The Nation Newspaper

Category: Equities

  • PEARL Awards lauds NSE

    PEARL Awards Nigeria has commended the management of the Nigerian Stock Exchange (NSE) for its focused initiatives and innovations aimed at enhancing the development of the capital market.

    Speaking during a courtesy visit by the PEARL Awards Board of Governors to the NSE in Lagos, President, PEARL Awards Nigeria, Mr. Tayo Orekoya, noted the increasing restoration of investors’ confidence in the capital market, which has been resulting in higher trading transactions, robust yield and returns to investors.

    Alluding to the trajectory of the PEARL Awards during the visit, Orekoya restated that the Awards was instituted in 1995 to reward quoted companies for actual operational performance based on verifiable facts and figures. This according to him has endeared the Awards to the capital market stakeholders over the years.

    While thanking the NSE for its support for the Awards Project in the past years, Orekoya solicited for continued support of the NSE for the PEARL Awards Project.

    In his remarks, Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema attributed the success of the NSE to team work by the management and staff of the Exchange.

    He commended the PEARL Awards for its resilience and ability to weather the storm over the past 22 years of its existence.

    He congratulated the Awards Board of Governors for staying the course both in the good and bad economic climates with a pledge to continue to support the Awards as one of the initiatives dedicated to promoting market development.

  • Investors strike 14 deals as Oando remains on technical suspension

    Investors strike 14 deals as Oando remains on technical suspension

    •SEC, NSE still studying court order 

    Investors struck 14 deals for 142,250 shares of Oando yesterday at the Nigerian Stock Exchange (NSE) but the indigenous energy group’s share price remained unchanged at N5.99 per share, despite a court order that restrains the NSE from putting the company under technical suspension.

    A full suspension is the halt of trading activities in a listed security for a period. A technical suspension is the interruption of price movement in a listed security for a period so that any dealings in the securities which occur during the period of the suspension will not result in any change in price, which change may have occurred had the suspension not been implemented.

    The NSE had on Monday October 23, 2017 placed the shares of Oando on technical suspension, “thus, the shares will be available for trading but there will be no price movement while the technical suspension subsists”.

    Securities and Exchange Commission (SEC) had last week ordered the placement of full suspension on the shares of Oando as the apex capital market regulator launched a forensic investigation into allegations leveled against the management of Oando by two aggrieved shareholders. The Commission also indicated that the full suspension should be relaxed to technical suspension after 48 hours.

    Oando obtained an interim court order on Monday October 23, 2017, restraining the NSE and any other party working on their behalf from giving effect to the directive of the SEC to implement a technical suspension of the shares of the company pending the hearing and determination of the motion for injunction and also an order restraining the SEC and any other parties claiming through or working on behalf of the Commission from conducting any forensic audit into the affairs of the company pending the hearing and determination of the motion for injunction.

    However, both the NSE and SEC were served with the enrolled court order on Tuesday, October 24, 2017 after the technical suspension was carried out by the NSE on Monday, October 23, 2017.

    A regulatory source said there was no immediate compliance with the ex-parte order because the regulators were seeking legal interpretation and implication of the court order.

    According to the source, the court order rather than seeking to vacate and lift the suspension on the company’s shares sought to restrain a directive that was already in process since last week and completed on Monday with the relax of the full suspension to technical suspension.

    In a statement signed by Chief Compliance Officer and Company Secretary, Oando Plc, Ayotola Jagun, Oando stated that it was of the view that the SEC’s directives were illegal, invalid and calculated to prejudice the business of the company.

    Two petitioners -Alhaji Dahiru Mangal and Ansbury Inc had filed petitions against Oando with SEC, alleging gross abuse of corporate governance and financial mismanagement. SEC had ordered placement of Oando’s shares under trading suspension at the NSE while directing a forensic audit of Oando.

    Oando stated that it found it necessary to take legal action because of contradictions in the directives by SEC and the need to protect the interest of its shareholders.

    Oando noted that it had fully co-operated with the SEC since the commencement of this investigation in May 2017 and provided all information requested but it was evident that submissions made to the SEC were not duly considered due to the conclusions reached and actions taken, as all of the matters raised have been responded to in great detail with all supporting documents requested by the SEC.

  • NASCON grows profit by 130% to N6b in Q3

    NASCON Allied Industries Plc, a member of the Dangote Group, recorded significant growths in sales and profitability in the third quarter, putting the company in good stead to increase dividend payout for another consecutive year.

