The Nation Newspaper

Category: Equities

  • Oando to take over Port Harcourt Refinery

    Oando to take over Port Harcourt Refinery

    •Mulls N40b capital raising

    The Federal Government has entered into a Memorandum of Understanding (MoU) with Nigeria’s largest indigenous energy group, Oando Plc to manage the Port Harcourt Refinery under a repair, operate and mainteain (ROM) arrangement.

    Chief executive officer, Oando Plc, Mr. Wale Tinubu at a presentation on the underlying facts of the group’s operations at the Nigerian Stock Exchange (NSE) yesterday in Lagos, said the group has received approval of the government to oversee the Port Harcourt Refinery.

    “We also got approval from the President to repair, operate and maintain the Port-Harcourt refinery together with our partner Agip. We plan to increase the refinery capacity from 30 per cent to a 100 per cent, subsequently to 120 per cent,” Tinubu said.

    He said the parties to the transaction were finalising the details of the arrangement that will help to enhance the efficiency of refinery.

    He noted that the group has deleveraged its balance sheet through the divestment of its upstream services company, Oando Energy Services and embarked on the expansion of its retail and gas footprint through a strategic partnership with Helios Investment Partners and Vitol Group to recapitalise its downstream business for $210 million and the $115.8 equity buy-in of its Gas and Power business by Helios Investment Partners.

    He said the company was considering raising some N40 billion in new capital.

    Tinubu said the first quarter earnings of the group underscore its proactive decision to focus on its dollar denominated export businesses.

    “Our resilience is evident in our capacity to grow via a diversified model, and as we continue to chart our deliberate path in this challenging business environment, we look forward to better performance in the quarters to come,” Tinubu said.

    Oando doubled its turnover in the first quarter of this year as the indigenous energy group continued to reap from its strategic focus on assets optimisation and deleverage.

    Key extracts of the three-month report for the period ended March 31, 2017  showed that Oando Group grew its top-line by 116 per cent to N138.27 billion in first quarter 2017 compared with N63.9 billion recorded in comparable period of 2016. Gross profit also increased by 53 per cent from N8.7 billion in first quarter 2016 to N13.4 billion in first quarter 2017. The company recovered from a pre-tax loss of N461 million in first quarter 2016 with a pre-tax profit of N494 million in 2017. The company also reduced its net indebtedness by 29 per cent from N316.6 billion in first quarter 2016 to N225.9 billion in first quarter 2017.

  • Sterling Bank outlines growth targets

    Sterling Bank outlines growth targets

    •Shareholders laud resilience 

    The board and management of Sterling Bank Plc yesterday laid out the lender’s priorities  in 2017 as it begins the implementation of a five-year medium term plan aimed at enhancing its status  as “Nigeria’s financial institution of choice”.

    In his address to shareholders at the annual general meeting yesterday in Lagos, Managing Director, Sterling Bank Plc, Mr. Yemi Adeola, said the directors  had agreed on a five-point agenda in 2017 as the bank continues on its vision of long-term sustainable and competitive growth .

    The bank plans to prioritise efficiency over scale in its decision framework to be an institution built on smart people, smart structures and smart strategies.

    Adeola said the bank would also  strengthen and diversify its funding sources and capacity through a quicker and smarter execution of its retail banking rollout. Besides, it will also ensure disciplined use of its institutional liquidity and capital through improvement in lending practices and overall risk management culture.

    He added that the bank would also focus on excellent service delivery to internal and external customers noting that the bank’s service organisation must become the source of competitive advantage to sales organisation in order to deliver on its ‘one customer bank’ commitment.

    He said the bank would reemphasise commitment to execution excellence in all its transactions.

    “Over the next five years, we will be steering our ship differently and aggressively growing the retail business through electronic channels,” Adeola noted.

    He said the bank would continue to boost innovative banking – driven by market insights that would enable it   serve its customers satisfactorily while implementing significant investment in technology-led growth initiatives and accelerating the growth of its non-interest banking segment.

    Chairman, Sterling Bank Plc, Asue Ighodalo said the bank was poised to take advantage of emerging opportunities in the economy.

    He noted that the bank recorded resilient performance in 2016 in spite of the macroeconomic challenges as it reported profit after tax of N5.2 billion on gross earnings of N111.4 billion during the year.

