The Nation Newspaper

Category: Equities

  • Africa Prudential Registrars wins PEARL Awards

    Africa Prudential Registrars (APR) Plc received double honour as it won Best Profit Margin Ratio and Best Corporate Governance awards at 20th Pearl Awards Dinner in Lagos.

    In the market excellence category, APR Plc won the award for Best Profit Margin Ratio, beating every other listed company in Nigeria. In 2014, it led the entire group of listed companies by profit margin with a distance at 54 per cent, the closest rival being 40.7 per cent.

    APR also won the Best Corporate Governance in the Special Recognition category, making her awards two on the night. Other nominees in this category were Total Nigeria Plc and Custodian and Allied Plc.

    Managing director, Africa Prudential Registrars (APR), Mr. Peter Ashade, said the company would continue to strive to improve on its performance year-on-year, particularly when it comes to ability to convert revenue into profit.

    Chairman, Africa Prudential Registrars (APR) Plc, Chief Eniola Fadayomi noted that the “Best Corporate Governance Award” highlighted that the board and management of the company have been working in harmony.

    She assured stakeholders that the company will continue to protect their interests, while ensuring international best practices in corporate governance.

    Organisers of the Pearl Awards noted that it was established to reward corporate excellence and  thereby challenge and spur quoted companies to explore innovative and competitive approaches towards achieving outstanding performance and growth. Therefore, nominees and eventual winners were selected through a verifiable and objective award selection process.

     

  • Exchange inducts 31 stockbrokers

    The Nigerian Stock Exchange (NSE) has inducted 31 dealing clerks, who recently qualified to trade on the Exchange..

    The induction is the end of a long-drawn process of internship and paves the way for the stockbrokers to trade on any floor of the Exchange or through personal remote access.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, charged the new dealing members to uphold the virtues of integrity, good character and high ethical and professional standards.

    He noted that the Exchange has clear and enforceable rules with a zero tolerance policy on all infractions.

    “Today’s ceremony  is not just a celebration. It marks a call to stand tall on integrity, to be spotless in character, to be professional in service and to be deep in ethics and values,” Onyema said.

    He said with the rigorous process that led the qualification of the new dealing members, the Exchange has found them worthy to be a practising stockbroker and able to trade on any floor of its floor.

     

     

     

  • Berger Paints CEO reiterates commitment to shareholder value

    Managing Director, Berger Paints Nigeria Plc, Mr Peter Folikwe has reiterated his commitment to creating better value for shareholders of the company by adhering to highest standard of corporate governance.

    He said that the on-going turnaround efforts at Berger Paints was to re-position the company to take its rightful place as one of the most profitable quoted companies on the Nigerian Stock Exchange (NSE).

    He pointed out that within the short period of his assumption of office at Berger Paints, the company’s earnings had grown by 50 per cent and 89 per cent respectively. Folikwe was appointed the Managing Director of Berger Paints Nigeria Plc in April 2015.

     

     

  • NSE, brokers pick May & Baker as stock to watch for sustainable growth

    May & Baker Nigeria Plc has sustainable growth potential and its fundamentals and investments have positioned it to deliver better returns in the medium to long term.

    This was the assessment of top management and dealers at the Nigerian Stock Exchange (NSE) who undertook a factory tour of May & Baker Nigeria’s manufacturing complex in Ota, Ogun State. The manufacturing complex includes May & Baker Nigeria’s World Health Organisation (WHO)-certified pharmaceutical manufacturing plant, otherwise known as The Pharma Centre.

    May & Baker Nigeria’s share price recorded the highest gain last week at the NSE, rising by 10.64 per cent to close at N1.04 per share. The benchmark index at the NSE, the All Share Index (ASI), indicated a week-on-week average gain of 0.05 per cent.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema led the team of the leadership of the Nigerian stock market, which included president, Association of Stockbroking Houses of Nigeria (ASHON), Mr Emeka Madubuike and Doyen of Stockbrokers, Mr. Sam Ndata.

    Onyema said May & Baker Nigeria has taken a long-term view of development by its investments in the Ota manufacturing complex noting that such long-term view guarantees sustainable growth.

    “Another thing that impresses me about the company is that most quoted companies want to see their share price do well. They want short-term gain. So they take a shorter view to investing. But the company has done the opposite. It takes a long-term view which, in my opinion, is more sustainable,” Onyema said.

    He said the current share price of the company belied its earnings potential and reflected the downturn in the national economy and the stock market.

