The Nation Newspaper

Category: Equities

  • GTBank declares N7.36b interim dividends amidst tight bottom-line

    GTBank declares N7.36b interim dividends amidst tight bottom-line

    Guaranty Trust Bank (GTBank) Plc yesterday released its much-awaited audited report and accounts for the first half of 2014, with a recommendation to distribute about N7.36 billion as interim dividends to shareholders.

    Key extracts of the six-month report for the period ended June 30, 2014 indicated a modest growth in the top-line but the bank’s bottom-line was notably constrained by almost a triple in loan loss provisions. While gross earnings rose by 7.0 per cent, pre and post tax profits declined by 7.0 per cent and 10 per cent respectively.

    The gross dividend of N7.36 billion represents a dividend per share of 25 kobo, the same rate that the bank paid in the previous year. The dividend will be paid on September 18, 2014 to shareholders on the register of the bank as at September 4, 2014.

    Gross earnings stood at N132.99 billion in first half 2014 as against N124.20 billion in corresponding period of 2013. Interest income had risen by 8.0 per cent from N92 billion to N99.7 billion. A disproportionate increase in interest expense by 20 per cent from N23.46 billion to N28.15 billion depressed net interest expense growth to 4.0 per cent at N71.56 billion in 2014 as against N68.54 billion.

    With loan loss expenses rising by 287 per cent from N1.32 billion to N5.10 billion, the bank’s pre-tax profit slipped from N57.36 billion to N53.40 billion. After taxes, profit after tax also dropped from N49.01 billion to N44.01 billion. Earnings per share stood at N1.55 in first half 2014 as against N1.73 in first half 2013.

    Managing director, Guaranty Trust Bank Plc, Mr. Segun Agbaje, attributed the decline in the bottom-line to challenges in the operating environment, especially increasing regulatory headwinds, and the loan loss provision made during the period.

    According to him, the impairment charge was as a result of a significant loan that the bank decided to provide for following the demise of the obligor; in line with its laid down corporate governance practices.

  • TrustBond Mortgage Bank lists shares on NASD

    TrustBond Mortgage Bank lists shares on NASD

    TrustBond Mortgage Bank Plc yesterday listed its entire issued share capital on the NASD Plc, paving the way for investors to trade on the shares of the mortgage bank on the over-the-counter (OTC) platform.

    The Nation’s check yesterday indicated that about 10.95 billion ordinary shares of TrustBond Mortgage Bank was listed on the NASD at N1.20 per share, implying a starting market capitalisation of N13.13 billion for the mortgage company.

    The NASD was formally launched on July 1 and opened for trading on July 2. Formerly known as the National Association of Securities Dealers, NASD is registered with Securities and Exchange Commission (SEC) as an over-the-counter (OTC) trading platform for unquoted securities; including equities and bonds.

    TrustBond Mortgage Bank metamorphosed from the acquisition of Intercontinental Bank Plc by Access Bank and subsequent investment by a core investor group, Interrec into Intercontinental Homes Savings & Loan (IHSL).

    TrustBond Mortgage Bank recently raised N500 million in new equity funds through a special placement, pushing the mortgage bank’s capital base to N5.2 billion, a notch above the N5 billion capital base for  national mortgage banking operation. The new equity fund was raised from a core investor.

    Chairman, TrustBond Mortgage Bank Plc, Mr. Etigwe Uwa, noted that the bank was the most capitalized mortgage bank in the country at N4.7 billion capital base but then needed to go for private placement to exceed Central Bank of Nigeria (CBN) requirements adding that this will put it in vantage position to run its business and increase shareholders’ profitability.

    He said they decided on a core investor to provide fund urgently to meet the regulatory requirements of CBN.

    On the future of mortgage banks in the country, Uwa predicted that there may be mergers and acquisitions to make the banks stronger.

    He commended the current CBN regulations on mortgage banks noting that the policy will strengthen mortgage banks to give mortgages to prospective home owners as they will have more funds to lend to the public.