    “I am proud to report that our bank remained resilient and we recorded notable achievements. We are therefore poised to take advantage of emerging, identified and created opportunities as our economy recovers from its most difficult period in recent memory,” Ighodalo said.

    He expressed optimism on the national economic recovery, pointing out that continuing improvement in the coordination of fiscal and monetary policy initiatives will expedite national economic recovery.

    Shareholders severally lauded the performance of the bank.

    President, Association for the Advancement of the Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, praised the bank for being prudent and responsible.

    Founding National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu also lauded the management of the bank for its positive and encouraging performance in 2016.

  • Investors scramble for banks’ shares

    •Equities rally N157b gain

    Investors were all out for banking stocks last week as Nigerian equities sustained all-session bullish rally to reach their highest index point in recent period. Benchmark indices at the Nigerian Stock Exchange (NSE) showed week-on-week gain of 1.85 per cent at the equities market, equivalent to a net capital gain of N157 billion in the four-day trading week.
    The recovery at the stock market was evidently driven by a week-long scramble for banking stocks, which turned the banking sector into a seller’s market with most transactions closing on premium. The NSE Banking Index, which tracks the banking sector, recorded average week-on-week gain of 3.64 per cent, almost a double of the average return at the stock market.
    Banking stocks dominated the activities chart with two of the most capitalised banks-Zenith Bank International and FBN Holdings, accounting for 25 per cent and 30.4 per cent of the total turnover volume and value respectively. The Nation had reported considerable improvement in banks’ corporate earnings in the first quarter of this year, which many analysts believed was the major factor for the renewed investors’ appetite for banks’ shares.
    With nearly three gainers for every loser, aggregate market value of all quoted equities rose from the week’s opening value of N8.913 trillion to close the week at N9.069 trillion, an increase of 1.75 per cent. The All Share Index (ASI)-the benchmark index that tracks prices at the Exchange, also trended from the index on board of 25,758.51 points to close at 26,235.63 points, representing a week-on-week gain of 1.85 per cent. The difference between the market capitalisation and the ASI was due to delisting of four companies during the week. The delisted companies included UTC, MTECH Communications, Beco Petroleum and MTI Plc. With the sustained rally, the negative overhang at the market reduced as the average year-to-date return improved to -2.38 per cent.
    There were 43 gainers against 16 losers last week compared to 38 gainers and 25 losers recorded in the previous week. A total of 114 stocks have remained unchanged for the past two weeks. Fidson Healthcare recorded the highest gain, in percentage terms, of 43.6 per cent to close at N1.58. Oando followed with a gain of 24 per cent to close at N7.17 while Livestock Feeds rose by 16.2 per cent to close at 86 kobo.
    Zenith Bank was the most active stock with a turnover of 176.77 million shares valued at N2.78 billion in 1,957 deals. FBN Holdings followed with 112.18 million shares worth N396.44 million in 1,408 deals. Altogether, the two most active stocks accounted for 288.95 million shares valued at N3.18 billion in 3,365 deals, representing 25 per cent and 30.4 per cent of total turnover volume and value for the week.
    Total turnover during the four days of trading at the NSE stood at 1.15 billion shares worth N10.44 billion in 16,676 compared with a total of 1.33 billion shares valued at N9.67 traded in 16,300 deals two weeks ago.
    Financial services sector, the traditional dominant sector, remained atop activities’ chart with 813.02 million shares valued at N6.90 billion in 10,298 deals; representing 70.45 per cent and 66.13 per cent of the total equity turnover volume and value respectively. The oil and gas sector occupied a distant second with 106.57 million shares worth N1.06 billion in 1,356 deals while the services sector ranked third with a turnover of 90.94 million shares worth N188.20 million in 660 deals.
    Also traded during the week were a total of 20 units of Exchange Traded Products (ETPs) valued at N110,000 in a deal compared with a total of 533 units valued at N32,204 traded in 15 deals two weeks ago.
    In the debt segment, a total of 1,582 units of Federal Government Bonds valued at N1.608 million were traded in 10 deals compared with a total of 4,705 units valued at N3.934 million traded in four deals two weeks ago.
    “The impressive market breadth recorded this week as well as broad-based nature of the two-week long rally – with mid and small-cap stocks also advancing – suggests investor sentiment is beginning to improve,” analysts at Afrinvest Securities stated.
    Analysts said the market could continue on the upswing over in the meantime, although profit-taking transactions could moderate performance in early trades this week.

