The Nation Newspaper

Category: Equities

  • Cordros launches online video contest to woo investors

    Cordros Asset Management Limited (CAML) has launched an online video contest to woo investors into the Nigerian capital market.

    The online challenge, known as the Cordros 10k Challenge was part of efforts to reintroduce the many collective investment schemes or mutual funds from the company.

    Acting Managing Director, Cordros Asset Management Limited (CAML), Morenike Da-Silva, said the online campaign is targeted at the wider market, including the younger demographic, to engage them on the importance of investing in general market and mutual funds specifically.

    She explained that the Cordros 10k Challenge is currently ongoing on all the social media pages of the company and people with the highest number of likes from the video contest will win funded mutual funds accounts from Cordros Asset Management.

    She noted that the many mutual funds from the company, including the Cordros Money Market Fund and Cordros Milestone Fund 2023 and Cordros Milestone Fund 2028 offer investors opportunities to invest in high-yielding professionally managed funds.

    According to her, the Cordros Money Market Fund is an open-ended fund that seeks to provide safety, liquidity, diversification and competitive return.

    “The Cordros Money Market offers investors the opportunity to preserve their capital and earn returns from investments in short term money market securities such as treasury bills, commercial papers, banker’s acceptance, certificate of deposits and other eligible money market instruments with financial institutions in Nigeria recognized by the Securities & Exchange Commission. The Money Market Fund has grown in the excess of N5 billion and continues to grow. The minimum initial investment for the Fund is N10,000 for 100 units while additional investments is N5,000,” Da-Silva said.

    Cordros Milestone Funds 2023 and Cordros Milestone Fund 2028 are target-dated mutual funds which pursues a long-term investment strategy. The Milestone Funds are balanced funds and have a mix of equities, fixed income and money market instruments. The funds will start out seeking capital appreciation and will become more conservative by seeking capital preservation towards their target dates 2023 and 2028.

    The Milestone Funds are the first set of target-dated mutual funds to be launched in Nigeria although it is a popular fund with over $1.1 trillion in investment globally. The Milestone Funds are strategic move aimed at providing products which cater to the retail segment of the economy. These are specially designed to provide for individuals and corporations saving towards a ‘target’. The minimum amount required to subscribe to the fund is N2,500 and investors can make an additional investment of 10 units or more for N1,000.

    CAML, a subsidiary of Cordros Capital Limited, is licensed by the Securities & Exchange Commission as a fund and portfolio management company. CAML offers services in portfolio management, wealth management, college and education planning, wills and estate planning and mutual funds.

  • Equities continue decline with N61b loss

    For the second consecutive trading session, transactions at the Nigerian equities market continued on the negative side as sustained selloffs pressured the market to a net capital depreciation of N61 billion.

    Benchmark indices at the Nigerian Stock Exchange (NSE) showed average decline of 0.53 per cent yesterday, equivalent to net loss of N61 billion. The decline worsened the average year-to-date return to -0.80 per cent.

    The All Share Index (ASI)- the value-based common index that tracks share prices at the Exchange, declined from its opening index of 31,344.24 points to close at 31,178.71 points. Aggregate market value of all quoted equities also dropped from its opening value of N11.688 trillion to close at N11.627 trillion.

    All sectoral indices closed negative, underlining the widespread profit-taking trading across the sectors. The NSE Banking Index declined by 3.7 per cent. The NSE Consumer Goods Index depreciated by 0.56 per cent. The NSE Insurance Index dipped by 0.23 per cent. The NSE Oil and Gas Index slipped by 0.1 per cent while the NSE Industrial Goods Index closed flat.

    There were 30 losers to 14 gainers. Nigerian Breweries led the losers with a drop of N1.90 to close at N78. Zenith Bank followed with a loss of N50 kobo to close at N22.95. Guaranty Trust Bank declined by 45 kobo to close at N33.80. Access Bank lost 30 kobo to close at N6.05. Dangote Sugar Refinery and Dangote Flour Mills dropped by 20 kobo each to close at N14.10 and N6 respectively while Ikeja Hotel declined by 16 kobo to close at N1.52 per share.