    “We commend you for the diversification of your business and for the long term investment strategy. The low price of your share is reflective of the general condition of the Nigerian economy. Be assured that your share price will go up once the economy picks up. This is because the company has good fundamentals, like your price earnings ratio is a good indicator to show that the company has bright future,” Onyema said.

    He said the factory tour has given the market opportunity to get acquainted with the challenges the company is facing, the opportunities before it and its expectations for the future, adding that he was fascinated by the diversification as well as the long-term nature of May & Baker Nigeria’s vision.

    Onyema said the company should consider a combination of bond and equity issue as it seeks to raise fresh fund to bolster its operations and deleverage its balance sheet.

    Madubuike said May & Baker Nigeria is a stock for investors that seek stable and sustainable returns on investments.

    According to him, May & Baker Nigeria will make a lot of progress with its investments and it is one of the companies for the future.

    Ndata praised the management of May & Baker Nigeria and urged them to interact more with the investing public in order to give them better understanding of the prospects of the company.

    “It is a stock for the future, it is best to buy now that the price is low, anybody that buys now will be smiling to the bank later,” Ndata said.

    Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, said the share price of the company does not reflect its fundamental values and recent investments, including its position as one of the four pharmaceutical companies certified by the WHO as having current general manufacturing practices.

    “May & Baker Nigeria has potentials as a strong Sub-Saharan African brand. A country with huge population of over 188.6 million people; biggest economy in Africa; strong Gross Domestic Product growth rate of 6.5  per cent in 2014 to 4.0 per cent in 2016 and vibrant workforce with emerging middle class, has a lot to benefit from the success of this our great company,” Okafor said.

    He noted that the pharmaceutical business contributes 70 per cent of the company’s revenue and recapitalisation of the business would improve its ability to compete in current and planned businesses.

  • FirstBank sells its microfinance bank

    FBN Holdings Plc, the holding company for FirstBank of Nigeria (FBN) and its former subsidiaries, has concluded arrangements for the sale of the group’s microfinance subsidiary-FBN Microfinance Bank Limited, to Letshego Holdings Limited.

    Letshego, a Botswana company, is  a holding company with consumer and micro lending subsidiaries across nine countries in Southern and East Africa including Botswana,  Kenya,  Lesotho,  Mozambique,  Namibia,  Rwanda,  Swaziland,  Tanzania  and Uganda

    In a regulatory filing obtained at the weekend signed by FBN Holdings’ company secretary, Tijjani Borodo and head of finance, Oyewale Ariyibi, the group said it has obtained the requisite approval from the Central Bank of Nigeria (CBN) for its divestment from FBN Microfinance Bank.

    FBN Holdings has executed Sale Purchase Agreement (SPA) with Letshego Holdings Limited to sell its shares in FBN Microfinance Bank to Letshego Holdings.

    “We expect that the sale will be concluded before the end of the current financial year,” the group stated, referring to its business year ending December 31, 2015, within the next 24 days.

    FBN Holdings’ holding company structure allows it to own and operate the microfinance bank. Central Bank of Nigeria (CBN)’s Scope of Banking Activities and Ancillary Matters No 3, 2010 requires banks to fully concentrate on core banking functions. The new model requires banks to either sell all non-core banking businesses or form a holding company to hold such non-core banking businesses including activities such as insurance, asset management and capital market operations.  Three banks including First City Monument Bank (FCMB) Plc, First Bank of Nigeria (FBN) Plc and Stanbic IBTC Bank Plc then opted for holding company structure while others opted to divest from non-core subsidiaries.

    FBN Holdings’ share price declined by 1.80 per cent to close at N4.90 per share at the weekend, playing the negative contrarian stock in a market with modest average gain of 0.26 per cent.

    Head, Media & External Relations, FBN Holdings Plc, Mr. Babatunde Lasaki, in a response to The Nation’s enquiry said the divestment was part of the a strategic intent to refocus the group.

    He said the board of FBN Holdings decided to divest its interest in FBN Microfinance Bank to a strategic investor on a going concern basis.

     

  • SEC moves to deepen market with rules on crowdfunding

    Securities and Exchange Commission (SEC) has started arrangements to introduce crowdfunding into the Nigerian capital market as part of efforts to deepen the market and enhance its global competitiveness.

    Director-General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, said the commission was partnering with the Ontario Stock Exchange to develop framework and rules on crowd funding for the Nigerian capital market.

    Crowdfunding is a means of raising money from a large number of people to fund a project or venture. It is usually undertaken through online medium and it has gathered steam as a form of alternative finance. The crowdfunding model is based on three actors: the project initiator who proposes the idea, individuals or groups who support the idea and the platform that brings the parties together.

