The Nation Newspaper

Category: Equities

  • Nine million investors yet to join electronic-dividend system

    Nine million investors yet to join electronic-dividend system

    •SEC urges investors to take advantage of free registration

    About nine million investors are yet to sign on to the electronic dividend payment (e-dividend) system, where dividends will be paid directly by corporate registrars to the bank accounts of investors.

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), at the weekend confirmed that about 2.2 million investors have so far mandated their bank accounts for direct payment of dividends through the e-dividend platform.

    There are  more than 12 million investors in the stock market. Minority retail investors account for more than 80 per cent of the domestic investors’ base, although they account for lower turnover. Institutional investors, including pension fund administrators (PFAs), insurance companies, investment banking firms, stockbrokers, dealers and high networth individual investors among others, account for the larger percentage of transactions.

    The latest transactional report by the NSE indicated that retail domestic investors account for 38.5 per cent of total transaction value by domestic investors last May.

    Many sources in the know said the large number of unregistered investors for the e-dividend might have been responsible for the extension of the June 30, 2017 deadline for the cessation of dividend warrants and adoption of the full e-dividend option by SEC.

    SEC had announced the extension of the deadline from June 30, 2017 to December 31, 2017, citing numerous requests received from the investing public.

    In a circular at the weekend, SEC however, insisted that the deadline of December 31, 2017 “will mark the end of conventional issue of physical dividend warrants to shareholders of public companies in the Nigerian capital market”.

    The Commission stated that it has also decided to continue to underwrite the cost of e-dividend enrolment till December 31, 2017, implying all unregistered investors will also be able to enroll without any payment within the six-month period.

    “The advantage of the e-dividend is not only to enable investors collect subsequent dividends electronically, but it allows all accrued dividends to be credited to investors’ bank accounts. This will stem the rising unclaimed dividend in the capital market,” SEC stated.

    The Commission noted that the extension of the deadline and free registration underscored its strong focus on market development and enhancement of investor confidence.

    “All investors in the Nigerian capital market are therefore advised to take advantage of this extended grace period by approaching their bankers or registrars for enrolment before the deadline,” SEC said.

    SEC had in November 2015 launched the E-Dividend Mandate Management System (E-DMMS) in collaboration with the Central Bank of Nigeria, Nigerian Interbank Settlement System (NIBSS) and other stakeholders. The E-DMMS is an E-dividend payment portal that ensures the payment of dividends directly into a shareholder’s account.

    It is believed that the steps taken by the Commission would help to reduce the increase of unclaimed dividend which stood at N117 billion as at December 31, 2016.  Out of this figure, N86 billion was in the custody of the paying companies while N13.7 billion was in the custody of the registrars. From November 2015 when the SEC flagged-off the campaign on e-dividends to February 2017, about N42.2 billion has been paid to investors from the backlog of unclaimed dividends.

    SEC Director-General, Mounir Gwarzo, had recently said efforts made by the Commission to ensure that the era of stale dividends and huge unclaimed dividends in the market become a thing of the past have started achieving result with the e-dividend registration system.

    “In this country, we have never had this kind of initiative that has reduced unclaimed dividends like we had today. Apart from the investor getting his dividends where ever he is, that investor will be able to get dividends that in the last five years he has not been able to get. The e-dividend is for the interest of retail investors,” Gwarzo said.

  • Banking stocks lead returns at stock market

    Investors in banking stocks earned as much as a double of any other average investor in the Nigerian equities market in the first half of this year.

    A six-month review of sectoral indices for the period ended June 30, 2017 at the weekend showed that banking stocks significantly outperformed the benchmark index and other sectoral indices at the Nigerian Stock Exchange (NSE).

    The NSE Banking Index, which tracks price appreciation in the most active banking sector, indicated average year-to-date return of 45.08 per cent for the first half, almost a double of the average year-to-date return of 23.23 per cent for the overall stock market.

