The Nation Newspaper

Category: Equities

  • Equities open with N56b gain

    Nigerian equities sustained their uptrend yesterday as the stock market reopened with stronger investors’ appetite. After rallying N138 billion gain last week, equities opened this week with a gain of N56 billion.

    With nearly two gainers against every loser, aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) rose from N9.496 trillion to close at N9.552 trillion. The All Share Index (ASI), the benchmark index for the stock market, appreciated by 0.58 per cent to close at 27,812.06 points as against its opening index of 27,650.32 points.

    The appreciation recorded in the share prices of UBA, Seplat, Access Bank, GT Bank and Nigerian Breweries were mainly responsible for the gain recorded in the NSE ASI. Year-to-Date, the ASI depreciated by 2.90 per cent.

    The total value of stocks traded on the floors of The NSE today was N2.83bn, up by 2.09 per cent from N2.77bn recorded last Friday. The total volume of stocks traded was 216.17mn in 3,316 deals.

  • EFInA gives $1.5m to support mobile banking

    Enhancing Financial Innovation & Access (EFInA) has awarded $1.5 million or about N421.5 million from its Innovation Grant to support Diamond Bank’s Diamond Y’ello Account (DYA), a mobile banking platform, which was built on MTN Xaas platform.

    The DYA was built on a platform powered by CWG Plc. It was designed to enable MTN subscribers, which include the largely unbanked and under-banked populace in Nigeria, enjoy banking services from Diamond Bank, using their mobile phones within the convenience of their varying locations. It provides easy access to a broad range of financial products tailored to meet consumers’ needs, at an affordable cost. These include bills payment, savings, retail collections, microcredit and insurance transactions

    On the development, Mr James Agada, Chief Executive Officer, CWG Plc observed that the DYA has demonstrated significant prospects, hence no surprise on the investment by EFInA.

    According to him, within a period of a little over 12 months, the Diamond Yello Account has enabled over 6 million subscriber’s access banking services with ease. The EFInA grant shows that these giant strides are being recognised and this will challenge us at CWG to do more in deploying technology solutions that enable growth.

    The Innovation Grant, as released by EFInA to support the DYA; ‘Winning the North’ project, is intended to enhance financial inclusion to the unbanked in the Northeast and Northwest geopolitical zones, who have more financially excluded citizens than other parts of the nation, as referenced in the EFInA Access Financial services in Nigeria 2014 survey. Furthermore, it is anticipated that this project will aid in tilting the variances in the financial sector; enabling the operators an opportunity to upgrade the features of the DYA in order to allow customers do more and cover a broader geographical base.

    It should be noted that CWG has worked in partnerships with other banks in the past, deploying innovative technology based products that enable customers’ access financial and other value added services through their mobile phones.

    CWG  has also deployed the Finacle Banking Application to 60 per cent of the financial institutions, enhancing their operations and currently deploys about a third of the aggregate ATMs presently in the country.

  • Embrace mutual funds, experts tell investors

    Investors should diversify their investments and hedge against the risks of volatility in the financial markets by buying into professionally managed collective investment schemes, otherwise known as mutual funds.

    Against the background of the decline in share prices, devaluation of Naira and the rising inflation, investments experts at Cordros Group urged investors use professionals and assets diversification to minimise risks and enjoy competitive returns.

    Acting Managing Director, Cordros Asset Management Limited(CAML), a subsidiary of Cordros Capital Limited, Mrs. Olafisayo Ogunbiyi-Badaru, said that despite the  volatility in the market, there are still investment opportunities that investors can take advantage of by using the professional services that will ensure steady income.

    According to her, in line with CAML’s strategy   to create array of products suitable for the underserved retail segment of the economy, the company is currently offering 10 million units of Cordros Money Market Fund (CMMF)  at N100 per unit, with  minimum subscription  of N10,000.

    “This is in line with the company’s strategy   to create array of products suitable for the underserved retail segment of the economy. The fund is targeted at the retail investors and that the main objective is to provide capital preservation, regular income, liquidity and capital appreciation,” Ogunbiyi-Badaru said.

