The Nation Newspaper

Category: Equities

  • Why Nigeria should promote domestic savings, by CFA chief

    If Nigeria is to develop as a society that delivers economic growth and happiness to its people, it must  channel domestic savings and capital inflows into critical areas in need of development, the President and Chief Executive Officer,  Chartered Financial Analyst (CFA) Institute, Paul Smith, has said.

    He spoke at the second edition of the Nigeria Investment Conference, organised by the CFA Nigeria chapter.

    Smith urged professionals to rise to the challenge and do more as financial services professionals to sustain market integrity through services that are more transparent,  client-focused.

    He said they should promote business models that are favorable to  investors.

    “Professionalism really is about purpose and I think the problem in the investment management industry is the way they fail to articulate that purpose with sufficient force into our community. We need to be a lot louder and a lot prouder about the point of investment banking.

    “ We need to be able to convince the communities  we serve that really without us, they are going to be poorer. It is through professionalism and sense of purpose that we can really make sure that we have sustainable industry. The way professionals behave is really founded on trust,” Smith said while addressing the theme: “Let’s Measure Up”.

    Attesting his confidence in the Nigerian market, the CFA president said  Nigeria’s  demography projects a future where younger population will seek the type of education offered by the CFA, a professional credential

    programme, offered internationally by the American-based CFA Institute to investment and financial professionals.

    The president, CFA Society Nigeria, Banji Fehintola at his opening remark said addressing investment concerns was relevant at a time when the investment industry is porous,as he urged professionals to uphold the highest standard of ethics of professionalism.

    As the conference emerges as one of Nigeria’s foremost investment forum, Fehintola hopes it’s an opportunity to bring the industry together and  provide a platform for dialogue and advocacy.

    He said: “The reason we are in advocacy is for us to be able to influence and improve our markets. We are proud to be a top leader in our market and everything we do.”

  • How Fintech promotes economic development, by SystemSpecs

    Nigeria has been described as a leading country in the Financial Technology (Fintech) space, which is key in promoting economic development.

    The Executive Director, Systemspecs Limited,  Aderemi Atanda, stated this at the Centre for Financial Journalism (CFJ)-Association of Corporate Affairs of Managers of Banks’ (ACAMB) Business Forum held in Lagos.

    According to him, many things have happened in the Fintech landscape in Nigeria that have not happened elsewhere in the world.

    However, he lamented that the success stories in this area has not been adequately captured and celebrated. This, he said, is because “we are not schooled in value narratives”.

    He advised that we should “understand the paradigm that shape narratives”. This way, we can capture the successes achieved so far in the Fintech landscape.

    He said despite the successes achieved so far, even well acknowledged by advanced countries, there is still a lot of room for improvement.

    Atanda said that Fintech is part of the digital age which evolved partly as a result of revolution in mobile telecommunications. Dwelling on the theme of the Business Forum Fintech and Financial Services Delivery in the Digital Age, he said that Fintech which is driven by data, is transforming the ways financial and business transactions are now carried out.

    He noted that pay-tech is just one aspect of Fintech, and virtually the only aspect that we are still dealing with now as there are many other aspects that are yet to be integrated into the entire architecture of Fintech. According to him, it is not only the banking sector that requires the services of Fintech providers. He said that insurance, pension schemes, medical services, oil and gas and even agriculture require Fintech to drive them. “There is huge potential yet untapped that can help to move the entire system forward to new stage of development”, he said.

    He optimistically said that indeed Nigeria can really lead the entire world by being at the forefront of Fintech, providing veritable model for others to follow.

  • FirstBank, FBNQuest mark World Savings Day

    First Bank of Nigeria Limited and FBNQuest Merchant Bank, both subsidiaries of FBNHoldings, have joined the rest of the world to mark this year’s World Savings Day.

    With: “What do you wish for?”as its theme, the six geo-political zones of the country were covered with visits to 30 secondary schools and more than 1000 students imparted with knowledge of financial literacy nuggets.

    The World Savings Day is in line with FirstBank’s FutureFirst programme, specially designed to equip students with the knowledge of money management, early entrepreneurship skills, and financial independence whilst stimulating in them savings culture at an early age. Commemorating the World Savings Day is consistent with the Bank’s financial literacy initiatives.

    Also, volunteers from FBNQuest Merchant Bank went further to cover and highlight how students can take advantage of investment opportunities in fixed deposits and Mutual Funds from a young age, cultivating the habit of putting money away to meet medium to long term financial goals.

