The Nation Newspaper

Category: Equities

  • 5 banks hit new highs as equities’ return rises to N1.84tr

    Nigerian equities reopened yesterday on a balance of bargain-hunting and profit-taking with five quoted commercial banks rallying to their highest values in one year. Quoted equities posted average gain of 0.51 per cent yesterday at the Nigerian Stock Exchange (NSE), equivalent to net capital gain of N79 billion.

    With 26 gainers and losers each, the overall market position was marked by a noticeable shift to low-priced stocks, otherwise known as penny stocks. Four low-priced banking stocks-Skye Bank, Sterling Bank, Wema Bank and FCMB Group, rallied to their highest values in one year. Stanbic IBTC Holdings also remained at its one-year high at N44.94 per share.

    Skye Bank, which had traded at a low of 50 kobo, closed yesterday at a one-year high of 91 kobo. Sterling Bank quadrupled from a low of 67 kobo to close yesterday at a high of N2. Wema Bank rose to a high of 82 kobo as against its lowest value of 50 kobo while FCMB Group rallied to a high of N2.79 from a low of 92 kobo.

    The recovery yesterday pushed the aggregate net capital appreciation so far in 2018 for Nigerian equities to N1.84 trillion, representing average year-to-date return of 12.75 per cent.

    Aggregate market value of all quoted equities at the Exchange rose from its opening value of N15.368 trillion to close at N15.447 trillion. The All Share Index (ASI)-the benchmark index at the stock market, rallied to a high of 43,119.00 points as against its opening index of 42,898.90 points.

    “The equity market was characterised by a mix of profit taking and renewed buying interest in banking stocks. Although there may be profit taking on some stocks, the market should remain in positive territory, sustained by bargain hunting in anticipation of 2017 corporate earnings,” FSDH Securities stated.

    While the overall market remained positive due to bargain-hunting for value stocks, sectoral indices showed underlying profit-taking trend on large-cap stocks. Most sectoral indices closed negative yesterday, underlining the losses by high-cap stocks.

    The NSE Industrial Goods Index dropped by 1.6 per cent. The NSE Insurance Index followed with a drop of 1.0 per cent. The NSE Oil & Gas Index declined by 0.8 per cent while the NSE Consumer Goods Index dipped by 0.1 per cent. The NSE Banking Index played the contrarian with a gain of 1.1 per cent.

    Total turnover stood at 730.62 million shares valued at N6.30 billion in 7,964 deals. Transnational Corporation of Nigeria led the activities chart with a turnover of 193.9 million shares valued at N400.08 million. Diamond Bank followed with 85.66 million shares valued at N221.86 million while FCMB Group ranked third with 57.57 million shares worth N157.9 million.

    “Although the equities market performed positively today, we expect a largely mixed performance this week as we anticipate profit taking in sessions ahead,” Afrinvest Securities noted.

    Dangote Cement and International Breweries led the gainers with a gain of N3 each to close at N255 and N63 respectively while Lafarge Africa led the losers with a drop of N2.84 to close at N54.06 per share.

  • Deutsche Bank appoints new trade finance head for SSA

    Deutsche Bank has announced the appointment of Andreas Voss as Head of Trade Finance for Financial Institutions (TFFI) in Sub-Saharan Africa (SSA).

    Voss will combine his new role with his portfolio as Head of Global Transaction Banking West Africa and Chief Representative of Deutsche Bank AG’s Lagos Representative Office.

    Based in Lagos, Voss will be responsible for driving the development and execution of Deutsche Bank’s TFFI growth strategy in Sub-Saharan Africa for Trade Finance business directly originated from financial institutions. He will also support Deutsche Bank’s corporate teams to promote trade financing in the region.

    Commenting on the appointment, Jamal Al Kishi, Chief Executive Officer Middle East & Africa (MEA), said: “Andreas has led our franchise in Nigeria admirably since joining Deutsche Bank a few years ago. This promotion is a fitting recognition of his leadership and contributions. His expertise and broader involvement will help us to grow and further develop our Financial Institutions business in general and the TFFI sector in particular.”

