The Nation Newspaper

Category: Equities

  • NAHCO assures shareholders continuous of returns

    NAHCO assures shareholders continuous of returns

    The Chairman of Nigerian Aviation Handling Company (NAHCO), Alhaji Suleiman Yahyah, has assured stock market operators that it will  continue to  provide steady returns to shareholders in form of dividends and bonuses.

    Speaking at the Closing Gong Sounding ceremony on the floor of the Nigerian Stock Exchange (NSE) on Wednesday, Yahyah said since the company was privatised and listed on the exchange in 2006, it has remained consistent with dividend payment.

    “I want to assure shareholders that this year will not be different. We will continue to declare healthy dividend in line with our consistent dividend strategy,” he said.

    According to him, since its privatisation, the company has embarked on business diversification programme that cuts across industries and geography. He said  the company  has  developed strategic global alliances through its membership of aviance, the global alliance of 10 reputable airport service providers operating from 112 stations in 17 countries, and The International Air Cargo Association (TIACA), which exists to promote the air cargo industry and world trade.

    Yahyah noted that  from a single business company, NAHCO has grown into a diversified  group that is not only in cargo and passengers handling, but is also into agriculture,  free trade zone and energy.

    He said: “We are ready to go on the investment in the free trade zone. The licence has been secured, the partnership with International Development Ireland,had been signed, management is in place and   market is looking good. We are also investing in our agric zone development ,which is part of  free trade zone, a sub element of  using our platforms in Lagos, Abuja, and Port Harcourt. Already 10 per cent of our earnings  is coming from export. So we want to deepen it  in view of the difficulty now in the forex market. So  we will fast track that investment and hopefully,  that should begin  show in our  performance by the end of  2016. Besides, we are also are moving to other  African countries. We are licensed in Senegal and Cote d I’voire. Now is the time to make those investment decisions active.”

    He disclosed that NAHCO  invested over N10 billion in equipment, saying these equipment made the company to be about 150 per cent   self-sufficiency.

    He said the company has enough equipment and is ready  for the new terminals that are coming  Lagos,  Port  Harcourt, Kano and Abuja Terminals.

    “Our future remains to deepen our market presence, deepen our corporate governance culture and strengthen the board, which is stable and experienced and management to face the challenges in the economy. We also believe that our agric zone and free trade zone will provide continuous sustainability to the investors,” he said.

  • Tough macro economy, impairments weigh down First Bank’s earnings

    Tough macro economy, impairments weigh down First Bank’s earnings

    The board of directors of FBN Holdings Plc, the holding company for First Bank of Nigeria and its former subsidiaries, yesterday alerted the investing public that the group could record significant decline in earnings in the immediate past business year ended December 31, 2015.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) signed by FBN Holdings’ company secretary, Tijjani Borodo, the holding company stated that preliminary review of its management account for the 2015 business year has shown that it should be “expected that earnings will be materially below that of the prior year”.

    FBN Holdings attributed the reduction in earning to the recognition of impairment charges on some specific accounts resulting from a reassessment of the loan portfolio within the group’s commercial banking business.

    “This reassessment was driven by the challenging macro environment, coupled with fiscal and monetary headwinds which have resulted in marked reduction in domestic output. This is a prudent measure being taken while the bank has commenced active remedial action on the specific impaired accounts. Our merchant banking and asset management as well as insurance business remain strong and resilient,” the group stated.

    The group however reiterated that its focus in the current business year remains restoring shareholder value by driving improvements in underlying asset quality, cost efficiency, enhancing revenue generation and extracting synergies across the group, as well as growth through innovation.

    FBN Holdings’ share price dropped by 4.41 per cent to close yesterday at the NSE at N3.47 per share.

    FBN Holdings had distributed a bonus share of one new share for every 10 shares already held and a dividend per share of 10 kobo for the 2014 business year. Key extracts of the audited report and accounts of FBN Holdings for the year ended December 31, 2014 showed that gross earnings rose by 21.3 per cent to N480.6 billion in 2014 compared with N396.2 billion in 2013. Interest income had grown by 12 per cent from N323.6 billion to N362.6 billion. Net interest income rose to N243.9 billion in contrast with N230.1 billion recorded in previous year. Profit before tax rose marginally from N91.3 billion to N92.9 billion. Profit after tax also grew by 17.3 per cent from N70.6 billion to N82.8 billion.