    On the positive side, PZ Cussons Nigeria led the gainers with a gain of 85 kobo to close at N12.15. Red Star Express rose by 50 kobo to close at N5.50. Cadbury Nigeria added 20 kobo to close at N10. UACN Property Development Company gathered 15 kobo to close at N1.72. Sterling Bank chalked up 6.0 kobo to close at N2.30 while Caverton Offshore Support Group and Union Bank of Nigeria added 5.0 kobo each to close at N2.25 and N6.20 respectively.

    Meanwhile, the momentum of activities improved as turnover rose by 61.4 per cent to 359.51 million shares valued at N1.91 billion in 3,773 deals. Consolidated Hallmark Insurance was the most active stock with a turnover of 100.4 million shares valued at N31.12 million. United Bank for Africa followed with 48.84 million shares valued at N354.75 million while Sterling Bank placed third with 30.15 million shares worth N66.16 million.

    “We anticipate further profit taking in market bellwethers in subsequent sessions,” Afrinvest Securities stated.

    Analysts at Cordros Capital stated that the equities market would continue on the negative side in the mean time. “Our outlook for equities in the near-to-medium term is negative, and we guide investors to trade cautiously, amidst political jitters ahead of the upcoming elections. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term,” Cordros Capital stated.

     

  • Equities lose N31b as profit-taking resumes

    After sustained capital appreciation last week, Nigerian equities reopened this week with a tinge of profit-taking as investors sought to monetise and lock in capital gains. With three decliners to every advancer, the equities market witnessed widespread sell pressure.

    The All Share Index (ASI)-the common value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), declined by 0.26 per cent to close at 31,344.24 points as against its opening index of 31,426.63 points. Aggregate market value of all quoted equities at the NSE dropped correspondingly from opening value of N11.719 trillion to close at N11.688 trillion. The negative performance yesterday left the market with average year-to-date return of -0.27 per cent.

    With 30 losers to 10 gainers, all sectoral indices also closed in the red with the exception of the NSE Industrial Goods Index, which inched up by 0.01 per cent. The NSE Insurance Index declined by 1.1 per cent. The NSE Banking Index dropped by 0.5 per cent. The NSE Oil & Gas Index dipped by 0.4 per cent while the NSE Consumer Goods Index slipped by 0.3 per cent.

    Seplat Petroleum Development Company led the decliners with a drop of N20 to close at N520. Berger Paints followed with a loss of 75 kobo to close at N7. United Bank for Africa declined by 35 kobo to close at N7.35. Dangote Flour Mills dropped by 30 kobo to close at N6.20 while GlaxoSmithKline Consumer Nigeria and Guaranty Trust Bank lost 25 kobo each to close at N11.75 and N34.25 respectively.

    On the positive side, Total Nigeria led the advancers with a gain of N8.80 to close at N223.30. Beta Glass followed with a gain of 65 kobo to close at N55.65. Zenith Bank rose by 45 kobo to close at N23.45. Oando added 25 kobo to close at N5.10 while NPF Microfinance Bank chalked up 14 kobo to close at N1.60 per share.

    Total turnover stood at 222.7 million shares valued at N1.84 billion in 4,152 deals. Fidelity Bank was the most active stock with a turnover of 23.77 million shares valued at N56.66 million. United Bank for Africa followed with 21.89 million shares worth N162.02 million while Diamond Bank placed third with 21.21 million shares valued at N48.48 million.

    “In line with our expectation, we experienced some profit taking in today (Monday)’s trading session. While we maintain a bearish outlook in the near term, we do not rule out the possibility of bargain hunting in fundamentally sound stocks,” Afrinvest Securities stated.

    “Our outlook for equities in the near-to-medium term remains conservative, in the absence of a near term positive catalyst and amidst brewing political concerns,” Cordros Capital stated in a post-trading note to investors.

  • Global securities regulators issue good practices on audit quality

    The board of the International Organisation of Securities Commissions (IOSCO) has published its IOSCO Report on Good Practices for Audit Committees in Supporting Audit Quality. The report seeks to assist audit committees in promoting and supporting audit quality.

