The Nation Newspaper

Category: Equities

  • Equities sustain rally with N32b gain

    Nigerian equities continued on the uptrend for the fourth consecutive trading session as fund managers continued to rebalance their portfolios for the year-end. Today is the last trading session for this year and the stock market will close by 12.30 pm, two hours earlier than the usual closing time for the market. Nobel Laureate, Professor Wole Soyinka will beat the closing gong to close the market for the 2016 business year, keeping to the Nigerian Stock Exchange (NSE)’s tradition of ceremonial closure for the market.

    With 24 gainers to 20 losers, aggregate market value of all quoted equities rose from N9.183 trillion to close at N9.215 trillion, representing a gain of N32 billion. The All Share Index (ASI), the common index that tracks prices at the Exchange, also rose from 26,688.25 points to close at 26,782.93 points.

    Oil and gas stocks remained atop on both sides of bargain-hunting and profit-taking. Total Nigeria led the gainers with a gain of N11.88 to close at N299. Seplat Petroleum Development Company followed with a gain of N9.49 to close at N379.99. Guaranty Trust Bank rose by N1.35 to close at N24.74. Okomu Oil Palm added 65 kobo to close at N40.17 while Ashaka Cement garnered 57 kobo to close at N12.02 per share.

    On the other hand, Forte Oil led the losers with a loss of N10.07 to close at N93.54. Mobil Oil Nigeria followed with a loss of N2 to close at N290. Stanbic IBTC Holdings declined by 66 kobo to close at N15. Access Bank lost 19 kobo to close at N5.78. Champion Breweries dropped by 12 kobo to close at N2.38 while Airlines and Services Logistics lost 12 kobo to close at N2.43.

    Total turnover was below average at 117.40 million shares valued at N877.63 million in 2,392 deals. FCMB Group was the most active with 12.77 million shares worth N13.9 million. Zenith Bank followed with 11.76 million shares valued at N174.15 million while FBN Holdings placed third with 11.6 million shares worth N40.31 million.

    Analysts at Afrinvest Securities noted that the uptrend has been largely dictated by end of year portfolio rebalancing by institutional investors.

    “We expect this bullish sentiment to persist in (today) tomorrow’s trading session as the market closes for the year,” Afrinvest Securities stated.

  • Shareholders eye 129% capital gain on Mobil-Nipco’s $301m acquisition deal

    Minority shareholders in Mobil Oil Nigeria Plc could receive more than a double of their current valuations if they decide to take advantage of the ongoing acquisition deal between divesting ExxonMobil Oil Corporation and Nipco Plc.

    Nipco had agreed to pay $301 million for the acquisition of ExxonMobil Oil Corporation’s 60 per cent majority equity stake in Mobil Oil Nigeria Plc. The total consideration of $301 million, which is subject to price adjustments for dividends and other factors, is equivalent to N91.88 billion at current official exchange rate of N305.25 per Dollar.

    Under the deal, ExxonMobil will sell its majority equity stake of 60 per cent to Nipco Investments Limited; a wholly-owned subsidiary of Nipco. ExxonMobil will transfer its total shareholding of 216.36 million ordinary shares of 50 kobo each to Nipco Investments Limited for the consideration of $301 million.

    The gross transaction value implies a valuation of about N425 per share, 128.5 per cent above Mobil Oil Nigeria’s share price of N186 on the announcement date for the deal and 51.8 per cent above Mobil Oil Nigeria’s current share price of N280 per share at the Nigerian Stock Exchange (NSE).

    Under the extant laws at the capital market, Nipco will be required to make offer similar to the ExxonMobil Oil Corporation’s to the minority shareholders of Mobil Oil Nigeria Plc.

    The acquisition, which has already been filed with the Securities and Exchange Commission (SEC) for a “no objection” clearance, is expected to trigger the mandatory tender offer (MTO) provision of the Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC, which make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

    Lafarge Africa Plc, which acquired majority shares in Ashaka Cement Plc, made similar MTO to minority shareholders of Ashaka Cement.

    Mobil Oil Nigeria’s share price remained unchanged at N280 per share at the NSE yesterday as oil and gas stocks continued to lead the downtrend at the Exchange. Seplat Petroleum Development Company led the losers with a loss of N19.50 to close at N370.50. Forte Oil followed with a loss of N9.22 to close at N85.47 while Oando dropped by 21 kobo to close at N4.20 per share. The sectoral index, the NSE Oil and Gas Index declined by 3.7 per cent, significantly higher than the average decline of 0.46 per cent recorded by the general benchmark index.

