The board of directors of Tripple Gee & Company Plc has blamed the relapse of the company into loss on the continuing depreciation of Naira, which has impacted negatively on the profit margin of the security printing and accessories company.
In a regulatory filing at the weekend, the nine-month report of Tripple Gee for the period ended December 31, 2016 showed a loss after tax of N16.12 million by December 2016 as against modest net profit of N2.6 million in comparable period of 2015. Total turnover had dropped from N532.95 million in 2015 to N354.24 million in 2016. The company recorded pre-tax loss of N12.58 million by December 2016 compared with pre-tax profit of N8.29 million by December 2015.
The company’s board noted that its profit margins are continuously being eroded as a result of continuous depreciation of the naira.
The board assured that the company is vigorously exploring new opportunities in the economy to enhance shareholders’ value and chart a path for stable growth.
Tripple Gee was incorporated in April 1980 and its shares were listed on the Nigerian Stock Exchange (NSE) in 1991. With 495 million outstanding ordinary shares and some 30,000 shareholders, Tripple Gee is one of the largest security printers in West Africa. The company services the financial markets with cheques, certificates and warrants as well as other security documents such as ballot papers.
Category: Equities
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Tripple Gee blames poor performance on Naira depreciation
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SEC, EFCC form alliance to protect investors
Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) and Nigeria’s main anti-graft agency, the Economic and Financial Crimes Commission (EFCC) have signed an alliance to tackle infractions at the capital market and protect investors.
While the EFCC has severally participated in capital market investigations in the past, SEC and EFCC have now signed a Memorandum of Understanding (MoU) that formally established the alliance between the two Commissions. The MoU, which was signed at the EFCC office in the Federal Capital Territory (FCT), Abuja, will serve as the framework for future capacity building and mutual investigations by the Commissions.
SEC’s Director-General, Mr. Mounir Gwarzo, signed on behalf of SEC while acting chairman, Economic and Financial Crimes Commission (EFCC), Mr. Ibrahim Magu, signed on behalf of the EFCC.
The MoU is expected to promote the efficient investigation and conclusion of all cases reported by either of the institutions to each other and to promote the integrity, efficiency and soundness of the Nigerian capital market and the economy in general.
It also seeks to promote collaboration in the areas of training and secondment of middle cadre officers of the SEC to the EFCC and those of the EFCC to the SEC; or in the alternative, the establishment of a liaison desk in both institutions as well as promote collaboration in other areas beneficial to both institutions.
According to the MoU, both Commissions shall provide each other with the utmost mutual assistance in any matter within their competences, including in particular the following areas: secondment of middle cadre officers, training to enhance the investigative skills and capacity of personnel of the institutions and consequently increase the general output and performance of the institutions and facilitate better understanding of each others’ functions through capacity building programmes and human capital development in the areas of investigation of fraud in the capital market.
Both institutions will also collaborate in the areas of exchange of information to assist the performance of the institutions’ respective functions, reporting, investigation and prosecution of fraudulent and manipulative practices in the Nigerian capital market and any other activity as agreed between the institutions from time to time.
However, the MoU serves as a basis of cooperation between the institutions and does not create any legal obligation, nor does it modify or supercede any laws, regulations or regulatory requirements in force or applying to the institutions. Furthermore, the MoU does not create any rights enforceable by third institutions nor does it affect any arrangement under other MoUs.
Gwarzo said SEC, which is saddled with investors’ protection, cannot discharge its responsibility effectively without collaborating with the anti-graft agency.
“We are by provision of our law mandated to protect investors on developing the market, but the way our law is structured we have limitations over criminal cases and that is why in the last 10 years there has been a very great collaboration between both agencies. We hope that when this MoU becomes fully operational, it will assist in reducing market infractions to the barest minimum,” Gwarzo said during a pre-signing visit to the EFCC.
He noted that the collaboration with the EFCC has been of tremendous benefit to the SEC, especially in areas of investigation and enforcement, adding that effective policing of the market is one of the ways of reviving investor confidence.
“One of our agenda is to bring back the retail investors to the market and there is no way they will agree to return if they are not sure of the safety of their investments,” Gwarzo said.