    He however regretted that so much money is tied down in real estate and advised that capital should be channeled into more productive use as done in developed economies such as mortgage re-financing especially with the over 17 million housing deficit.

    According to him, the low capital base of mortgage banks before had hampered the lending abilities of such banks to the public but now most banks that have met the capital target will be better positioned to give loans to prospective home owners.

    Managing Director, TrustBond Mortgage Bank, Mr. Adeniyi Akinlusi said with the private placement of over N500 million the bank is positioned in playing in the big league to offer mortgages to Nigerians and be part of institutions that will bridge the housing gap in the country.

    “In the light of our enlightened position and strength we have built 174 houses in Agege, undertaking construction and mortgage financing, provided mortgages for low income earners, adapt the newest technology in housing construction, work closely with developers and the Federal Housing Authority,” Akinlusi said.

  • Julius Berger MD promises continuous growth

    Julius Berger MD promises continuous growth

    The new managing director of Julius Berger Nigeria Plc, Mr. Detlev Lubasch, has assured that he would sustain the construction company’ s growth. Lubasch succeeded Mr. Wolfgang Goetsch on July 1, 2014.

    Lubasch, who has 27 years of experience within Julius Berger in both Nigeria and Germany; said he would dedicate his tenure to continuing the success of Julius Berger.

    He said he would implement initiatives that would ensure a strong continuity in the management as well as ensuring that the company’ corporate values including quality, reliability, sustainability and integrity remain at the heart of Julius Berger’s corporate culture.

    Goetsch had focused his tenure on strengthening Julius Berger’s organizational structures and developing the Julius Berger Group of companies. Goetsch remains an integral part of the company as he will join the executive management of Julius Berger International and continue to serve within the board of directors of Julius Berger Nigeria Plc as a non-executive director.

    Audited report and accounts of Julius Berger for the year ended December 31, 2013 showed that turnover rose marginally from N201.57 billion to N212.74 billion. Profit before tax rose by 31 per cent from N12.34 billion to N16.22 billion. Profit after tax however dropped slightly from N8.19 billion to N8.06 billion. Earnings per share thus stood at N6.72 in 2013 as against N6.83 in 2012.

    The construction company distributed N3.24 billion in cash dividends and 120 million ordinary shares of 50 kobo each as bonus shares as returns for the 2013 business year. A breakdown of the dividend indicated that shareholders received a dividend per share of N2.70 and a bonus share of one share for every 10 shares held as at the closure date.

    The company recently added 120 million shares to its outstanding shares following the listing of the bonus shares declared by the board of the company. The listing of the bonus shares increased Julius Berger Nigeria’s total issued shares to 1.32 billion ordinary shares of 50 kobo each.

    As part of its strategic positioning, Julius Berger has said it would focus on further diversification of its clients and business segments, improve on business development efforts, sustain due diligence and explore opportunities in alternative financing models to improve on its performance.

  • Global stocks ease over rate scare

    Global equity markets eased on Wednesday on a few poor corporate results and the release of Bank of England minutes that hinted at an early interest rate hike, but minutes from the Federal Reserve showed no desire to bring forward plans to raise rates.

    The Fed said it has been surprised by how quickly the United States (US) labour market is healing yet the recovery has to be more convincing to change its view on when to increase rates.

    Stocks on Wall Street rebounded after the release of the Fed minutes, suggesting investors believe there will be no change in monetary policy, while US Treasuries prices fell.

    “The Fed remains dovish. However, one eye is looking towards improvements in labor markets. Potentially a rate increase might come slightly sooner or the increases might come faster than expected,” said Putri Pascualy, credit strategist For Pacific Alternative Asset Management Company, In Irving, California.

    Wall Street pushed higher, but MSCI’s all-country equity index was 0.04 percent lower. The Dow Jones industrial average rose 68.78 points, or 0.41 percent, to 16,988.37. The S&P 500 gained 5.71 points, or 0.29 percent, to 1,987.31 and the Nasdaq Composite added 3.167 points, or 0.07 percent, to 4,530.681.