  • Stockbrokers’ chief explains benefits of new certification model

    President, Chartered Institute of Stockbrokers (CIS), Mr Oluwaseyi Abe has said the introduction of stand-alone certifications model by the institute would align the operations of the CIS with the global best practices.
    Addressing stockbrokers at the institute’s 22nd Annual General Meeting (AGM) in Lagos, Abe said the new certification was also in response to the need of the institute to expand its focus in line with its transformation programme.
    According to him, the new certification model would enable the candidates to specialise and focus on their core career areas, in conformity with the global best practices and the proposed Chartered Institute of Securities and Investment (CISI) Bill, which is before the National Assembly.
    He said the CIS was actively involved in the development of the curriculum for the introduction of capital market studies in the primary and secondary schools in Nigeria by the Securities and Exchange Commission (SEC) in collaboration with the Nigerian Educational Research and Development Council.
    Under the new stand-alone certification, an aspiring stockbroker can choose to specialise in any of the following segments: equity trading, debt instruments, commodities, and derivatives, among others. This would effectively reduce the rigours of sitting for all the courses in the professional examination.
    The new classification, which has received the approval of the CIS Governing Council, is expected to be tied to professional examination in line with the speciality of the aspiring stockbroker.
    Abe expressed optimism that the new certification model would create multiple opportunities for aspiring stockbrokers to operate as the market had grown in terms of diverse instruments for trading .
    He also commended the stockbrokers on their ability to scout for trading opportunities despite the complex operating environment, noting that under the stand-alone classification, every stockbroker would find an attractive area to trade.
    He said the institute places high premium on innovation as this is a critical factor that would move every organisation to the next level.
    He added that the institute would continue to come up with the latest thinking in the financial market in order to empower the stockbrokers.
    The new specialisation is expected to enhance more enrollment for the institute’s professional examination, shore up its membership base and raise the bar of its international profile.
    Commenting on the performance of the Institute in the period under review, Abe lamented that macro-economic headwind had adversely affected operation of stockbrokers with attendant effects on their ability to pay necessary fees. This, according to him, is impacting negatively on the cashflow of the institute.
    He commended the stockbrokers for their resilience despite the tough operating environment.

  • Stakeholders review market situation

    Regulators, operators and other stakeholders in the Nigerian capital market are scheduled to meet tomorrow to discuss key initiatives that can impact on the recovery and long-term growth of the market.
    This is first meeting of the Capital Market Committee (CMC) in the year under the auspices of the Securities and Exchange Commission (SEC), and it is scheduled to hold tomorrow at the Federal Palace Hotel, Victoria Island, Lagos.
    The CMC, chaired by the Director-General of Securities and Exchange Commission (SEC), consists chief executives of all registered capital market operators, including stockbrokers, solicitors, custodians, fund managers, issuing houses, rating agencies, registrars, reporting accountants, trustees and consultants, among others.
    Other members included chief executives of the Chartered Institute of Stockbrokers (CIS); Nigerian Stock Exchange (NSE), Abuja Securities and Commodity Exchange (ASCE) and Central Securities Clearing System (CSCS).
    The CMC also included two members each from observer groups, which included Asset Management Corporation of Nigeria (AMCON), Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), Debt Management Office (DMO), Federal Ministry of Finance, Federal Mortgage Bank of Nigeria (FMBN), Federal Inland Revenue Service (FIRS), Nigerian Deposit Insurance Corporation (NDIC), Investment and Securities Tribunal (IST), Nigerian Investment Promotion Council (NIPC), National Insurance Commission (NIACOM), National Pension Commission (Pencom) and FSS2020.
    The CMC was established to serve as a medium for exchange of ideas among market stakeholders, as well as for feedback on how to continuously improve the market activities and regulation. The CMC meets every quarter to deliberate on various issues affecting the market and other policy matters.