    Ulf-Peter Noetzel, Deutsche Bank’s Global Head of TFFI remarked, “This appointment highlights the importance of Africa, and in particular Nigeria, to Deutsche Bank’s trade finance business. The bank is looking to further develop its business with select African clients and through Andreas’ expanded role we aim to enhance our focus on supporting Financial Institutions on a broader base in Sub-Saharan Africa.”

    Voss has been with Deutsche Bank since October 2015. He joined Deutsche Bank from Deutsche Investitions-und Entwicklungsgesellschaft (DEG) and brings more than 14 years of experience in the financial sector.

    Prior to DEG, Andreas worked in the corporate and project finance industries with German commercial banks. Until the end of 2014, Andreas was based in Ghana as Regional Director of DEG’s office in Western Africa.

    Deutsche Bank first established a presence in Nigeria in 1978. The representative office in Lagos supports and assists Deutsche Bank’s correspondent banking activities, which it offers to many Nigerian Financial Institutions. Deutsche Bank has also played key roles in various financial advisory and restructuring projects and in helping Nigerian counterparts raise finance.

  • Stock Exchange places 7-Up on full suspension

    Authorities at the Nigerian Stock Exchange (NSE) at the weekend slammed a full suspension on the shares of Seven-Up Bottling Company (7-Up) Plc following the bid by the foreign majority shareholder in the soft-drink company, Affelka SA to buy out all minority shareholdings.

    Under full suspension, there will be neither trading nor price movement on the company’s shares.

    According to the Exchange, the suspension was for the purpose of determining the shareholders who will qualify to receive the scheme consideration under the Affelka SA’s buy out deal.

    The Exchange at the weekend noted that the acquisition of minority shareholdings will result in the voluntarily delisting of 7-Up Bottling Company from the Exchange.

    Shareholders of Seven-Up Bottling Company had last Thursday approved a plan by the majority shareholder, Affelka SA to acquire the outstanding 26.8 per cent shares held by the minority shareholders.

    At a court-ordered meeting in Lagos, shareholders approved the scheme of arrangement for the acquisition. With the ongoing acquisition process, Affelka SA will increase its ownership of the Nigerian soft-drink company to 100 per cent by acquiring all the outstanding and issued shares, previously held by the minority shareholders.

    In consideration for the transfer of the shares, a payment of N125 per scheme share will be made to each shareholder. This payment represents a 22.6 per cent premium on the last traded share price of Seven-Up on January 9, 2018 and a 27.6 per cent premium on the share price as at close of August 9, 2017 being the last business day prior to the date the initial proposal was received from Affelka.

    Chairman, Seven-Up Bottling Company Plc, Mr. Faysal El-Khalil said the acquisition will create considerable benefits and opportunities for all stakeholders of the company while also helping to protect minority shareholders from a continuous erosion of value.

    “Furthermore Seven-Up Bottling Company Plc is again assured of Affelka’s long-term commitment to the company and Nigeria,’’ El-Khalil said.

  • Vitafoam Nigeria optimistic on future growth

    Vitafoam Nigeria Plc expects significant reduction in interest expense and new business operations to boost performance and ensure better returns to shareholders in the years ahead.

    At a media interactive session at the weekend, Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi said strategic initiatives aimed at boosting working capital and sustaining competitive edge would impact positively on the company’s performance in the years ahead.

    He noted that the company has secured a four-year N2 billion loan from the Bank of Industry (BOI) at concessionary interest rate of 12 per cent, a significant reduction from 25 per cent commercial rate incurred by the company in 2017.

    According to him, the BOI’s credit facility would help to reduce finance cost and enhance the company’s ability to directly import its raw materials from the global market.

    “There will be a huge favourable reduction in finance cost by a minimum of N240million, representing 20.4 per cent. Secondly, the previously depleted working capital will be boosted by the BOI’s four-year working capital support. This will enable Vitafoam to source its major raw materials directly from overseas manufacturers, thereby retaining middlemen margin in the business. A minimum of 15 per cent margin will be saved on every direct import of major raw materials,” Adeniyi said.

    He outlined that the company has created new business lines that will boost profitability and cushion the adverse effect of fluctuations in other business lines.