    She explained that the fund’s investment objective is to provide capital preservation and regular income to unit holders by investing in high-quality money market instruments recognised by the Securities & Exchange Commission (SEC).

    She added that the fund is attractive to all investors who desire a steady stream of income and have low risk appetite.

    “High networth individuals with available short term ash balances can also take advantage of the fund to earn higher rates of return. Institutional clients who desire liquidity and easy accessibility to their funds with competitive returns can also take advantage,” Ogunbiyi-Badaru said.

    Also, Group Managing Director, Cordros Capital Limited, Mr. Wale Agbeyangi said the CMMF offers investors professional fund managers to avoid the mistakes of the amateur investor.

    He outlined that the fund consists of seasoned professional advisers led by Vetiva Capital Management Limited as the Issuing House, STL Trustees Ltd as the Trustee, African Prudential Registrars Ltd as Registrars to the Fund, Babalakin & Co as Solicitor to the Trustees, UBA Plc Global Investor Services as the Custodian, Access Bank Plc as the Receiving Bank and TAC Professional Services as the Reporting Accountant.

  • Core investors acquire 75% stake in Nema’s GNI

    Wema Bank Plc has secured  approval of the Nigerian Stock Exchange (NSE) to sell its 75 per cent majority equity stake in Great Nigeria Insurance (GNI) Plc to Insurance Resourcery and Consultancy Services Limited.

    A document obtained by The Nation at the weekend indicated that the authorities at the NSE, where both Wema Bank and GNI are listed, have approved the divestment. Under the transaction, a block divestment of 2.87 billion ordinary shares of GNI currently held by Wema Asset Management would be transferred to Insurance Resourcery and Consultancy Services, a relatively unknown firm.

    The divestment is valued at N1.44 billion at current market value of GNI. GNI currently has total paid up capital of 3.827 billion ordinary shares of 50 kobo each with a market capitalisation of N1.91 billion. GNI is trading at its nominal value of 50 kobo per share.

    GNI at the weekend indicated that Wema Bank was its core investor. “Besides many well meaning Nigerians ,who invested in Great Nigeria insurance Plc, our other core investors are Wema bank Plc and Odua Investment Group of Companies. Our relationships with these great groups have created a synergy for the growth of our business,” GNI stated in its corporate profile.

    GNI started operations in 1960 and its businesses include general and life insurance.

    Following the Central Bank of Nigeria (CBN)’s banking regulatory regime that required banks to either divest from non-core banking subsidiaries or form a holding company to hold those subsidiaries, Wema Bank had opted to divest from its non-core banking businesses including GNI. The bank had since divested from Wema Insurance Brokers Limited, Wema Registrars Limited, Independent Securities Limited and Whyte Cleon Limited. It also integrated operations of four subsidiaries into its core banking business including Wema Asset Management Limited, Wema Securities and Finance Plc, Wema Homes (Savings and Loans) Limited and Wise Properties Limited. Wema Bank had 100 per cent equity stakes in the trio of Wema Registrars, Wema Insurance Brokers and Whyte Cleon Limited while it had 94.7 per cent stake in Independent Securities and 75 per cent in GNI.

    Meanwhile, the new core investor would be required to restructure GNI’s issued share capital to dilute the existing concentrated shareholdings of the core investors and allow more investments from the investing public.

    In the latest report on public shareholding status in quoted companies obtained by The Nation, the NSE indicated that GNI and 10 other companies were in violation of the listing requirement, which compels companies quoted on the main board of the NSE to ensure that a minimum of 20 per cent of its issued shares is in the hand of the general investing public.

    Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market in their securities. The free float requirement for companies on the main board is 20 per cent while companies on the second board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors, who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    The report indicated that GNI currently has 16 per cent of its issued shares in the hands of the general investing public.

    According to the report, the management of the NSE had given GNI a deadline of July 8, 2016 to free more shares for the general investing public.