    IOSCO is global body of securities regulators and its members regulate more than 95 per cent of the world’s securities markets in more than 115 jurisdictions.

    According to IOSCO,  the quality of a company’s financial report, supported by an independent external audit, is key to market confidence and informed investors, and to the effective functioning of capital markets.

    The global body pointed out that while the auditor has primary responsibility for audit quality, the audit committee should promote and support audit quality and thereby contribute to greater confidence in the quality of information in the listed company’s financial reports.

    “The good practices report can assist audit committees in considering ways in which they may be able to promote and support audit quality,” IOSCO said.

    The report provides good practices that audit committees may consider when recommending the appointment of an auditor; assessing potential and continuing auditors; setting audit fees;           facilitating the audit process; assessing auditor independence; communicating with the auditor and when assessing audit quality.

    The report sets out good practices regarding the features that an audit committee should have to be more effective in its role, including matters such as the qualifications and experience of audit committee members.

    The IOSCO board is the governing and standard-setting body of the Commissions, and is made up of 34 securities regulators. Mr. Ashley Alder, the Chief Executive Officer of the Securities and Futures Commission (SFC) of Hong Kong, is IOSCO Board chairman. Its board members are the securities regulatory authorities of Argentina, Australia, Belgium, Brazil, China, Egypt, France, Germany, Hong Kong, India, Indonesia, Ireland, Italy, Japan, Kenya, Korea, Malaysia, Mexico, the Netherlands (observer), Ontario, Pakistan, Panama, Portugal, Quebec, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the United Arab Emirates, the United Kingdom and the United States (both the U.S. Commodity Futures Trading Commission and U.S. Securities and Exchange Commission). The Chair of the European Securities and Markets Authority (ESMA) and the Chair of IOSCO´s Affiliate Members Consultative Committee are also observers.

     

  • Lafarge Africa’s N89.2b rights issue closes

    Acceptance list for the N89.2 billion rights issue by Lafarge Africa Plc closes today. Acceptance list, which had opened on  December 17, 2018, was earlier scheduled to close on January 26, 2019, but was extended till today (Monday January 28, 2019).

    Lafarge Africa is offering 7.43 billion ordinary shares of 50 kobo each at N12 per share. The rights have been pre-allotted on the basis of six new ordinary shares for every seven ordinary shares held as at the close of business on December 4, 2018.

    The latest capital raising is Lafarge Africa’s second issue in 14 months. Lafarge Africa had sold its November 2017’s rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share. The new rights issue is also structured like the November 2017 rights issue, including a convertible deal, which allows the majority core investor, LafargeHolcim, to convert its debts to equities.

    Lafarge Africa Plc Chairman, Mr Mobolaji Balogun, has said the additional capital to be raised will further help to deleverage the company’s balance sheet and provide headroom for expansion of its business.

    He said the company foresees a stable pricing environment and favourable economic conditions in its Nigeria market while its South Africa’s operations are undergoing a turnaround plan.

    Lafarge Africa Plc Chief Executive Officer, Mr. Michel Puchercos said the company’s refinancing plan is aimed at preparing for future development in Nigeria by improving the company’s leverage as well as strengthening its profitability.

  • Stock Exchange delists Great Nigeria Insurance

    The Nigerian Stock Exchange (NSE) at the weekend delisted Great Nigeria Insurance (GNI) Plc share capital, ending more than 13 years of public quotation and listing on the main board of the equities market.

    The delisting was sequel to the request for voluntary delisting by the board of GNI, which opted to revert to a private unquoted company. GNI was listed on the NSE in October 2005.

    The NSE had  approved application for voluntary delisting by GNI, after the insurance company insisted on delisting its shares from the Exchange. GNI had been struggling to meet the stringent corporate governance practices at the stock market. The insurance company subsequently sought  approval to delist its shares.

    As part of the delisting process, Insurance Resourcery and Consultancy Services Limited (IRCSL), which owns majority equity stake in the company, had offered to pay cash consideration of 50 kobo per share for every share surrendered by minority shareholders. The exit price of 50 kobo was based on the highest price of 50, which GNI had traded in the last six months.

