The Nation Newspaper

Category: Equities

  • Equities halt 7-day rally with N101b loss

    After seven consecutive days on the upswing, Nigerian equities reopened on Monday with wide profit-taking selloffs as investors sought to lock in gains from the recent rally. With more sell orders than buys, the equities market closed negative with average decline of 0.88 per cent, equivalent to net capital depreciation of N101 billion.

    Aggregate market value of all quoted companies at the Nigerian Stock Exchange (NSE) declined from its opening value of N11.562 trillion to close yesterday at N11.461 trillion. The benchmark value index, the All Share Index (ASI), also dropped from its opening index of 31,005.17 points to close lower at 30,732.72 points.

    The decline further depressed the average year-to-date return so far in 2019 to -2.22 per cent. Nigerian equities had recorded a full-year depreciation of 17.81 per cent in 2017.

    With 18 losers to 13 gainers, most sectoral indices also closed in the red. The NSE Oil and Gas Index declined by 4.55 per cent. The NSE Banking Index dipped by 0.14 per cent while the NSE Consumer Goods Index closed flat. On the upside, the NSE Insurance Index appreciated by 1.51 per cent while the NSE Industrial Goods Index recorded a gain of 0.97 per cent.

    The momentum of activities also increased considerably, driven by the sell pressure. Turnover volume and value increased by 66 per cent and 47 per cent respectively as investors traded 499.2 million shares valued at N5.53 billion in 3,874 deals. Banking stocks dominated the top activities chart. Diamond Bank was the most active stock with 239.36 million shares valued at N497.89 million. Guaranty Trust Bank followed with 119.35 million shares worth N3.80 billion while Zenith Bank placed third with 26.11 million shares worth N563.2 million.

    On price movements, Seplat Petroleum Development Company led the decliners with a loss of N46 to close at N530. 11, formerly Mobil Oil Nigeria, followed with a drop of N8 to close at N180. Dangote Cement declined by N4.90 to close at N190. Lafarge Africa dropped by 40 kobo to close at N12.40. E-Tranzact lost 31 kobo to close at N3.25 while Custodian Investment dipped by 30 kobo to close at N6.15 per share.

    On the positive side, Cement Company of Northern Nigeria led the advancers with a gain of N1.80 to close at N26.90. NEM Insurance followed with a gain of 12 kobo to close at N2.60. FCMB Group rose by 7.0 kobo to close at N1.83. Linkage Assurance and United Bank for Africa added 5.0 kobo each to close at 61 kobo and N7.35 respectively while Sterling Bank inched up by 4.0 kobo to close at N2.05 per share.

    “We expect (Monday) today’s performance to persist into tomorrow’s trading session, as we maintain our near-term bearish outlook for the domestic equities market,” analysts at Afrinvest Securities stated.

    Analysts at Cordros Capital also remained negative on the outlook for the equities market in the short to medium term, citing political concerns ahead of the 2019 elections and the absence of a positive market trigger. Most analysts however agreed on a long-term positive outlook for Nigerian equities.

  • Access Bank cancels meeting on new capital raising

    The board of directors of Access Bank Plc yesterday cancelled an extraordinary general meeting of shareholders of the bank called to seek shareholders’ consideration for new capital raising.

    The bank did not provide reasons for the cancellation of the previously scheduled February 1, 2019 meeting. Market sources said the cancellation might not be unconnected with the need for clarity and streamlining of key considerations in the ongoing business combination between Access Bank and Diamond Bank Plc.

    “We regret any inconvenience that this cancellation may cause our shareholders,” Access Bank stated in a terse notice of cancellation.

    Directors of Access Bank had late December 2018 called for an extraordinary general meeting of shareholders to approve new equity issue. Access Bank planned to raise N75 billion from existing shareholders through a rights issue.

    At the meeting, shareholders of Access Bank were expected to consider increase in the authorised share capital of the bank from N20 billion to N35 billion, thus increasing the shares from 38.0 billion ordinary shares of 50 Kobo each and 2.0 billion preference shares of 50 Kobo each to 68 billion ordinary shares of 50 kobo each and 2.0 billion preference shares of 50 kobo each through the creation of 30 billion ordinary shares of 50 kobo each.