     

     

  • PZ Cussons declares N1.99b dividends

    PZ Cussons declares N1.99b dividends

    PZ Cussons Nigeria Plc will be distributing about N1.99 billion to its shareholders as cash dividends for the immediate past business year as the conglomerate struggled to curtail the negative impact of economic slowdown and foreign exchange constraint on its operations.

    The board of directors of PZ Cussons recommended that a dividend per share of 50 kobo be paid to shareholders in the book of the company by September 23, 2016. The dividend will become payable on October 7, 2016.

    Key extracts of the audited report and accounts of PZ Cussons Nigeria for the year ended May 31, 2016 showed that turnover stood at N69.53 billion in 2016 as against N73.13 billion in 2015. Operating profit dropped from N6.65 billion to N3.25 billion. Profit before tax also declined from N6.56 billion to N3.15 billion. Profit after tax declined from N4.57 billion to N2.13 billion. Earnings per share dropped from N1.02 to 47 kobo. However, the group’s total assets increased from N67.39 billion to N74.43 billion.

    Chairman, PZ Cussons Nigeria Plc, Chief Kola Jamodu, said the performance was a relatively fair performance when viewed against the background of the tough macroeconomic environment characterized by scarcity of foreign exchange, price hikes, weakening consumer demand and upheavals in some part of the country.

    He said the group has continued to implement strategic initiatives aimed at increasing shareholders’ value and sustaining long-term growth.

    According to him, the group continued innovative projects aimed at improving efficiencies in supply chain while increased attention was brought on its core brands.

    He added that the group streamlined its product portfolio to make the business more agile in an increasingly competitive and fast changing market.

    “Overall, the company did well to hold its position in the market restricting the negative impact of the prevailing adverse conditions and performed satisfactorily against peers in the sector,” Jamodu said

    He added that the group maintains a strong cash position which puts it in a flexible and agile position to fund its operations and exploit any emerging business opportunities.

  • GTB grows pre-tax profit by 45% to N91.4b in first half

    GTB grows pre-tax profit by 45% to N91.4b in first half

    Guaranty Trust Bank (GTB) Plc recorded strong growths in incomes and profitability in the first half of this year as the most capitalised banking stock grew pre-tax profit by 45 per cent to N91.4 billion.

    Key extracts of the audited half-year report of GTB for the period ended June 30, 2016 released yesterday at the Nigerian Stock Exchange (NSE) showed that gross earnings rose by 37 per cent to N209.9 billion in first half 2016 as against N153 billion recorded in comparable period of 2015. Profit before tax rose from N63.11 billion to N91.38 billion. After taxes, net profit stood at N77.46 billion in first half 2016 compared with N53.37 billion recorded in first half of 2016.

    The bank balance sheet also emerged stronger. Total assets rose to N2.93 trillion by June 2016 as against N2.52 trillion recorded by December 31, 2015. The bank’s loan book grew by 14 per cent from N1.37 trillion recorded as at December 2015 to N1.56 trillion by June 2016. Total deposits also increased by 23 per cent to N2.01 trillion by June 2016 as against N1.64 trillion by December 2015. However, the proportion of non-performing loans to gross loans and advances spiked up slightly to 4.39 per cent but the group made coverage of 170.1 per cent to cushion the bad assets. The bank’s capital adequacy remains strong with capital adequacy ratio of 18.25 per cent while return on equity (ROAE) and return on assets (ROAA) stood at 35.8 per cent and 5.7 per cent respectively.

    The board of directors of the bank has recommended payment of interim dividend per share of 25 kobo to shareholders for the half-year results.

    Managing director, Guaranty Trust Bank (GTB) Plc, Mr Segun Agbaje said the bank had prepared well for the challenges in the industry by focusing on effective management of the balance sheet and adapting its business model to changing market variables.

    “The quality of our past decisions enabled us navigate the challenges that persisted in the business environment most of the half year period,” Agbaje said.

    According to him, while the current economic realities present some challenges to growth, the bank remains committed to its ideals of staying positive, delivering exceptional service to its customers and adding value to all stakeholders.