    The board of the company, however, assured that shareholders that intend to continue to be a member of an unlisted GNI shall be free to remain and they have no obligation to receive the exit consideration.

    In an explanatory statement on the proposed delisting, the board of the company noted that the voluntary delisting would shield it from any enforcement action that may arise as a result of the outstanding free float deficiency at the NSE.

    The board also noted that over the last five years, there has been little or no trading activity on the shares held by the minority shareholders, pointing out that shareholders were not benefiting from the continued listing as they were not getting any exit opportunity and their investments had been locked up and they found it difficult to dispose of their shareholding.

    The board added that the company has neither benefitted from the continuing listing as its shares continue to trade at a significant discount to the intrinsic value.

    It also said the delisting will afford the company opportunity to further an imminent corporate restructuring exercise to take advantage of emerging opportunities, noting that the company may consider  re-listing on the Exchange in the future if the market conditions are favourable.

    According to the company, the voluntary delisting would not occasion loss of business opportunities as there are similar unlisted insurance companies that are commanding significant share of the insurance market.

  • Unity Bank’s directors meet on recapitalisation

    Directors of Unity Bank Plc will next week meet to review the bank’s ongoing recapitalisation plan and performance in the immediate past business year.

    Unity Bank Plc Company Secretary, Mohammed Shehu, said the bank‘s board will meet to consider the bank’s financial statement and accounts for the year ended December 31, 2018.

    Another major item on the agenda of the crucial board meeting is the ongoing capital raising efforts of the bank.

    Unity Bank has been discussing with new major equity investors that are expected to inject new funds and expertise into the commercial bank as it seeks to beef up its capital base.

    The bank’s board of directors confirmed that discussions have reached advanced stage in the planned recapitalisation by prospective investors and the bank might soon announce the transactions.

    The ongoing discussions with prospective investors, the bank said, had led to extensive review of the bank’s operations by the Central Bank of Nigeria (CBN).

    “We are pleased to inform our stakeholders that discussions with our prospective investors are progressing according to plan and will be concluded shortly, following which necessary regulatory approvals would be sought and announcement made,” the bank said in a regulatory filing signed by Shehu.

    Key extracts of the third quarter report of Unity Bank for the period ended September 30, 2018 showed that gross earnings dropped from N65.03 billion in 2017 to N26.125 billion in 2018. Interest income had declined from N63.15 billion to N20.409 billion. Operating income stood at N15.54 billion in 2018 as against N40.39 billion in 2017. Profit before tax slumped to N643.78 million, from N2.72 billion. Profit after tax dwindled to N585.84 million in third quarter 2018 as against N2.448 billion in third quarter 2017. With these, earnings per share dropped from 20.94 kobo to 5.01 kobo.

  • LSEG lists Mojec among Africa’s high-growth companies

    Mojec International Holdings has been listed as one of the ‘Companies to Inspire Africa’ in 2019 by the London Stock Exchange Group (LSEG).

    The ‘Companies To Inspire Africa’, CTIA, is an annual report compiled by the LSEG to identify most inspirational, dynamic, privately owned high-growth companies investing in the real sector of the African continent. Companies that are making significant socio-economic impact by creating substantial numbers of jobs and have the potential to be publicly listed within the next few years.

    The growth rates and sector diversity of these firms featured in the report highlights their potential to transform the African and wider economy. Over 5,000 companies were recommended and shortlisted across the continent, only five per cent of them from 32 countries made the list. The companies that made the list boast of an average compound annual growth rate of 46 per cent, up from 16 per cent last year. On average, each firm employs over 350 people, with an average compound annual employee growth rate of 25 per cent.

    Speaking at the presentation of the second edition of the report recently in London, United Kingdom (UK), LSEG CEO, David Schwimmer said LSEG’s ‘Companies To Inspire Africa’ showcases fast-growing firms that are crucial to the future of the African economy, capable of driving transformative economic growth in their home countries, and have the potential to reach over a billion people.

    Mojec Meter Manufacturing Company is the largest meter manufacturer in West and East Africa with a footprint of over 80 per cent market penetration rate in the Nigerian Electricity market with ambitious future plans to triple its production capacity in 2019 and further entrench its leadership positioning in the market place.