    Key extracts of the interim report and accounts for the third quarter ended September 30, 2017 showed that gross earnings rose by 62 per cent while profit before tax jumped by 130 per cent. Net earnings per share doubled by 129 per cent from 89 kobo in third quarter 2016 to N2.04 in third quarter 2017.

    NASCON had paid a dividend per share of 70 kobo for the 2016 business year, 27 per cent above 55 kobo paid for the 2015 business year. Earnings per share had improved from 79 kobo in full-year 2015 to 91 kobo in full-year 2016.

    The latest report showed that turnover rose from N12.8 billion in third quarter 2016 to N20.71 billion in third quarter 2017. Profit before tax doubled from N2.59 billion to N5.96 billion while profit after tax leapt from N1.76 billion to N4.05 billion.

    Chairman,   NASCON Allied Industries Plc, Yemisi Ayeni, recently said the company would be making new investments in its major lines of operations to improve overall efficiency and market share in continuation of ongoing efforts to ensure long-term growth and returns to shareholders.

    She assured shareholders of its unwavering commitment to the continued growth and prosperity of the company.

    She said the outlook for the company remains optimistic as it continues to drive growth across its core brands with significant investments in marketing and brand building efforts.

    She said the company would also continue to focus on distribution and route-to-market efficiency as a key driver of growth.

    “To support our growth strategy, we will be investing in salt packaging and seasoning cubing lines to improve efficiency and increase market share. We will be acquiring new trucks to reduce external hiring and ensure optimal distribution of all our products,” Ayeni said.

    Managing director, NASCON Allied Industries Plc, Mr. Paul Farrer, noted that with expected steady improvements in the economy over the next 18 months, the company is confident of improved performance.

    He added that the company had taken some key decisions in the area of retail pricing and convenience, which have resulted in immediate and long-term gains, including a focus on optimization of the route to market to ensure product availability.

    “We remain confident that our long term strategy for vegetable oil and tomato paste businesses will yield results in the near future,” Farrer said. NASCON had suspended the vegetable oil and tomato paste businesses in 2016 due to paucity of raw materials.

  • Stock Exchange removes full trading suspension on Oando

    Investors resumed trading on the shares of Oando Plc yesterday as the Nigerian Stock Exchange (NSE) lifted the full suspension placed on the shares of the indigenous energy group. The NSE meanwhile replaced the full suspension with a technical suspension, implying that while trading will continue unhindered on the shares of Oando, there will be no price movement.

    Oando traded at N5.99 per share yesterday, the price that it will continue to trade on for the period of the technical suspension.

    A full suspension is the halt of trading activities in a listed security for a period. A technical suspension is the interruption of price movement in a listed security for a period so that any dealings in the securities which occur during the period of the suspension will not result in any change in price, which change may have occurred had the suspension not been implemented.

    “Please be informed that effective today, Monday, 23 October 2017; the shares of Oando Plc have been placed on technical suspension. Thus, the shares will be available for trading but there will be no price movement while the technical suspension subsists,” the NSE stated.Securities and Exchange Commission (SEC) had last week ordered the placement of full suspension on the shares of Oando as the apex capital market regulator launched a forensic investigation into allegations leveled against the management of Oando by two aggrieved shareholders. The Commission also indicated that the full suspension should be relaxed to technical suspension after 48 hours.

    In responding to the suspension and investigation, the management of Oando had reiterated its commitment to protecting the interest of all shareholders.

    “The company remains committed to act in the best interests of all its shareholders,” Oando stated in a short statement signed by its Chief Compliance Officer and Company Secretary, Ayotola Jagun.

    SEC had launched a forensic audit into the operations and governance of Oando in furtherance of the Commission’s investigation into allegations of corporate governance abuse and improper dealings.

    In a notification of the suspension signed by General Counsel and Head of Regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, SEC directed that the NSE should impose full suspension on the shares of Oando for 48 hours with effect from today October 18, 2017 to October 20, 2017.

    Also, with effect from October 20, 2017 and until further directive, the Exchange should implement a technical suspension in the shares of Oando Plc.

    In an official circular on the suspension, SEC explained that the suspension and forensic audit were in relation to the two petitions from Alhaji Dahiru Barau Mangal and Ansbury Incorporated.

