The Nation Newspaper

Category: Equities

  • FBN Holdings in N5b off-market shares deals

    Two deals were struck yesterday for the transfer of 1.11 per cent equity stake in FBN Holdings Plc valued at N5 billion. Two deals were struck for the exchange of 400 million ordinary shares of 50 kobo each of FBN Holdings at N12.50 per share.

    Transaction report obtained by The Nation showed that the deals were negotiated off-market deals, implying that the deals were consummated by the buying and selling investors ahead of the formal transfer at the Exchange.

    As an off-market, negotiated cross deal, it means that the deal was not subjected to the dynamics of price discovery for the particular period. Off-market trade implied that the deal was sealed outside the floor of the NSE.

    The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction. By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost.

    FBN Holdings is the holding company for First Bank of Nigeria (FBN) and its former subsidiaries. It recently launched a three-year medium-term strategic plan aimed at extracting significant synergies from the group with a view to enhancing returns to shareholders.

    The three-year 2017-2019 Strategic Plan with the theme: Rebuilding the Group for Enhanced Shareholder Value, aims at increasing efficiency and consolidating the growth momentum of the FBN Holdings in line with its vision of being a leading Middle Africa financial service group.

    Meanwhile, Nigerian equities opened this week with a renewed selloff with nearly two in every three price changes closing on the negative. Benchmark indices at the Exchange indicated average decline of 0.26 per cent, equivalent to net capital loss of N105 billion. The decline depressed the average year-to-date return to 12.6 per cent.

    Aggregate market value of all quoted equities dropped from its opening value of N15.508 trillion to close at N15.403 trillion. The All Share Index (ASI)-the main index that tracks share prices also dropped from its opening index of 43,167.86 points to close at 43,056.51 points.

    There were 34 losers against 19 gainers. Unilever Nigeria led the losers with a drop of N1.40 to close at N60.80. Nestle Nigeria followed with a loss of N1 to close at N1,380 while NASCON Allied Industries dropped by 90 kobo to close at N23.

    On the positive side, Total Nigeria led the gainers with a gain of N4.10 to close at N246.10. Dangote Sugar Refinery followed with a gain of 85 kobo to close at N23.35 while Nigerian Breweries rose by 50 kobo to close at N130 per share.

     

  • Zenith Bank declares N84.8b dividend

    The board of directors of Zenith Bank Plc yesterday announced that the bank will be distributing N84.8 billion to shareholders as cash dividend for the 2017 business year. The recommended payout represents 33.7 per cent increase on N63.42 billion paid for the 2016 business year.

    The dividend recommendation submitted to the Nigerian Stock Exchange (NSE) indicated that shareholders will receive a final dividend per share of N2.45, in addition to an interim dividend of 25 kobo, bringing total dividend per share to N2.70.

    The bank had distributed N63.42 billion to shareholders for the 2016 business year, representing a dividend per share of N2.02. The increase in dividend payout underlined the improvement in the performance of the bank in 2017.

    Key extracts of the audited report and accounts of Zenith Bank for the year ended December 31, 2017 showed that gross earnings rose by 46.7 per cent from N508 billion in 2016 to N745.19 billion in 2017. Profit before tax increased from N156.75 billion to N203.46 billion. After taxes, net profit rose by 37 per cent to N177.93 billion in 2017 as against N129.65 billion recorded in 2016. Earnings per share thus improved from N4.12 in 2016 to N5.66 in 2017.

     

  • Vitafoam Nigeria assures of higher return

    Vitafoam Nigeria assures of higher return

    •Shareholders get N156m dividend

    The board of directors of Vitafoam Nigeria Plc has assured shareholders that it would work to more than triple dividend payout for the current business year as the group continues with the implementation of key strategies aimed at strengthening its operations.

    At the annual general meeting yesterday in Lagos, shareholders unanimously approved the payment of N156 million as cash dividend for the 2017 business year, representing a dividend per share of 15 kobo. Shareholders however called on the directors of the company to increase payout in the current business year.

    Addressing the shareholders, Chairman, Vitafoam Nigeria Plc, Dr. Bamidele Makanjuola, said the board and management would work to ensure that the company delivers better returns to shareholders in the years ahead.

    According to him, with the improvement in the macroeconomic environment and injection of N2 billion new capital into the operations of the company, Vitafoam Nigeria will leverage its innovative pedigree and strong presence in markets nationwide to achieve superior performance.

    He noted that most of the subsidiaries of the company have now reached maturity and are well-positioned to bolster shareholder value and outpace competition.