    Schwimmer noted the increasing influence of women in leadership positions in the fast growing companies that would play a pivotal role in shaping the future of African business. The CEO commended Mojec International for being one of these high growth companies to make world impact in 2019.

    Speaking after receiving the award, Chief Executive Officer, Mojec International, Ms. Chantelle Abdul, described the listing of Mojec international in the report as a significant milestone in the history of the company and a worthy recognition of its contribution to leapfrog Nigeria and  Africa’s economy.

    Abdul noted that the recognition is a symbolic one which would further propel Mojec International Holdings in its drive to place Nigeria and Africa on the global map.

    The companies listed in last year’s ‘Companies To Inspire Africa’ report have already realised significant progress and achievements in the last 12 months in a variety of ways, including pursuing IPOs and issuing bonds to grow, while some have also undertaken cross-border expansion, both within the African continent and globally.

  • May & Baker Nigeria raises N1.86b new equity funds

    May & Baker Nigeria Plc has successfully raised N1.86 billion in new equity funds from its shareholders, providing the healthcare company with new capital buffer to reduce indebtedness and support its growth plan.

    May & Baker Nigeria yesterday concluded its rights issue with the listing of the 745.23 million ordinary shares of 50 kobo each at N2.50 per share. With the listing of the additional 745.23 million ordinary shares of 50 kobo each, the total issued and fully paid up shares of May & Baker Nigeria increased from 980 million ordinary shares of 50 kobo each to 1.725 billion ordinary shares of 50- kobo each.

    Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, has said the company would pay dividend on the new ordinary shares issued through the rights issue, despite the fact that the net proceeds of the rights issue were received towards the end of the 2018 business year.

    According to him, while the impact of the recapitalisation will become visible in the 2019 business year, the company will pay dividend for the 2018 business year on the old and newly issued shares.

    He said the net proceeds of the rights issue would be invested in some key projects including N400 million to finance part of the company’s equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production and over N500 million on capacity expansion for one of its cash cow products, which it is building a dedicated plant. The company would also use N400 million to offset part of its current loan portfolio while N500 million will be invested in marketing and brand building.

    Citing the growth outlook of the healthcare company, Okafor said recent strategic investments and new growth initiatives being undertaken by the company would boost returns in the years ahead.

    “We derive our confidence mainly from the pedigree, performance track records and strategic plans of the company which we believe should appeal to all discerning investors. The new funds will be used to strengthen their investments and make the company more profitable,” Okafor said.

    He outlined that company has been making strategic investments including construction of Anti Retroviral drugs in Nigeria in 2006 and a World Health Organisation (WHO) standard pharmaceutical manufacturing plant known as the Pharmacentre in 2011.

    According to him, the Pharmacentre, which was among the few certified by the WHO for current Good Manufacturing Practice in 2014, has capacity to produce 6.0 billion tablets and 49 million bottles of 60ml liquid medicines annually.

    “We are also investing in key areas of healthcare where we have both comparative and competitive advantage, top among which include the joint venture with the federal government on local vaccine production. To us that investment is a goldmine because of the huge opportunities that exist in the Nigerian vaccine market,” Okafor said.

    May & Baker Nigeria recently signed a memorandum of understanding with the Federal Ministries of Health and Science and Technology to commercialize some locally discovered medicaments.

     

    In the first instance, it shall commence the commercial production of an anti sickle cell drug discovered by the National Institute for Pharmaceutical Research and Development. This drug holds a large potential because of the enormity of the sickle cell challenge in the country. Similarly, it is working with the Federal Institute of Industrial Research in Oshodi to develop and commercialize a nutraceutical product.

    Okafor said while the company is making local inroads, it has also signed marketing agreements with foreign companies to market herb-based medicines key to African disease profile, with some of these products already doing well in the market.

    “Our strategic goal is to become a preferred brand in Nigeria with the clear leadership of the market segments we deal in. We also want to become a regional healthcare powerhouse with strong and wide footprints in the sub Saharan market,” Okafor said.