    He noted that with this solid financial result in the first half, GTB has continued to enshrine its position as a clear leader in the banking industry in Nigeria, with strong showing in Africa, a position validated by numerous awards and accolades received by the bank during the course of the year in recognition of its leading role in Africa.

  • Zenith Bank’s profit drops as bad loans rise

    Zenith Bank’s profit drops as bad loans rise

    Zenith Bank Plc witnessed declines in its top-line and profitability in the first half as the quality of the bank’s credit assets worsened. The proportion of non-performing loans to gross loans spiked up to 2.34 per cent by the end of first half 2016 compared with 1.44 per cent recorded in the comparable period of 2015.

    Zenith Bank’s share price dropped by 2.50 per cent to close at N15.60 per share as the much-awaited results filtered into the stock market.

    Key extracts of the audited report and accounts for the six-month period ended June 30, 2016 showed that gross earnings dropped by 6.23 per cent while pre and post tax profits declined by 12.35 per cent and 15.68 per cent respectively. Non-performing loans rose to N54.67 billion by first half of 2016, indicating addition of about N10 billion to the full-year classified loans of N44.9 billion.

    The report indicated that while gross loans and advances grew by 15.3 per cent during the six-month period, non-performing loans rose by about 22 per cent. Gross loans, which closed 2015 at N2.03 trillion, rose to N2.34 trillion by June 2016.

    The contraction in net earnings depressed earnings per share to N1.43 in first half 2016 as against N1.69 recorded in comparable period of 2015. The board of the bank has however recommended interim dividend per share of 25 kobo for first half 2016, retaining the same amount paid in 2015.

    Gross earnings closed June 2016 at N214.81 billion as against N229.08 billion recorded in first half 2015. Profit before tax dropped from N72.20 billion to N63.28 billion. Profit after tax declined from N53.18 billion to N44.84 billion.

  • NSE reduces bonds’ fees to boost debt market

    NSE reduces bonds’ fees to boost debt market

    The Nigerian Stock Exchange (NSE) yesterday announced a revision of the listing and trading fees for securities listed and traded on its fixed income market. The revised fee structure will become effective on August 17, 2016.

    The new fee structure will run through a six-month pilot phase after which it will be evaluated to determine if it has met its objectives.

    Under the revised fee structure, NSE will no longer charge trading fees on fixed income traded on its platform. Also, the initial flat listing application fee of 0.15 per cent for all types of bonds has been replaced with variable listing application fees.

    With this, corporate bonds exclusively listed on the NSE, with existing equity listing, will attract 0.01 per cent listing application fee. Dual-listed corporate bonds with existing equity listing and other corporate bonds will attract 0.0375 per cent listing application fee while the listing application fees for State and Supranational Bonds has been reduced to 0.05 per cent.

    The Exchange also replaced the fixed brokerage commission of 0.0005 per cent with a negotiable rate capped at 1.0 per cent. This will enable investors to negotiate trading commission with brokerage firms.

    Executive Director, Capital Markets, Nigerian Stock Exchange (NSE), Mr. Haruna Jalo-Waziri, said the reduction in fee demonstrated Exchange’s commitment to boost market efficiency.

    “The reduction in listing application fees gives issuers opportunity to raise their profile and increase visibility through listing on a globally recognised Exchange with the highest regulatory standards. The aim is to reduce issuers cost of accessing long term capital and to provide investors with diverse investment products at competitive trading fees,” Jalo-Waziri said.

    He urged issuers to raise cheap long term capital through bond issuance for business expansion, project finance and loan refinancing, noting that Nigeria has huge investment opportunities.

    “NSE remains committed to building an enduring marketplace and will continue to pursue initiatives that add value to issuers and investors,” Jalo-Waziri said.

     

  • Dividend warrant to go by June 2017

    Capital market regulators and operators have reached agreement to discontinue issuance of dividend warrant as from June 30, 2017 as stakeholders consolidate initiatives aimed at full automation of transactions and payments in the market.