    Earlier in Europe, the FTSEurofirst 300 index of leading European shares closed down 0.07 percent at 1,346.02.

    A warning from brewer Carlsberg that profits would fall this year due to deteriorating conditions in Russia rattled European investors.

    A cut in its full-year sales forecast by Lowe’s Companies also unnerved investors, though the world’s No. 2 home improvement products retailer also posted better-than-expected second-quarter results.

    Reuters reported that Sterling and UK bond yields rose after the surprise tilt toward higher British rates, while the U.S. dollar advanced to its highest against the euro since last September.

    The Fed minutes come ahead of Fed Chair Janet Yellen’s widely anticipated address to the annual gathering of central bankers in Jackson Hole, Wyoming, on Friday.

    With US and global stock indexes trading close to all-time highs, investors await a reaffirmation of the accommodative monetary policies that have helped spur a global rally.

    “The next leg up is going to come from what we hear on Friday from Yellen,” said Phil Orlando, chief equity market strategist at Federated Investors in New York. “The market has been a little bit on tenterhooks,” he said.

    The dollar broke through resistance at $1.3300 and last November’s high of $1.3295 per euro to trade as high as $1.3275. It also climbed to a 4-1/2-month high against the yen. It was last up 0.4 percent versus the euro at $1.3266.

  • Forte Oil outlines growth plan, eyes oil assets

    Forte Oil outlines growth plan, eyes oil assets

    Forte Oil Plc would combine investments in its downstream and energy businesses with prospecting for productive upstream oil assets to ensure it achieves its main goal of becoming the foremost integrated energy solution provider in Nigeria.

    Chief executive officer, Forte Oil, Mr. Akin Akinfemiwa, outlined the company’s growth plan yesterday at the presentation of the company’s underlying fundamentals at the Nigerian Stock Exchange (NSE) in Lagos.

    Akinfemiwa said the group would diligently implement the strategic initiatives under its growth plan to enhance profitability and increase shareholders value.

    He said the group was considering two options of acquiring moribund fields and bring back them to production or buy existing international oil companies (IOCs)’s assets in its plan to diversify into the upstream market adding that the group would exercise great caution by identifying the risk and getting parties to share and manage the risks.

    He pointed out that the group’s immediate strategic initiatives included strengthening its corporate governance structure, achieving market dominance through the expansion of retail infrastructure, commercial business and diversification into the upstream space through profitable acquisition of upstream assets.

    “Upstream diversification is to be managed properly, considering the level of investment required. We are into petroleum retailing and marketing but if we are going into the upstream, we would form strategic alliances so that we can share the risk together because there is no technical expertise for it now. We have identified potential partners that will go into it with us and we are going into it as producing assets not as a prospecting one,” Akinfemiwa said.

    He said the company is committed to becoming the investment of choice through positive actions that would boost investor confidence at all times.

    He outlined that the company has embarked on aggressive and strategic acquisition programme noting that it has concluded plan to site its branch network in such a way that the distance between two branches would be at the region of three kilometers with a view to expanding its retail network.

    According to him, the group’s business transformation programme was aimed at repositioning the business on the bedrock of strong corporate governance and business ethics, enhanced safety health and environment practices, effective business control across the company as well as superior customer delivery.

    “We would acquire market where we can drive up volume across Nigeria but it has to be strategic. It has to be three kilometers along densely populated areas where the market is booming. The exercise would be continuous without any time frame and we would continue to consolidate on it,” Akinfemiwa said.

    He said the company has also invested in the acquisition of 100 trucks and tankers in order to give transporters the confidence to invest in the business.

    He hinted on the prospects of further capital raising by the group noting that the company’s balance sheet for the expansion exercise would be funded through the combination of equity and debt issues.

    “Through our focused commitment to remain open, responsive, continually engaging our customers and maximizing our resources, we are confident that Forte Oil Plc will attain its vision of being the foremost integrated solutions provider in Nigeria,” Akinfemiwa assured.