    The NSE Industrial Goods Index, which includes Nigeria’s most capitalised company-Dangote Cement, recorded the second highest return with a six-month return of 21.12 per cent. Expectedly, the NSE 30 Index, which tracks the 30 most capitalised stocks that largely comprise of banking and industrial goods stocks, recorded average return of 25.87 per cent within the period.

    With the exception of investors in the emerging stocks segment of the market, other tracked indices showed modest positive returns within the period. The NSE Insurance Index recorded a return of 9.16 per cent. The NSE Consumer Goods Index posted a gain of 11.61 per cent. The NSE Oil and Gas Index recorded the lowest return of 3.35 per cent on the main board.

    The NSE Lotus Islamic Index, which tracks stocks that comply with Islamic investment guidelines, indicated a return of 11.15 per cent.

    Meanwhile, pensioners appeared to be in for wider dining tables as the NSE Pension Index, which tracks a portfolio of stocks specially screened for pension investment in line with the pension investment guidelines, posted a return of 42.92 per cent.

    However, the NSE ASeM Index, which tracks equities on the Alternative Securities Market (ASeM) for emerging stocks, posted a negative return of 1.27 per cent within the first half of the year.

    Also, investors earned net capital gain of N344 billion during the three-day trading session last week. Aggregate market value of all quoted equities at the NSE rose from the week’s opening value of N11.108 trillion to close the week at N11.452 trillion, representing net capital gain of N344 billion. The benchmark index for the stock market, the All Share Index (ASI) also rallied from its index on board of 32,122.14 points to close the week at 33, 117.48 points.

    Total turnover stood at 1.171 billion shares worth N11.458 billion in 13,763 deals during the three-day trading session compared with a total of 2.311 billion shares valued at N24.577 billion traded in 27,836 deals in the previous five-day trading week.

    The financial services sector led the activity chart with 899.307 million shares valued at N6.779 billion traded in  7,977 deals; thus contributing 76.78 per cent and 59.16 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with 111.022 million shares worth N189.462 million in 952 deals while the consumer goods sector ranked third with a turnover of 56.912 million shares worth N2.373 billion in 2,055 deals.

    The three most active stocks were United Bank for Africa Plc, Transnational Corporation of Nigeria Plc and Access Bank Plc, which altogether accounted for 499.566 million shares worth N3.717 billion in 2,954 deals, contributing 42.65 per cent and 32.44 per cent to the total equity turnover volume and value.

    Also traded during the week were a total of 869,680 units of Exchange Traded Products (ETPs) valued at N19.150 million in 16 deals compared with a total of 63,927 units valued at N841,330.04 traded in 11 deals in the previous week.

    In the debt segment, a total of 20 units of Federal Government Bonds valued at N16,487 were traded in a deal compared with seven deals struck for 2,212 units valued at N2.098 million in the previous week.

     

  • Unilever Nigeria to launch N59b rights issue

    Unilever Nigeria to launch N59b rights issue

    Unilever Nigeria Plc yesterday said it plans to raise about N58.86 billion by selling new ordinary shares to existing shareholders.

    In a regulatory filing at the Nigerian Stock Exchange (NSE), Unilever Nigeria indicated that it plans to float a rights issue of 1.962 billion ordinary shares of 50 kobo each at a price of N30 per share. The rights issue will be pre-allotted to shareholders in the register of the company as at the close of business yesterday on the basis of 14 new ordinary shares for every 27 ordinary shares held.

    Acting Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai confirmed that the fast moving consumer goods company has submitted application for the approval of the rights issue to the Exchange.

    Shareholders of Unilever Nigeria had at the annual general meeting in Lagos approved a proposal by the board of the company to raise up to N63 billion in new equity funds by selling new shares to existing shareholders.

    In preparation for the rights issue, shareholders also increased the authorised share capital of the company to N5 billion or 10 billion shares through the creation of additional 3.95 billion ordinary shares of 50 kobo each.