Magu expressed delight that the collaboration between both agencies has yielded enormous benefit for the growth of the capital market, adding that his agency will continue to provide assistance where required. -
Diamond Bank, Jumia Food team up on customer experience
Diamond Bank Plc has partnered Nigeria’s largest food delivery platform, Jumia Food, to provide the bank’s customers with access to the tastiest foods from Nigeria and across the world.
The partnership has kicked off with a customer loyalty campaign to Diamond’s Xclusive customers in Lagos and Abuja and it will run till March 9, 2017.
Head, consumer banking, Diamond Bank, Mrs Aishah Ahmad, said the bank decided on the partnership because of its commitment to its beyond banking ethos, which seeks to integrate banking with customers’ lifestyles.
“With this partnership, our Xclusive customers will enjoy 30 per cent off their first order on Jumia Food, giving them access to the finest cuisines from Nigeria and across the world via over 200 select restaurants, delivered to their door,” Ahmad said.
Managing Director, Jumia Food, Olamide Bada, said the food outlet recognised Diamond Bank as a premier financial institution, which is often at the forefront of innovation in order to benefit its customers.
“Our common goal is great customer experience, which makes this partnership mutually rewarding,” Bada said. -
Franco-African alliance launches N25b investment for SMEs
Group of French and African private and public sectors investors have launched a €77 million investment fund to support investments in Small and Medium Enterprises (SMEs) in Africa and France, the first of cross-border investment fund dedicated to the development of African and French SMEs.
The Franco-African Investment Fund (FFA), with investible funds of 77 million euro is aimed at accelerating the growth of innovative and entrepreneurial African and French SMEs with development projects on both continents. FFA will have a lifespan of 10 years.
Investors in the FFA included Societe Generale Orange, BpiFrance, Africinvet, Caisse Nationale de Prevoyance Sociale of CDI, Proparco (AFD), SAHAM from Morocco, Financecom, the pension fund of the Central Bank of Kenya, other private investors in Kenya and United Capital Plc, a publicly quoted Nigerian company. The fund is sponsored by BpiFrance and Africinvet. United Capital is a limited partner on the FFA.
Beyond financial performance, particular attention will be paid to the positive impact of the Fund’s investments in terms of governance, transparency, job creation, and respect for social and environmental values.
The Fund will be split into half, with 50 per cent to be invested in French SMEs, who have interest in doing business in and with Africa, and the other 50 per cent will be invested in African SMEs. FFA will invest primarily in African SMEs with high growth potential in order to create champions of regional and even continental statures.
Beyond capital contribution, the Fund managers will assist French companies to grow in Africa and, conversely, African companies in their growth strategy in France and Europe
The agreement to set up the fund was signed in Bamako, Mali at the sideline of the Franco-African Summit, which was witnessed by the Malian President Ibrahim Boubacar Keita, French President Francois Hollande, amongst other global leaders in the private and public sectors.
Deputy group chief executive, United Capital Plc, Bunmi Akinremi, who signed on behalf of the company, said the participation by United Capital was symbolic as it served as a strategic inroad into the continent, which would see it play big in an emerging continental economy.
“The French government wants to explore growth markets and Africa has been identified as another area of growth. United Capital is keen to encourage the expansion of economic opportunity for Africa,” Akinremi said. -
UPDC to raise N5.2b new equity from shareholders
UACN Property Development Company (UPDC) Plc is seeking to raise about N5.2 billion new equity funds from its existing shareholders to reduce its debt burden and provide supportive capital for long-term growth.
A source in the know indicated that UPDC, a subsidiary of UAC of Nigeria (UACN) Plc, Nigeria’s largest conglomerate; plans to undertake a rights issue of about 1.72 billion ordinary shares of 50 kobo each at a price of N3 per share.
According to the source, the qualification date for the rights issue was Thursday January 19, 2017 and the shares would be pre-allotted on the basis of one new ordinary share for every one ordinary share held as at the qualification date.
The rights issue price of N3 per share represents a premium of 9.1 per cent on UPDC’s market price of N2.75 at the start of trading on Friday. Traditionally, rights issue is usually offered at lower-than-market price as a form of bonus and incentives to shareholders. An analyst stated that the UPDC’s rights price of N3 implied that the directors of the company and their professionally advisers believe that the company is undervalued at the secondary market.
