The Nation Newspaper

Category: Equities

  • Equities open with marginal decline

    Nigerian equities reopened yesterday to a wave of profit-taking after four consecutive positive trading sessions. The two main indices at the Nigerian Stock Exchange (NSE) showed a marginal decline of 0.12 per cent or N12 billion, shaving the average year-to-date return to 4.48 per cent.

    The negative overall market position was driven largely by losses induced by profit-taking transactions on leading consumer goods and banking stocks. The underlying sentiments at the market meanwhile remained largely bullish with 26 gainers to 18 losers in the five-hour trading session.

    The All Share Index (ASI)-which tracks prices at the NSE, dipped from its opening index of 28,113.38 points to close at 28,078.30 points. Aggregate market value of all quoted equities also declined from opening value of N9.719 trillion to close at N9.707 trillion.

    The decline on Monday halted a four-day rally that started last Tuesday. Most sectoral indices still showed positive performance. The NSE Oil & Gas Index rose by 0.4 per cent while the NSE Insurance Index and NSE Industrial Goods Index inched up by 0.1 per cent each. However, the NSE Consumer Goods Index dropped by 0.7 per cent while the NSE Banking Index slipped by 0.03 per cent.

    Seplat Petroleum Development Company led the gainers with a gain of N5.20 to close at N372.70. Total Nigeria followed with a gain of N5 to close at N270. Nestle Nigeria rose by N1 to close at N836. Okomu Oil Palm and PZ Cussons Nigeria added 90 kobo each to close at N50.90 and N18.90 while Guaranty Trust Bank rose by 50 kobo to close at N32 per share.

    On the downside, Nigerian Breweries led the losers with a drop of N3.12 to close at N140.84. Presco followed with a loss of N1 to close at N48. Cadbury Nigeria declined by 53 kobo to close at N10.12. Ecobank Transnational Incorporated dropped by 49 kobo to close at N9.31 while UAC of Nigeria lost 34 kobo to close at N14.56 per share.

    Total turnover stood at 208.33 million shares valued at N3.74 billion in 3,498 deals. Diamond Bank was the most active with 36.89 million shares valued at N34.33 million. Zenith Bank followed with 29.86 million shares worth N534.06 million while Guaranty Trust Bank placed third with 22.14 million shares valued at N708.45 million.

    “Today’s negative close was majorly due to profit taking by investors, however, we expect performance to strengthen in trading sessions ahead as investor sentiment remains strong,” analysts at Afrinvest Securities stated.

  • NSE, NEPC partner on economic diversification

    The Nigerian Stock Exchange (NSE) and the Nigerian Export Promotion Council (NEPC) yesterday committed to mutual cooperation and collaboration towards achievement of the economic diversification agenda of the government.

    Chief Executive Officer, Nigerian Export Promotion Council (NEPC), Mr. Segun Awolowo, was at the NSE in Lagos yesterday to formally present the Zero Oil Plan of the NEPC to stakeholders at the stock market.

    The Zero Oil Plan seeks to develop the non-oil potential of the Nigerian economy by focusing on development of key export-oriented products. It is estimated that Nigeria stands to achieve greater growth and development through its agricultural and non-oil mineral resources.

    Awolowo underscored the importance of the Zero Oil Plan and the diversification agenda of the government noting that Nigeria slipped into recession because of its lop-sided dependence on crude oil as its major export commodity.

    According to him, with gradual decline in oil revenues from $70 billion in 2014 to $50 billion in 2015 and $40 billion in 2016, it was evident that Nigeria’s economic decline was in line with the crude oil decline.

    “If we are not selling anything except oil to get foreign exchange as at today, then we are going to continue to be in this kind of trouble, so we developed the zero oil plan based on President Muhammadu Buhari’s call for diversification of the economy,”  Awolowo said.

    He noted that Nigeria has enormous non-oil potential as it has some 22 non-oil sectors that it can concentrate on as sources of foreign exchange.