    Unilever Plc, United Kingdom, the majority core investor in Unilever Nigeria, is expected to provide about N35.4 billion in the capital raising. Unilever UK holds 60.06 per cent majority equity stake in Unilever Nigeria through its Unilever Overseas Holdings BV. Stanbic Nominees Nigeria Limited holds the second largest equity stake of 10.43 per cent in Unilever Nigeria.

    Unilever UK has shown sustained interest in increasing its majority shareholding in the Nigerian subsidiary. It mopped up additional shares through open market purchases at the Nigerian Stock Exchange (NSE) to increase its majority stake by 1.53 per cent from 58.53 per cent in 2015 to 60.06 per cent in 2016. It had also made open market purchases in 2015.

    Unilever UK will be required to contribute at least N35.35 billion to the rights issue to retain its current shareholding and the multinational may increase its stake by applying for additional shares from renounced rights.

  • Equities regain rally with N185b gain

    After losing N584 billion to profit-taking last week, Nigerian equities regained the uptrend at the resumption of trading yesterday as highly capitalised stocks rallied the market to a net capital gain of N185 billion. Benchmark indices at the Nigerian Stock Exchange (NSE) showed average gain of 1.7 per cent, nudging the average year-to-date return to 21.5 per cent.

    The overall market situation showed widespread positive sentiments, especially within the blue chips and value stocks. However, the profit-taking continued to run underneath with 26 gainers to 21 losers. Aggregate market value of all quoted equities rose from its opening value of N11.108 trillion to close at N11.293 trillion. The All Share Index (ASI)-the common value-based index that tracks prices at the Exchange, also increased from 32,122.14 points to close at 32,657.30 points.

    Most sectoral indices also closed positive, underlining the broad rally that marked share pricing yesterday. The NSE Banking Index rose by 3.2 per cent. The NSE Industrial Goods Index appreciated by 1.1 per cent. The NSE Consumer Goods Index rose by 0.8 per cent while the NSE Oil & Gas Index inched up by 0.4 per cent. However, the NSE Insurance Index slipped by 0.1 per cent.

    Nestle Nigeria-the highest priced stock at the stock market, led the rally with a gain of N9.99 to close at N910. Dangote Cement-the most capitalised quoted company, followed with a gain of N4.40 to close at N200. Nigerian Breweries-the second most capitalised quoted company, appreciated by N2.63 to close at N154.53. Forte Oil rose by N2.50 to close at N52.54 while Guaranty Trust Bank-the most capitalised banking stock, rallied N1.50 to close at N36 per share.

    Total turnover stood at 386.2 million shares valued at N3.3 billion. The most active stock was United Bank for Africa with 87.11 million shares worth N762.08 million.

    On the downside, Okomu Oil Palm led the losers with a loss of N3.07 to close at N58.49. Unilever Nigeria followed with a drop of N2.14 to close at N40.85 while Julius Berger Nigeria lost N2.07 to close at N39.45 per share.

    “As expected, the prices of some value stocks prompted buying interest by investors and we expect the optimism to be sustained in the near term as investors continue to spot opportunities in a fundamentally driven market,” Afrinvest Securities stated.

  • Access Bank sustains improved performance

    Access Bank sustains improved performance

    Access Bank has remained on strong growth trajectory as latest earnings reports showed improvements across key performance indicators.

    The bank’s focus on assets quality and cost management, appeared to be paying off with strong earnings growth and significant reduction in loan loss provisions, driving overall performance to the Deposit Money Bank to the industry’s top chart.

    The improvements in fundamentals have positively impacted share pricing trend at the Nigerian Stock Exchange (NSE), with the bank’s share price rising by more than 70 per cent so far this year.

    Access Bank reported an impressive first quarter profits, showing improvement in performance indicators. The bank’s unaudited financial results for the first quarter ended March 31, 2017 showed an increase of 38 per cent in profit before tax to N31.2 billion when compared with N22.6 billion in the first quarter of 2016. The bank’s profit after tax rose by 34 per cent to N26.0 billion in 2017, up from N19.4 billion recorded in the corresponding period of 2016.