    Gwarzo said the commission was interesting in developing Nigeria’s crowdfunding framework as another way of deepening participation in the Nigerian capital market and ensuring that businesses and entrepreneurs have many channels of accessing funds.

    He said the apex capital market regulator has been implementing initiatives that would strengthen investors’ confidence in the capital market.

    According to him, SEC believes that retail investors will return to the capital market once their concerns are properly addressed.

    He noted that the commission has inaugurated the board of Investors Protection Fund (IPF) and from next year, proceeds of shares sale will be paid directly into the account of investors as part of efforts to address the investor concerns.

    He pointed out that dematerialisation is very important to the growth of the market and by 2016 more shares would be dematerialised.

    Gwarzo said the introduction of the over-the-counter (OTC) platforms- FMDQ OTC Plc and NASD Plc, have transformed the way the capital market is perceived in Nigeria.

    According to him, the level of liquidity and price of unlisted securities in Nigeria has been greatly enhanced by the operation of the two OTC platforms.

    “On our part at the SEC, we will continue to ensure that these platforms are optimally regulated so that they can continue to add value to investors. As you are aware, the SEC is currently leading the capital market in implementing the 10-year master plan for the growth and development of our market,” Gwarzo said.

     

  • New investors indicate interest in former Dangote Flour Mills

    New investors have shown early interests in acquisition of assets of Tiger Branded Consumer Goods (TBCG) Plc as the foreign core investor in the former Dangote Flour Mills Plc, South Africa’s Tiger Brands Limited, continued to evaluate all options for the restructuring of the lose-spinning Nigerian subsidiary.

    Chief executive officer, Tiger Brands Limited, Peter Matlare, said there have been formal and informal approaches that indicate interests in the former Dangote Flour Mills’ assets but these have neither been evaluated nor any decision taken on the interests.

    He said the board of Tiger Brands would work with all stakeholders to determine the way forward for the newly rebranded Tiger Branded Consumer Goods Plc and any material information and decisions would be communicated to the investing public.

    Tiger Brands had last month announced that it has reached decision not to provide any further financial supports to Tiger Branded Consumer Goods Plc. The decision also coincided with the resignation of chairman of the company, Alhaji Aliko Dangote and other directors including Mr. Olakunle Alake, Mr. Asue Ighodalo and Mr. Arnold Ekpe. Tiger Brands then said it was exploring various alternatives with regard to its investment in Tiger Branded Consumer Goods.

    Matlare explained that Tiger Brands had made significant investments in the former Dangote Flour Mills but the company continued to struggle with losses, which brought the board of Tiger Brands to consider either of two options of further recapitalisation or to find alternative option, the board subsequently settled for alternative options.

    “A variety of options are being considered, which could include a partnership, a sale, a merger, but no decision has as yet been made,” Matlare said in response to questions on whether foreign core investor would consider merging TBCG with its other investments in Nigeria and short-to-long term plans for the troubled Nigerian company.

    He, however, said the foreign core investor was not considering any further increase in its shareholding in TBGC. Many multinationals had in recent period been making efforts to increase their shareholdings in their Nigerian subsidiaries-many below 70 per cent had indicated plans to move to between 70-75 per cent.

    He said the continued listing of TBCG on the Nigerian Stock Exchange will depend on whatever option is chosen for the business, stating that the foreign core investor would not give a commitment that it would sustain the listing of TBCG on the NSE in the light of envisaged corporate restructuring

    He explained that the foreign core investor believed it made the right decision when it acquired the majority stake in the former Dangote Flour Mills (DFM) in 2012, but subsequent events impacted negatively on the fortunes of the company.

    Matlare said the action taken on TBCG must not be mistaken for a vote of confidence on the Nigerian economy pointing out that Tiger Brands still retains substantial investments in Nigeria and would consider any further investment opportunities.

    “We will look at all opportunities and consider them on their merits. This action is not a vote of no confidence in Nigeria, as Tiger Brands retains its 50 per cent interest in UAC Foods and its 100 per cent interest in Deli Foods.  Africa remains fundamental to Tiger’s international growth strategy and we will continue to develop in these markets and invest appropriately to drive penetration. Despite some challenges in our African businesses, expansion in Africa represents a growth opportunity for the group,” Matlare said.