The source confirmed that UPDC has applied to the Quotation Committee of the Nigerian Stock Exchange (NSE), which oversees new issues and listing, for the approval of the rights issue.
UPDC was spuned off from UACN and its shares were listed on the NSE in 1997. UACN still holds the largest 46 per cent equity stake while First Trustees Nigeria holds the second largest stake of 12 per cent. Other corporate bodies hold some 18 per cent while individuals and trustees hold the balance of 24 per cent.
UPDC had recorded pre-tax profit of N133 million in the third quarter of 2016, breaking away from a losing streak that had worsened due to its relatively high financial leverage and indebtedness. The company had recorded a net loss of about N128 million in the first quarter of 2016.
Key extracts of the nine-month report of UPDC for the period ended September 30, 2016 showed that the real estate company recorded profit before tax of N132.95 million in the third quarter of 2016 as against pre-tax loss of N109.76 million in comparable period of 2015. Tax provision of N109.18 million in 2016, however, depressed net profit after tax to N23.77 million, still a significant recovery from the net loss of N109.76 million recorded in third quarter 2015 when the company did not provide for tax due to the losses.
The report showed that the rebound was driven by reduction in cost of sales and gains from disposal of certain assets. While group turnover dropped from N4.10 billion to N3.21 billion, gross profit improved from N841.12 million to N904.46 million. With a gain of N747.37 million on disposal of assets, operating profit stood at N348.04 million in 2016 as against N445.1 million. Operating profit was depressed by 80 per cent increase in administrative expenses from N788.9 million to N1.42 billion.
Chairman, UACN Property Development Company (UPDC) Plc, Mr Larry Ettah, had recently outlined that the company plans to raise new equity funds through a rights issue and additional capital by disposing some assets in a multi-prong strategy aimed at enlivening the slowing performance of the real estate company.
According to him, the company plans to reduce its indebtedness and strengthen its balance sheet by raising new equity funds from existing shareholders, selling down the company’s surplus stake in the UPDC Real Estate Investment Trust (UPDC REIT) and disposing underperforming assets.
“Our strategy for 2016 and beyond includes deleveraging the business through equity capital injection by way of rights issue, sell down of surplus stake in the REIT and disposal of low-performing assets, as well as leveraging on partnerships and alliances that are in sync with the company’s long term goals,” Ettah said.
He said the company was recalibrating development towards the retail segment and has put in place strategies to enable it take advantage of emerging opportunities in the segment. -
Equities lose N15b in tight market
Nigerian equities traded yesterday on a tight rope of bargain-hunting and selloff with every advancer matched with a decliner. Losses recorded by large-cap stocks however overshadowed the overall market position, leaving the market with a net capital loss of N15 billion.
A running selloff in the fast moving consumer goods sector and the industrial goods sector counterbalanced increased demand for the oil and gas stocks, pushing equities to their third straight negative session.
The All Share Index (ASI)-the benchmark index for the Nigerian Stock Exchange (NSE), declined by 0.17 per cent to close at 26,201.60 points as against its opening index of 26,245.34 points. Aggregate market value of all quoted equities also dropped from N9.030 trillion to close at N9.015 trillion, representing a loss of N15 billion. The decline yesterday pushed the negative average year-to-date return to -2.50 per cent.
With 19 advancers to 19 decliners, sectoral indices showed a tight market situation. The NSE Industrial Goods Index declined by 0.3 per cent while the NSE Consumer Goods Index dropped by 0.2 per cent. However, the NSE Insurance index rose by 0.42 per cent. The NSE Banking Index gained 0.4 per cent while the NSE Oil and Gas Index appreciated by 0.10 per cent.
Nestle Nigeria, Nigeria’s highest-priced company, led the losers with a loss of N3 to close at N752. Forte Oil followed with a loss of N2 to close at N67. Dangote Cement, Nigeria’s most capitalised company, declined by N1 to close at N167. Nigerian Breweries, the second most capitalised company, dropped by 60 kobo to close at N142 while International Breweries declined by 48 kobo to close at N17.50.
On the positive side, Total Nigeria led the gainers with a gain of N9.52 to close at N294.97. Mobil Oil Nigeria followed with a gain of N3.50 to close at N264. Ecobank Transnational Incorporated chalked up 41 kobo to close at N10.10. Guinness Nigeria added 40 kobo to close at N64.05 while Dangote Sugar Refinery rose by 27 kobo to close at N6.35 per share.