    Gross earnings stood at N116 billion, an increase of 44 per cent on N80.3 billion reported in comparable period of 2016. Interest income and non-interest income contributed 68 per cent and 31 per cent respectively to the gross earnings. Although loan growth remains subdued in the first quarter and some key fee income businesses weakened, margin expansion and gains on foreign exchange and derivatives have more than compensated. Funding income should remain strong in the near term, supported by relatively high yields on treasury bills.

    Also, key extracts of the full-year report for the period ended December 31, 2016 showed that pre-tax profit appreciated by 20 percent to N90.3 billion in 2016 from N75.4 billion recorded in the 2015. Also, post-tax profit climbed up by 9.23 percent to N90.3 billion in 2016 from N75.0 billion in 2015. Gross earnings increased from N337.4 billion in 2015 to N381.3 billion in 2016, indicating an increase of 13.05 percent.

    Further analysis of the bank’s finance showed that its balance sheet remained strong with a total assets standing at N3.54 trillion at the end of first quarter, compared to N3.48 trillion recorded as at December 2016. Derivative assets rose from N156 billion as at December 2016 to N161 billion, representing an increase of 3.2 per cent, while its investment in subsidiaries, properties and equipments increased by 2.5 per cent from N84.1billion to N86.2 billion. Its income from derivative instrument has been a topical line item around the bank’s earnings in recent years. The income line offsets the impact of currency devaluation on its foreign currency liability and has consistently supported non-interest income.

    The bank’s capital adequacy and liquidity ratios, which are a class of financial metrics used to determine a bank’s ability to pay off its short-term debts obligations, remain 21 per cent and 46.3 per cent respectively, more than the minimum regulatory requirement of 15 per cent and 30 per cent. The higher the value of the ratio, the larger the margin of safety a bank possesses to cover short-term debts. The bank raised a $300 million five-year Eurobond at 10.5 per cent in October 2016 in a bid to support its foreign exchange liquidity, which continues to enhance its balance sheet.

    The reports showed that the bank continues to focus on de-risking its portfolio, building a consolidated business, expanding its international network, and driving efficiency through technology innovation in a bid to successfully navigate the tough operating environment.  Asides restructuring existing loans, the bank has been cautious about risk asset creation – maintaining a zero exposure to the troubled power sector whilst restricting credit to quality names across other sectors. The bank continues to focus on enhanced technology and innovation to drive efficiency as the bank looks to contain its relatively high operating cost, which came from a high cost base post acquisition of Intercontinental Bank.

    Group Managing Director, Access Bank Plc, Mr. Herbert Wigwe said that 2017 marks the end of the bank’s third five-year transformation journey and in the coming months, its priorities will be the delivery of its strategic objectives.

    “We will continue to improve on profitability and shareholder value by maintaining our capital and liquidity positions, assiduously implementing our cost management strategy, and exploiting retail business opportunities using our digital platforms and deepening market share of the wholesale business,” Wigwe said.

    He assured stakeholders that the bank was now stronger and well positioned to deliver long-term value to its stakeholders. According to him, although the macro-economic conditions and corresponding implications on the banking industry remain uncertain, the bank’s diversified banking model, robust balance sheet and solid management team give it the strength and resilience that will keep the financial institution in good stead.

    “By diligently executing our strategy, we will continue to maintain improved profitability and create the capacity to continue to invest in our key areas of strength.  As we come to the end of our third five-year transformation journey, our top priority in the coming year will be to cement our position as a dominant corporate bank and establish ourselves as a formidable retail player, leverage digital technology and innovation to create value for our customers whilst unlocking new revenue streams and deliver seamless and superior customer experience across all our service touch points,” Wigwe said.

