equities recorded net loss of N714 billion in April, increasing the net capital depreciation so far this year to N762 billion. With the decline in April, average decline in investors’ portfolio over the past 16 months now stand at 25.03 per cent, with net decline of N2.65 trillion in total market value of quoted equities.

    The All Share Index (ASI)- the main index that tracks share prices at the Nigerian Stock Exchange (NSE) closed April 2019 at 29,159.74 points as against its 2019’s opening index of 31,430.50 points, representing a four-month average return of -7.22 per cent.

    Aggregate market value of all quoted equities at the NSE also dropped from the year’s opening value of N11.721 trillion to close April 2019 at N10.959 trillion, indicating net capital depreciation of N762 billion. The decline was exacerbated by widespread selloff in April with average decline of 6.06 per cent.

    The ASI dropped from April’s opening index of 31,041.42 points to close the month at 29,159.74 points, representing average month-on-month decline of 6.06 per cent. Aggregate market value of all quoted equities also dropped from the month’s opening value of N11.672 trillion to close at N10.958 trillion. Fundamentally, the ASI and market value move simultaneously at the same value and in the same direction. However, addition and deduction of shares-through new listings and delisting, usually create temporary disparity between the two indices. When the impact of a new listing is fully absorbed by the market, the indices will converge and continue to trend on the same level.

    With 57 decliners to 24 advancers, most sectoral indices closed negative during the month, despite subsisting dividend recommendations for the 2018 business year and the release of first quarter earnings reports by most quoted companies. The NSE Industrial Goods Index recorded average negative return of -7.36 per cent. The NSE Insurance Index dropped by 5.40 per cent. The NSE Consumer Goods Index posted a return of -5.38 per cent. The NSE Banking Index dipped by 4.48 per cent while the NSE Oil and Gas Index depreciated by 3.75 per cent during the month.

    Chams Plc recorded the highest gain, in percentage terms, of 150 per cent to close April at 50 kobo per share. Dangote Flour Mills (DFM) Plc, which announced a major takeover offer during the period, rose by 84.31 per cent to close at N18.80 while Japaul Oil and Maritime Services appreciated by 65 per cent per cent to close at 33 kobo. On the downside, Associated Bus Company declined by 43.40 per cent to close at 30 kobo. Cement Company of Northern Nigeria (CCNN) followed with a loss of 29.65 per cent to close at N14 while Union Diagnostic & Clinical Services depreciated by 23.33 per cent to close at 23 kobo.

    Nigerian equities had closed the first quarter with net capital depreciation of N49 billion, a sharp reversal from the bullish trading that saw equities with net capital gain of N1.38 trillion in first quarter of 2018. The performance in April further exacerbated the decline at the Nigerian equities market, which had suffered average decline of 17.81 per cent or about N1.89 trillion in 2018.

    With the decline in April, average decline in investors’ portfolio over the past 16 months now stand at 25.03 per cent, with net decline of N2.65 trillion in total market value of quoted equities. Meanwhile, Nigerian equities had recorded net capital gain of N4.36 trillion or average gain of 42.30 per cent in 2017, implying considerable upside for investors despite the decline in the past 16 months.

    The ASI opened 2018 at 38,243.19 points while aggregate market value of all quoted equities at the NSE opened 2018 at N13.609 trillion.

    Further analysis showed that the market started the year with a loss in January, rallied to appreciable recovery in February and relapsed into negative again in March. Nigerian equities lost N326 billion in January 2019, with average decline of 1.82 per cent. The ASI and market value of equities had closed January 2019 at 30,557.20 and N11.395 trillion respectively.

    In February 2019, investors in Nigerian equities netted N433 billion in capital gains as the stock market staged a major recovery. Average return for the month stood at 3.80 per cent. The ASI and market value of quoted equities had closed February higher at 31,718.70 points and N11.828 trillion respectively. The market rounded off the first quarter with a net loss of N156 billion and average decline of 2.135 per cent in March 2019.

    Most analysts agreed that heightened political risk was a major factor that had adversely impacted the equities market since 2018. According to analysts, the impact of intense political activities, which had started earlier than expected, and the tenor of the often rancorous campaigns dampened investors’ enthusiasm. Global markets also contributed to the decline, especially improving yields in advanced economies. Foreign portfolio investors accounted for some half of transactions in the Nigerian market. Most analysts however believe that the equities will close positive this year.

    Chief Dealer, Globalview Capital Limited, Mr. Aruna Kebira, told The Nation that the political tension remains a major moderator for the market despite the conduct of the March 2019 general elections. The Independent National Electoral Commission (INEC) had declared incumbent President Muhammadu Buhari of the All Progressives Congress (APC) as the winner of the presidential election, but the main opposition candidate, Alhaji Atiku Abubakar of the Peoples Democratic Party (PDP) is contesting the results of the election at the election tribunal.

    Vice Chairman and Chief Executive Officer, Capital Assets Limited, Mr. Ariyo Olushekun noted that the fundamentals of most quoted companies suggest positive outlook for the market citing attractive earnings yields, price to book ratios and dividend yields that show that Nigerian equities are undervalued and have considerable upside potential.

    “This year you can expect to see a rebound. Last year was a flight to safety, but this year, after the elections, you will see a steady recovery. I see political stability and the continuation of the economic programmes of the government, most of which should underpin long-term development of the economy,” Olushekun said.

    He also advised investors to invest in companies with sound fundamentals and to seek the advice of their stockbrokers to determine the most appropriate timing to enter into the stocks.

  • SEC urges beneficiaries to claim deceased’s dividends

    Securities and Exchange Commission (SEC) has urged beneficiaries of deceased investors to step up efforts to claim their dividends as part of efforts to reduce the quantum of unclaimed dividends in the Nigerian capital market.

    This was stated by the Acting Director General of the SEC, Ms Mary Uduk in her welcome remarks at the enlightenment programme for Lagos State Probate Registry in Lagos. Uduk who was represented by Acting Executive Commissioner Operations of the SEC, Mr. Isyaku Tilde, said the purpose of the enlightenment programme is to give participants an understanding of the operations of the capital market, especially in the area concerning transmission of shares and administration of estate, areas in which the Probate Registry is a key stakeholder.

    Uduk stated that one category of investors whose investment yields have contributed to the growth of unclaimed dividends are deceased investors, whose beneficiaries as indicated in the will or letter of administration are yet to claim the investments and accrued dividends through the share transmission process.

    According to her, the capital market is a market for raising medium to long term capital via a number of instruments. The most popular of the instruments are shared and bonds with resultant yields of dividends and interests respectively.

    She noted that the quantum of unclaimed dividends in the Nigerian capital market has been on the increase as investors fail to claim the dividends from their investment in shares.

    Uduk also congratulated the Probate Registry on the recent commissioning of the e-filing probate registry saying it will guarantee integrity of data, provide for online tracking of applications, simplify and shorten the application process of Letter of Administration and grants.

    She restated the readiness of the SEC to collaborate with the Probate Registry staff  so that together the Nigerian capital market can become a desirable investment destination.