    “After every economic recession, historical antecedents suggest that a new era of prosperity and progress usually emerges. Our company is fully cognizant of this trend and has already utilised the difficult year to fine-tune its strategies for the incipient opportunities,” Makanjuola said.

    He explained that a strategic review of the company’s business units was undertaken to ascertain continued alignment with broader transformation objectives in order to position the group for accelerated profitability.

    He added that the company had completed its expansion project and has begun to consolidate for optimal performance as reflected in the operations of its subsidiaries.

    “Vitapur Nigeria Limited has become a source of hope and inspiration. It has posted profit for the second year running. Our moulded foam products, Vitavisco Nigeria Limited has continued to operate profitably, it is growing slowly but steadily.  Vitablom Nigeria Limited has maintained its profit-making streak, although this was attenuated during the year by the adverse economic conditions in the country,” Makanjuola said.

    He said the directors of the company will look into the popular demand for recapitalisation of the company through a rights issue by the shareholders, assuring that the board will take the appropriate decision in the best interest of the shareholders.

    Shareholders who spoke at the meeting commended the company’s board and management on its long tradition of stability and regularity of dividends despite the tough operating environment.

     

    Shareholder activist and founding member of the Nigeria Shareholders Solidarity Association (NSSA), Alhaji Gbadebo Olatokunbo commended the company’s foresight in its diversification into pre-fabricated buildings and leather products, which could be exported to earn foreign exchange.

    In his remarks, Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi said the first quarter result of the company for the current business year has already shown that it could attain the target of significant increase in dividend payout.

    He assured shareholders that the management would remain prudent in its financial management while exploring opportunities to improve the performance of the business units.

  • American equity firm stakes N77b on Resort Savings

    Milost Global Inc-an American private equity firm is staking $250 million, about N76.5 billion, on Resort Savings & Loans Plc in another major acquisition after the American firm entered into a binding commitment to invest $350 million in Japaul Oil & Maritime Services.

    Milost, combining its traditional equity and debt approach, will be staking $100 million as equity capital and $150 million as debt capital. Already, Milost Global and Resort Savings have signed a commitment letter, giving the private equity firm the mandate to proceed with due diligence and other regulatory issues. The board of Resort Savings had approved the proposed transaction at its meeting on February 26, 2018.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) yesterday, the board of Resort Savings indicated that the mortgage bank has executed a $250 million deal with Milost Global. The regulatory filing was signed by Managing Director, Resort Savings & Loans Plc, Mr Olayemi Rabiu and Chairman, Resort Savings & Loans, Senator Sunday Fajinmi.

    With the signing of the commitment letter, Milost Global will conduct due diligence on Resort Savings after which substantive agreement and other documentations will follow. The Central Bank of Nigeria (CBN) has been notified of the proposed transaction.

    The board of Resort Savings indicated that the transaction will be executed in phases through private placement to Milost Global and another local investor, which is currently undergoing approval process at the apex bank.

    “It is the belief of the board and management that the proposed investment will assist the bank in no small way in recapitalising the business, growing capacity and in becoming the leader in the mortgage finance industry. With this, we expect to be able to deliver impressive returns to our shareholders and satisfy the expectations of our other stakeholders in the very near future,” the board stated.

    The Nation had reported that Milost Global is seeking to invest more than $8 billion or about N2.6 trillion on Nigerian investments as a demonstration of the New York-based firm’s confidence in the Nigerian economy.

    Headquartered in New York City, Milost Global Inc is at the intersection of creative investing and value creation and has more than $25 billion in committed capital. Milost provides alternative capital, mezzanine finance, and alternative lending to a broad range of industries across the world including technology, transport, cannabis, education, distribution, mining, oil and gas, financial services, healthcare, pharmaceuticals, real estate, alternative energy and infrastructure development.

  • American equity firm stakes N77b on Resort Savings

    Milost Global Inc-an American private equity firm is staking $250 million, about N76.5 billion, on Resort Savings & Loans Plc in another major acquisition after the American firm entered into a binding commitment to invest $350 million in Japaul Oil & Maritime Services.

    Milost, combining its traditional equity and debt approach, will be staking $100 million as equity capital and $150 million as debt capital. Already, Milost Global and Resort Savings have signed a commitment letter, giving the private equity firm the mandate to proceed with due diligence and other regulatory issues. The board of Resort Savings had approved the proposed transaction at its meeting on February 26, 2018.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) yesterday, the board of Resort Savings indicated that the mortgage bank has executed a $250 million deal with Milost Global. The regulatory filing was signed by Managing Director, Resort Savings & Loans Plc, Mr Olayemi Rabiu and Chairman, Resort Savings & Loans, Senator Sunday Fajinmi.