  • Shareholders endorse CWG’s expansion into telecom services

    •Assures on sustained profit

    Shareholders of CWG Plc yesterday in Lagos amended the memorandum of association of the company to include provision of telecommunication services in its portfolio of businesses. The amendment will allow CWG to provide value-added services in the vast telecommunication and digital business.

    At the annual general meeting in Lagos, shareholders commended the rebound in the operations of the company as the bottom-line recovered from a net loss of N1.8 billion in 2015 to a net profit of N127.7 million in 2016.

    Key extracts of the audited report and accounts of CWG for the year ended December 31, 2016 showed a rebound from a pre-tax loss of N1.75 billion in 2015 to pre-tax profit of N142.0 million in 2016. Group turnover however declined from N15.6 billion to N10.17 billion.

    Speaking at the meeting, Chairman, CWG Plc, Mr. Abiodun Fawunmi, attributed the rebound in the performance of the company to new well articulated and implemented strategies that steadied the group against the operating challenges.

    According to him, the improvement was due to strategic cost optimisation initiatives adopted by the management including mitigated measures against foreign exchange losses, the absence of income reversals and non-recurrence of inventory write-offs.

    “The impressive result recorded by the company last year is attributable to our focus on profitable information technology solutions with deliberately less exposure to foreign exchange fluctuations and with predictable recurrent revenues,” Fawunmi said.

    He assured that the company has an impressive and promising outlook for investors as its strategic decision to leverage on home-grown initiatives has built-in a running resilience that allows the company to thrive in spite of the tough economic environment.

    He said the company will continue to focus on its recurrent businesses with lower cost of sales and more predictable and recurring income adding that the company will ensure improved penetration of its home-grown products in various sectors of the economy.

    Managing Director, CWG Plc, Mr James Agada said the company will in the current year convert its investments in new services in its utility, health, transport and government sectors into contributors to the top-line and bottom-line.

    He added that group would also invest in converting its previous outright sales businesses into subscription mode businesses while it will start several initiatives to sustain overall performance.

    “Our ultimate target is to become one of the largest providers of IT platform services out of Africa by 2020. We will be well on our way by meeting the target of six million transactions per month in the next year and then growing aggressively from there to a minimum of sixty million transactions per month by 2020. Meeting these targets set us on the way to reaching the $1 billion a year benchmark,” Agada said.

    “Your company is in the business of solving problems with technology and as we continue to solve them, the value of your investments will continue to grow,” Agada assured shareholders.

  • Equities remain down with N190b loss

    Equities remain down with N190b loss

    For the second consecutive trading session, Nigerian equities continued to reel under profit-taking transactions with three out of every four transactions closed at lower prices. Total market value of all quoted equities dropped by N190 billion, bringing total loss in the past two trading sessions to N500 billion.

    With 45 losers to 14 gainers, the benchmark index at the Nigerian Stock Exchange (NSE), the All Share Index (ASI) declined by 1.6 per cent from its opening index of 33,477.89 points to close at 32,928.44 points. Aggregate market value of all quoted equities dropped from its opening value of N11.577 trillion to close at N11.387 trillion. The average year-to-date return thus dropped to 22.5 per cent.

    All sectoral indices also closed in the negative, underlining the widespread selling sentiment that drove transactions yesterday. The NSE Consumer Goods Index dropped by 2.6 per cent. The NSE Banking Index declined by 2.4 per cent. The NSE Insurance Index slipped by 1.3 per cent. The NSE Industrial Goods Index lost by 0.8 per cent while the NSE Oil and Gas Index dropped by 0.4 per cent.

    Nigerian Breweries, NSE’s second most capitalised company, led the losers with a loss of N7.97 to close at N158.03. Okomu Oil Palm followed with a loss of N3.40 to close at N64.80. Presco lost N3 to close at N73. Mobil Oil Nigeria dropped by N2.90 to close at N248 while Julius Berger Nigeria lost N2.18 to close at N41.52 per share.