  • NSE scores GTI Securities high on operating standards

    The Nigerian Stock Exchange (NSE) has awarded GTI Securities Limited the highest rating under its verification scheme for market operators that have the prerequisite resources to compete effectively, otherwise known as Minimum Operating Standards (MOS).

    The NSE had introduced the MOS in April 2014 as part of efforts to develop a stronger, stable and sustainable capital market. The MOS are a set of standards prescribed by the Exchange for dealing members to develop robust controls; strong governance framework and effective human capital that will enable them achieve best-in-class operations in order to compete on a global level for the benefit of investors and the Nigerian capital market.

    The main objective of the MOS is to ensure effective operational, technological and governance structures among the dealing members of the Exchange.

    Managing director, GTI Securities, Mr Amos Aledare, at the weekend, said the verification team of the Exchange for the MOS scored the securities firm high on all benchmarks.

    “We are delighted to inform you that GTI Securities Limited has rightfully received the maximum score of five out of five in the recently concluded inspection exercise carried out by the NSE. The five broad areas covered under the MOS exercise were manpower & equipment; organizational structure and governance; effective processes; technology and global competitiveness,” Aledare said.

    He said the score was an acknowledgement of the securities firm’s contribution to technological drive and innovation in the industry.

    According to him, the 100 per cent compliance status of GTI Securities shows its commitment to excellence in service delivery and its determination to revolutionize the trading environment.

    He assured the investing public that the company would continue to explore opportunities to open up greater world of financial possibilities for its clients.

    Commenting on the rationales for the new standards, head, legal and regulation division, Nigerian Stock Exchange, Ms Tinuade Awe, had said the new minimum operating standards were meant to complement the tremendous transformation that the market had undergone in recent years and to extend these forward-moving traits to the dealing members.

    According to her, the objective of the minimum operating standards is to transform the operators into more competitive and compliant operators.

     

     

  • Average loss hits 20.31% as equities dwindle further

    An average investor has so far this year lost more than one-fifth of his investment portfolio in quoted equities as the downtrend at the Nigerian stock market continued last week.

    Key benchmark indices at the Nigerian Stock Exchange (NSE) indicated continuing depreciation in values of most quoted equities last week, worsening the negative average year-to-date performance of the market.

    Aggregate market value of all quoted equities dropped to N9.495 trillion at the weekend, representing a loss of N175 billion on the opening value of N9.670 trillion recorded at the beginning of the week. The All Share Index (ASI)-the common index that tracks prices of all quoted equities, declined by 1.83 per cent to close the week at 27,617.45 points as against its week’s opening index of 28,131.28 points.

    There were 41 decliners during the week as against 21 advancers while 128 stocks closed flat. The preponderance of losers to gainers and the weight of losses pushed the negative average year-to-date return to -20.31 per cent.

    Total turnover stood at 1.04 billion shares worth N13.01 billion in 13,407 deals last week compared with a total of 793.557 million shares valued at N7.15 billion traded in 12,831 deals two weeks ago. Financial services sector remained atop activity chart with a turnover of 857.05 million shares valued at N6.77 billion traded in 7,916 deals; representing 82.4 per cent of total turnover volume. The consumer goods sector followed with a turnover of 64.55 million shares worth N4.22 billion in 2,479 deals. The conglomerates industry sector placed third with a turnover of 62.745 million shares worth N585.655 million in 638 deals.

    The trio of FBN Holdings Plc, Zenith International Bank Plc and Diamond Bank Plc accounted for 475.12 million shares worth N3.68 billion in 3,026 deals, representing 45.7 per cent of total turnover volume.  Also, a total of 49,895 units of Exchange Traded Products (ETPs) valued at N916,710 were traded in 38 deals compared with a total of 2,143 units valued at N1.734 million traded in 35 deals in the previous week. A total of 8,262 units of Federal Government Bonds valued at N9.151 million were also traded in seven deals.

    Market analysts however said the market might witness gradual rebound in the weeks ahead as investors respond to Central Bank of Nigeria (CBN)’s monetary policy and year-end earnings of quoted companies.

    “Following the MPC decision to cut Monetary Policy Rate (MPR) and expand market liquidity, we envision increased participation of domestic institutional players in the stock market going forward giving plunge in yields in fixed income securities,” said Afrinvest Securities at the weekend.

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) had on Tuesday after its two-day meeting, slashed the MPR, which serves as benchmark for interest rates, from 13 per cent to 11 per cent, with an asymmetric corridor of +2 per cent and -7 per cent. The apex bank also reduced Cash Reserve Requirement from 25.0 per cent to 20.0 per cent.