  • Investors swap major stakes in Continental Reinsurance

    Investors swap major stakes in Continental Reinsurance

    Continental Reinsurance Plc appeared to have started witnessing major changes in its shareholding structure as voluminous transactions placed the insurance firm atop the activities’ chart for the stock market.

    Continental Reinsurance accounted for more than one-fifth of the aggregate turnover at the stock market last week. Trading on the insurance company was particularly the highlight of the market at the last trading session with the exchange of 208.34 million shares valued at N208.34 million in 25 deals. The last-day transactions pushed Continental Reinsurance’s total turnover for the week to N288.6 million shares valued at N289 million in 117 deals, representing 21.1 per cent of the aggregate turnover volume for the week.

    However, Continental Reinsurance’s turnover represented 2.78 per cent of its outstanding shares. Market analysts said the transactions, especially on Friday, were indicative of a cross deal, implying possible agreement between the buyer and seller before the perfection of the deal at the Nigerian Stock Exchange (NSE).

    The majority core investors in Continental Reinsurance recently indicated that they were seeking to fully divest their shareholdings in the holding company that holds 50.6 per cent equity stake in the insurance company.

    Regulatory filing indicated that the core investors, which indirectly hold 50.6 per cent equity stake in Continental Reinsurance, have started the full divestment process.

    According to the report, ECP Africa Fund II PCC and its partners, which form the ECP Fund II Consortium, are exploring the opportunity for the divestment of their interests in C-Re Holding Limited, a Mauritius-based limited liability company wholly owned by the ECP Fund II Consortium.

    C-Re Holding Limited is the majority shareholder in Continental Reinsurance, currently holding approximately 50.6 per cent of the issued share capital of the company. C-Re Holding is expected to sell approximately 5.25 billion ordinary shares of 50 kobo each.

    Continental Reinsurance was incorporated in 1985 and started business as a private reinsurance company in Nigeria. In January 1987, it began to operate as a general reinsurer and then became a composite reinsurer in January 1990, offering both treaty and facultative life and non-life reinsurance, with a well-diversified business mix and customer base.

    As part of its goal to become a recognized leading reinsurance company in Africa, it converted to a public limited liability company in 2000. After it recapitalized to the tune of N10 billion in 2007, it listed its shares on the NSE in May 2007.

    With five client service centres in Nigeria, Cameroon, Cote d’Ivoire, Kenya and Tunisia with Nigeria as headquarters, it has grown a diversified portfolio across 43 countries.

    Continental Reinsurance recently reported that its gross premium increased by 28 per cent to N15.86 billion in 2013 as against N12.40 billion in 2012. The company indicated that non-life and life businesses grew by 32 per cent and 11 per cent, respectively, while the total comprehensive income grew by 19 per cent from N1.75 billion in 2012 to N2.09 billion in 2013. Profit before tax rose by five per cent to N2.23 billion in 2013 compared with N2.13 billion in the previous year while the profit after tax rose to N 1.75 billion as against N1.73 billion in 2012. The company is paying a dividend per share of 11 kobo.

  • Equities lose N402b as selling pressure rises

    •Average return dwindles to 0.12%

    Nigerian equities witnessed a major contraction last week as increased selling pressure and low investors’ appetite combined to create sustained downtrend, which shaved of N402 billion from investors’ capital gains.

    With the market closing on the negative four times out of the five trading sessions during the week, all key indices at the Nigerian Stock Exchange (NSE) indicated widespread bearish sentiments. Aggregate market value of all quoted equities reversed from the week’s opening value of N14.066 trillion to close the week at N13.664 trillion, representing a loss o N402 billion.

    The All Share Index (ASI), the common value-based index that tracks prices of all quoted equities, indicated a week-on-week decline of 2.86 per cent. The ASI, which opened the week at 42,598.46 points, closed the week at 41,380.05 points.