    He said the Zero Oil Plan also seeks to develop the value chain of Nigerian exports rather than the current dominant trend of raw material exports.

    “We knew that value exports are the only way we are going to promote the economy. We are tired of selling raw materials, without adding value to the economy and then importing the finished product of the raw material exported. We export cocoa and buy chocolate, all these must stop. The revival of our economy must be an export-based revival,” Awolowo said.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema said the Exchange would support the Zero Oil Plan by encouraging market operators and quoted companies to cue into the programme.

    He commended the initiative to diversify the economy and develop additional sources of foreign exchange earnings for the country.

    “We are very happy to collaborate with NEPC,” Onyema said.

    Doyen of stockbrokers, Alhaji Rasheed Yusuf said the stockbroking community would support the NEPC by providing specialised services to export-based companies under the NEPC.

    “We are set to offer the services of the NSE to the companies under NEPC. It is our expectation that now that you have come, we are now on the same page, the stockbrokers are ready to support in boosting the non-oil export,” Yusuf said.

  • Shareholders approve new capital raising for Med-View Airline

    Shareholders of Med-View Airline Plc have mandated the board of the company to raise additional capital to support the business expansion programme of the company.

    At the annual general meeting in Lagos, shareholders unanimously approved a special resolution authorizing the board of the company to raise new capital through debt or equity or a combination of debts and equities through any of private placement, rights issue, public offer and staff share purchase scheme.

    Chairman, Med-View Airline Plc, Sheik Abdul-Mosheen Al-Thunayan, said the company was witnessing the beginning of a new era and urged all shareholders and other stakeholders to support the company as the board and management continue to work together to move the company forward.

    According to him, the growth of the company has continued with accelerated efforts and ahead of its contemporaries as it has been able to spread to various routes across the world from its humble beginning in Nigeria in 2007.

    “We have commenced plans to include Conakry, Douala, Cotonou, Kinshasha, Abidjan and Lome in the second quarter of 2017. Our international route covers Jeddah and London. We are planning to include Dubai, United States of America and South Africa in 2017,” Al-Thunayan said.

    He noted that the airline came at a time that Nigerians were yearning for an airline and Med-View Airline has been the preferred airline by Nigerian, which earned it the nickname “airline of Nigeria”.

    Managing Director, Med-View Airline Plc, Alhaji Muneer Bankole, pointed out that the airline industry is capital intensive, thus access to funds is a major key factor to the survival of any airline.

    According to him, the challenges before the company are to ensure that it improves its performance and move to an era of sustained growth, profitability and adequate returns to all stakeholders within the shortest period of time.

    He assured that the company has been well-positioned to overcome challenges of the business environment citing the quality of its human capital and experience of the directors.

    “We expect 2017 to be a year that will provide us with the opportunities for growth and investment with which we shall consolidate our past achievement, take advantage of the projected growth the Nigerian economy will offer and deliver value to our stakeholders,” Bankole said.

  • FBN Holdings launches new three-year plan to drive growth

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

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

    Chairman, FBN Holdings Plc, Dr. Oba Otudeko, who unveiled the three-year plan at the annual general meeting in Lagos at the weekend, said the medium-term plan has provided the group with the an opportunity to redefine its strategic intent, identify pressure points and challenges in the light of emerging macroeconomic environment and to plan effectively for the future.

    According to him, the new strategic plan will enable the company to weather current market conditions and position itself for improved and sustainable performance.

    “The responsibility of rebuilding shareholder value is a journey, and as such, we will be consolidating the building blocks emplaced from the last cycle in the 2017-2019 strategy cycle. We aim to achieve our goals within an acceptable risk level and through an efficient organisation,” Otudeko said.

    He added that the apex management organ of the group has been tasked with the overall responsibility of ensuring alignment of all strategic business units with the overall group strategy and realization of the group’s synergy initiatives.