    According to the official website of World Savings Day, “World Savings Day or World Thrift Day was established to inform people all around the world about the idea of saving their money in a bank rather than keeping it under their mattress” which is akin to FirstBank’s commitment to encouraging its key stakeholders, customers, to imbibe savings culture whilst having their children also carried along on the essence of savings through its youth focused products, KidsFirsts (0 – 12 years) and MeFirst (13 – 17 years) carefully designed to meet the financial targets of the given demographics.

    These accounts ensure the accounts holders acquire the rudiments of banking and financial literacy as they grow into adulthood and they both come with exciting packages to support the financial journey of the children, enabling them learn money management from an early age.

    Speaking on the World Savings Day, Folake Ani-Mumuney, Group Head, Marketing & Corporate Communications, First Bank of Nigeria Limited said ‘’FirstBank’s participation in the 2018 World Savings Day is one of our many interventions in Financial Literacy. As the Bank continues to entrench the savings culture across all its markets, it has over several years engaged in Savings Promo to encourage and reward savings whilst committing human and financial resources to the development of financial literacy among secondary school students under the auspices of the FirstBank Futurefirst programme.

    Sharing similar views, Kayode Akinkugbe, Managing Director/CEO FBNQuest Merchant Bank said “The CBN has created an essential platform which affords us the opportunity to enlighten the younger generation on finance-related matters, and contribute to financial literacy across the nation. It’s an initiative we are very proud to be a part of, as we believe such is crucial for the sustainable development of our nation.” “We believe that opportunities to transfer a wealth of knowledge, are crucial to the development of our economy and the sustainability of society. We therefore, take very seriously, the responsibility of equipping the next generation so they can take our nation to its next level of success,” he added.

  • Baru chairs Red Star Express

    Former Deputy Governor of Central Bank of Nigeria (CBN), Alhaji Suleiman Baru, has been appointed as the chairman of the board of directors of Red Star Express Plc. Baru succeeded Dr Mohammed Koguna, who retired after leading the board for 26 years.

    At a brief handover ceremony, Baru reiterated his commitment to take the company forward.

    He commended the Koguna, describing him as an elder statesman whose unique ways of doing things had impacted on the fortunes of companies he chaired, including Red Star Express.

    Group Managing Director, Red Star Express Plc, Mr Sola Obabori, said the company believed in the ability of the new chairman to further improve its performance given Baru’s wealth of experience.

    He noted that under Koguna’s leadership, the company grew from the scratch and has a turnover that is more than N8 billion now.

    “We have continually had an increase profit recorded each year preceding the penultimate. We hope to have better times ahead while giving the best to our customers,” Obabori.

     

     

     

  • Fictitious investors now have till December 2019 to claim shares

    The Capital Market Committee (CMC)-a consultative assembly of stakeholders in the Nigerian capital market, yesterday extended the deadline for investors that used fictitious names and other surreptitious means to buy shares to claim their shares from December 31, 2018 to December 31, 2019.

    The 12-month extension of the deadline was one of the highpoints of the third quarterly meeting of the CMC in Lagos.

    Acting Director General, Securities and Exchange Commission (SEC), Ms Mary Uduk, at a media interactive session that rounded off the CMC meeting yesterday, said stakeholders agreed that the multiple subscriptions and forebearance for shareholders will now run till December 31, 2019.

    This is the fourth time the CMC will be extending the deadline as it had earlier granted a six-month extension till September 30, 2018 and then another three-month extension till December 31, 2018. SEC had issued a deadline of September 1, 2017 for the regularization of the multiple and fictitious accounts and later extended this to March 31, 2018.

    The “Multiple Subscription Initiative” is aimed at regularization of shares purchased with multiple identities, by investors-otherwise known as ghost shareholders that conjured up many identities to secure large allocation of shares, especially during public offerings.

    Claimants are expected to provide verifiable evidence and identifications to proof ownership of such unclaimed dividends and shares, after which such unclaimed dividends and shares will be forfeited.

    Uduk said the CMC decided to give investors more time to regularise their multiple accounts in order to derive the benefits from their investments.

    “I am delighted to report that on the lingering issue of multiple subscriptions and forbearance for shareholders with multiple accounts, the CMC agreed that the forbearance window should be extended by another year from the December 31, 2018 deadline previously communicated. We expect investors to take advantage of this opportunity to claim their unclaimed dividends and bonuses,” Uduk said.

    She added that the meeting also agreed on a two-pronged approach to address the intractable challenges associated with transmission of shares related to the estate of deceased investors.

    According to her, the first step would involve engagement with and enlightenment of the Probate Registry with a view to providing solutions to the cumbersome process of transmitting shares. Secondly, rules would be developed around the time frame for transmission shares and the fee structure.

    Worried by issues of identity theft in the capital market, the Acting DG said the Commission will work with other major stakeholders in setting up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.