    May & Baker Nigeria had floated a rights issue of 980 million ordinary shares of 50 kobo each at N2.50 per share. The rights issue was provisionally pre-allotted on the basis of one new ordinary share for every one ordinary share held.

     

  • Vitafoam Nigeria to drive growth with new products

    Vitafoam Nigeria Plc has assured of sustained improvement in earnings in the years ahead as the company launched new products to boost its ability to meet the needs of diverse customers.

    Speaking at the launch of eight new products in Ikeja, Lagos, Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi, said the company was poised to sustain its impressive growth in the years ahead.

    According to him, the new products will help to expand the revenue base of the company and deliver better values for stakeholders.

    He said the first quarter results of the company, which will be released shortly, have shown that its growth trajectory, which recovered from a net loss of N127.69 million in 2017 to a net profit of N601.92 million in 2018, is sustainable.

    On the basis of the 2018 results, the board of Vitafoam Nigeria had recommended cash dividend of N260.51 million, representing a dividend per share of 25 kobo, in addition to bonus share of one new ordinary share of 50 kobo each for every five ordinary shares of 50 kobo each.

    Key extracts of the audited report and accounts for the year ended September 30, 2018 showed that Vitafoam Nigeria recorded impressive growths in sales and profitability. Group turnover rose from N17.69 billion in 2017 to N19.53 billion in 2018. Profit before tax jumped from N18.13 million in 2017 to N793.85 million in 2018. After taxes, the company reversed net loss of N127.69 million recorded in 2017 with a net profit of N601.92 million in 2018. Earnings per share thus improved from a loss of 15 kobo in 2017 to a gain of 57 kobo in 2018.

    Presenting the new products, Adeniyi said that the new products were borne out of the company’s culture of innovativeness adding that product differentiation has become one of the hallmarks of Vitafoam Group which makes it difficult for anyone to clone the company’s unique products.

    The new products included Vita Pearl, a pillow that regulates temperature and draws moisture from body, assorted customised beds, sofas, threefold mat for leisure, reading chairs, three specialized mattresses including orthopedic and classic and various polyurethane sandwich panel steels.

    “For us in Vitafoam, we are very concerned about innovation. Our ability to research, develop and then end up in innovating different products that meet the customers’ needs gives us great satisfaction. In the history of Vitafoam, this launch is one event long overdue because we had sneaked into the market a number of products which were not particularly launched this way. We delight ourselves to be able to make history once again. This is another step in the right direction to sustain our corporate culture of shareholder value,” Adeniyi said.

    He pointed out that the new products would help to sustain the company’s reputation as a customer-centric organisation and a delightful investment for shareholders, noting that Vitafoam Nigeria has had unbroken dividend payment records since its quotation.

    “The Nigerian market is waiting for our products. As soon as we have introduced a product into the market, we are also working on some other ones. It is difficult to fake our products because product differentiation is our strategy,” Adeniyi said.

    Commercial Director, Vitafoam Nigeria Plc, Mr Sola Owoade added that the company’s subsidiaries have carved niches for themselves as they specialize in manufacturing of specific products.

    He noted that Vitafoam Group leverages on research and development in order to keep abreast of changing dynamics of customers’ demand.

    He listed the subsidiaries to include Vitapur Nigeria Limited, Vitablom Nigeria Limited, Vitavisco Nigeria, Vitagreen, Vitapart, Vono  Products and Vitafoam Sierra Leone Vitafoam Ghana.

    One of the major distributors of Vitafoam Nigeria’s products, Mr Toye Adegboye said the new products would further diversify Vitafoam’s products and increase its market share.

    “Some of the products are pocket -friendly and without compromising standard. As a good corporate citizen, all the company’s products are of high quality and the target of Vitafoam as a group is to produce affordable, high quality products which is making business to thrive for us as their partners,” Adegboye, Operator of Vitafoam’s Comfort Center, Ilupeju, said.

    Chairman, Vitafoam Nigeria Plc, Dr Bamidele Makanjuola commended the management of the company for keeping faith with the ideals of innovation, training and spirit of teamwork.

    He expressed optimism that that the company’s products could compete favourably with any global products.