    He said the group remained committed to its two-pronged approach of extracting significant synergies, both in cost and revenue within the business units in each operating company and across the entire group.

    “We are forging ahead with greater optimism and determination, knowing that we are well positioned to meet the aspirations of our stakeholders,” Otudeko said.

    He assured shareholders that FBN Holdings is actively preparing for the future and the challenges ahead with the advancement of the group’s innovative projects and continuous extraction of the opportunities that abound in its holding structure.

  • Atedo Peterside faults forced exit of directors

    •Receives honours at NSE

    Leading investment banker and boardroom guru, Mr. Atedo Peterside, has faulted certain provisions in corporate governance and regulatory codes that stipulate tenures for founders, directors and top management of companies as antithetical regulations that could be counterproductive and inimical to the success of the company.

    Peterside spoke at a ceremony at the Nigerian Stock Exchange (NSE) yesterday to mark his retirement from the board of directors of Stanbic IBTC Holdings Plc. Peterside founded Stanbic IBTC in 1989 and led the company from a private limited liability investment bank to one of the largest financial services groups in Nigeria. He resigned as a non-executive director and chairman of the board of Stanbic IBTC Holdings on March 31, 2017.

    Stanbic IBTC Holdings closed yesterday at the Exchange with a market capitalisation of N265 billion, ranking as the third most capitalised company in the financial services sector and the sixth most capitalised quoted company in Nigeria.

    Peterside, who was given the honour of beating the closing gong for the stock market yesterday, said the decisions on tenures and terms of owners, directors and top management of companies should not be circumscribed into some rigid rules but should be within the ambit of business management decisions by the board of directors and owners of the company.

    He noted that the implications of decisions such as tenures and exit of key owners and directors could vary from company to company adding that such decisions must be taken with consideration for the peculiarities, growth cycle and other factors within a particular company.

    He said his seamless exit from Stanbic IBTC Holdings was facilitated by the depth of human capital development in the company, which discovers and develops new talents.

    “I am not saying anybody can be on the board forever, but I think it is the business of the board of directors and owners of the company to look at that in line with their succession plan,” Peterside said.

    He pointed out that investors take into consideration owners and personalities around a company in taking investment decisions and the exit of such people could lead to withdrawal of investments.

    He urged stockbrokers to be strong advocates for good corporate governance and be at the forefront of the debate on governance and ownership issues.

    A visibly excited Peterside recalled that the first time he performed the ringing of closing bell at the NSE at the listing of the then Investment Banking and Trust Company (IBTC) Plc, the total market capitalisation was about N40 billion but today the market capitalisation of Stanbic IBTC Holdings alone is more than N250 billion.

    The Doyen, the longest-trading stockbroker on the trading floor, Mr Sam Ndata, commended Peterside for his contributions to the development of the Nigerian capital market.

    He said the market would continue to cherish his advice and wealth of experience.

  • Stockbrokers brainstorm on economic development

    Stockbroking firms under the aegis of Association of Stockbroking Houses of Nigeria (ASHON) is holding a capital market summit to brainstorm on the strategic importance of the Nigerian capital market in effective implementation of the Economic Recovery and Growth Plan (ERGP) and 2017 budget.

    Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Chief Patrick Ezeagu, said the summit scheduled for next week in Lagos would create a platform to identify means by which the Federal Government can salvage the economy.

    He noted that the theme of the summit: The Road to Nigeria’s Economic Recovery- The Capital Market Route, was borne out of the desire to sensitise the Federal Government and other tiers of government as well as private sector players and investors on the critical roles the capital market can play towards the achievement of the objectives of the ERGP and successful implementation of the 2017 budget.

    He pointed out that the capital market primarily helps to mobilize funds from the surplus economic units and channels them to the deficit ones.