    The All Share Index (ASI), NSE’s general benchmark index, declined from its opening index of 26,540.87 points to close at 26,418.11 points. Aggregate market value of all quoted equities on the Exchange also dropped by N42 billion from N9.132 trillion to close at N9.090 trillion.

  • May & Baker Nigeria assures on good returns for 2016

    The management of May & Baker Nigeria Plc has assured of steady growth in sales and stable profitability in 2016 notwithstanding the tough macroeconomic environment that had constrained access to production materials and consumer’s purchasing power.

    Managing Director, May & Baker Nigeria PLC, Mr. Nnamdi Okafor, who spoke yesterday at the company’s end-of-year media parley at the corporate head office in Ikeja, Lagos, said the company’s performance has been resilient so far this year citing the third quarter results and the subsequent management accounts.

    According to him, although the management cannot provide full figures now because the company still has about two weeks to round off its 2016 business year ending December 31, 2016, the first three quarters of the year pointed to positive signals of where the company shall be by the end of the year.

    He noted that in spite of the macroeconomic challenges, the company’s sales have been trending at some 13 per cent growth while the management has maintained efficient cost control to mitigate the effect of the macroeconomic headwinds on the bottom-line.

    “We have continued to take advantage of improved production capacity and better cost management to mitigate the tough operating environment. Our results in 2016 have consistently shown improvement in major fundamentals, a trend which started in the last quarter of 2014 and significantly improved in 2015,” Okafor said.

    He assured that as a world-class company, May & Baker Nigeria is consistently keeping abreast of international best practice and making strategic plans that can take its businesses to the next levels.

    He pointed out that the company’s World Health Organisation (WHO)-prequalified manufacturing facility in Ota is growing into a hub of pharmaceutical manufacturing in West Africa adding that the company is also building a world-class human capital that will help to enhance the global standards of its operations.

    “We are already looking ahead for better results this year and beyond. By the Grace of God and with the support of all, we shall accomplish our objectives not only to remain the leader in our market segments but also to create more wealth and value for all our stakeholders,” Okafor assured.

    Key extracts of May & Baker Nigeria’s nine-month report for the period ended September 30, 2016 showed that turnover rose to N5.94 billion in 2016 as against N5.28 billion recorded in comparable period of 2015. While higher cost of sales dropped gross profit from N1.75 billion to N1.70 billion, the company took advantage of its internal cost management to boost operating profit from N470.4 million in third quarter 2015 to N489.5 million in third quarter 2016.

    Also, finance costs reduced considerably from N425.39 million in third quarter 2015 to N377.93 million in third quarter 2016. Profit before tax rose to N66.24 million in 2016 as against N60.63 million recorded in corresponding period of 2015. Profit after tax also grew to N44.4 million in 2016 compared with N41.2 million in 2015. With this, earnings per share improved from 4.21 kobo in third quarter 2015 to 4.53 kobo in third quarter 2016.

    Against the background of its improved performance in 2015, May & Baker Nigeria had increased total dividend payout by 20 per cent to N58.8 million for the 2015 business year compared to what it paid for 2014 business year.

  • Nipco shareholders okay guaranty for $301m Mobil acquisition

    Nipco shareholders okay guaranty for $301m Mobil acquisition

    Shareholders of Nipco PLC have authorised the Board of Directors to stand as a surety and guarantor for the acquisition of 60 per cent majority equity stake in Mobil Oil Nigeria by Nipco Investments Limited, a wholly owned subsidiary of Nipco Plc.

    At the extraordinary general meeting, shareholders praised the acquisition and approved all resolutions tabled before the meeting.

    Nipco had agreed to pay $301 million for the acquisition of ExxonMobil Oil Corporation’s 60 per cent majority equity stake in Mobil Oil Nigeria Plc. The total consideration of $301 million, which is subject to price adjustments for dividends and other factors, is equivalent to N91.88 billion at current official exchange rate of N305.25 per Dollar.

    Under the deal, ExxonMobil will sell its majority equity stake of 60 per cent to Nipco Investments Limited; a wholly-owned subsidiary of Nipco. ExxonMobil will transfer its total shareholding of 216.36 million ordinary shares of 50 kobo each to Nipco Investments Limited for the consideration of $301 million.

    At the meeting, shareholders authorised the board to stand as surety and guarantor for Nipco Investments Limited and also approved the guaranty dated September 26, 2016 given by Nipco for the benefit of ExxonMobil Corporation, USA in connection with the acquisition by Nipco Investments Limited.

    A shareholder, Alhaji Sanni Yau said the acquisition was a demonstration of the capacity of Nipco and its commitments to the Nigerian economy.