    Similarly, Uduk said as part of efforts to eliminate underhand dealings, the Commission is set to take enforcement actions against any persons engaged in trading in the shares of public unlisted companies outside a recognised securities exchange as provided by the Rules.

    On the need to grow the market for trading in securities on unlisted public companies, she said the Commission is making concerted efforts in collaboration with CAC and other stakeholders to assist public companies that are yet to register their securities to do so without much difficulty.

    According to her, in furtherance of the commitment to develop a vibrant Commodities eco-system, the Commission has commenced the implementation of measures to strengthen regulatory capacity by establishing a Commodities Division.

    In order to boost the e-dividend mandate and Direct Cash Settlement initiatives, Uduk said the Commission gave a commitment to the market that it would engage NIBSS (Nigeria Inter-Bank Settlement System) on behalf of the capital market community to facilitate identity validation and account validation in an effort to enhance market processes.

    She also disclosed that the market provided an update on the electronic distribution of annual accounts by public companies to shareholders and it was reported that the shareholders have largely accepted the new initiative and are willingly providing their email addresses. It was agreed that further sensitization would be carried out by stakeholders to enlighten shareholders on the benefits of the initiative.

  • Sterling Bank launches world first digital commodity market

    Sterling Bank Plc yesterday set Nigeria on the global record with the launch of the world’s first fully digital, end-to-end blockchain-based commodity trading and financing platform.

    Developed in partnership with Binkabi and AFEX Commodities Exchange, the platform is expected to decentralise agricultural commodity trading in Nigeria and all emerging economies, helping to reduce intermediation in trade while distributing profit more widely across the value chain.

    Speaking at a press briefing yesterday in Lagos, Chief Executive Officer, Sterling Bank Plc, Abubakar Suleiman, said Nigeria loses about half of its agricultural products yearly to post harvest processes noting that by introducing and establishing a viable and efficient agricultural commodities exchange platform, the bank is taking the lead to tackle agricultural challenges.

    He pointed out that cereal grains such as rice, maize and soya beans which are among the basic staple foods across Nigeria suffer the most loss among all agricultural commodities but the application of some of the latest scientific storage technologies and provision of liquidity can help to reduce this problem and increase margins for the farmers.

    “In addition, this is a medium to long-term value investment for us at Sterling Bank. The productivity gain from the partnership is that the agric sector will be de-risked and our farmers will become more viable for commercial lending. It will also create a pathway for more banks to lend to farmers without intervention funds making it possible for the government to free up funds allocated to subsidizing agric sector to other industries,” Suleiman said.

    Country Manager, Nigeria, AFEX Commodities, Ayo Balogun, said the commodity exchange was designed with farmers in mind, to help them mitigate risks and ensure payments are made through reliable financial service providers.

    According to him, a typical scenario at the exchange involves the use of warehouses across the country with modern facilities where farmers and traders can take their produce to minimise wastages. Farmers can deposit their agro commodities in certified warehouses and are issued receipts, which are recognised by the bank.

    “We are excited that a reputable commercial bank like Sterling Bank has come on board to enable farmers reduce exploitation by middlemen. As a result of this partnership, farmers can use their receipt as collateral to procure loans or other financial services. They can also sell the receipt on the commodity exchange market without transferring their agro commodities from the warehouse,” Balogun said.

    Founder and Chief Executive Officer, Binkabi, Quan Le, said the platform is expected to ensure that the commodity network becomes fairer and more profitable through collaborative efforts which leverage blockchain technology.

    “We understand that if financial markets can fail ordinary people in the developed world then the agricultural markets are failing ordinary farmers in the developing world. The only difference is that these farmers don’t have a voice – it is a silent crisis. This has motivated us to work with like-minds to develop a marketplace of end-buyers and end-sellers of commodities to help reduce intermediation in trade, distributing profit more widely in the value chain,” Le said.

    He noted that Binkabi offers an end-to-end solution for the entire trading process from sourcing to settlement and creating new opportunities.

    “We are transforming agro commodity supply chain in emerging markets for the benefit of farmers, SMEs and other actors. We understand that while banks want to lend to SMEs, the cost of acquiring and serving this sector as a result of additional human resource required to perform various checks on smaller transactions, insufficient credit information of borrowers, lack of measurable collaterals, and inherent higher credit risk associated with SMEs. Binkabi streamlines commodity trading process and allow banks to lend against warehouse receipts and contracts,” Le said.

     

  • SEC, NERDC step up efforts on capital market studies in schools

    Securities and Exchange Commission (SEC) and the Nigerian Educational Research and Development Council (NERDC) have moved a step further in the efforts to include capital market studies in the curriculum for the basic and senior secondary schools in Nigeria.