    “This underscores the fact that government’s budget deficit gap and critical infrastructure development can be financed through the instrumentality of the capital market. Indeed, the history of our capital market in Nigeria is robust with several times in the past when governments at various levels took advantage of the market to raise funds to execute infrastructural projects,”  Ezeagu said

    He added that the professional body has also concluded arrangements to grant awards to a few individuals for their sustained contributions to the growth and development of the capital market.

    The summit is expected to come up with recommendations on how to turn around the economy and the capital market in particular.

    In his remarks, Vice President, Association of Stockbroking Houses of Nigeria (ASHON), Mr Akin Akeredolu-Ale noted that the relative stability in the foreign exchange market and good corporate earnings are part of the factors driving the stock market currently and they are sustainable.

  • Why our audited report is late, by Linkage Assurance

    The management of Linkage Assurance Plc has sought for additional 60-day grace to submit its audited report and accounts for the 2016 business year, blaming the delay on late commencement of the audit exercise.

    In a regulatory filing signed by the company secretary, Mrs Kehinde Ayodele, Linkage Assurance said it was constrained to request further extension of 60 calendar days from April 30, 2017 within which to file its 2016 audited accounts.

    The company stated that it has received approval for the extension from the Nigerian Stock Exchange (NSE) and would file its accounts unfailingly on or before June 29, 2017.

    Quoted companies on the NSE are required to submit their annual report and accounts not later than 90 calendar days after the end of the year. The deadline for the submission of the annual report for the year ended December 31, 2016 was thus March 31, 2017.

    “We regret to inform you that our 2016 audit exercise is yet to be decisively concluded thus we have been unable to meet the filing deadline of March 31, 2017,” Linkage Assurance stated.

    The company noted that it encountered challenges during the 2015 audit exercise which resulted in the delay in approving and publishing of its accounts and subsequently holding of its annual general meeting belatedly on February 7, 2017.

    Consequently, the appointment of the new external auditors to the insurance company, KPMG, could not be ratified until the February 7, 2017 general meeting. KPMG replaced Akintola Williams Deloitte (AWD), which completed a tenure of five years.

    According to the company, the late ratification of the new external auditor caused delay in the commencement of the audit exercise for the 2016 Accounts and initially necessitated request for an extension to April 30, 2017 from the NSE.

    “We envisaged that the audit exercise would have been concluded in record time to enable us obtain board approval for onward submission to the National Insurance Commission. Unfortunately, the process has taken longer than anticipated being that our auditors are new and have had to go through a number of preliminary matters in order to familiarise themselves with the operations of the company,” the company stated.

    Linkage Assurance said it appreciated the concerns that may be raised over the delay, urging shareholders and the public to remain confident as the company remained committed to operational excellence, due diligence, and best-in-class financial practice.

  • Unilever UK to inject N38b into Unilever Nigeria

    Unilever Plc, United Kingdom (UK), will inject about N38 billion into its Nigerian subsidiary, Unilever Nigeria Plc under a new capital raising programme approved by the shareholders of the fast moving consumer goods company last week.

    Shareholders of Unilever Nigeria 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 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.

    An investment banker in the know of issuance processes said the board must have received provisional approval of the majority core investor before putting the resolution for new share issue forward for shareholders’ approval.

    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 N37.84 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, the investment banker said.

    Unilever UK had earlier indicated it intended to acquire up to 75 per cent controlling equity stake in the Nigerian subsidiary.

    Unilever Uk had in first half of 2015 sought to increase its majority equity stake in the Nigerian subsidiary from 50 per cent to 75 per cent, citing long-term strategic importance of Unilever Nigeria to its global business.

    In a transaction initially valued at about N43 billion or £144.5 million, Unilever Overseas Holdings sought to increase its equity stake in the Nigerian company from 50.04 per cent up to a maximum of 75 per cent by buying additional shares from minority shareholders. The tender offer sought to acquire about 942.42 million ordinary shares in Unilever Nigeria at a price of N45.50 per share in cash.