    All other indices at the NSE also closed on the negative with banking stocks leading the downtrend. The NSE 30 Index, which tracks the 30 most capitalised stocks, dropped by 3.40 per cent. The NSE Banking Index declined by 4.83 per cent. The NSE Insurance Index slipped by 0.26 per cent. The NSE Consumer Goods Index lost 3.68 per cent. The NSE Oil and Gas Index declined by 4.05 per cent while the NSE Industrial Goods Index dropped by 1.48 per cent.

    The downtrend last week almost reversed the year-to-date market performance to the negative as average year-to-date return shrank to 0.12 per cent. However, most equities are already trading on the negative.

    Analysis of year-to-date returns across the key sectors indicated a largely negative performance for the stock market so far this year. Over the seven months and a half period, the NSE 30 Index has lost 1.41 per cent while banking stocks and insurance stocks have lost an average of 6.17 per cent and 5.78 per cent respectively. The NSE Consumer Goods Index indicated a year-to-date return of -6.31 per cent. Meanwhile, investors in the oil and gas and industrial goods sectors remained on the positive side with average gain of 39.28 per cent and 5.85 per cent respectively.

    Market analysts have blamed the sluggish market performance in recent period on low earnings of several quoted companies during the first half of the year. Interim reports and accounts of several companies for the first half ended June 30, 2014 had shown depressed bottom-line amidst tight top-line.

    The negative outlook of the Nigerian stock market last week contrasted sharply with the global equities performance. United Kingdom’s FTSE Index recorded average gain of 2.7 per cent at the weekend while the United States’ S&P 500 index garnered 1.2 per cent. India’s BSE Sens returned 3.1 per cent. The Brazil Bovespa gained 1.5 per cent. Russia’s RTS rose by 1.5 per cent while Japan Nikkei 225, Germany Dax and Hong Kong Seng rose by 3.7 per cent, 3.4 per cent and 2.6 per cent respectively.

    Across the continent, African equities, with the exception of Nigerian stocks, showed a bullish outlook. Egypt EGX 30 Index indicated average return of 2.6 per cent while Kenya NSE 20 Index appreciated by 0.8 per cent apiece.

    Meanwhile, total turnover at the NSE last week stood at 1.37 billion shares worth N13.30 billion in 23,973 deals as against 1.43 billion shares valued at N20.19 billion traded in 26,289 deals in previous week.

    The financial services sector remained the dominant sector with a turnover of 1.05 billion shares valued at N7.27 billion in 11,551 deals; representing 77.05 per cent of total turnover volume. The conglomerates sector followed with a turnover of 139.099 million shares worth 948.332 million in 1,570 deals. The third place was occupied by consumer goods sector with 53.794 million shares worth N1.785 billion in 3,736 deals.

    The trio of Continental Reinsurance Plc, Transnational Corporation of Nigeria Plc and Access Bank Plc were the most active with a joint turnover of 549.828 million shares worth N2.263 billion in 2,162 deals, contributing 40.22 per cent of total turnover.

    Also traded during the week were a total of 47,946 units of Exchange Traded Products (ETPs) valued at N1.008 million executed in 21 deals compared with a total of 282 units valued at N251,033.40 transacted last week in 12 deals. Similarly, 300 units of FGN bonds valued at N339,762.78 were traded this week in 3 deals compared with a total of 28,400 units of FGN bonds valued at N28.087 million transacted last week in 6 deals.

     

  • Stockbrokers’ institute enhances human capital initiative

    The Chartered Institute of Stockbrokers (CIS) is set to train more than 150,000 young graduates and provide them with skills that will enable them to function in back-office functions across the financial services industry.

    As part of the human capacity development, CIS has signed a Memorandum of Understanding (MoU) with Anabel Leadership Academy Limited. The initiative aims at mobilising 150,000 young graduates in 2014 to enroll for the CIS Professional Diploma in Securities and Investment Examination.

    Under the MoU, Anabel Leadership Academy Limited would deploy its membership and mobilization strategies to enlist qualified young Nigerians seeking a career in the capital and financial market to benefit from this initiative.