    With the signing of the commitment letter, Milost Global will conduct due diligence on Resort Savings after which substantive agreement and other documentations will follow. The Central Bank of Nigeria (CBN) has been notified of the proposed transaction.

    The board of Resort Savings indicated that the transaction will be executed in phases through private placement to Milost Global and another local investor, which is currently undergoing approval process at the apex bank.

    “It is the belief of the board and management that the proposed investment will assist the bank in no small way in recapitalising the business, growing capacity and in becoming the leader in the mortgage finance industry. With this, we expect to be able to deliver impressive returns to our shareholders and satisfy the expectations of our other stakeholders in the very near future,” the board stated.

    The Nation had reported that Milost Global is seeking to invest more than $8 billion or about N2.6 trillion on Nigerian investments as a demonstration of the New York-based firm’s confidence in the Nigerian economy.

    Headquartered in New York City, Milost Global Inc is at the intersection of creative investing and value creation and has more than $25 billion in committed capital. Milost provides alternative capital, mezzanine finance, and alternative lending to a broad range of industries across the world including technology, transport, cannabis, education, distribution, mining, oil and gas, financial services, healthcare, pharmaceuticals, real estate, alternative energy and infrastructure development.

    “Milost is very committed to the further advancement of the Nigerian economy with over one third of funds being committed to Nigerian investments,” Milost Global had stated in an official statement announcing the arrival of the senior leadership of the firm in Nigeria two weeks ago.

    The senior leadership of the American private equity firm was led by the Managing Partner and Chief Executive Officer, Mr Kim Freeman and Senior Partner & Chief Investment Officer Mr Solly Asibey. During the one-week tour of Nigeria, Milost Global executives met with the management of the firm’s  portfolio companies in Nigeria including Primewaterview Holding Nigeria Limited, Femab Properties Limited and Japaul Oil & Maritime Services Plc. Milost Global also concluded the Resort Savings’ commitment during the tour.

     

     

  • Equities relapse with N236b loss

    After three consecutive positive trading sessions, Nigerian equities witnessed a major contraction yesterday as investors sought to monetise gains on large-cap stocks. Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average decline of 1.51 per cent, equivalent to net capital loss of N236 billion.

    With 26 gainers to 23 losers, the decline was driven by profit-taking transactions on influential large-cap stocks including Dangote Cement, Nigerian Breweries, Nestle Nigeria, Guaranty Trust Bank and Zenith Bank.

    The All Share Index (ASI)-the main index that tracks share prices at the Exchange, declined from its opening index of 43,609.77 points to close at 42,952.70 points. Aggregate market value of all quoted equities also dropped from its opening value of N15.667 trillion to close at N15.431 trillion. The average year-to-date return thus trended downward to 12.31 per cent.

    “Market performance across sectors was broadly bearish with renewed sell pressure amidst weakening investors’ sentiment. The bearish sentiment is likely to remain till company results are released. This is expected to boost market activity and investor sentiment in coming sessions,” FSDH Securities stated.

    All sectoral indices also closed negative with the exception of the NSE Insurance Index, which rose by 0.4 per cent. The NSE Industrial Goods Index declined by 1.8 per cent. The NSE Banking Index dropped by 0.9 per cent. The NSE Consumer Goods Index dipped by 0.7 per cent while the NSE Oil & Gas Index slipped by 0.5 per cent.

    Analysts at Afrinvest Securities noted that “although the market closed in the red, we anticipate renewed buying interest in the near term, in anticipation of positive corporate earnings releases”.

    Dangote Cement-Nigeria’s most capitalised quoted company led the losers with a loss of N9.90 to close at N265. Total Nigeria trailed with a drop of N9.80 to close at N240.20. Nestle Nigeria lost N5 to close at N1,375. Nigerian Breweries declined by N4.40 to close at N125.60 while Guaranty Trust Bank lost 90 kobo to close at N47.60 per share.

    On the positive side, Flour Mills of Nigeria led the gainers with a gain of N1.40 to close at N36. GlaxoSmithKline Consumer Nigeria followed with a gain of N1 to close N22. Eterna rose by 59 kobo to close at N6.40. Unilever Nigeria gathered 50 kobo to close at N60.10. Cadbury Nigeria added 40 kobo to close at N16 while Nascon Allied Industries chalked up 25 kobo to close at N24.75 per share.

    Total turnover stood at 270.33 million shares worth N5.18 billion in 4,799 deals. Zenith Bank was the most active stock with a turnover of 64.6 million shares worth N2.01 billion.