    The cancelled meeting was also expected to authorise the directors of Access Bank to raise additional equity capital of up to a maximum of N75 billion by way of a rights issue in the ratio, on such terms and conditions and on such dates as may be determined by the board.

    Under the proposals for the meeting, if the rights issue is undertaken prior to the implementation date of the merger between Access Bank and Diamond Bank, the rights issue will also include a provision that allows Access Bank to issue shares to shareholders of Diamond Bank, under the same terms.

     

  • Incomplete share reconciliation delays trading on C & I Leasing

    C & I Leasing Plc has requested for extension of the full suspension of trading on its shares at the Nigerian Stock Exchange (NSE), after the leasing company failed to complete its ongoing share reconstruction within earlier stipulated period.

    The C & I Leasing at the weekend indicated that the suspension on its shares would remain for unspecified number of days to enable it complete the ongoing shareholding reconciliation, a major step under the ongoing share reconstruction exercise.

    According to the company, it had witnessed a delay in the reconciliation of its shareholding. A complete and fully reconciled shareholders’ register is a necessity for any changes in the shareholding structure.

    “We are now close to completing the exercise and the suspension will be lifted in the coming days,” the company said at the weekend.

    The NSE had placed full suspension on trading in the shares of C & I Leasing in order to facilitate the ongoing share reconstruction of the leasing company. The full suspension was expected to remain until December 27, 2018 during which there would be no trading and price movement on the shares of C & I Leasing.

    The full suspension was to enable the company’s registrars to update the register of shareholders for the planned share consolidation.

    C & I Leasing plans to reduce its paid up share capital by 80 per cent in a share capital reconstruction that will see cancellation of 1.506 billion ordinary shares.

  • Nigeria Mortgage Refinance Company lists N11b bond

    The Nigeria Mortgage Refinance Company (NMRC) has listed its N11 billion 13.80 per cent Series 2 Fixed Rate Bonds on the Nigerian Stock Exchange (NSE), paving the way for bondholders to trade on their investments.

    The N11 billion bond was part of NMRC’s N440 billion Medium Term Note Programme. NMRC had launched a high-stake capital raising plan to support its mandate.

    The NMRC is a private sector-driven mortgage refinancing company with the purpose of promoting home ownership for Nigerians while deepening the primary and secondary mortgage markets. Most of its shareholders are corporate institutions.

    NMRC was incorporated on June 24, 2013 and obtained its final operating license from the Central Bank of Nigeria on February 18, 2015. In July 2015, NMRC successfully issued a 15-year N8 billion Series 1 Bond under its then N140 billion medium term note programme, backed by an unconditional Federal Government of Nigeria guarantee.

    NMRC is listed on the NASD OTC Securities Exchange, the over-the-counter platform for trading in shares that are not listed on the Nigerian Stock Exchange (NSE).

    Head, Shared Services Division, Nigerian Stock Exchange (NSE), Mr. Bola Adeeko commended the NMRC for listing the bond on the NSE, assuring that the Exchange would support the company in the realisation of its mandate.

  • Equities sustain rally with N46b gain

    Nigerian equities continued on the upswing yesterday as investors sustained bargain-hunting for undervalued stocks. With nearly two advancers to every decliner, the equities market closed with average gain of 0.40 per cent, equivalent to net capital gain of N46 billion.

    The All Share Index (ASI)- the benchmark value index for the equities market, trended upward to 30,583.21 points from its opening index of 30,460.68 points. Aggregate market value of all quoted equities rose from N11.359 trillion to close at N11.405 trillion. The sustained rally moderated the negative average year-to-date return to -2.70 per cent.

    All sectoral indices also closed positive with the exception of the NSE Banking Index, which slipped by 0.3 per cent. The NSE Industrial Goods Index appreciated by 2.0 per cent. The NSE Oil & Gas Index rose by 0.5 per cent. The NSE Consumer Goods Index improved by 0.3 per cent whole the NSE Insurance Index inched up by 0.1 per cent.