    With these, earnings per share had improved from N2.16 in 2013 to N2.55 in 2014, representing an increase of 18 per cent. Total assets rose by 12.1 per cent from N3.87 trillion in 2013 to N4.34 trillion in 2014. Shareholders’ funds improved by 10.8 per cent from N471.78 billion to N522.89 billion.

    FBN Holdings’ profit warning came on the heels of earlier profit warning by FCMB Group Plc, the holding company for First City Monument Bank and its former subsidiaries. FCMB Group stated that it would report lower earnings for 2015 financial year.

    In the profit warning, FCMB said its earnings in third quarter 2015 will be materially below earnings for the corresponding period in 2014. It added that the fourth quarter 2015 earnings also followed a similar trend with the third quarter 2015.

    Managing director, FCMB Group Plc, Mr. Peter Obaseki  said the slowdown in the third quarter continued in fourth quarter 2015 and largely emanated from wholesale banking activities, although retail banking showed greater resilience and earnings momentum.

    “Third quarter 2015 earnings as at September 2015, will be materially below earnings for the same period in 2014, due to two factors: a spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity,” Obaseki said.

  • Budget 2016 not zero-based, says Auditor- General

    The Auditor- General of the Federation (AGF), Samuel Ukura yesterday shocked the Senate when he faulted the assertion that the 2016 budget is zero-based budgeting.

    Ukura specifically contradicted the Presidency on template adopted for details of the N6.08trillion budget estimates.

    He noted that the template used for the budget proposal before the National Assembly remained enveloped based budgeting and not zero based as claimed by the Budget and National Planning Office.

    Ukura made the clarification when he appeared before Senate Committee on Public Accounts for the budget defence session of his Office in Abuja.

    He noted that though the earlier intention of the government was to adopt zero-based budgeting template, realities on the ground later forced it to adopt the usual enveloped based budgeting system.

    Ukura said the N2.9billion budget proposal for his office  was not arrived at through zero budgeting but handed over to his office as an envelope by the Ministry of Finance.

    He said: “Budgets of all Ministries, Departments and Agencies of government this year are all enveloped based and not zero-based as it has been the case over the years, including that of my office, which is even largely done for us by the supervising ministry.”

    Reminded by Senators Akpan Albert Bassey (Akwa Ibom Northeast) and Foster Ogola (Bayelsa West),that his submission on the 2016 budget template ran contrary to what President Muhammadu Buhari told a joint session of the National Assembly on December 22 last year,  the AGF insisted that the budget remained envelope based.

    He said: “It is envelope. The zero-based budgeting, they wanted to introduce was not adhered to at the end of the day.

    “In zero-based budgeting, it is assumed that such expenditure does not exist, you start from zero and justify why that expenditure must be used.

    “ So, it is a system which is good and which would have also helped to set targets, but that wasn’t applied at the end of the day, perhaps  because it was hurriedly being introduced.

    “Budget proposal and by extension, defence,  is not about fighting but discussing on what is made available for one to work with because what they want, they give.”

    On why his office has not deemed it fit to audit the account of Department of Petroleum Resources ( DPR) for always budgeting N32billion for recurrent expenditure  of the staff strength of about 1,400 the same staff strength of the AGF’s office with N1.8billion votes for recurrent expenditure, he declined to answer the question.

    Members of the committee expressed dissatisfaction with the presentation and performance of the AGF in office.

    The lawmakers were specifically shocked that not a single audit query was raised from his office in the face of a series of corruption cases being carried out in various government offices including unbridled budget padding under recurrent and overhead votes to outright stealing.

  • Portland Paints to raise N2b from shareholders

    Portland Paints and Products Nigeria (PPPN) Plc has launched a new capital issue process aimed at raising N1.98 billion new equity funds from existing shareholders.

    A regulatory filing at the NSE indicated that PPPN, a subsidiary of UAC of Nigeria (UACN) Plc, plans to issue 600 million ordinary shares of 50 kobo each to existing shareholders at N3.30 per share. The rights’ shares will be allotted on the basis of three new ordinary shares for every two ordinary shares held as at the close of business on February 9, 2016.

    Shareholders of the company had at the annual general meeting last year approved the rights issue as part of efforts to deleverage the company and enhance its production capacity.

    Chairman, Portland Paints and Products Nigeria (PPPN) Plc, Mr. Larry Ettah, said the net proceeds from the rights issue would be used to reduce existing loans from banks and also to improve plants and equipment of the company.

    According to him, as the company makes efforts to improve returns, there is need to address the high leverage position of the company in addition to implementation of other business expansion plans.