     

     

  • High-cap stocks sustain equities’ rally with N35b gain

    There were more losers than gainers yesterday at the Nigerian Stock Exchange (NSE) but gains recorded by highly capitalised stocks moderated the losses and rallied the overall market position to a net capital gain of about N35 billion.

    With 26 gainers against 29 losers, benchmark indices rode on the back of gains by influential banking, manufacturing and oil and gas stocks to close with average day-on-day gain of 0.22 per cent, equivalent to net capital gain of N35 billion.

    Aggregate market value of all quoted equities rose from its opening value of N15.632 trillion to close at N15.667 trillion. The All Share Index (ASI)-the main index at the Exchange, improved from 43,513.93 points to close at 43,609.77 points. With this, the average year-to-date return trended upward to 14.03 per cent.

    With large-cap stocks leading the rally, most sectoral indices closed on the upside. The NSE Oil & Gas Index led with above-average gain of 1.4 per cent. The NSE Consumer Goods Index rose by 0.9 per cent. The NSE Insurance Index appreciated by 0.1 per cent while the NSE Industrial Goods Index inched up by 0.01 per cent. However, the NSE Banking Index dipped by 0.3 per cent.

    “Despite weaker investor sentiment, market performance remained positive. Hence, we anticipate a sustained uptrend in subsequent trading sessions as investors continue to take position in anticipation of positive corporate earnings,” Afrinvest Securities stated in post-trading note.

    Seplat Petroleum Development Company led the gainers with a gain of N25 to close at N785. Unilever Nigeria followed with a gain of N5.50 to close at N59.60. Flour Mills of Nigeria rose by N1.55 to close at N34.60. Dangote Sugar Refinery added N1.05 to close at N22.50. Nascon Allied Industries rose by 70 kobo to close at N24.50 while Dangote Flour Mills and Union Bank of Nigeria added 30 kobo each to close at N16.50 and N7.35 respectively.

    The momentum of activities also improved with a total turnover of 445.50 million shares worth N5.96 billion in 5,078 deals. Banking stocks dominated the activities chart. Sterling Bank was the most active with a turnover of 101.91 million shares valued at N191.59 million. Fidelity Bank followed with a turnover of 49.22 million shares worth N147.66 million while Zenith Bank placed third with a turnover of 37.85 million shares worth N1.18 billion.

    On the negative side, Nestle Nigeria led the losers with a loss of N20 to close at N1,380. Total Nigeria followed with a loss of N4 to close at N250. Guaranty Trust Bank lost 85 kobo to close at N48.50. Access Bank declined by 30 kobo to close at N13.15 while Vitafoam Nigeria dropped by 14 kobo to close at N2.85 per share.

    “Bargain hunting may continue in coming sessions, as market outlook remains positive in the immediate term,” FSDH Securities stated.

     

  • Equities open with N229b gain

    Equities open with N229b gain

    Nigerian equities reopened yesterday with a bullish run as investors jostled to take positions ahead of expected corporate earnings and dividend recommendations. Equities rallied net capital gains of N229 billion on 4,270 deals, pushing the average year-to-date return for Nigerian equities to 13.78 per cent.

    All benchmark indices at the Nigerian Stock Exchange (NSE) trended upward with large-cap stocks leading a market-wide rally. The All Share Index (ASI)-the value-based index that tracks share prices rose by 1.49 per cent to close at 43,513.93 points as against its opening index of 42,876.23 points. Aggregate market value of all quoted equities also appreciated to N15.632 trillion compared with its opening value of N15.403 trillion.

    All sectoral indices closed positive, underlining the widespread positive sentiments that dominated transactions. The NSE Oil & Gas Index rose by 4.8 per cent. The NSE Industrial Goods Index appreciated by 2.2 per cent. The NSE Insurance Index rose by 0.8 per cent. The NSE Banking Index rallied by 0.4 per cent while the NSE Consumer Goods Index inched up by 0.02 per cent.

    There were 32 gainers to 25 losers. Seplat Petroleum Development Company led the gainers with a gain of N59.90 to close at N760. Total Nigeria rose by N11.50 to close at N254. Dangote Cement rallied N10 kobo to close at N275. Presco gained N5.25 to close at N78 while Beta Glass chalked up N3.60 to close at N75.70.

    On the losers’ list, 11, formerly Mobil Oil Nigeria, led with a drop of N2 to close at N175. Guinness Nigeria declined by N1.70 to close at N98. Nigerian Breweries lost N1.10 to close at N129.90. Flour Mills of Nigeria dipped by 55 kobo to close at N33.05 while Zenith Bank lost 45 kobo to close at N31.10 per share.