    “Specifically, Vitaparts Nigeria Limited, a new subsidiary, established to manufacture oil filters, is expected to commence operation in the third quarter of the current financial year while importation and installation of the manufacturing plant will be concluded in the second quarter of the year, all things being equal.

    “These new strategic initiatives are designed to diversify operation and revenue base of the group. In a similar vein, Vitablom Nigeria Limited, the soft furnishing subsidiary has concluded installation of fiber processing plant. The new production line is expected to boost the operation and revenue base of the group,” Adeniyi said.

    He pointed out that the company recorded a profit after tax of N190 million in 2017 as against N412 million recorded in 2016, despite the tough operating climate. Group turnover also rose by 30 per cent.

    He attributed the performance in 2017 to cost control measures put in place by the management, citing the three per cent reduction in administrative expenses and reduction of distribution cost from five percent to four percent of revenue between 2017 and 2016 financial year.

    He noted that due to weak working capital and paucity of foreign exchange letters of credit, the company purchased more than 80 per cent of its raw materials locally, thereby incurring more cost .

    He said the board of the company has decided to recommend distribution of N156.36million as cash dividend to shareholders to further demonstrate the company’s long-standing commitment to shareholder value.

  • Flour Mills opens application for N39.9b rights issue

    Flour Mills of Nigeria Plc will today open application list for its N39.9 billion rights issue, paving the way for shareholders to pick up their rights, or trade such rights at the stock market.

    Flour Mills of Nigeria will be raising N39.85 billion through a rights issue of 1.476 billion ordinary shares of 50 kobo each at N27 per share. The rights have been pre-allotted to shareholders on the basis of nine new ordinary shares of 50 kobo each for every 16 ordinary shares of 50 kobo each held as at Friday December 8, 2017. Application list for the rights opens today and will run till the close of business on Wednesday February 21, 2018.

    Group Managing Director, Flour Mills of Nigeria Plc, Mr. Paul Gbedebo, said the rights issue will enable the company to raise funds to support its long-term strategic plan with a view to ensuring sustainable growth for the company.

    “The rights issue is part of our strategy to grow and build long-term value for all stakeholders. The proceeds from the rights issue will be used to strengthen the company’s capital base by deleveraging our balance sheet, supporting our working capital needs and positioning the company to exploit value-accretive opportunities, whilst giving greater operational and financial flexibility to ensure business growth and continuity,” Gbedebo said.

    He noted that Flour Mills has a long and rich history in Nigeria and continues to evolve into becoming the leading food and agro-allied group in Africa.

    According to him, Flour Mills’ commitment to sustainability as a corporate strategy is shown in different levels of its operations and activities, while the company’s customer-centric culture remains focused on both product and process innovation aimed at building value for all stakeholders.

    Chairman, Flour Mills of Nigeria (FMN) Plc, Mr. John Coumantaros, in a recent review, noted that though the operating environment has been tough and challenging, the group can look to the future with confidence that its prospects are promising and bright while the fundamentals are strong.

    According to him, the group sees opportunities in the challenges and it is determined to explore them in the most profitable but sustainable manner.

    “FMN is determined to continue to feed the nation every day. We shall keep maintaining our wide portfolio of high quality consumer food options and step up our input of locally sourced raw materials thereby supporting the livelihood of Nigerian farmers and Nigerian businesses,” Coumantaros said.

  • Union Bank lists N50b rights’ shares

    Union Bank of Nigeria (UBN) Plc at the weekend listed  listed supplementary shares that were issued under its recent rights issue, raising the commercial bank’s market capitalisation to N244.61 billion.

    A total of 12.13 billion ordinary shares of 50 kobo each were listed at N4.10 per share at the weekend. With the listing of the 12.13 billion ordinary shares, the total issued and fully paid up shares of Union Bank increased from 16.99 billion to 29.12 billion ordinary shares of 50 kobo.

    Union Bank had floated the rights issue to raise N49.745 billion from existing shareholders by offering 12.133 billion ordinary shares of 50 kobo each at N4.10 per share. The rights issue had been pre-allotted on the basis of five new ordinary shares of 50 kobo each for every seven ordinary shares held as at the close of business on Monday August 21, 2017.