    “We want to improve the way we run this company. If plants and equipments are running well, the cost of sale will reduce and we will be able to pay dividend next year. We already borrowed about N700 million and we intend to raise money to reduce our burden,” Ettah said.

    He said that the company is being repositioned for improved performance noting that the company is currently realigning its portfolio and making strategic shifts where necessary while continuing to focus on innovation and seek opportunities to introduce new offerings into its portfolio of brands.

    Key extracts of the audited report and accounts for the year ended December 31, 2014 showed that profit after tax rose by 159 per cent from N57.3 million in 2013 to N148.6 million in 2014. Operational profit also grew from N174.3 million in 2013 to N304.5 million.

  • ICAN visits Adeosun, supports Public Finance Reforms

    The ongoing reforms in the nation’s public finance sector received a boost on Thursday when the Institute of Chartered Accountants of Nigeria (ICAN) endorsed the measures being undertaken. It passed a vote of confidence on the Minister of Finance, Mrs. Kemi Adeosun, during a courtesy visit to the Ministry of Finance in Abuja.

    The leader of the delegation and President of the Institute, Otunba Olufemi Deru, commended the efforts of the Minister and her team thus far, said ICAN is solidly behind the Federal Government in its efforts to rid the civil service of grafts and other fraudulent activities.

    He lauded the effort of the Minister to achieve cost savings and eliminate ghost workers, saying money recovered from these exercises could be invested for the benefit of the Nigerian people.

    He disclosed that in a bid to key into the government’s programme, ICAN is training its members on forensic investigation so as to assist the Federal Government to trace illicit funds in Nigeria and abroad.

    Mrs. Adeosun said the present administration is resolute on its resolve to plug all loopholes and ensure judicious use of the nation’s resources.

    She explained that the Federal Government is committed to reforming the public finance of the country as one of the levers to unlock the nation’s economic prosperity. She stated that the government plans to introduce a risk-based internal audit system and implement adequate controls.

    She said efforts are being made to present a bill to the National Assembly so as to pass the proposed internal audit into law.

    Mrs. Adeosun also spoke about efforts being made to strengthen the capacity of small and medium enterprises, explaining that the Federal Government is introducing a programme that will mandate big accounting firms to partner with small firms as a condition to be eligible for government business.

    Mrs. said the programme would yield significant benefits including the desired knowledge of the local context that small scale accounting firms would bring to bear across the country, as well as the capacity enhancement that the small scale firms would gain from partnering with their more established counterparts.

  • Equities relapse with N108b loss

    After six successive days of positive rally, Nigerian equities on Tuesday suffered a relapse as investors turned to take profit on highly capitalised stocks that had driven the rally.

    Market capitalisation of all quoted equities on the Nigerian Stock Exchange (NSE) dropped by N108 billion after investors opted to sell down on Dangote Cement and Nigerian Breweries, the two most capitalised stocks on the stock market.

    Aggregate market value of all quoted equities dropped from N8.539 trillion to close at N8.431 trillion. The All Share Index (ASI)- the benchmark index at the stock market, declined to 24,514.91 points as against its opening index of 24,827.50 points. The negative average year-to-date return worsened to -14.4 per cent.

    With 19 losers to 16 gainers, the negative market position was driven by losses recorded by highly capitalised stocks such as Dangote Cement, Seven-Up Bottling Company, Nestle Nigeria, Nigerian Breweries, and Flour Mills of Nigeria.

    Dangote Cement, NSE’s most capitalised stock, led the losers with a loss of N5.99 to close at N146. Seven-Up Bottling Company dropped by N4.50 to close at N170. Nestle Nigeria, NSE’s highest-priced stock, dropped by N3 to close at N667. Nigerian Breweries, Nigeria’s second most capitalised stock, declined by N1.17 to close at N96.03 while Flour Mills of Nigeria dropped by 50 kobo to close at N19 per share.

    Turnover remained around average with the exchange of 290.94 million shares valued at N2.88 billion in 2,946 deals. Guaranty Trust Bank was the most active stock with a turnover of 100.48 million shares valued at N1.66 billion. Zenith Bank followed with a turnover of 35.91 million shares valued at N413.6 million while Fidelity Bank recorded a turnover of 33.9 million shares worth N43.7 million.

    On the positive side, Guinness Nigeria led the gainers with a gain of N2.08 to close at N120.80. GlaxoSmithKline Consumer Nigeria followed with a gain of N1.04 to close at N21.93. Portland Paints Products Nigeria added 16 kobo to close at N3.90 while FBN Holdings rose by 14 kobo to close at N3.91 per share.