    According to the Commission, a comprehensive review of the petitions showed that there were breach of the provisions of the Investments & Securities Act 2007, breach of SEC Code of Corporate Governance for Public Companies, suspected insider dealing, related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando Plc among others.

    “The Commission’s primary role as apex regulator of the Nigerian capital market is to regulate the market and protect the investing public. The Commission notes that the above findings are weighty and therefore needs to be further investigated. After due consideration, the Commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc. This is pursuant to the statutory duties of the Commission as provided in section 13(k), (n), (r) and (aa) of the ISA 2017,” SEC stated.

  • FCMB acquires 88.2% majority stake in Legacy Pension Managers

    FCMB Group Plc has reached agreement to acquire additional 60 per cent equity stake in Legacy Pension Managers Limited to increase FCMB’s majority equity stake in the pension firm to 88.2 per cent.

    In a regulatory filing yesterday, FCMB stated that it has entered into an agreement with other shareholders of Legacy Pension Managers for the acquisition of an additional 60 per cent equity stake in the firm.

    The proposed acquisition will increase FCMB’s interest in Legacy Pension Managers to 88.2 per cent, thus making the firm a subsidiary of FCMB.

    However, the transaction is still subject to the approvals of the Central Bank of Nigeria, the National Pension Commission and the Securities and Exchange Commission (SEC).

    Legacy Pension Managers Limited is licensed by the National Pension Commission (PenCom), to carry on business as a Pension Fund Administrator (PFA). It has over N220 billion asset under management comprising, retirement savings accounts, retire accounts as well as privately managed pension funds for institutions. It has over 350,000 pension contributors which it services from 48 locations across the country.

  • Stockbrokers push for innovative finance, technology to boost economy

    Stockbrokers have identified innovative financial services and products and technology-driven processes as major enablers for the development of the Nigerian capital market and the economy.

    Stockbrokers have thus resolved to bring the issues of rapid changes in technology  and product innovation into the mainstream of national discourse as the Chartered Institute of Stockbrokers (CIS) begins preparations to mark its Silver Jubilee.

    Stockbrokers have also endorsed privatization of moribund enterprises as a way of boosting their efficiency and attracting private sector participation .

    At a media briefing on the annual conference of stockbrokers scheduled for November 16th and 17th, 2017, Chairman, Annual Conference Committee, Mrs Lilian Olubi said that the conference had been packaged to help deepen the market and expand the professional knowledge of the dealing members.

    According to her, as one of the most prestigious professional bodies in the Nigerian financial industry, stockbrokers have, again, sought to elevate the all-important debate of financial market development at their conference with the aim of charting a course forward on policy alternatives.

    “This is reflected in our theme for this year’s edition titled, “Adapting to Dynamic Changes in the Financial Market”. Our choice of this year’s theme was informed by the marked rapid pace of innovations in the economy and capital markets, which require operators – both dealing members and the investing public, to keep abreast of these developments in order to make informed choices,” Olubi said.

    She noted that as businesses seek for alternative ways to raise capital and investors look to further diversify their portfolios from traditional assets, it has become imperative to encourage innovation of financial products.

    She added that the stockbrokers’ conference would be discussing options and strategies for deepening of our local market through introduction of new products’ such as derivatives, commodities, sukuk and alternative assets.

    “Introduction of new products will help deepen the market and expand professional knowledge on diverse investments products, thus encouraging more foreign investors’ participation whilst also developing our finance professionals. Also, advancement of technology in finance profession has become imperative in improving investors’ experience and supporting efficiency drive of stockbrokers,” Olubi said.

    Corroborating her, the CIS’ First Vice President, Mr Tunde Amolegbe assured participants that top government functionaries would participate in the conference.

    Responding to a question, a member of the Organizing Committee, Mr Akeem Oyewale explained that Nigeria’s economy was ripe for trading in derivatives.

    According to him, Nigeria is a large market which largely depends on mono product pointing out that the economy needed to invest in capacity building in order to cope with the challenges of the global economy.

    Another member of the Organising Committee, Mohammed Garuba advised the investors to take advantage of Investment opportunities in the Capital Market in order to enhance their Returns On Investment (ROI)

    Speaking further, Olubi stated that the Nigerian capital market had a lot of potentials for deepening in terms of investment products and private sector participation.