    There were 23 gainers against 15 losers. 11, formerly Mobil Oil Nigeria, led the gainers with a gain of N4 to close at N188. Dangote Cement followed with a gain of N2 to close at N190. Cement Company of Northern Nigeria rose by N1 to close at N23. PZ Cussons Nigeria added 85 kobo to close at N11.85. Forte Oil and Nigerian Breweries chalked up 75 kobo each to close at N30.15 and N78.75 while Ecobank Transnational Incorporated rose by 30 kobo to close at N13.80 per share.

    Total turnover stood at 231.2 million shares valued at N11.4 billion. Banking stocks dominated the activities chart. Diamond Bank was the most active stock with 59.56 million shares worth N125.13 million. Guaranty Trust Bank followed with 45.59 million shares valued at N1.48 billion while Zenith Bank placed third with 19.83 million shares worth N427.57 million.

    On the downside, NASCON Allied Industries led the losers with a drop of 60 kobo to close at N18. Stanbic IBTC Holdings declined by 50 kobo to close at N47. E-Tranzact International dropped by 39 kobo to close at N3.56. Zenith Bank dipped by 25 kobo to close at N21.70 while Guaranty Trust Bank lost 20 kobo to close at N32.40 per share.

    “We maintain a cautiously optimistic outlook for the market in the near term and recommend that investors position largely in value stocks,” Afrinvest Securities stated.

    Analysts at Cordros Capital maintained a negative outlook for the equities market in the short to medium term, citing political concerns ahead of the 2019 elections and the absence of a positive market trigger.

    “However, positive macroeconomic fundamentals remain supportive of recovery in the long term,” Cordros Capital stated.

     

  • New core investor acquires largest stake in NEM

    Advanced Finance and Investment Group (AFIG) Funds has acquired 29.29 per cent largest equity stake in NEM Insurance Plc. AFIG Funds, an African private equity fund manager, acquired the shares from existing shareholders of the insurance company.

    Group Managing Director, NEM Insurance Plc, Mr Tope Smart, said the AFIG Funds investment was a product of several years of constructive engagement and strategic internal decision to partner with a long-term institutional partner.

    He said the partnership with AFIG Funds will accelerate the realisation of the insurance company’s growth ambitions within Nigeria and across the continent.

    “We are confident this will be a fruitful and mutually rewarding partnership,” Smart said.

    Director of Investments, AFIG Funds, Mr Kelechi Okoro said the new core investor has confidence in the management of NEM, citing its growth trajectory over the year.

  • Sovereign Trust Insurance to raise N2.09b from shareholders

    Sovereign Trust Insurance Plc has launched a process to raise N2.09 billion from existing shareholders as the insurance company seeks to beef up its capital base to position it in better stead for large-ticket transactions.

    A regulatory filing obtained yesterday by The Nation indicated that Sovereign Trust plans to raise N2.085 billion in new equity funds through a rights issue. The Nigerian Stock Exchange (NSE) confirmed that Sovereign Trust has submitted application, seeking NSE’s approval for the rights issue.

    Under the rights issue, which is expected this quarter, Sovereign Trust will issue 4.17 billion ordinary shares of 50 kobo each at offer price of 50 per share. As rights, the new shares to be issued have been pre-allotted on the basis of one new share for every two ordinary shares held as at the close of business yesterday, Tuesday, January 15, 2019.

    Shareholders of Sovereign Trust had recently approved a new capital raising plan for the insurance company, on the heels of the cancelled tier-based minimum solvency capital policy proposed by the National Insurance Commission (NAICOM).

    Shareholders authorised the board of the company to create 5.0 billion new ordinary shares of 50 kobo each to increase its authorised share capital to N10 billion of 20.0 billion ordinary shares of 50 kobo each.  Shareholders also approved the proposal to raise “additional equity capital for the company up to the maximum of the authorised share capital” with additional mandate to the board to absorb excess money in the event of oversubscription of the initial offer.

    Under its capital raising plan, Sovereign Trust could raise funds by issuing new shares to existing shareholders, new general retail investors, existing and new strategic investors or a combination of many means of capital raising.