  • Nigeria capital market targets two-day settlement cycle

    •Investors to get dividends in 24 hours

    The Nigerian capital market plans to leverage on its technological advancement and the enrollment of investors’ details and holdings in electronic custody to shorten its trading cycle from four days to two days, blazing the trails as the only African market with such a timely cycle.

    Nigerian stock market currently operates a T+3 settlement cycle, implying that the value of trade and custodial of ownership would only be perfected in four days. T+3 means trading day and additional three days. Nigeria currently has the best trading cycle in Africa, ahead of South Africa’s T+5 settlement cycle.

    A further reduction in trading and settlement cycle will translate into quicker turnover and improved liquidity for investors in the Nigerian stock market.

    Director General, Securities and Exchange Commission (SEC), Mr Mounir Gwarzo, said ongoing initiatives such as cash direct settlement, electronic dividend and full dematerialisation being implemented by the capital market stakeholders would enable the transition from T+3 to T+1.

    Besides, for the first time in the history of any capital market in Africa, investors in the Nigerian capital market are now to get dividend payment within 24 hours through the electronic dividend (e-dividend) payment system.

    Speaking at a town hall sensitisation meeting on e-dividend at Muson Centre, Onikan, Lagos, yesterday, Gwarzo said the proposed system will automatically allow dividends to be credited directly into shareholders’ accounts within 24 hours of payment by the company.

    “We have achieved something that is very unique, even South Africa they have T+5, where when you do transactions you cannot get payment until five days. But with this system, we are going to achieve T+1 settlement system. You sell shares by today, payment are effected within 24 hours which is going to be the first by any capital market in Africa. No market in Africa has experienced that before and we are determined to ensure that it is achieved,” Gwarzo said.

    He outlined that all these initiatives are aimed at encouraging retail investors to participate actively in the Nigerian stock market as part of a long-term 10-year master plan for the development of Nigerian capital market.

    According to him, one of the strategies of deepening the market by the Commission is to target the retail domestic investors by implementing key confidence-building initiatives that would encourage the retail investors to invest in Nigerian market.

    “It is only the domestic investor that, no matter the condition of the market, will stay with us. What we have been experiencing in the market is the dominance of the foreign investor where anytime they want to move out of the market they get out and anything they want to come in they do so. Seeing what happens in the market, we decided that the best thing it to get the retail investor and our approach is not to go to them and be telling them to come back. Our approach is to identify the issues why they are not in the market and deal with such issues,” Gwarzo said.

    He outlined that once the e-dividend platform is fully operational the issue of stale warrant will be of the past, the issue of travelling from one place to another to deposit the warrant will be a thing of the past; the issue of change of address will also be eliminated, the issue of unclaimed dividend, which is in excess of N80 billion, will also be a thing of the past.

  • Oba of Lagos urges investors to embrace e-dividend

    The Oba of Lagos, Oba Rilwan Akiolu has urged investors to embrace the ongoing efforts at automating dividend payment by registering for the electronic dividend initiative of the Securities and Exchange Commission (SEC).

    He advised investors to take advantage of the free e-dividend registration exercise to ensure that they receive returns on their investments in the capital market without undue delay.

    Oba Akiolu stated this in Lagos yesterday when management and staff of SEC visited him in his palace as part of the e-dividend sensitisation campaign in Lagos.

    He said Nigerians who invested in the capital market have suffered years of no returns due to the cumbersome nature of getting their dividends and urged them to register immediately to correct the anomaly.

    The Oba also lamented the practice by some stock brokers who sell off shares without the knowledge of the owners and commended SEC for instilling discipline in the market.

    “Many Nigerians have lost money in this market and that is why I am appealing to you to regulate well. Any operator that runs foul of the rules should be disciplined appropriately, and I know that with discipline and prayers we will get to the promised land”

    “I am also a victim of unclaimed dividends and I will do all I can to support SEC in this initiative. I will mobilise my people to ensure that everyone is aware of how to get their dividends electronically” he said.

    Oba Akiolu commended the DG and his team for the bold steps the Commission is taking to restore confidence in the market adding that e-dividend will reduce incidence of fraud in the market.

    Speaking earlier, Director General of SEC, Mounir Gwarzo informed the Oba that the purpose of the visit was to receive Royal blessing on the e-Dividend registration campaign and to solicit his support on the exercise.