    According to him, the fact that Nipco had in the last 12 years focused exclusively on the downstream sector will give it necessary confidence and wherewithal to effectively reposition Mobil Oil Nigeria as an industry leader within the shortest possible time.

    He noted that the confidence reposed in Nipco to put Mobil Oil back as an industry has started to manifest, citing the share price appreciation of more than 55 per cent since the official announcement of the deal by Mobil Oil Nigeria at the Nigerian Stock Exchange (NSE).

    He expressed confidence that Nipco would not only sustain the modest performance of Mobil Oil  but also improve on it as it pursues the company’s vision of being the  first choice company in the hydrocarbon industry to all stakeholders.

    Another shareholder, Alhaji Suleiman Mohammed, noted the historic position of the acquisition as the first of such to be undertaken by an indigenous operator.

    He praised the Board of Nipco for taking such a laudable step which is fast reshaping the landscape of the downstream sector.

    Similarly, another shareholder, Alhaji Musa Felande, said the acquisition would benefit independent fuel marketers who will earn more returns through improved earnings on their shares in Nipco.

    He urged the board and management of the company to consider going into petroleum refinery in the near future.

    In his remarks, Managing Director, Nipco PLC, Mr Venkataraman Venkatapathy said the acquisition is an important synergy and part of a strategy to support Nipco’s continuous growth and expansion in the retail sector of the oil and gas industry.

    Venkatapathy, who stood in for the Chairman of Nipco, Chief Bestman Anekwe, said the company would continue to maintain the Mobil Oil brand at its retail outlets as well as continue to blend and sell Mobil Oil brand of lubricants under blending licence from ExxonMobil.

  • Stock Exchange approves N218.6m new capital raising for DN Meyer

    Stock Exchange approves N218.6m new capital raising for DN Meyer

    Authorities at the Nigerian Stock Exchange (NSE) at the weekend approved the plan by DN Meyer Nigeria PLC to raise about N218.62 million in new equity funds from existing shareholders. The move will double the paid up share capital of the paint manufacturing company and raise total equity funds to above N900 million.

    A regulatory approval obtained by The Nation at the weekend indicated that DN Meyer Nigeria plans a rights issue of 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.

    The provisional allotment will be done on the basis of one new ordinary share for one ordinary share held as at the close of register on September 8, 2016. The rights issue price is a discount of about 10 per cent to DN Meyer’s share price of 83 kobo at the NSE.

    The latest audited report and accounts of DN Meyer for the year ended December 31, 2015 showed a turnover of N1.19 billion in 2015 as against N1.34 billion in 2014. Gross profit dropped from N592.24 million in 2014 to N505.38 million. Operating profit however improved from N72.01 million to N151.01 million. The company returned to profit in 2015 with a pre-tax profit of N60.46 million as against pre-tax loss of N37.36 million recorded in 2014. After taxes, net profit stood at N52.86 million in 2015 as against net loss of N36.58 million in 2014. Shareholders’ funds closed 2015 at N685.28 million as against N632.03 million in 2014. DN Meyer currently has a paid up share capital of N145.75 million consisting of 291.5 million ordinary shares of 50 kobo each.

    In the 2014 audited report, the external auditors to DN Meyer, Akintola Williams Deloitte, had expressed concerns about the going concern status of the chemical and paints company as recurring losses over the years and inability to inject additional equity funds built up huge deficit on the balance sheet.

    A new external auditors, BDO Professional Services, signed on the audited report for 2015 without any material emphasis or doubt on going concern.

    In the 2014 report, the external auditors noted that recurring losses and negative working capital plaguing the company “indicates existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern”.

    The auditors particularly drew attention to the fact that the DN Meyer group has sustained recurring losses over the years and recorded negative working capital. In the year ended December 31, 2014, the company posted a loss of N44.2 million while it also has a negative working capital of N161 million by the December 2014 year-end.

    Audited accounts of DN Meyer Group had shown that the company suffered a reversal in 2014. Turnover dropped from N1.59 billion in 2013 to N1.34 billion in 2014. As against pre-tax profit of N51.9 million in 2013, the company recorded a pre-tax loss of N37.36 million. After taxes, net loss stood at N35.58 million in 2014 as against net profit of N47.07 million in 2013.

    The board of the company, however, said the operations of the company have been improving and it will be in adequate position to generate needed cashflows in the years ahead.

    Auditors at Akintola Williams Deloitte had earlier in an independent audit report dated August 2013, highlighted the possibility of the working capital deficiencies and negative cash flow impairing on the sustainable operations of the company.  Negative working capital had risen by 11 per cent to N181 million in 2012 as against N163 million and N60 million in 2011 and 2010 respectively. Besides, the group recorded negative operating cash flows of N34 million in 2012. The board of the company blamed the legacy loans and the attendant financing charges for the continuing negative bottom-line of the company.