    In a statement by Richard Hazell, Director, Unilever Overseas Holdings B.V, Unilever had said it was making the additional share acquisition as part of long-term strategic plan by the conglomerate as it believes that Nigeria offers significant growth potential.

    “The Unilever Group has had a major presence in Nigeria for many years and continues to believe that the country offers significant growth potential. This makes Nigeria a strategic long term investment priority for Unilever Overseas. Globally, the Unilever Group is focused on investing in the foods, household and personal care categories and the long heritage and great brands of Unilever Nigeria in these categories in Nigeria make it attractive for Unilever Overseas to increase its holding in Unilever Nigeria, whilst maintaining its stock exchange listing,” Unilever stated in the statement enclosed in the tender offer.

    Nigerian shareholders, however, largely shunned the N43 billion share-acquisition bid as it recorded less than a third of its target. At the conclusion of the tender offer, Unilever UK’s total shareholdings in Unilever Nigeria only increased by 8.49 per cent from 50.04 per cent to 58.53 per cent. The increase also included open market purchases.

    Under the extant laws, a 75 per cent equity stake would have given Unilever UK the overriding majority equity stake to undertake several strategic transactions including mergers, acquisitions, new capital issues and other major corporate changes with little or less resistance from Nigerian shareholders.

  • Sterling Bank lists N8b bond

    Sterling Investment Management SPV Plc, a special purpose vehicle floated by Sterling Bank Plc, at the weekend listed its N8 billion bond on the Nigerian Stock Exchange (NSE).

    A total of 7.965 million units were listed at par value of N100 at the weekend.

    Sterling Investment Management SPV’s N7.965 billion bond is a seven-year 16.50 per cent fixed rate unsecured bond due in 2023. The N7.965 billion maiden issuance is part of Sterling Bank’s N65 billion debt issuance programme.

    The SPV is a tier-11 capital raising programme for Sterling Bank, a creative way to shield the bank from unnecessary regulatory and market issues while having access to the much-needed capital.

    Global Credit Ratings (GCR) had accorded a final, public national scale long term rating of BBB (NG) to the N7.965 billion bond; with the outlook accorded as stable. The rating is valid until August 31, 2017.

  • Equities back with N881b gain in 11 days

    Nigerian equities surged to their highest level this year and reversed the negative overhang at the stock market as major scramble for shares by foreign and domestic investors spurred the equities market to a net capital gain of N881 billion in the past 11 days. Equities closed last week with net capital gain of N677 billion, equivalent to a week-on-week average gain of 7.46 per cent, as the rousing price appreciation that started in the last days of April gathered momentum.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE), which opened on Thursday April 27, 2017 at N8.865 trillion, rose consecutively for 10 days to N9.825 trillion on Thursday May 11, 2017, representing a net capital gain of N960 billion. The market, however, witnessed a tinge of profit-taking last Friday May 12, 2017, dropping the aggregate market value of quoted companies by N79 billion to N9.746 trillion. Thus, the net capital gain for the 11-day period dropped to N881 billion.

    The All Share Index (ASI)- the benchmark index for the Nigerian stock market, also rose consecutively from opening index of 25,620.94 points on Thursday April 27 to 28,423.70 points by last Thursday May 11 and dipped marginally to close at the weekend at 28,192.46 per cent. This represented average gain of 10.04 per cent over the 11-day period.

    Market analysts were unanimous that three factors were the main drivers of the rally. These included the steady performance of most quoted companies in 2016 and improvement in first quarter 2017 earnings, renewed interest by foreign investors as foreign exchange crisis eases off and positive macroeconomic outlook.

    Moody`s Investors Service, a leading global rating agency, in its latest reports said it expected Nigeria`s real Gross Domestic Product (GDP) to grow by 2.5 per cent in 2017, after a contraction of 1.5 per cent in 2016. Nigeria’s GDP growth is expected to double to 4.0 per cent in 2018, according to Moody.  Moody also maintained its stable outlook on the Nigerian banking sector.