     

     

     

  • SEC votes N5b for investors’ protection

    SEC votes N5b for investors’ protection

    Securities and Exchange Commission (SEC) has voted N5 billion as take-off grant for the National Investors Protection Fund (NIPF). SEC, Nigeria’s apex capital market regulator, last week launched the board of NIPF, flagging off the special purpose vehicle that will compensate investors for pecuniary losses arising from the insolvency, bankruptcy or negligence of sundry capital market operators that are not members of a registered stock exchange.

    Director General, Securities and Exchange Commission (SEC), Mounir Gwarzo, disclosed this  at the weekend in Lagos.

    He said the launch of the NIPF has placed Nigeria within the elite group of countries with specialised compensation scheme for investors, noting that investors would now have a window to redress losses that arise non-investment risks.

    “While dozens of jurisdictions have functional investor protection funds run mainly by Exchanges and their dealing members, Nigeria is now among only a few countries to have a National Investor Protection Fund, to compensate investors for pecuniary losses arising from the insolvency, bankruptcy or negligence of non-broker/dealer capital market operators,” Gwarzo noted.

    He said SEC has played its part by providing the take-off grant for the initial operation of the NIPF, adding that the entire capital market community would now have to come together to discuss details of how to contribute to continue funding for this critical market vehicle.

    He assured that the commission would ensure that the fund is used to compensate investors in accordance with the rules guiding its operation.

    Gwarzo said the verification committee will quickly commence its assignment by scrutinising the already processed compensation claims so that the first set of beneficiaries from the Fund may emerge soon.

    He pointed out that since the 2008 financial crisis in which the Nigerian stock market lost about 70 per cent of its value, investor confidence had been eroded, creating apathy that still impacts the state of the market.

    He noted that SEC has a dual mandate of regulating and developing the capital market and as such has put in place several reform measures to restore investor confidence and attract investors back to the market, with the NIPF as part of the investors’ protection mechanisms.

    The inauguration of the board of the NIPF completed a cycle of protection for investors that suffered losses due to inactions of capital market operators. The Nigerian Stock Exchange (NSE) had earlier launched an Investor Protection Fund (IPF) that covers losses due to inactions or bankruptcy of its dealing members-stockbrokers and dealers.

    Under the rules of the NIPF, beneficiaries would include investors who suffer pecuniary loss due to the insolvency, bankruptcy or negligence of a capital market operator and defalcation committed by a capital market operator or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received or deemed received by the capital market operator in the course of its business as a capital market.

    The NIPF will cover the entire capital market activities under the regulation of SEC, a broader scope than the earlier IPF of the NSE, which covers only the operations of members of the NSE. The NIPF will apply only to defalcations by insolvent or bankrupt capital market operators not dealing members of Securities Exchange or Capital Trade Points. In other words, the NIPF will be for the purpose of compensating investors whose losses are not covered under the IPFs administered by Securities Exchanges and Capital Trade Points.

    Going forward, the NIPF will subsequently generate funds through grants, subventions, donations and annual contributions to be made by all capital market operators not subject to contribute to the IPF of Securities Exchanges and Capital Trade Points. The board of the NIPF is also empowered to obtain loans, subject to approval of SEC. Also, the NIPF can generate funding through assets, properties or cash that shall be realised from liquidated operators after compensation to investors and proceeds from investment of its resources.

    Under the NIPF, investors can only receive a maximum compensation of N200, 000. The maximum amount claimable under the NIPF is 50 per cent of the N400, 000 limit stipulated by the Investors Protection Fund (IPF) of the NSE.

    According to the rules, the maximum amount payable to an investor who has suffered loss shall be N200, 000 or its equivalent in form of shares and units of bonds. However, where the amount of loss is lesser, the investor shall be paid the calculated amount of loss.

    Beside the variance in the maximum compensation, the SEC’s NIPF also differs from the NSE’s IPF in the area of recognition of previous infractions and losses. Where the NSE’s IPF took on backlog of complaints from the NSE, the SEC’s NIPF will not recognise any claim prior to establishment of the NIPF.

    “Any claim prior to the incorporation of the Fund shall not be covered by the Fund,” the rules stated.

    However, the amount of compensation to be paid by the NIPF may be reviewed from time to time as approved by the board of the Fund.

    Besides, the rules underscored that “the Fund is not under any obligation to pay compensation to an investor”

    However, any client who participated in the wrongful act of the capital market operator shall not benefit from the Fund while the NIPF will also not apply to losses arising from transactions not regulated by the Commission.