    Total turnover stood at 509.8 million shares valued at N5.0 billion. United Bank for Africa (UBA) led the activities’ chart with a turnover of 88.92 million shares valued at N776.27 million. Diamond Bank followed with 70.36 million shares worth N79.01 million while Transnational Corporation of Nigeria placed third with 60.3 million shares worth N91.72 million.

    On the positive side, Conoil led the contrarian stocks with a gain of N4.14 to close at N44.56. Ashaka Cement followed with a gain of N1.50 to close at N16.27. Berger Paints of Nigeria rallied 65 kobo to close at N7.12. UBA added 38 kobo to close at N9.20 while UAC of Nigeria chalked up 10 kobo to close at N18 per share.

    “The bearish sentiment in the Bourse in the last two sessions is partly attributable to slide in oil prices since the start of the week. We expect this fundamental driver to continue to dictate performance in the near term, although we remain medium term positive on the market performance,” Afrinvest Securities stated.

  • Equities lose N310b to profit-taking

    Nigerian equities ended their four-day consecutive rally yesterday as investors turned round to monetise recent capital gains. The scramble to close sell transactions turned the stock market into a buyer’s market, forcing most transactions to close at lower prices.

    With nearly three losers to every gainer, benchmark indices at the Nigerian Stock Exchange (NSE) showed a net capital loss of N310 billion within the five-hour trading session, representing average day-on-day decline of 2.6 per cent.

    Aggregate market value of all quoted equities dropped from its opening value of N11.887 trillion to close at N11.577 trillion. The All Share Index (ASI)-the main value-based index also declined from its opening index of 34,375.60 points to close at 33,477.89 points.

    Highly capitalised stocks headlined the downtrend. Nestle Nigeria-the highest-priced stock at the Exchange, led the losers with a loss of N10 to close at N900. Dangote Cement, the most capitalised quoted company, followed with a loss of N8.97 to close at N205. Seven-Up Bottling Company dropped by N2.99 to close at N90.01. Lafarge Africa declined by N2.20 to close at N52 while Nigerian Breweries, the second most capitalised company, lost N2 to close at N166 per share.

    There were 37 losers against 13 gainers. Conoil recorded the highest gain of N1.92 to close at N40.42. CAP followed with a gain of 79 kobo to close at N34.99. Cement Company of Northern Nigeria added 53 kobo to close at N11.27. UAC of Nigeria rose by 35 kobo to close at N17.90 while Nascon Allied Industries chalked up 20 kobo to close at N10 per share.

    Zenith Bank was the most active stock with a turnover of 87.03 million shares worth N1.86 billion. Fidelity Bank followed with 55.4 million shares worth N71.5 million while Zenith Bank placed third with 50.3 million shares valued at N1.8 billion.

  • Banking stocks’ return hits 51.2% as equities continue rally

    Banking stocks’ return hits 51.2% as equities continue rally

    Investors in banking stocks have earned as much as a double of any other average investor as equities continued their most consistent price appreciation in recent years. The NSE Banking Index, which tracks price appreciation in the most active banking sector, indicated average year-to-date return of 51.16 per cent at the weekend, a double of the average year-to-date return of 25.81 per cent for the overall stock market.

    Banking stocks led another week of sustained price appreciation last week with a week-on-week gain of 4.99 per cent by the sectoral gauge. The All Share Index (ASI)-the common index that tracks prices of all equities at the Nigerian Stock Exchange (NSE), closed the week with a gain of 1.60 per cent.

    General and sectoral indices showed that most investors are  trading on the profit side with the ASI, which serves as Nigeria’s sovereign equities return index, indicating a quarter profit for the average investors by the weekend.

    Besides banking stocks, the uptrend at the Nigerian stock market had been driven by large-cap stocks. The NSE 30 Index, which tracks the 30 most capitalised stocks, rose by 2.28 per cent last week to close the week with average year-to-date return of 29.42 per cent. The NSE Industrial Goods Index, which includes Nigeria’s most capitalised company-Dangote Cement, posted a year-to-date return of 25.09 per cent in spite of a marginal decline of 0.28 per cent during the week.