    Investors in the Nigerian stock market, who had been wriggled under losses, are back in the green. Average year-to-date return reversed from negative to a positive return of 4.90 per cent at the weekend. All sectoral indices showed that investors have generally recovered from losing position to various gains.

    The NSE 30 Index, which tracks the 30 most capitalised stocks at the Exchange, showed year-to-date return of 7.96 per cent. Banking stocks were ahead with year-to-date return of 19.51 per cent, providing positive real return on investment after adjustment for inflation. The NSE Industrial Goods Index has so far this year appreciated by 6.36 per cent. The NSE Oil and Gas Index has returned 3.07 per cent while the NSE Insurance Index and the NSE Consumer Goods Index showed modest year-to-date gain of 0.89 per cent and 0.93 per cent respectively.

    With more than four gainers to every loser, the stock market was particularly on the high last week. Aggregate market value of all quoted equities rose from the week’s opening value of N9.069 trillion to close the week at N9.746 trillion. The ASI, which doubles as sovereign equities index for Nigeria, also rallied from the week’s index-on-board of 26,235.63 points to close at the week at 28,192.46 points.

    There were 57 gainers against 13 losers last week compared to 43 gainers and 16 losers recorded in the previous week. May & Baker Nigeria recorded the highest gain, in percentage terms, of 32 per cent to close at N1.28. Ecobank Transnational Incorporated rose by 22.5 per cent to N9.80. Fidson Healthcare followed with a gain of 21.5 per cent to close at N1.92. PZ Cussons Nigeria appreciated by 20.4 per cent to close at N18.06. Oando rose by 20.2 per cent to close at N8.62. Unity Bank chalked up 20 per cent to close at 60 kobo. Eterna rose by 17.9 per cent to N3.89. Diamond Bank appreciated by 17.7 per cent to close at N1 while Nigerian Breweries rose by 17.1 per cent to N149 per share.

    Turnover more than doubled as investors flooded the market with open orders to buy shares at whatever available prices. Total turnover last week stood at 3.26 billion shares worth N28.74 billion in 25,370 deals compared with a total of 1.15 billion shares valued at N10.44 billion traded in 16,676 deals two weeks ago.

    The banking-led financial services sector remained the dominant sector with 83.4 per cent and 60 per cent of total turnover volume and value respectively. Turnover in the financial services sector stood at 2.72 billion shares valued at N17.23 billion in 15,103 deals. The consumer goods sector occupied a distant second on the activities chart with 185.75 million shares worth N6.6 billion in 3,817 deals. The conglomerates sector ranked third with 156.01 million shares worth N385.43 million in 1,340 deals.

    The three most active stocks were FBN Holdings Plc, FCMB Group Plc and Zenith International Bank Plc. The three most active stocks accounted for 1.42 billion shares worth N8.19 billion in 5,117 deals, representing 43.6 per cent and 28.5 per cent of the total equity turnover volume and value respectively.

    Also traded during the week were a total of 948 units of Exchange Traded Products (ETPs), valued at N16,591 in 14 deals compared with a total of 20 units valued at N110,000 traded in a deal in the previous week.

    In the government bonds sector, a total of 5,201 units of Federal Government bonds valued at N5.40 million were traded in three deals compared with a total of 1,582 units valued at N1.61 million traded in 10 deals two weeks ago.

    On the negative side, Jaiz Bank  led the losers with a drop of 9.1 per cent to close at N1. Seplat Petroleum Development Company followed with a loss of 5.9 per cent to close at N400. Newrest ASL declined by 5.6 per cent to N4.69. Neimeth International Pharmaceuticals dropped by 5.4 per cent to 53 kobo while BOC Gases dipped by 4.8 per cent to close at N3.35 per share.

    Market analysts at SCM Capital Markets said there was likelihood of a continuation of the profit-taking trend that started at the weekend in the next week as investors seek to lock in recent price gains.