    While NAICOM has cancelled the new tier-based capitalisation programme, market analysts believed that many insurance companies that had launched emergency capital raising plans may go ahead with their plans as proactive measures. Many analysts expected a considerable consolidation of the Nigerian insurance sector, with capitalisation as a major benchmark.

  • Meristem blazes trails with GIPS compliance

    Meristem Wealth Management has blazed the trails as the first indigenous Nigerian asset manager to claim compliance with the Global Investment Performance Standards (GIPS).

    The GIPS is a set of guidelines created by the Chartered Financial Analysts (CFA) Institute to provide ethical framework for the calculation and presentation of the performance history of investment management firms.

    Managing Director, Meristem Wealth Management Limited, Mr. Sulaiman Adedokun said by becoming the first and only Nigerian asset management firm to claim GIPS compliance, Meristem Wealth Management Limited was keeping to its brand promise to grow wealth for its clients in good time and in a transparent way.

    According to him, Meristem Wealth Management Limited is a high performance-driven and transparent firm and the achievement of the GIPS through its asset management division underscored the organisational values.

    He noted that the GIPS compliance will ensure that the asset management unit’s processes, policies and procedures are committed towards ensuring that performance results, calculations and presentation to clients are done in accordance with the industry’s best practices and standards.

    “Claiming compliance with GIPS is no mean feat but it’s worth achieving for the investment terrain in Nigeria and for the sake of our treasured clients who have given us the privilege to serve them. We constantly seek to be open and transparent in all our dealings with our clients, they have our best assurance as we have successfully walked our talk in becoming the first and only GIPS compliant firm in Nigeria,” Adedokun said.

    He said Meristem decided to comply with GIPS to reinforce its value of professionalism and integrity adding that the compliance makes it performance comparable to how same performance results would have been calculated and presented if the clients were based in Germany, Toronto, Tokyo, North America and other parts of the world.

    He pointed out that GIPS allows for standardization of reporting formats and thus makes real comparative analysis of returns possible among fund managers.

    “Being a firm committed to high standards and with strong passion to serve and deliver values to our clients. We could not afford to not claim compliance and face the riguors of this compliance even though it is voluntary to do so. It is a choice we have made and a choice that makes us the first firm to do so in Nigeria,” Adedokun said.

    He noted that the journey to complying with the GIPS had been an interesting and challenging one which took two years from start to finish and required a lot of dedication, commitment, doggedness and determination from staff and management.

    “It is indeed an achievement which all of us at Meristem Wealth Management Limited and the entire Meristem Group are very proud to attain,” Adedokun said.

  • Equities: NSE predicts volatile H1, stable H2

    The Nigerian equities will experience volatile trading pattern in the first half of this year but will witness considerable recovery in the second half, the Nigerian Stock Exchange (NSE) has said.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, at a briefing yesterday on the review of 2018 and preview of 2019 at the Exchange in Lagos, said the market sentiments in the first half of the year would be driven by uncertainty in crude oil prices and the 2019 general elections.

    According to him, the Exchange anticipates volatility in the equities markets in the first half of 2019, but there would be enhanced stability after the elections.

    “We believe swift approval and implementation of the 2019 budget will have a positive impact on companies’ earnings as well as consumer spending. Therefore, we expect an uptick in market activity during the second half of 2019,” Onyema said.

    Nigerian equities opened yesterday with average year-to-date decline of 5.09 per cent, equivalent to net capital depreciation of N597 billion so far this year. The equities market had closed 2018 with average full-year decline of 17.81 per cent, contrary to most pundits’ projections and a slowdown on the record-setting gain of 42.3 per cent recorded in 2017.

    Onyema attributed the negative performance of the market in 2018 to a combination of political risks, oil price volatility and rising global yields pointing out that there was more than 50 per cent increase in foreign outflows due to a shift to higher yielding assets with lower risks in developed countries and political risks in Nigeria.

    He noted that the performance of the Nigerian market mirrored the general decline in global equities market as global stock market correction, geopolitical tensions and apprehensions and stronger United States’ Dollar drove the global capital markets from their positive start to negative performance by the year end. United States’ benchmark index, Dow Jones Industrial Average (DJIA) closed 2018 down by 7.0 per cent while the MSCI EM and MSCI FM, which track emerging and frontier markets, declined by 17 per cent.