    He said the essence of the campaign is to enlighten Nigerians on the need to register electronically so that when dividends are declared by the various companies such can be transferred directly to the bank accounts of the shareholders.

    “What we have experienced in the Last 50 years is that people have not been opportune to enjoy their dividends due to various issues

    “e-dividend is very important because I believe it is going to be a major game changer, it is an issue we have had since the inception of this market whereby people buy shares and are unable to claim their dividend either because the warrant becomes stale, they change address or are living in an area that is quite far and it will take more than what the dividend warrant is worth and they will not want to go and collect it” he said.

    Gwarzo emphasised the need for Nigerians to go out and register with their banks or registrars so as to eradicate the issue of unclaimed dividends.

  • High-cap stocks rally stock market to N163b gain

    A strong rally within the highly capitalised stocks group overshadowed widespread underlining negative sentiments at the Nigerian stock market, leaving the market with a gain of N163 billion in the first trading session on Monday.

    While there were more losers than gainers, a group of highly capitalised stocks led by Dangote Cement pushed the market up to a positive close. Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) rose to N8.246 trillion as against its opening value of N8,.083 trillion, representing a gain of N163 billion.

    The All Share Index (ASI)-the common-share broad index that tracks prices of all quoted companies indicated average gain of 2.02 per cent to close at 23,977.10 points compared with its opening index of 23,501.87 points. The upturn helped to reduce the negative average year-to-date return to -16.29 per cent.

    Dangote Cement, NSE’s most capitalised stock, led the 17-stock gainers’ list with a gain of N9.70 to close at N134. There were widespread news reports on Monday that the cement group planned to build two new cement plants while launching operations at a completed plant. Nestle Nigeria, the highest-priced stock at NSE, followed on the gainers’ list with a gain of N2.02 to close at N705.02. Seplat Petroleum Development Company rose by N2 to close at N245. Unilever Nigeria added N1.50 to close at N31.84 while PZ Cussons Nigeria rose by N1 to close at N21.90 per share.

    Total turnover was around average with the exchange of 190.39 million shares valued at N1.69 billion in 2,756 deals. FCMB was the most active stock with a turnover of 38.53 million shares valued at N34.22 million.

    Sectoral analysis showed mixed performance across the sectors. The NSE Industrial Goods Index rode on the back of Dangote Cement’s gain to return a sectoral average gain of 3.8 per cent. The NSE Banking Index also appreciated by 0.1 per cent. However, the NSE Insurance Index dropped by 0.4 per cent. The NSE Oil & Gas Index declined by 0.03 per cent while the NSE Consumer Goods Index fell marginally by 0.01 per cent.

    On the downside, Guinness Nigeria led the 22-stock losers’ list with a loss of N2.84 to close at N119.50. Mobil Oil Nigeria followed with a loss of N2.62 to close at N145.01. Conoil declined by N2.09 to close at N20.25. Okomu Oil Palm dropped by N1.01 to close at N27.99. Nigerian Breweries lost 85 kobo to close at N95.20 while Cadbury Nigeria declined by 25 kobo to close at N17.80 per share.

  • We are outsourcing to drive growth, says Berger Paints

    We are outsourcing to drive growth, says Berger Paints

    BergeR Paints Nigeria Plc is outsourcing its depots and launching a franchisee scheme to ensure more availability of its products and to drive growth in the years ahead.

    Under the plan, Berger Paints will outsource its 17 depots nationwide. It will later complement this initial stage with appointment of franchisees in other locations in the country where Berger Paints has minimal presence and visibility.

    Managing Director, Berger Paints Nigeria Plc, Mr Peter Folikwe, said the plans were part of renewed efforts to reduce huge cost of operations and boost shareholder value.

    According to him, the strategy, aimed at enhancing accessibility, visibility and availability of the company’s products, is expected to boost earnings and strengthen its competitive edge.

    He explained that the strategic move was designed to improve the company’s operational efficiency and ensure strong and sustainable growth of both the top and bottom line.

    “These steps taken by the board and management will enhance proximity of our products to our customers and ensure the availability of genuine Berger Paints products all over the country”, Folikwe said.

    He pointed out that the expansion scheme by the company has seen the deployment of existing and newly recruited employees to cover its front and back end operations.

    Folikwe advised existing and aspiring entrepreneurs to key into this scheme which promises to be a rewarding one as testified to by those who have become Berger Paints outsourced depot operators, distributors and dealers.

    He encouraged existing and potential customers of the company not to use inferior paint products, because these do not only have severe mid to long term financial implications, but also constitute health hazards.