Total turnover stood at 196.46 million shares valued at N2.61 billion in 3,317 deals. Access Bank was the most active with 31.99 million shares valued at N224.09 million. Diamond Bank followed with 28.4 million shares worth N31.5 million while United Capital traded 24.1 million shares valued at N80.9 million.
“With current macroeconomic realities dampening investor sentiment, we expect market volatility to persist as performance of the benchmark index remains dictated by short term speculative trading,” analysts at Afrinvest Securities stated.
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Equities slip further with N11b loss
The equities market posted a negative performance yesterday as the market continued to experience selling pressure especially on consumer goods and oil and gas stocks.
The benchmark index, the All-Share Index (ASI) shed 32.86 absolute points, representing a dip of 0.13 per cent to close at 26,245.34 points. Similarly, the market capitalization declined by N11 billion, to close at N9.030 trillion.
The dip was largely due to depreciation recorded in some medium and large capitalized stocks including Guinness, Unilever, Forte Oil, Nestle, Okomu Oil, Mobil, ETI and Zenith Bank.
Analysts noted said that, “Given the current weak macro-economic fundamentals, market performance remains subdued in opening trades this year save for the rally in banking stocks. Hence, barring any news to stoke investors’ appetite and release of company earnings, we expect further losses for the rest of the week.”
Also, performance across sectors was largely bearish. The Oil & Gas index led sector losers’ closing 0.44 per cent lower due to persistent sell-offs in Forte Oil and Oando. The Consumer Goods index went down by 0.2 per cent continued the bearish streak which has persisted since the start of the year as losses in Nestle, Guinness and Unilever dragged the index lower. Similarly, the Banking index shed 0.10 per cent due to profit taking in ETI and Zenith Bank, while the Industrial Goods and Insurance indices closed the day flat.
Market breadth closed negative with 12 gainers and 20 losers. AG Leventis led the gainers table by 4.76 per cent to close at 88 kobo per share. Cutix followed with a gain of 2.11 per cent to close at N1.45, while Airline Services gained 1.92 per cent to close at N2.65 per share.
Also, Wema Bank went up by 1.89 per cent to close at 54 kobo and Continental Reinsurance rose by 1.82 per cent to close at N1.12 per share.
On the other hand, Guinness and Portland Paints led the laggards’ table by five per cent each, to close at N63.65 and N1.71 per share, respectively, while Diamond Bank trailed with a loss of 4.80 per cent to close at N1.19 per share.
Also, Unilever declined by 4.29 per cent to close at N33.50, while Transcorp shed by 3.33 per cent to close at 87 kobo per share.
Meanwhile, the total volume traded appreciated by 6.17 per cent to 394.82 million shares, valued at N1.37 billion, and traded in 3,015 deals. Transactions in the shares of Continental Reinsurance topped the activity chart with 149.57 million shares valued at N164.52 million. Fidelity Bank followed with 51.64 million shares worth N48.04 million, while United Capital traded 30.25 million shares valued at N105.46 million.
Diamond Bank traded 26.13 million shares worth N31.36 and UBA transacted 21.56 million shares valued at N109.83 million.
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SEC warns investors against virtual currencies
Securities and Exchange Commission has cautioned Nigerians against investing in digital currencies, otherwise known as crypto currencies.
The apex capital market regulators in a public alert at the weekend noted that crypto currencies such as Swisscoin, OneCoin, Bitcoin and such other virtual or digital currencies carry enormous risks with no official protection for anyone participating in such scheme.
According to SEC, none of the persons, companies or entities promoting crypto currencies has been recognised or authorised by the Commission or by other regulatory agencies in Nigeria to receive deposits from the public or to provide any investment or other financial services in or from Nigeria.
“The public should also be aware that any investment opportunities promoted by these persons, companies or entities are likely to be of a risky nature with a high risk of loss of money, whilst others may be outright fraudulent pyramid schemes,” SEC stated.
The Commission noted that given that these instruments and the persons, companies or entities that promote them have neither been authorised, nor any guidelines and regulations developed for them by any of the regulatory authorities in Nigeria, there is no protection available to users or investors in these virtual currencies from financial losses if the virtual currencies fail or the companies promoting them go out of business.