    SEC and NERDC on Monday held a planning and writing workshop for the development of capital market studies curriculum (CMSC) for basic and senior secondary schools. The workshop followed the conclusion of the contents selection stage of the curriculum development.

    Speaking at the workshop in Lagos, Acting Director General, Securities and Exchange Commission (SEC), Ms. Mary Uduk restated the commitment of the Commission to further educate and enlighten investors in the Nigerian capital market to enhance their ability to make informed investment decisions.

    She said that the Commission has been in the vanguard of inculcating financial literacy for quite a long time because the SEC has realised that it is very important for students to imbibe the culture and habit of being financial literate and to be familiar with the operations of the capital market.

    According to her, the partnership with NERDC to actualize this ground breaking capital market literacy programme is part of SEC’s effort at vigorously pursuing the implementation of one of the essential initiatives of the 10-year Nigerian Capital Market Master Plan.

    Uduk said the implementation programme kick-started with the signing of a Memorandum of Understanding between the Commission and the NERDC in 2016, to develop a Standalone Capital Market Studies (CMS) curriculum for infusion into Basic and Senior Secondary Schools.

    She said the Commission recognizes the efforts required for other stages of the programme and remain confident that with the active support and commitment of all stakeholders the project will be completed.

    In his welcome address, Executive Secretary National Educational Research and Development Council (NERDC) Prof Ismail Junaidu said the capital market connects the financial sector with the real sector of the economy and in the process, facilitates real sector growth and economic development adding that it increases the proportion of long term savings that are channeled to long term individuals/households and channels them into long term investments and fulfils the transfer of current purchasing power from surplus sectors of the economy to deficit sections.

     

  • Equities rebound with N44b gain

    The topsy-turvy trading at the Nigerian stock market continued yesterday as equities rode on the back of renewed appetite for large-cap banking and manufacturing stocks to rally to their highest level in the past five days. The equities market has been trading on a one-day gain, one-day loss pattern in recent days.

    The All Share Index (ASI)- the main index that tracks share prices at the Nigerian Stock Exchange (NSE) rose by 0.37 per cent to close at 32,228.50 points as against its opening index of 32,108.30 points. Aggregate market value of all quoted equities also increased by N44 billion from its opening value of N11.722 trillion to close at N11.766 trillion.

    With 19 gainers to 15 losers, the modest gain yesterday improved the negative average year-to-date return to -15.73 per cent. The recovery was driven largely by gains recorded by large-cap banking stocks such as Guaranty Trust Bank, Zenith Bank and FBN Holdings as well as gains by major manufacturers led by Nestle Nigeria.

    The NSE Banking Index rose by 1.0 per cent. The NSE Insurance Index improved by 0.7 per cent while the NSE Consumer Goods Index appreciated by 0.4 per cent. However, the NSE Industrial Goods Index declined by 0.3 per cent while the NSE Oil and Gas Index dipped by 0.9 per cent.

    Nestle Nigeria- NSE’s highest-priced stock, led the gainers with a gain of N20 to close at N1,450. Presco followed with a gain of N1.75 to close at N66.25. CAP rose by 85 kobo to close at N26.60. Guaranty Trust Bank chalked up 45 kobo to close at N37.50. Union Bank of Nigeria rallied 40 kobo to close at N5.30. Zenith Bank appreciated by 30 kobo to close at N24.30. Dangote Flour Mills added 20 kobo to close at N6.20 while Northern Nigeria Flour Mills and FBN Holdings rose by 15 kobo each to close at N5 and N7.55 respectively.

    On the downside, Mobil Oil Nigeria led the losers with a drop of N11.70 to close at N151. Cement Company of Northern Nigeria dropped by N2 to close at N18.25. Flour Mills of Nigeria declined by N1.55 to close at N15.25. Red Star Express dropped by 25 kobo to close at N4.25. Vitafoam Nigeria dipped by 23 kobo to close at N3.23. Pharma-Deko lost 16 kobo to close at N1.52 while United Bank for Africa dropped by 15 kobo to close at N7.85 per share.

    The momentum of activities however slowed down with turnover volume and value dropping by 55.5 per cent and 71.6 per cent respectively. Investors traded 200.1 million shares valued at N2.7 billion in 2,639 deals. Banking stocks dominated the top activities chart. Access Bank was the most active with a turnover of 81.26 million valued at N649.92 million. FBN Holdings followed with 31.71 million shares valued at N235.01 million while FCMB Group ranked third with 10.58 million shares worth N17.77 million.

    Market analysts remained cautious over the market outlook citing macroeconomic uncertainties.