    Other tracked indices showed positive returns. The NSE Insurance Index rose by 3.57 per cent last week to increase average year-to-date return to 15.4 per cent. The NSE Consumer Goods Index inched up by 0.51 per cent last week to close average accruable capital gain so far this year at 13.68 per cent. However, a drop of 4.20 per cent last week almost halved year-to-date return in the oil and gas sector to 5.83 per cent.

    Aggregate market value of all quoted equities at the NSE rose from the week’s opening value of N11.504 trillion to close the week at N11.692 trillion, representing net capital gain of N188 billion. The ASI also rallied from its index on board of 33,276.68 points to close at 33,810.56 points.

    While highly capitalised stocks held the market against running profit-taking, there were more losers against gainers during the week as investors sought to monetise accumulated capital gains into cash. There were 38 gainers against 42 losers last week compared with 59 gainers and 21 losers in the previous week.

    Penny stocks continued to lead the rally. May & Baker Nigeria’s share price rose by 60.6 per cent to N4.56 per share last week. Skye Bank followed with a gain of 41.5 per cent to close at 75 kobo. Cement Company of Northern Nigeria rose by 33.7 per cent to N8.85. Transnational Corporation of Nigeria appreciated by 22.4 per cent to N1.86 while Ashaka Cement rose by 21.2 per cent to N14.07 per share.

    Total turnover stood at 2.737 billion shares worth N32.042 billion in 32,217 deals compared with a total of 3.100 billion shares valued at N29.180 billion that exchanged hands week in 33,677deals two weeks ago.

    The financial services industry led the activity chart with 2.189 billion shares valued at N21.792 billion traded in 18,832 deals; thus contributing 79.98 per cent and 68.01 per cent to the total equity turnover volume and value respectively. The conglomerates industry followed with 287.945 million shares worth N621.772 million in 2,031deals. The third place was occupied by Consumer Goods Industry with a turnover of 114.832 million shares worth N5.370 billion in 5,040 deals.

    The trio of Access Bank Plc, Zenith International Bank Plc and Transnational Corporation of Nigeria Plc were the most active. They accounted for 918.046 million shares worth N10.324 billion in 5,809 deals, contributing 33.53 per cent and 32.22 per cent to the total equity turnover volume and value respectively.

    Also traded during the week were a total of 16,300 units of Exchange Traded Products (ETPs) valued at N973,376 in three deals compared with a total of 40.317 million units valued at N178.841 million transacted in 12 deals in previous week.

    In the debt segment, a total of 12,193 units of Federal Government Bonds valued at N12.440 million were traded in 14 deals compared with a total of 10,860 units valued at N10.196 million traded 10 deals in previous week.

  • ‘Many stocks are still trading below their values’

    ‘Many stocks are still trading below their values’

    Leading investment banker, Dr. Umaru Kwairanga, in this interview with Taofik Salako speaks on the opportunities in the stock market and strategies to build healthy investment portfolio. A former chairman of Ashaka Cement, Kwairanga is on the National Council of the Nigerian Stock Exchange (NSE) and a director in several companies, including Lafarge Africa, Central Securities Clearing System Plc (CSCS), Jaiz Bank Plc and FBN Mortgages Limited.

    What is your assessment of the capital market so far this year?

    The capital market has been on a rebound in 2017, especially from the end of the first quarter till now. Recent initiatives taken by the Central Bank of Nigeria to solve the problem of chronic scarcity of forex has boosted the economy and the capital market in particular. The All Share Index has swung into positive territory after months of persistent declines and trading volumes have increased dramatically in the last couple of months. I would say the Nigerian capital market has done quite well in the last couple of months.

    In the light of market situation, what is your advice for investors?