    Total turnover stood at 252.05 million shares valued at N5.75 billion in 4,270 deals. Guaranty Trust Bank was the most active stock with a turnover of 45.99 million shares valued at N2.25 billion. Access Bank followed with a turnover of 28.67 million shares worth N383.05 million while FBN Holdings placed third with 25.42 million shares worth N292.67 million.

    “Market performance in coming sessions will be a combination of profit taking and bargain hunting as the market anticipates 2017 company results,” FSDH Securities stated.

    “Following improved investor sentiment, we expect performance in subsequent sessions to remain largely positive though we anticipate market movement to be determined by investor reaction to companies’ earnings results,” Afrinvest Securities stated.

  • Nigeria needs lower interest rate, access to finance to drive growth

    Nigeria needs to implement fiscal and monetary policies that will considerably reduce interest rate and open up access to finance to Small and Medium Enterprises (SMEs) in order to drive national economic growth.

    Managing Director, H. Pierson Associates Limited, Mrs. Eileen Shaiyen said the only way to fast-track Nigerian economic growth through the SMEs is to drastically bring down interest rate and create access to finance.

    According to her, the SME space is desperately in need of a stimulus that will unearth the potential of the sector and enable it to drive broad economic growth.

    “But in the short term while we are making that strategic change, we need to look at the issue of interest rate. If we can get interest rate down to single digit, it will make a world of difference,” Shaiyen said.

    She noted that efforts must also be made to provide amenable capital to the SMEs beyond the traditional lending activities of the commercial banks.

    According to her, there is need to step back and review approach to the SME business. A lot of the SME businesses require venture capital, private equity; a different kind of money, not the traditional banking; the traditional money we find in our banking system doesn’t focus on this kind of business.

    Shaiyen commended the policy trust of the President Muhammadu Buhari administration urging the government to be committed to the execution of the Economic Recovery and Growth Plan (ERGP), which she said was well articulated and focused.

    “You will agree with me that it is very well-focused, well-articulated. But what we need is execution. In strategy, everything is about execution. As we go through to 2019, what we need is consistency in governance, and timeline for execution. If we begin to do that, you will begin to see the impact. But if you have major interjections that disrupt execution, you lose focus and the plans are disrupted,” Shaiyen said.

    She added that Nigerians need to choose transformational leaders who will run the country with the efficiency and thoughtfulness of an entrepreneur.

    She noted that leadership must be based on competence and track records rather than ethnocentric and other sentiments.

    “A leader has to be nominated based on the footprints of what he has done. Our economy, states are just too large to be used as experiments.  At all levels of leadership, we need a paradigm shift on how we see leadership. They must be leaders who have a global view and global standard. That requires deliverables and transformation. l think we need to have a fundamental shift on how we define good leadership and we need to also act very quickly,” Shaiyen said.

     

  • Oando explains delay in earnings report

    Oando explains delay in earnings report

    Oando Plc yesterday indicated that it would not be able to meet the deadline for the submission of its full-year audited report for the year ended December 31, 2017 due to a review of the report by the Financial Reporting Council of Nigeria (FRCN).

    Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.

    Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.  Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The deadline for the submission for the 2017 business year is thus March 31, 2018.

    In a regulatory filing signed by Company Secretary and Chief Compliance Officer, Oando Plc, Ayotola Jagun, Oando stated that the Financial Reporting Council of Nigeria (FRCN) has indicated interest in undertaking a more detailed review of the company’s audited financial statements as part of their statutory review due to the issues raised by the recent investigation of the company by the Securities and Exchange Commission (SEC).

    “We envisage that the FRCN’s review might take longer than originally anticipated. Therefore, the company may not be able to file the accounts until the second week in May, the exact date of filing will be dependent on the turnaround time at the FRCN,” Oando stated.

    SEC has directed a forensic audit of Oando. The forensic audit was precipitated by alleged findings of the SEC, following an investigation into the company which commenced in July 2017. SEC had in October 2017 released the findings of the investigation and called for a technical suspension on the trading of Oando’s shares as well as a forensic audit into the affairs of the company.

    Oando had initially disagreed to what it termed ‘steep penalties’, however, in December 2017, the company issued a statement on its website, saying it would fully cooperate with the SEC on the forensic audit.

    For three consecutive quarters the company has released its results on time and posted strong revenues and profits, despite a challenging environment.  Following in the footsteps of the company’s cooperation with the SEC, Oando recently reached a peace accord with one of the shareholders who petitioned the SEC, AlhajiDahiruMangal with the Emir of Kano, SanusiLamido as the arbitrator.