    “Privatisation of public entities which helps to improve their efficiency, will also aid the objective of boosting private sector participation in the capital markets through primary market issuances for debt and equity securities.  Upon highlighting these various topics, it becomes imperative to discuss them extensively to ensure continual development of the Nigerian Capital Market. We have a cream of notable speakers to do justice to the topics,” Olubi said.

  • Zenith Bank grows profit by 31% to N153b in Q3

    Zenith Bank grows profit by 31% to N153b in Q3

    Zenith Bank Plc recorded significant growths in the top-line and bottom-line in the third quarter, raising prospects of better returns for the 2017 business year.

    Key extracts of the interim report and accounts of the bank for the nine-month period ended September  30, 2017 showed gross earnings of N531.3 billion, showing a growth of 39.7 per cent above the N380.4 billion posted in the corresponding period of 2016. Net interest income rose marginally by 6.2 per cent from N189.8 billion to N201.5 billion, while non-interest income surged by 123 per cent to N169.5 billion, from N94.7 billion.

    Zenith Bank grew its profit before tax by 30.8 per cent from N116.6 billion to N152.5 billion while profit after tax (PAT) grew faster by 36 per cent to N129.2 billion, compared with N95.4 billion in 2016.

    Also, deposits grew from N2.6 trillion at the end of December 2016 to N3.1 trillion as at September. But loans and advances fell marginally by 2.6 per cent to N2.2 trillion, from N2.4 trillion. Total assets stood at N5.1 trillion, up from N4.6 trillion in December 2016.

    Chairman, Zenith Bank Plc, Mr. Jim Ovia recently assured that the bank would continue to work to improve shareholders’ value in spite of the challenging operating environment.

    He noted that the bank’s performance was due to its ability to fully exploit the available opportunities, pointing out that in line with its commitment to delivering superior returns to shareholders, the bank ensured that a good chunk of the profit would be distributed to the shareholders.

    “As a bank, we are monitoring developments both in the local and global economy and applying pragmatism and dynamism as appropriate. Our strategy and approach to the pursuit of financial inclusion and sustainability gives us a lot of competitive advantage to explore even new frontiers in the market,” Ovia said.

  • Commodities Exchange seeks N500m initial capital

    Promoters of the proposed Lagos Commodities and Futures Exchange (LCFE) have launched a private placement to raise N500 million initial capital for the takeoff of the new Exchange.

    At a meeting in Lagos yesterday, promoters of the new Exchange under the aegis of the Association of Stockbroking Houses of Nigeria (ASHON) endorsed the N500 million private placement to flag off the Exchange.

    The proposed Lagos Commodities & Futures Exchange is expected to trade in currency, commodities, oil and gas and solid minerals.

    The Memorandum of the Private Placement indicates that 500 million ordinary shares of N1 each would be offered to investors at N1 per share. The net proceeds of the private placement will be used to fund the start-up and operational take-off costs, administrative and personnel costs of the LCFE as well as leasing of a trading platform for the trading of qualifying derivatives including options, futures and spots among others.

    Several potential investors have already indicated interest in the LCFE, which they described as a laudable project that fits into the Federal Government’s diversification programme with special emphasis on agriculture.

    Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Mr Patrick Ezeagu said ASHON had worked tirelessly with its financial advisers, consultants, auditors and accountants to put together the Strategic Business Plan and Information Memorandum for the LCFE in order to provide investors with the basis for informed investment decision.

    Vice Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Mr Akin Akeredolu-Ale added that in order to ensure a seamless take-off of the Exchange, the Association had hired different consultants to confirm the depth of the market in terms of absorptive capacity for commodity and futures trading and models to run the Exchange in terms of strategy and the structure of the board to ensure compliance with corporate governance requirements.

    According to him, all reports indicated that the proposed Exchange would be run professionally and profitably.

    He noted that the private placement makes provision for strategic investors because the new Exchange requires huge capital outlay and know-how.

    “The Exchange is a capital intensive project. It also requires investment in high technology. We need one or two institutional investors that have huge capital and also technology. Some institutional investors that meet these criteria are already showing interest.  But by the structure that we shall adopt, there is no fear of marginalization of minority shareholders,” Akeredolu-Ale said.

    A senior stockbroker and former President, Chartered Institute of Bankers of Nigeria (CIBN), Mr Okechukwu Unegbu commended ASHON for the initiative.