‘’The public and consumers of financial services are further advised that before making any investment or entering into any financial services transaction they should ascertain that the entity with whom the investment or transaction is being made is authorised by the Commission or other financial services regulatory authority as applicable to provide such services,’’SEC advised. -
Forex crisis worsens investors’ 2016 losses to N10tr
Investors in the Nigerian stock market lost about N10 trillion in 2016 when adjustments were made for foreign exchange, according to new comparative trading and valuation data provided by the Nigerian Stock Exchange (NSE).
The comparative Dollar-Naira data indicated that total market value of the Nigerian stock market dropped by about 37.8 per cent, equivalent to N9.83 trillion in 2016, when adjustments were made for the steep decline in foreign exchange (forex) during the year, providing the full glimpse of the losses suffered by investors during the year. A nominal Naira-based valuation had indicated that total market value of the Nigerian stock market dropped by N817 billion or 4.81 per cent in 2016.
The report showed that contrary to Naira-based valuation that showed that the Nigerian equities lost N604 billion or 6.17 per cent in 2016, forex-adjusted simple nominal return for equities was -38.6 per cent, equivalent to a net capital loss of N5.83 trillion at current exchange rate.
Total market capitalisation of the NSE, which included equities, bonds and exchange traded funds (ETFs), which opened 2016 at $85.295 billion, dropped to $53.068 billion by the end of the year, indicating a loss of $32.23 billion or N9.83 trillion at the current exchange rate of N305 to a Dollar.
Segmental analysis showed that aggregate market value of all quoted equities, which opened 2016 at $49.56 billion, closed the year at $30.35 billion, representing a loss of $19.11 billion or N5.83 trillion at current exchange rate.
Market value of bonds dropped from the year’s opening value of $35.82 billion to close at $22.71 billion, a decline of 36.6 per cent or $13.1 billion, equivalent to a loss of about N4 trillion. The market value of ETFs also depreciated by 21.95 per cent from the year’s opening value of $20.16 million to $15.73 million, a decline of $4.43 million or N1.35 billion.
Foreign portfolio investors hold significant influence in the Nigerian stock market, where they control some half of the transactions. Several Nigerian investors also access Dollar-denominated funds to invest in the market. The movement in foreign portfolio investments (FPIs) has been known to correlate with the pricing trend and overall performance at the Nigerian stock market.
The 12-month report also highlighted considerable slowdown in activities at the Nigerian capital market, in both Naira and Dollar terms. The primary market was almost inactive, underlining the challenge of capital raising faced by quoted companies as investors’ apathy gripped the market.
While total turnover volume of equities traded rose marginally by 3.15 per cent, the value of equities’ transactions dropped by 60.51 per cent from $4.78 billion in 2015 to $1.89 billion in 2016. There were only two new equity issues each in 2015 and 2016, but the value of the new issues dropped by 88.1 per cent from $388.71 million in 2015 to $46.1 million in 2016. Supplementary equity issues also dropped from $2.15 billion in 2015 to $127.92 million in 2016, representing a drop of 94.1 per cent. Value of new bond issues declined by 14.3 per cent from $5.01 billion in 2015 to $4.30 billion in 2016.
With the delisting of some companies, number of listed companies at the stock market dropped from 184 companies in 2015 to 170 companies in 2016. Also, the number of listed equities declined from 190 equities to 175 equities. Total number of listed securities at the stock market dropped from 257 securities in 2015 to 247 securities in 2016. The number of listed bonds had increased from 60 bonds to 64 bonds while the number of exchange traded products increased modestly from seven to eight.
Chief executive officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, told stakeholders that the forex will remain a decisive issue for the performance of the Nigerian stock market in 2017.
“We expect investors to continue to keep a close eye on the divergence between the interbank forex rate and other exchange rates in the country. Accordingly, a convergence of forex rates in the country and the performance of listed corporates will determine the level of market activity in the short term,” Onyema said.
He noted that with forecasts for inflation expected to moderate due to the base effect, the monetary authorities will have more flexibility with respect to interest rates and foreign exchange regime, hence good coordination between fiscal and monetary policy should result in resolution of structural deficiencies and drive economic growth.