    At the end of the second quarter meeting of the Capital Market Committee (CMC), stakeholders in the Nigerian capital market directed that registrars would stop issuing dividend warrants as payments for dividends as from June 30, 2017. Shareholders will thereafter fully receive their dividends through the electronic dividend (e-dividend) directly into their bank accounts.

    The CMC, chaired by the director general of Securities and Exchange Commission (SEC), consists of 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 (Naicom), National Pension Commission (Pencom) and FSS2020.

    At a post-CMC media briefing yesterday, Director General, Securities and Exchange Commission (SEC), said the full automation of dividend payment will ensure that shareholders receive their dividends without delay.

    According to him, the e-dividend would stem the menace of unclaimed dividend and also ensure that the registrars can automatically pay the backlog of unclaimed dividends to verified shareholders’ bank accounts.

    He said the Commission has undertaken to extend the free e-dividend registration till December 31, 2016, urging shareholders to take advantage of the opportunity to enroll for the e-dividend.

    He lamented the poor response of shareholders to the initial e-dividend registration campaign noting that only 6,000 Nigerians have so far registered for e-dividend payment mandate launched by the SEC, the Central Bank of Nigeria and the Nigeria Inter-Bank Settlement System (NIBSS) in July 2015.

    He stressed that the aim of the e-dividend system was to eradicate the difficulty encountered by retail investors in claiming their dividends.

     

  • AG Leventis eyes foreign investors to boost growth

    LG Leventis (Nigeria) Plc has started discussions with foreign investors with a view to raising new capital to be invested in the major areas of the conglomerate’s businesses.

    The management of AG Leventis, one of the oldest listed companies, presented the underlying operational facts of the conglomerate to stakeholders at the Nigerian Stock Exchange (NSE) yesterday.

    Executive vice chairman and chief executive officer, AG Leventis (Nigeria) Plc, Mr. Michael Economakis, said the conglomerate was hoping to inject fresh capital to boost its turnaround plan and sustain the growth of its businesses.

    He outlined that the strategic priorities of the company in the meantime would be in the areas of fast moving consumer goods, automobile, agriculture and real estate noting that the conglomerate would seek to develop its businesses in these sectors over the next two years.

    According to him, AG Leventis is already discussing with foreign investors to inject new capital into the fast moving consumer goods sector of its businesses.

    “We are discussing with foreign investors, hopefully there will be capital inflow very soon, this capital inflow will assist us in having better cash flow, there will be reduction in our cost of fund and we will be able to expand our products portfolio”, Economakis said.

    He added that injection of new capital would enable the conglomerate to expand its product portfolio into some niche products with a potential long-term technical service partnership with Pick n Pay, one of the two largest retailers in South Africa.

    He noted that the conglomerate had commenced production of vehicles from mid 2015 and now looking at expanding it plans to assemble for other distributors in the region.

    He said AG Leventis is also looking at the large-scale farming in Nigeria that would lead the company to backward integration in agriculture.

    AG Leventis had recently announced that it had entered into a joint venture agreement with Pick n Pay Retailers (Pty) Limited, a South African company, to establish retails stores in Nigeria.

    The board of directors of the company had recommended distribution of N265 million from its reserves as cash dividends after the conglomerate posted a loss after tax of about N177 million in the 2015 business year. The board recommended that a dividend per share of 10 kobo be paid to all shareholders on the book of the company as at August 19, 2016.

    Key extracts of the audited report and accounts of AG Leventis for the year ended December 31, 2015 showed that the conglomerate’s profit before tax dropped from N534.04 million in 2014 to N329.38 million in 2015. After taxes, the company recorded a net loss of N176.99 million in 2015 as against net profit of N211.81 million in 2014. The company’s shareholders’ funds also declined from N9.39 billion in 2014 to N9.09 billion in 2015.

    Meanwhile, the company’s turnover rose from N11.79 billion in 2014 to N12.54 billion in 2015. Gross profit improved from N3.47 billion in 2014 to N4.17 billion in 2015.