    Application for the rights issue had opened on Wednesday September 20, 2017 and closed on Monday October 30, 2017. Allotment results approved by the Securities and Exchange Commission (SEC) showed that Union Bank raised N59.87 billion as shareholders submitted 4,313 applications for 14.6 billion ordinary shares. The bank has however decided to retain its target of N49.745 billion and to return the excess monies to shareholders.

    The breakdown of the allotment showed that 98.4 per cent of the shareholders accepted their rights in full with 52.03 per cent also applying for additional shares.

    Chief Executive Officer, Union Bank of Nigeria (UBN)

  • Equities sustain rally with N183b gain

    Nigerian equities continued on the uptrend yesterday as bargain-hunters drove the benchmark index above the 40,000 points, pushing the year-to-date return to 5.54 per cent.

    With nearly seven gainers against every loser, the momentum of activities at the stock market improved considerably. The All Share Index (ASI)-the main index that tracks share prices at the stock market, rode on the back of gains by 47 gainers against seven losers to hit a new threshold at 40,362.97 points compared with its opening index of 39,849.65 points.

    Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) rose from its opening value of N14.181 trillion to close at N14.364 trillion, representing net capital gain of N183 billion.

    With average return of 1.29 per cent yesterday, the average year-to-date return now stands at 5.54 per cent or N755 billion.

    All sectoral indices remained on the upside with the exception of the NSE Consumer Goods Index, which declined by 0.3 per cent. The NSE Banking Index rose by 2.3 per cent. The NSE Oil & Gas Index followed with 1.2 per cent while the NSE Insurance Index and NSE Industrial Goods Index appreciated by 0.7 per cent each.

    Seplat Petroleum Development Company led the gainers with a gain of N10 to close at N660. Dangote Cement followed with a gain of N3.24 to close at N237.50. Guinness Nigeria appreciated by N2 to close at N102. Conoil rose by N1.62 to close at N34.03 while Mobil Oil Nigeria and Presco chalked up N1.50 each to close at N180 and N68 respectively.

    Total turnover increased to 770.89 million shares valued at N7.89 billion in 7,395 deals. Low-priced stocks dominated the top activities chart. Diamond Bank was the most active stock with a turnover of 219.65 million shares valued at N441.24 million. Transnational Corporation of Nigeria followed with 139.92 million shares worth N254.92 million while FCMB Group placed third with 74.62 million shares worth N154.71 million.

    On the downside, Nestle Nigeria led the losers with a loss of N50 to close at N1,450 per share. GlaxoSmithKline Consumer Nigeria followed with a drop of 30 kobo to close at N21.80. Nigerian Aviation Handling Company dipped by 21 kobo to close at N4.29. Union Bank of Nigeria lost 20 kobo to close at N7.50 while UACN Property Development Company dropped by 15 kobo to close at N3.03 per share.

    “Although market sentiment remains strong and positive, the bullish momentum will likely slowdown in subsequent sessions with profit taking,” FSDH Securities stated.

    Analysts at Afrinvest Securities noted that there could be a streak of profit-taking as investors seek to monetise recent capital gains.

    “Following four consecutive days of appreciation, we do not rule out the possibility of some profit taking later in the week. Nevertheless, as investor sentiment waxes stronger, our near term outlook on the market remains positive,” Afrinvest Securities stated.

  • Equities hit N14tr amid widespread rally

    Investors in Nigerian equities pocketed N330 billion in net capital gains yesterday at the Nigerian Stock Exchange (NSE) as increased scramble for quoted shares pushed the total market value of quoted equities to N14.18 trillion.

    With more than four gainers for every loser, the stock market reopened yesterday with a strong market-wide rally, which nudged equities to their highest performance so far this year. Average day-on-day return yesterday stood at 2.38 per cent, equivalent to net capital gain of N330 billion.

    The sustained rally pushed the average year-to-date return for Nigerian equities so far in 2018 to 4.2 per cent.

    Aggregate market value of all quoted companies on the NSE rose from its opening value of N13.851 trillion to close at N14.181 trillion. The All Share Index (ASI)-the benchmark index at the NSE also crossed another level from 38,923.26 points to close at 39,849.65 points.