  • NSE automates rights

    NSE automates rights

    The Nigerian Stock Exchange at the weekend automated trading and settlement of rights’ shares.
    The automation, which took off on Friday, May 5, allows shareholders to sell subscription rights both efficiently and at fair prices.
    Executive Director, Market Operations and Technology, Nigerian Stock Exchange (NSE), Mr. Ade Bajomo, said the automation of rights trading and settlement in the capital market would enhance price discovery as rights can now be traded and re-traded without settlement complexities.
    “It will help eliminate operational challenges resulting from manual trading and cash settlement between counterparties, whilst simplifying counterparty trade reconciliation between the brokers, registrars and the NSE,” Bajomo said.
    Explaining the rights trading and settlement process, Bajomo said for an investor to be eligible to participate in rights trading, he must have a CSCS account set up through a licensed dealing member firm of the Exchange. In addition, the investor must fund his broker with the consideration value, premium and transaction fees, prior to execution of his mandate.
    Prior to this automation, trading and settlement of rights, where an investor decides to sell on the floor of the Exchange, was done manually.
    A rights issue is an offer to existing shareholders to purchase additional shares in a company during the company’s issue of new shares. The invitation to existing shareholders is usually made in proportion to their existing holdings, allowing them to buy the newly issued shares at a fixed price, usually at a discount to market value of the shares, within a specific subscription period. A rights issue is, therefore, one of the ways by which a listed company can raise funds from its existing shareholders. A unique security code, different from that of the underlying security will be assigned to the right.

  • Meyer gets N155.4m new equity funds from undersubscribed rights

    Meyer gets N155.4m new equity funds from undersubscribed rights

    Meyer Plc received total new fund of N155.4 million from its recent rights issue, about 29 per cent short of the N218.6 million target of the new capital raising.
    Regulatory documents showed that the 291.49 million shares offer recorded accepted subscription rate of 70.8 per cent. Meyer had offered 291.49 million ordinary shares of 50 kobo each to shareholders on the register of the company as at Thursday September 8, 2016 at a price of 75 kobo. Acceptance list for the offer opened on Monday January 9, 2017 and closed on Friday, February 10, 2017.
    The provisional allotment for the rights issue was on the basis of one new ordinary share for one ordinary share held as at the close of register on September 8, 2016.
    Regulatory documents indicated that a total of 206.24 million ordinary shares were validly accepted, implying a subscription rate of 70.8 per cent.
    The new issued shares of the paint manufacturing company have been listed at the Nigerian Stock Exchange (NSE). DN Meyer is owned by some 8,000 shareholders. Recent shareholding analysis showed that three shareholders held the largest stakes-Citiprops Limited held the largest 30 per cent equity, Bosworth Limited held 12.89 per cent while Mr Osa Osunde held 9.26 per cent.
    One of the legacy companies, DN Meyer, has a history of more than seven decades and was an iconic brand in its industry. Before its incorporation in 1960, it had operated for two decades. It converted to public limited liability and listed its shares on the Nigerian Stock Exchange (NSE) in 1979. In 1994, the then Dunlop Nigeria acquired majority equity of 68 per cent in the company and thus changed its name from Hagemeyer Nigerian Plc to DN Meyer Plc. In 2003, DN Meyer acquired the flooring and adhesives business of Dunlop Nigeria, thus extending its business operations from manufacturing and marketing of paints to adhesives and floor tiles.
    Dunlop sold its stake in DN Meyer in 2004 to ACIMS Limited and the Nigerian public through a combination of management buyout (MBO), thereby making DN Meyer a wholly Nigerian company. ACIMS sold its total equity in DN Meyer to Citiprops Limited in February 2010.

  • FGN Savings Bond targeted at poor, says DMO D-G

    The Director General of Debt Management Office (DMO), Abraham Nwankwo has stated the new Federal Government of Nigeria Savings Bond (FGNSB) was designed to give them a stake in government.

    He was addressing leaders of market unions and leaders of middle income earner organisations in an advocacy/sensitisation workshop on the FGN Savings Bond in Onitsha.

    He said over the years, government has issued bond, but it remained elitist bonds, which were sold as wholesale bond to privileged individuals, corporate companies and organisation.

    “All these super rich individuals bought it as wholesale bond, but the difference we have in the FGNSB is that we are making these bond available to the ordinary Nigerians. There are a lot to benefits I  investing in the FGNSB. First is that it is an opportunity for the common man to have a stake in the country. You can boost of having borrowed to the federal government,” he said.