    President, Chartered Institute of Stockbrokers (CIS), Mr. Albert Okumagba, said the institute was undergoing a comprehensive re-positioning of its programmes noting that one of the cardinal objectives is to grow the membership base and widen the scope of capacity building through creation of platform for impacting knowledge and skills that can provide job opportunities.

    He explained that upon completion, the beneficiaries would be awarded CIS Professional Diploma in Securities and Investment to operate as back-office staff for capital market operators and regulators while those who aspire for higher certification could enroll for the Institute’s professional examinations and become chartered.

    Chief executive officer, Anabel Group, Nicholas Okoye described the MoU as a great initiative by the CIS to develop a financial inclusion master plan for the young Nigerians.

    Okoye said the initiative would lead to development of manpower for the Nigeria’s economy and creating jobs for thousands of young people.

    He added that many of the qualified youths will be supported to set up their own financial planning houses in communities across Nigeria.

    According to him, the programme will now provide the foot soldiers needed for the Nation’s financial inclusion strategy which is being promoted by the Central Bank of Nigeria, the Federal Ministry of Finance, the Securities and Exchange Commission and the Nigerian Stock Exchange.

    Nicholas expressed delight that this private sector led initiative which is ultimately designed not just to create new jobs but also to support the mobilization of savings all over Nigeria, would not only have a multiplier effect on the overall development of Nigeria’s financial markets, but it will equally provide a positive boost to the growth of our national economy in the medium and long term.

    Under the new arrangement, the Professional Diploma Examination which is currently done twice per annum would henceforth be on monthly basis for the next one year from September, 2014.

    The beneficiaries would be exposed to fundamental knowledge of a wide spectrum of financial products in the securities market, pension, insurance and oil and gas among others.

  • NSE trains operators on portfolio management

    The Nigerian Stock Exchange (NSE) yesterday organised a one-day seminar to strengthen the capacity of stockbrokers, portfolio managers and other investors in the area of portfolio management.

    The seminar, which was in collaboration with Exchange Traded Funds (ETF) providers including Vetiva Fund Managers Limited, Lotus Capital Limited and ABSA Capital, South Africa, exposed participants to more effective strategies in portfolio management.

    Head, product management department, Nigerian Stock Exchange, Mr. Dipo Omotoso said that the training was designed to enlightened stakeholders on key areas such as using beta strategies in Portfolio Construction and the benefits of ETFs as an asset allocation tool.

    “The seminar also emphasizes the Exchange’s commitment to facilitate capacity building for market practitioners,” Omotoso said.

    According to him, participants at the seminar were taken through various topics including passive investment and portfolio benchmarking; alpha and beta strategies; use of ETFs and their benefits as alternative investment vehicles in portfolio construction;  ETF regulatory framework in Nigeria and investor protection guidelines.

  • NIDF pays investors N60.71 dividend

    Afrinvest Asset Management Limited, the fund managers of the Nigerian International Debt Fund (NIDF),  a listed collective investment scheme on the Nigerian Stock Exchange (NSE), has started payment of interim dividend of N60.71 per note to investors. The N60.71 coupon per note is well above the initial estimated dividend payment of N36.00 per note.

    In a statement, the fund manager stated that based on the number of qualified notes on the register of the NIDF as at the closure date of July 29, 2014, a total of N44.17 million would be distributed to all note holders at N60.71 per note.

    “Dividends have become an important factor for investors to consider and, at Afrinvest, we are committed to providing value for our clients, helping them achieve their investment objectives”, said Ike Chioke, Managing Director of Afrinvest West Africa Limited, the parent company of the Fund Manager.

    The Nigeria International Debt Fund invests in the domestic and international debt instruments of the Federal Government of Nigeria as well as those of the 36 States.

    Chioke said the NIDF offers investors safety, capital preservation, steady returns, diversification and value, and has a consistent dividend history making it quite attractive for both individual and institutional investors such as Pension Fund Administrators (PFAs), insurance companies, asset managers and gratuity funds.