    All sectoral indices closed on the upside, underlining the widespread demand for quoted shares. The NSE Industrial Goods Index led the rally with a gain of 2.3 per cent. The NSE Banking Index followed with 2.0 per cent. The NSE Oil & Gas Index posted a gain of 1.7 per cent while the NSE Consumer Goods Index and NSE Insurance Index returned 1.1 per cent each.

    There were 37 gainers against nine losers. Dangote Cement led the gainers with a gain of N11.15 to close at N234.26. 11 followed with a gain of N8.50 to close at N178.50. Guinness Nigeria rose by N4.40 to close at N100. Conoil rallied N3.01 to close at N32.41 while Nigerian Breweries added N1.90 to close at N140 per share.

    Total turnover stood at 604.5 million shares valued at N16.1 billion. Transnational Corporation of Nigeria was the most active stock with a turnover of 115.19 million shares valued at N203.28 million. Nigerian Breweries followed with a turnover of 88.29 million shares valued at N13.36 billion while Diamond Bank placed third with 82.72 million shares valued at N162.32 million.

    “The market is expected to remain in the positive territory but will likely be characterised by a mix of profit taking and bargain hunting by investors,” FSDH Securities stated.

    Analysts at Afrinvest Securities stated that the rally was in line with expectation as investor sentiment remained strong.

    “We expect the trend to be sustained in subsequent trading sessions against the backdrop of a broad based rally across sectors,” Afrinvest Securities stated.

  • MTI lists shares on NASD OTC Securities Exchange

    Mass Telecom Innovation (MTI) Plc has listed its shares on the NASD OTC Securities Exchange, opening up a new opportunity for secondary trading on the shares of the telecommunication company after it was delisted by the Nigerian Stock Exchange (NSE).

    A regulatory document at the weekend indicated that MTI’s shares have been admitted to trade on the over-the-counter market. Inaugurated in July 2013, NASD OTC Securities Exchange is registered by the Securities & Exchange Commission (SEC) as a Self-Regulatory Organisation (SRO). The NASD OTC provides the platform for trading of a broad range of instruments over-the-counter, including equities, bonds and securities not listed on the Nigerian Stock Exchange (NSE).

    Many leading companies are listed on the NASD OTC including world leaders like Dufil Prima Foods Plc, the manufacturer of Indomie Noodles; Friesland Campina Wamco Nigeria Plc, manufacturer of Peak Milk brand and Fan Milk Plc, popular manufacturer of Fan Yoghurts are listed.

    Other companies included NIPCO Plc; Air Liquide Nigeria Plc; Industrial & General Insurance Plc; Central Securities Clearing System Plc; the clearing and depository arm of the Nigerian Stock Exchange; Nigeria Mortgage Refinance Company; Jaiz Bank Plc, the Islamic bank; Acorn Petroleum Plc; Arm Life Plc; Afriland Properties Plc; BGL Plc; Consolidated Breweries Plc and Food Concepts Plc.

    Also included are Geo-Fluids Plc; Golden Capital Plc; Niger Delta Exploration & Production Plc; Partnership Investment Company Plc; Resourcery Plc; Riggs Ventures West Africa Plc; Swap Technologies & Telecomms Plc; Vital Products Plc; Fumman Agric Products Industries Plc; Free Range Farm Plc; FAMAD Plc; AG Mortgage Bank and Trustbond Mortgage Bank Plc, among others. There are also more than 137 registered traders of participating institutions at the market.

    Authorities at the NSE had in May last year, delisted MTI and three other companies that had repeatedly failed to meet corporate governance standards set by the Exchange. The other delisted companies included UTC Nigeria Plc, Beco Petroleum Plc and MTECH Communications Plc. The delisting took effect on May 2, 2017, although the national council of the Exchange had approved the delisting in February 2017.

    The NSE had stated that the delisting was pursuant to Clause 15 of the General Undertaking, Appendix III of the Rule Book of The Exchange, 2015-Issuers’ Rules,  which deals with the post-listing requirements and sanctions.

    The companies were delisted under the compulsory delisting mechanism of the Exchange after their failure to meet post-listing requirements on timely disclosures and corporate governance.

    The companies were delisted for recurring and irredeemable inability to comply with the listing requirements of the Exchange, especially in the areas of timely and accurate rendition of operational and financial accounts and other corporate governance issues.