    According to him, stockbroking firms should take advantage of the right of first refusal to invest in the project because it has potential for good returns.

    He said that the fund raising’s Memorandum contained vital information that can help any investor that intends to participate in the project, noting that government had begun to build many silos to boost trading in commodity products as part of the diversification programme.

    Representative of Meristem Securities Limited, Mrs Adejumoke Awolumate, who spoke extensively on the processes, benefits, critical success factors and other variables that would position the Exchange as a viable investment platform, assured investors that the Placement Memorandum contained all critical areas of investment decision on the project.

  • Jaiz Bank’s MD canvasses more Sukuk bonds

    Managing Director, Jaiz Bank Plc, Mr Hassan Usman, has advised the Federal Government to devise a regular Sukuk issuance programme to secure much-needed capital to boost infrastructural development and end the menace of abandoned projects.

    The Federal Government recently successfully floated its first sovereign Sukuk bond, raising N105 billion, N5 billion oversubscription on the initial target of N100 billion.

    Speaking at the 3rd African International Conference on Islamic Finance in Abuja, Usman said issuance of more Sukuk bonds would provide government with pool of capital finance infrastructural projects across the country while asset-based nature and financial discipline that come with Sukuk bonds will ensure timely completion of any identified project.

    According to him, Sukuk ensures discipline in the management of resources because there is always a structure to guide the process. As such, issuance of more Sukuk bonds will not only provide the huge quantum of funds needed to address infrastructural problems in the country but help to improve efficiency in public finance.

    “We have so many things that we need to address, from roads to railways, seaports, airports, hospitals, education and so many other things yearning for attention; which the normal budgeting system cannot address. We need to raise quantum of funds to address them. Issuing Sukuk gives you two things-you get the resources and get disciplined around it. Money from Sukuk is dedicated for what it is intended for. It is very unlikely for that money to be diverted out of those projects,” Usman said.

    He added that issuance of Sukuk will help Nigeria to address both financial inadequacy and structural deficiencies in public administration as every issuer of Sukuk will need to have a definitive structure in place for the utilization of the fund, which must be followed to the letter.

    “That for me is something Nigeria needs, because it would mean the end of abandoned projects. Before you raise Sukuk, you must have done your homework – you have gotten the contractors, you have done the bills of quantity- money is available and the contractor would go to the site and every certificate is paid for. So, Sukuk for me is the way to go to address many of our challenges,” Usman said.

  • Red Star plans new capital raising

    Red Star Express Plc has planned to raise new capital as the logistics and courier company moves to diversify its operations.

    Its Managing Director, Mr Sola Obabori, said the company would be raising the new capital in two tranches as part of efforts to provide supports for its business development plan.

    Speaking at the presentation of the underlying facts behind the operations of the company to the investing public at the Nigerian Stock Exchange (NSE), Obabori said the company has the potential to successfully raise the new funds, citing its historical performance and future outlook.

    “I have no doubt in my mind that we will be able to raise the money. This is why we are so confident about the figures we have put forward,” Obabori said.

    He noted that as Red Star Express celebrates its 25 years in business, the company will be diversifying into the agro business with the approval of the government.

    “The agro space in Nigeria is beginning to experience some buoyancy. Quite a lot of countries, especially in Europe and the United Kingdom, are beginning to request for products in Nigeria to be shipped to them. In the last 18 months, people have gone so much into farming in Nigeria trying to create new wealth in that environment. So, for us as a company we are beginning to look at the agro chain services, so we can move our products and services into that environment,” Obabori said.

    He added that the company will also invest in new ventures, which will unlock long term value through strategic investments as well as explore new growth opportunities in pharmaceutical logistics, agro trade, technological services, prints and packaging.

    Obabori said there would be expansion of existing businesses, including warehouses and fleet in order to increase coverage and visibility.

    He pointed out that the company’s subsidiary in Niger Republic has growth opportunities, noting that work has been done to ensure that the subsidiary taps into opportunities in the country.

    “It promises to bring additional revenue and profit  to the fold of Red Star Express.  More offices in underserved locations will be opened,” Obabori said.

    According to him, the company is targeting turnover of N8.1 billion for the year ending 2018, while profits before and after tax will be N883 million and N618 million respectively.

    “The logistics business is a wide one. Cargo is a major area where you can have more volumes once you have the economy bouncing back and you can have more people importing and exporting,” Obabori said.