    “Again, your investment has interest accruing to you, straight into your bank account, and your interest is tax free. There are many benefits. By Monday next week, the savings bond will open, and it will remain open for five days. We will also disclose the interest rate, and everyone is at liberty to buy. You can invest from as little as N5,000 to as high as N50 million,” Nwankwo said.

    The workshop featured teachings on the workings of bond, and how to purchase them. DMO’s Director of portfolio management, Oladele Afolabi took participants through a lecture on the bonds, while reeling out the list of accredited stockbrokers.

    Chairman of Niger Bridgehead market, Emmanuel Anagu who spoke on behalf of other market leaders, at the event stated that he is truly convinced that the DMO meant well for the poor by taking the workshop to traders in Onitsha.

    “Before now, we hear of sales of federal government bond, but it is usually for the very rich, but today the federal government has brought it down to us, but what we ask is that we must make this workshop a regular one to drum it into the mi D’s of our people.” The DG also reiterated the importance of the purchase of the savings bond, saying that it could serve as a means of saying for the future.

  • NASCON promises better future as shareholders get N1.85b dividend

    NASCON Allied Industries Plc 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.

    The board of directors of NASCON yesterday at the annual general meeting in Lagos assured shareholders of its unwavering commitment to the continued growth and prosperity of the company. The assurance came as shareholders approved distribution of N1.85 billion as cash dividend for the 2016 business year as against N1.46 billion distributed for the 2015 business year. Shareholders will receive a dividend per share of 70 kobo, 27 per cent above 55 kobo paid for the 2015 business year.

    Addressing the shareholders, chairman,   NASCON Allied Industries Plc, Yemisi Ayeni, 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.

    Key extracts of the audited report and accounts for the year ended December 31, 2016 showed that NASCON grew turnover to N18.29 billion in 2016 as against N16.18 billion in 2015. Gross profit rose from N4.36 billion to N5.92 billion. Operating profit also increased from N3.03 billion to N3.82 billion. Profit before tax rose from N3.02 billion to N3.52 billion. Profit after tax increased from N2.11 billion to N2.42 billion. Earnings per share thus improved from 79 kobo in 2015 to 91 kobo in 2016.

  • Equities rally to N9tr amidst bargain-hunting

    Nigerian equities rallied to a new highest index point to N9.03 trillion yesterday as investors stepped up demand for quoted equities on the back of considerable improvement in corporate earnings. With more than two gainers to a loser and widespread price appreciation, equities recorded average gain of 0.58 per cent or N52 billion to reach their highest index point in recent period.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) rose from its opening value of N8.975 trillion to close at N9.027 trillion, representing net capital gain of N52 billion. The All Share Index (ASI) – the main index that tracks prices at the Exchange, increased from 25,965.18 points to close at 26,116.79 points.

    The sustained rally has moderated the negative average year-to-date return to -2.82 per cent.

    All sectoral indices closed in the positive. The NSE Banking Index rose by 1.5 per cent. The NSE Oil & Gas Index appreciated by 0.6 per cent. The NSE Consumer Goods Index returned 0.4 per cent. The NSE Insurance Index inched up by 0.3 per cent while the NSE Industrial Goods Index closed flat.

    There were 27 gainers against 13 losers. Unilever Nigeria led the gainers with a gain of N1.69 to close at N33.50. Forte Oil rose by N1 to close at N44. Guinness Nigeria rallied 99 kobo to close at N61. UAC of Nigeria chalked up 65 kobo to close at N14.40 while Ashaka Cement rose by 52 kobo to close at N10.96 per share.

    Total turnover was above average with 264.49 million shares valued at N2.90 billion in 3,958 deals. Large-cap banks were the most active. Zenith Bank was the most active with 41.88 million shares worth N652.18 million. Guaranty Trust Bank followed with 37.75 million shares worth N1.01 billion while United Bank for Africa placed third with 34.03 million shares valued at N205.21 million.

    On the negative side, Total Nigeria led the losers with a loss of N10 to close at N255. Seven-Up Bottling Company dropped by N4.75 to close at N90.25. Nascon Allied Industries declined by 42 kobo to close at N8.05. UACN Property Development Company dropped by 5.0 kobo to close at N1.75 while Continental Reinsurance and Unity Bank slipped by 4.0 kobo each to close at N1.07 and 54 kobo respectively.