    The delisting process of some of the companies had started almost two years ago and the authorities at the Exchange had continuously engaged the companies with the hopes that they would regularise their operations, but they had failed to make any convincing move to comply with listing requirements.

  • Flour Mills to open application for N39.9b rights issue

    Flour Mills of Nigeria Plc has rounded off pre-offer processes and signed off documentation for its N39.9 billion rights issue, setting the stage for the opening of the application list for the new capital raising.

    At the signing ceremony, which rounded off the pre-offer processes and documentations at the weekend, Flour Mills of Nigeria Plc Group Managing Director,  Mr. Paul Gbedebo, confirmed that the company has received regulatory approvals from the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) and is ready to proceed with the rights issue.

    He said the rights issue will enable the company raise funds to support its long-term strategic plan with a view to ensuring sustainable growth for the company.

    The company plans to raise N39.85 billion through a rights issue of 1.476 billion ordinary shares of 50 kobo each at N27 per share. The rights will be pre-allotted to shareholders on the basis of nine new ordinary shares of 50 kobo each for every 16 ordinary shares of 50 kobo each held as at Friday December 8, 2017.

    Shareholders had at an extraordinary general meeting in 2015 authorised the directors to raise up to N40 billion of additional equity funds through a rights issue.

    “The rights issue is part of our strategy to grow and build long-term value for all stakeholders. The proceeds from the rights issue will be used to strengthen the company’s capital base by deleveraging our balance sheet, supporting our working capital needs and positioning the company to exploit value-accretive opportunities, while giving greater operational and financial flexibility to ensure business growth and continuity,” Gbedebo said.

    He noted that Flour Mills has a long and rich history in Nigeria and continues to evolve into becoming the leading food and agro-allied group in Africa.

    According to him, Flour Mills’ commitment to sustainability as a corporate strategy is shown in different levels of its operations and activities, while the company’s customer-centric culture remains focused on both product and process innovation aimed at building value for all stakeholders.

    In a statement at the weekend, its Company Secretary, Umolu Joseph, said the full terms of the rights issue will be set out in a rights circular to be mailed directly to shareholders of the company, which contains a provisional allotment letter and participation form.

    Chairman, Flour Mills of Nigeria (FMN) Plc, Mr. John Coumantaros, in a recent review, noted that though the operating environment has been tough and challenging, the group can look to the future with confidence that its prospects are promising and bright while the fundamentals are strong.

    According to him, the group sees opportunities in the challenges and  is determined to explore them in the most profitable but sustainable manner.

    “FMN is determined to continue to feed the nation every day. We shall keep maintaining our wide portfolio of high quality consumer food options and step up our input of locally sourced raw materials, thereby supporting the livelihood of Nigerian farmers and Nigerian businesses,” Coumantaros said.

    He added that the group would continue to invest in growing portfolio of localised products in support of the nation’s economy.

    He outlined that as the group strives to further restructure its operations, streamline business operations to focus on core businesses, constantly monitor and manage costs optimally, improve and re-engineer existing product range, the group will focus on innovation and develop new strategies for the market by making its products more visible and available at points of sale.

    “We shall also continue to improve our sales, merchandising, redistribution personnel and activities,” Coumantaros said.

    He reiterated the support of the group for the Federal Government’s backward integration policy, assuring that the group is determined to ensure that its agro-allied strategy provides sustainable returns on capital invested by maximising local content in group products.

    He noted that in furtherance of the group’s vision to be involved at all stages of food value chain- from the farm to table, raw materials are being produced locally to ensure that good quality but fair value products are developed locally through the food supply chain to final consumer consumption.

    “By our policy of aggregating grains and local farm products, we are creating jobs and boosting rural economy. We are determined to continue to ensure that our investments and processes aside from ensuring value for shareholders and other stakeholders continue to enrich the lives of our consumers, farmers, suppliers and other relevant stakeholders,” Coumantaros said.

    He pointed out that by investing in the nation’s agricultural food-chain, the group is safeguarding its future and ensuring the sustainability of its businesses, noting that the backward integration programme is the most viable and sustainable thing to do.