    My advice has always been that investors should make investing a regular habit, invest after thorough research and more importantly seek the opinion of a professional stock broker. Keep an eye on your investments and the fundamentals of the companies you invest in. Buy low, sell high. Our stock market has growth potential as many stocks are still trading below their intrinsic values. This is a good time to move in.

    What is the link between macro-economic instability and trading on the Nigerian Stock Exchange, especially the issue of foreign exchange?

    The macro-economic instability in the previous past impacted trading on the NSE negatively. The index and market capitalisation were down by almost five pr cent while the uncertainty lasted and trading volumes halved from previous years. As you know, participation in our capital market has been slightly skewed in favour of foreign portfolio investors for most of the past decade and this category of investors refused to participate in the capital market while the forex issues persisted. I believe the drastic dip in liquidity of the capital market was partly due to the refusal of this category of investors to play in the market while the macro-economic issues were prevalent

     What is your assessment of investor’s confidence in the market?

    Investor confidence is gradually returning as can be seen by the positive numbers in recent weeks. Our prayer is that the government, the Central Bank of Nigeria and other regulators remain consistent in their resolve to tackle the issues that have held our economy and this great country potential down in recent years. That will definitely boost investor’s confidence further and guarantee stability.

    Are there critical issues that the government should address to use the capital market to fund this year’s budget deficit?

    I think the funding of government deficits is an ongoing issue and cannot be tied to the current year’s budget alone. The capital market exists to bridge the gap between investors who have funds to invest and users whether government or the private sector who need funds at any particular time. As long as the Federal Government puts in place policies and mechanisms to ensure prudence and accountability and offers competitive returns, the capital market will remain a viable option for funding its deficits.

    What have been the roles of the Chartered Institute of Stockbrokers (CIS) in building investor’ confidence in the market?

    CIS has been very proactive in ensuring that members of the institute attain and maintain the highest standards in terms of professionalism, knowledge and character. Any investor dealing with a licensed member of the Institute is assured that he or she is dealing with a professional who knows his onions and who will always abide by the highest standards of integrity.  At the same time CIS is also waging a relentless war against quackery in the profession to ensure that investors in the Nigeria’s market are protected at all times.

     As chairman of the national workshop committee of the CIS for this year, what informed the theme, “Transiting from recession to a global power: A working template for Nigeria “?

    We chose the theme because we believe that what has happened in the last year is an aberration. Nigeria with its bountiful human and material resources and untapped opportunities should be on a consistent growth trajectory to taking its rightful place as a global power. Some mistakes were however made over the years especially in the last four decades that have consistently held back our potential. Our belief as an institute is that with the right strategies in place and proper implementation, we can reset this country and fast-track it to its rightful place in the comity of nations. We see the recession as a temporary blip and are confident that with the right template, we can attain our rightful status as a global power.

    What are the benefits of the theme to the economy in general and the capital market in particular?

    The theme will elicit a viable working template that the managers of the economy can leverage on to drive growth in the country. We anticipate that speakers will come up with feasible and workable strategies for important organs of government and the private sector to implement to drive momentum in various sectors. This will benefit the economy, the citizenry and, ultimately, the capital market as the capital market is but a barometer of the economy. When an economy is vibrant and growing, the capital market will mirror this. If otherwise, the market will equally reflect the situation. I must be quick to add that our market is forward looking.

    What is the nexus between the workshop theme and the Economic Recovery and Growth Plan (ERGP) recently launched by the Federal Government ?

    A: The two are complementary in that they both seek to proffer workable and practicable solutions to get the economy out of recession and back on the path of sustainable growth.

    What do you think would make the workshop unique?

    The workshop will be practical and offer implementable strategies on a wide ranging variety of problems holding our economy back. It will, therefore, not be just another talk shop. It shall be a new platform for engaging the government on the need to utilize the capital market for successful implementation of this year’s budget.

     What should the investing public expect from the national workshop?

    Investors should expect positive messages on growth in both the economy and the capital market. They should expect to hear about some of the laudable strategies being crafted to get the economy out of recession and increase corporate returns.