Onyema, however, expressed optimism that the Nigerian market may rebound in 2017 given expectations that the economy will perform better and grow in the new business year.
According to him, the Nigerian economy is expected to recover from its recession in 2017 with a modest Gross Domestic Products (GDP) growth forecast of 0.6 per cent, though this will depend largely on the vigour of fiscal policy implementation, lower rates of disruptions to oil infrastructure from resolution of the Niger Delta conflict, crude oil prices remaining above the government’s benchmark of $42.5 per barrel, improvement in ease of doing business and other policies aimed at boosting economic productivity.
He outlined that the Exchange intends to strengthen its thought leadership efforts with policy makers to drive policies that will free up the system and promote the ease of doing business in Nigeria pointing out that incentive schemes for sectors of the economy that can support a pivot to export-led economy and systematic removal of impediments to doing business and reduction of leakages will attract private sector investments.
“Cognisant of the ever evolving economic realities on ground, the NSE will take an adaptive approach to strategy execution in 2017. In the immediate future, the NSE will focus on achieving its goal of becoming a more agile and demutualised exchange and will fast track efforts towards developing innovative products such as exchange traded derivatives to provide investors with tools to better weather economic realities in 2017,” Onyema said.
He added that in order to drive liquidity; the Exchange will enhance its cross-border integration efforts through African Securities Exchange Association’s (ASEA) African Exchange Linkage Project (AELP) model and the West African Capital Market Integration (WACMI) programme.
“We will also continue our engagement efforts with the government to promote the listing of privatised state-owned entities, as well as engage with the private sector issuers for listings across all of our product categories. We anticipate that secondary market activity will be challenged initially as the impact of various policy measures work their way through the system. However, we expect to see a revival of supplementary listings, return of the new issuance market, and potentially one initial public offering (IPO) since the equity market is a forward indicator of the economy,” Onyema said. -
Mobile banking will boost financial inclusion, says Dozie
Mobile banking has potential to leverage on technology to drive financial inclusion and economic development across the Africa.
Managing director, Diamond Bank Plc, Mr. Uzoma Dozie, who stated this, noted that mobile banking has revolutionised the way financial transactions are made and positively transformed the ability of millions of people to conduct business and their everyday lives across Africa.
According to him, it is only by creating digital infrastructure that the banking industry can scale rapidly enough to support the needs of those currently left out, especially as Nigerians have become some of the most digitally advanced consumers on the planet.
He pointed out that when financial service firms think about the Nigerian market, they absolutely must provide a fully integrated, seamless digital offering.
‘’What is exciting is the potential ecosystem the digital infrastructure can help create. Through an integrated digital platform, consumers can access bundled services and products from multiple partners best suited to facilitating their lifestyle,’’ Dozie said.
Citing the example of the bank’s Diamond Mobile, Dozie noted that customers can manage their finances, search and book international and local flights, as well as purchase movie tickets among other unending and emerging possibilities.
He outlined that a key element to making sure the most valuable and consumer-centric proposition is developed and brought to market, is through the use of data, adding that by analysing the behaviour of consumers’ digital interactions and their financial transactions, banks can build a detailed picture.
‘’This valuable insight can then help banks build the most appropriate infrastructure required to best support consumers’ needs. Clearly, as the digital revolution unfolds, there will be legitimate questions about data security and privacy that will need to be answered, but I don’t see these risks, as real as they are, as insurmountable,” Dozie said.
He added that the digitisation of banking also provides much greater transparency and an audit trail throughout more of the economy, from individuals through to the largest international institutions, noting that any measures that improve financial transparency must surely be a good thing.
‘’Ultimately, notwithstanding the obvious short-term economic challenges, as a country thriving with innovation and opportunity, these are hugely exciting times for everyone in Nigeria. Similarly, whilst Nigerian banks are facing their own pressures in the short term, I believe the future success of Nigerian banking will be built upon the twin foundations of technology and innovation.‘’As many of you will know, I am a huge believer in the power of technology and innovation to drive improvement and positive changes. From greater efficiency for business operations, through to a better consumer experience; when harnessed effectively, technology has the ability make a material difference to everyone’s daily life. This notion is no more accurate than in the world of banking,’’ Dozie said.