    “Although we observed a positive performance today (Thursday) supported by the improvement in market breadth, we believe that the market will underperform in tomorrow’s session due to historical trend. Thus, we retain our bearish market outlook over the near term,” Afrinvest Securities stated.

    Analysts at Cordros Capital also reechoed the cautious sentiment. “We remain conservative in our short to medium term outlook for equities, amidst political concerns ahead of the 2019 elections, and the absence of a positive trigger. However, stable macroeconomic fundamentals remain supportive of recovery in the long term,” Cordros Capital stated.

     

  • Stockbroking firms, Mauritius firm mull partnership on ICT

    The Association of Stockbroking Houses of Nigeria (ASHON) and a leading Mauritius-based Information and Communications Technology (ICT) company,  Acoyvis Limited, have started discussions on a partnership that will enhance technology governance in the Nigerian stockbroking industry.

    Acoyvis Limited has proposed an international workshop for ASHON to address global best practices in technology governance and the need to enhance oversight functions of board members of stockbroking firms and bring them closer to the staff in the back office for harmonious operations.

    Specifically, Acovyis, adjudged as one of the leading companies in ICT training has proposed a comprehensive training programme for board members of stockbroking firms and back office staff in line with the global best practices in technology governance and oversight functions. If endorsed by ASHON, the proposed series of joint workshops will address a wide range of issues that will strengthen international competitiveness of its members.

    Addressing ASHON’s Executive members, Acoyvi’s Chief Executive Officer, Susanne Alfs, stressed the essence of continuous training of board members and back office staff to upscale their skills in view of frequent challenges in ICT architecture.

    She explained that disruptive trends in the ICT world have brought into fore the imperative of acquisition of latest skills in technology.

    “With technology invading even the remotest corner of our organizations, it is also moving up a few notches on a typical board agenda. But in the past, technology knowhow was not typically sought after in board members. That is why many boards today struggle to keep up,”  Alfs said.

    Responding, ASHON’s Chairman, Chief Patrick Ezeagu, described her presentation as a management change that every board must embrace.

    Ezeagu noted that the presentation has re-opened the on-going discussion on the fourth revolution and the need for every professional to be prepared for a change.

    “You have talked about the fourth revolution which is going to disrupt a lot of things in terms of how to do business. People are going to have fewer margins while many may lose jobs except they upscale their skills. Therefore, I believe that there would always be a place of collaboration for like minds, and I can tell you that the Council members shall deliberate on what have been said and arrive at a consensus on the areas to collaborate with Acoyvis,” Ezeagu said.

    He explained that stockbrokers in Nigeria were resilient as they operate in an environment characterized by market volatility, frequent changes in technology and high cost of its acquisition, unstable government policies and uncertainty in the economy following unguarded utterances of the political class, causing panic among investors.

  • Cadbury Nigeria bounces back to profit in Q3

    Cadbury Nigeria made considerable recovery in the third quarter as the company drew on increasing sales and operating efficiency to return to profit within the period.

    Key extracts of the nine-month report for the period ended September 30, 2018 showed that Cadbury Nigeria’s top-line grew by 10.63 per cent while operating profit leapt by 1,687 per cent. Compared with pre and post tax loss of N64 million in third quarter 2017, the company recorded profit before tax of N253 million while profit after tax stood at N172 million in third quarter 2018.

    Total turnover had risen from N24.37 billion in third quarter 2017 to N26.96 billion in third quarter 2018. Gross profit  dipped marginally from N5.43 billion to N5.31 billion. Operating profit however rose from N38 million in third quarter 2017 to N679 million in third quarter 2018.

    Cadbury Nigeria had paid N305 million as cash dividend to shareholders for the 2017 business year, representing a dividend per share of 16 kobo. Mondelçz International, a global snacks powerhouse that holds 74.97 per cent equity stake in Cadbury Nigeria.

    Chairman, Cadbury Nigeria Plc, Mr. Atedo Peterside, had recently said the company would this year focus on increasing its market share and enhancing the efficiency of its distribution system to sustain growth and deliver better returns to shareholders.

    Addressing shareholders recently in Lagos, he outlined that the company would focus on four strategic areas to drive its growth ambitions in 2018.

    According to him, the company will focus on driving growth ahead of competition to increase its market share within its product categories while also sustaining its aggressive route-to-market initiatives.

    He added that the company will sustain its focus on quality, improvements in productivity and operational efficiencies to maximize its competitive advantage.

    He commended the staff of the company for upholding the tenets of good business practices in all their operations, noting that as part of the four areas of focus in 2018, the company will continue to implement initiatives that develop an organization of high potential talent.