    One of the legacy companies, DN Meyer, has 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 stake 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 stake in DN Meyer to Citiprops Limited in February 2010.

    DN Meyer is now 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 stake, Bosworth Limited held 12.89 per cent while Mr Osa Osunde held 9.26 per cent.

  • Technology Global repositions for growth

    Technology Global Services Limited has expanded its product portfolio to meet the demand of its increasing customers and position itself for further growth.

    Chief Executive Officer, Technology Global Services Limited, Mr. Akin Oduwole, who unveiled a new logo for the company at a direct-to-garment and print academy business seminar in Abuja, said the company rebranded to further underscore its commitment to improved service delivery and compliance with eco-friendly environment.

    According to him, the rebranding marked another milestone in the history of the company as it expands its product portfolio to meet growing demand by customers and in line with the current economic realities.

    He assured that the company remained dedicated to ensuring the right equipment’s are procured for the intended jobs with an even stronger passion to ensuring that best standards are practised in the Nigerian printing industry.

    He said the rebranding pointed at the determination of the printing equipment sales and support company to continue to constantly explore the unending possibilities in the print industry.

    “Though we are print support provider, we believe in fresh ideas that will make the world a better place. More than ever, Technology Global is now passionate about an eco-friendly company that will not support any product which can bring about environment degradation,” Oduwole said.

  • May & Baker elevates three as EDs

    May & Baker elevates three as EDs

    May & Baker Nigeria PLC has announced the elevation of three senior management officers to the position of executive directors.

    The new members on the Board of Directors of the company are: Mr. Valentine Okelu, executive director, foods division; Mr.  Chukuka Chukutem, executive director, pharma sales and marketing and Mr. AyodejiAboderin, executive director, finance. While the appointments of Okelu and Chukutem take immediate effect, that of Aboderin will be effective in March 2017.

    Chukutem was head, pharma sales and marketing before his elevation. He initially joined May & Baker Nigeria in 1994 and was promoted as national key accounts manager. He was thereafter engaged by another key player in the Nigerian pharma industry to drive major growth initiatives in marketing, brand assets, public sector & regulatory affairs, rising to general manager and associate director positions, before returning to May & Baker Nigeria in May 2012 as head, corporate planning & development. He was reassigned to head the pharma sales & marketing division in 2013.

    Prior to his elevation, Okelu was the head, foods division of the company.  He joined May & Baker in 1996 as a medical representative. Other positions he held within the company include market development manager, product manager – cardiovascular and head, demand creation and head, pharmaceutical sales and marketing.

    Aboderin joined May & Baker Nigeria in 2014 as controller of finance. A 1993 Accountancy graduate of The Polytechnic, Ibadan, he is an associate member of the Institute of Chartered Accountants of Nigeria and holds a Commonwealth Executive MBA degree from the National Open University of Nigeria.

    He has over two decades of cognate experience in the fast moving consumer goods industry.

  • Share suspension: Resort Savings effects board changes

    Seven days after it was suspended on the Nigerian Stock Exchange (NSE), the board of Resort Savings and Loans Plc met yesterday in Lagos and appointed a new chairman and substantive Managing Director for the  mortgage institution.

    At the 90th board meeting at it’s head office in Ikeja, Lagos, the directors of the company appointed Jideofor. Chukwuocha as the new chairman, replacing Chief Babatunde  Adefarati.  The board also appointed Mr. Ola Oyinloye as the substantive Managing Director of the company. Chief Adefarati resigned from the board amidst scuffle for the chairmanship of the company.

    Chukwuocha, an astute businessman, has been a director of Resort Savings since 2012. The company secretary to the company, LPC Solicitors, has been mandated to notify all regulatory authorities of the decisions of the board.

    In a confirmatory email on the appointments, the board stated that the new appointments were part of efforts to reposition the mortgage company.

    Directors of the company stated that they expected the new chairman to bring his wealth of experience as a successful businessman to reposition the mortgage bank in its ongoing restructuring exercise.

    “The board wishes to assure its numerous customers and other stakeholders that the mortgage bank has been further strengthened than ever before to ensure that it sustains its high quality services in providing mortgage to Nigerians while supporting the policies of the Federal Government in making affordable accommodation available to Nigerians,” the board stated.

    The NSE had on Tuesday December 6, 2016 placed full suspension on the shares of Resort Savings as capital market regulators launched investigation into allegations of corporate governance abuses against the management and directors of the mortgage banker.