    He pointed out that Nigerian economy holds greater prospects in the current business year with the International Monetary Fund (IMF) projecting Nigerian economic growth at 2.3 per cent, the highest real Gross Domestic Products (GDP) growth estimate over the last three years.

    He noted that Nigerian economic recovery, which recovered to 1.81 per cent by third quarter 2018, was bolstered by increased stability in the macro environment as the Central Bank of Nigeria (CBN) continued to pursue a relatively tight policy stance in an effort to curtail inflation while holding the benchmark rate steady at 14.0 per cent; and effectively maintained liquidity and stability in the foreign exchange market during the year.

    According to him, fuelled by the economic recovery, year on year growth in capital importation to Nigeria reached 114.33 per cent as at September 2018, compared with the corresponding period of the previous year.

    He outlined that the Exchange has continued to implement key strategic initiatives in furtherance of its 2018-2021 strategic plan aimed at ensuring that the NSE remains the hub for capital formation and the gateway to the African financial markets.

    Onyema said the Exchange technology infrastructure has been enhanced to support trading of derivatives while the rulebook has been created and is currently going through the approval process alongside on-boarding of dealing members, preparatory to launching of the new asset class.

    “To enhance our listing prospects, we have strengthened our government engagement efforts on privatization and listing of state owned enterprises, and we expect to take advantage of opportunities within this space during the year,” Onyema said.

    He added that the Exchange also intends to maintain its collaborative efforts with public and private sector stakeholders to advocate for market friendly policies, and cater to infrastructure financing needs as well as other capital requirements necessary for sustainable economic growth.

    He said the NSE will further work with the private sector to catalyse the listing of more companies while creating added values that will help to retain listed companies and make compliance with market regulations easier.

    Reviewing the performance of the market in 2018, Mr. Onyema noted that “NSE equity market started the year on a high, with the All Share Index (ASI) reaching a ten-year peak of 45,092.83 in January. This was largely driven by the positive performance of the ASI in 2017 which emerged the best in Africa.

    Market review showed that listing activity remained relatively low during the year with one listing and four delistings. Equity turnover remained relatively stable, marginally declining by 5.45 per cent to N1.20 trillion. Turnover velocity inched up 0.91 percentage points to 10.25 per cent, and likewise, the size of volumes traded in the period increased by 0.96 per cent to 101.43 billion with the financial services sector being responsible for the highest traded volume and value. In 2018, foreign portfolio investments outpaced domestic participation by 1.73 per cent, accounting for 50.87 per cent of total transactions, while domestic transactions accounted for 49.13 per cent. Within domestic transactions, institutional order flow was 56 per cent while retail order flow was 44 per cent.

  • Incomplete share reconciliation delays trading on C & I Leasing

    C & I Leasing Plc has requested for extension of the full suspension of trading on its shares at the Nigerian Stock Exchange (NSE), after the leasing company failed to complete its ongoing share reconstruction within earlier stipulated period.

    The C & I Leasing at the weekend indicated that the suspension on its shares would remain for unspecified number of days to enable it complete the ongoing shareholding reconciliation, a major step under the ongoing share reconstruction exercise.

    According to the company, it had witnessed a delay in the reconciliation of its shareholding. A complete and fully reconciled shareholders’ register is a necessity for any changes in the shareholding structure.

    “We are now close to completing the exercise and the suspension will be lifted in the coming days,” the company said at the weekend.

    The NSE had placed full suspension on trading in the shares of C & I Leasing in order to facilitate the ongoing share reconstruction of the leasing company. The full suspension was expected to remain until December 27, 2018 during which there would be no trading and price movement on the shares of C & I Leasing.

    The full suspension was to enable the company’s registrars to update the register of shareholders for the planned share consolidation.

    C & I Leasing plans to reduce its paid up share capital by 80 per cent in a share capital reconstruction that will see cancellation of 1.506 billion ordinary shares.