    A circular issued by the NSE and obtained by The Nation had indicated that Securities and Exchange Commission (SEC) had directed that a full suspension be placed on Resort Savings, implying that there will be no trading on the shares of the company.

    “In compliance with the provisions of Section 35 of the Investments and Securities Act, 2007 and in order to give effect to the above directive, the Exchange will suspend full trading in the securities with effect from Tuesday 06 December 2016. The suspension will remain in force until further directives from the SEC,” the circular indicated.

    Resort Savings has wriggled under losses over the years. Loss after tax rose from N1.57 billion in 2013 to N2.99 billion in 2014. Also, the Consumer Protection Council (CPC) recently stated that it has started investigations into alleged diversion of mortgage funds and other sundry fraud allegations against Resort Savings.

  • NSE woos entertainers with long-term capital

    NSE woos entertainers with long-term capital

    Nigerian Stock Exchange (NSE) has expressed its readiness to provide a platform for artists and promoters in the Nigerian and African entertainment industry to raise long-term funds to boost the growth of the industry.

    Its Chief Executive Officer, Mr. Oscar Onyema, who spoke at a Music Week Africa event hosted by the Exchange in Lagos, said substantial capital is required for the music industry to achieve its potential in Africa.

    He said the NSE has positioned itself as the African Exchange of choice for African issuers and global investors looking to use capital markets to raise both equities and debt capital.

    “Globally, long term growth is often achieved through public quotation on an Exchange. We believe that this growth and more can only be achieved by having companies in the entertainment industry listed on the Nigerian Stock Exchange. As Nigeria’s foremost Exchange we are certain that we are well positioned to help your industry achieve its full potentials, as well as reduce the cost of raising capital and building infrastructure to be globally competitive,” Onyema said.

    He said the Exchange would continue to support the event that seeks to explore and develop the various aspects of the African and global music industry, with a view to creating jobs and wealth accumulation through the capital markets.

    According to him, with a total market capitalisation of N15.7 trillion across all of product categories, the NSE has implemented far-reaching transformational policies aimed at strengthening and providing products that are aligned to investors’ requirements, improve market access, while ensuring a fair and orderly market.

    He noted that these deliverables have improved investor confidence and repositioned firms listed on the Exchange as attractive investment opportunities, urging the entertainment industry to look seriously at leveraging the opportunities that abound in the  capital market.

    “We are, particularly, proud to partner with Music Week Africa to promote the business of music and accelerate the growth of this sector in Africa. The Music Week Africa platform provides opportunities for sector players, investors and collaborators to close deals, network, connect as well as increase their capacity to develop profitable and sustainable business models for the music and entertainment industry on the continent,” Onyema said.

  • Energy Fund outperforms stock market

    The Nigeria Energy Sector Fund (NESF), a closed-end collective investment scheme quoted on the Nigerian Stock Exchange (NSE), has delivered average return of 10.74 per cent over the last three years, significantly exceeding the overall market’s average return of -15.05 per cent during the period.

    In its latest payment, NESF has declared a coupon payment of N51 per note to unitholders for the financial year ended March 31, 2016. The coupon translates to 9.23 per cent at the current market price of N552.20 per note.

    In 2015, despite the impact of severe diminution incurred on investments in some oil and gas stock due to weak performance, NESF paid N35 coupon per note distribution. This translated into 6.33 per cent yield as against a negative return of -17.36 per cent in the stock market. Also in 2014, unitholders earned N92 coupon per note, which translated into a yield of 17 per cent compared to a negative return of 16.14 per cent in the stock market during the period.

    Group Managing Director, SCM Capital Limited, Gaventa Otono, the fund manager to NESF, said the impressive returns was a demonstration of sound management of the fund.

    He said the NESF has since inception continued to witness significant growth and delivered value to unitholders in terms of coupon payments that is second to none in the industry.

    “We kept our investment philosophy and adopted sound investment methodology to continue to sustain the fund`s performance. The adoption of the improved and optimal appropriate asset allocation strategy has been key to the performance,” Otono said.

    He reiterated the resolve of the SCM Capital to aggressively manage and take advantage of emerging opportunities in the economy despite the current economic recession which offers both opportunities and challenges to fund managers.

    While reassuring on its potential to generate competitive returns on investment, the fund manager urged discerning investors who are driven by the passion to earn regular income to take advantage of the enormous opportunities available to invest in the fund in order to earn consistent income.

    NESF is constituted under a trust deed with United Capital Trustees Limited as the trustees and UBA Global Services Limited as the custodian to the fund.