The Nation Newspaper

Category: Equities

  • SEPLAT commences book building for $500m IPO

    SEPLAT Petroleum Development Company Plc, an indigenous independent oil and gas company, at the weekend started the institutional book building for its global initial public offering (IPO) of $500 million. SEPLAT plans to make the maiden public sale of its ordinary shares and subsequently list its shares on the London Stock Exchange (LSE) and Nigerian Stock Exchange (NSE).

    A document on the IPO obtained by The Nation at the weekend indicated that the institutional book-building has commenced with the publication of the pathfinder prospectus. BNP Paribas and Standard Bank are the joint global coordinators for the IPO and book-runners. Standard Bank is also acting as the stabilising manager. Also, Renaissance Securities (Cyprus) Limited, Citigroup Global Markets Limited and RBC Capital Markets are acting as joint book-runners. On the home front, Renaissance Securities (Nigeria) Limited and Stanbic IBTC Capital Limited have been appointed as Nigerian joint issuing houses.

    According to the report, the indicative price range for the global offer has been set at 195 pence to 255 pence per ordinary share for shares to be traded on the LSE’s main market and N535 to N700 per ordinary share for shares to be listed on the NSE.

    The initial offer size is expected to raise gross proceeds of approximately $500 million, equivalent to £300.9 million and N82.5 billion. With this, and based on the mid-point of the price range, SEPLAT’s implied market capitalisation upon listing would be about £1,200.9 million, equivalent to $ 1,995.5 million and N329.5 billion.

    The indicative price range of between N535 and N700 will make SEPLAT the second highest-priced stock at the Nigerian Stock Exchange (NSE), after Nestle Nigeria. The listing market capitalisation of N329.5 billion will make the company the seventh most capitalised stock on the NSE.

    SEPLAT has however indicated it intends to absorb over-subscription. According to the report, the over-allotment option in the global IPO shall represent 15 per cent of the final amount allocated to the international offering in the base offer. The over-allotment option shall be exercisable for a period of 30 calendar days from the announcement date of the final pricing of the global offer, expected on or about April 9, 2014.

    Thus, the global offer will comprise a base offering and an over-allotment option, consisting of new shares to be issued by the company.

    The report noted that the global offer will be effected variously by means of offering of ordinary shares to qualified investors in certain institutional investors in the United Kingdom and elsewhere outside the United States. Shares would also be offered to qualified international brokers in the United States. In Nigeria, shares will also be offered to ordinary shares to qualified institutional investors and high networth investors as defined in Rule 321 of the Securities and Exchange Commission (SEC) Rules.

    The company indicated that it intends to use $48 million from the net proceeds of the IPO to repay in full all outstanding amounts under its shareholder loan from MPI S.A. (MPI) while the balance would be used to acquire and develop new acquisitions or pay down any additional debt raised in connection therewith, of both onshore and shallow offshore acreages, assets or joint venture (JV) farm-ins.

    According to the company, the main source of acquisitions is expected to come from divestitures by various international oil companies.

    Upon listing, SEPLAT will thus be the first Nigerian company to have its ordinary shares listed on both the LSE and the NSE.

    The report indicated that announcement of the final pricing of the global offer and the commencement of conditional dealings in the ordinary shares on the LSE are expected to occur on or around Wednesday April 9, 2014 under the ticker symbol “SEPL”

    Also, admission of the ordinary shares to the official trading list of the NSE, under the ticker symbol “SEPLAT”, to the official list of the FCA and to trading on the main market for listed securities of the LSE and the commencement of unconditional dealings are expected to take place on or around Monday April 14, 2014.

    Earlier, chairman, SEPLAT Petroleum Development Company Plc, Dr. ABC Orjiako had said the global offer will allow the company to further implement its business strategy, which includes acquiring new assets.

    “We are confident that SEPLAT will continue to succeed and flourish as a leading Nigerian oil and gas operating company with a proven track record for delivering value to its investors, while fostering indigenous participation in the Nigerian oil and gas industry. We are committed to maintaining our track record and achieving our growth aspirations through sound corporate governance and best practice,” Orjiako said.

    SEPLAT was founded in 2009 by Shebah Petroleum Development Company Limited and Platform Petroleum (Joint Ventures) Limited for the purpose of investing in Nigerian oil and gas opportunities. Maurel& Prom, a French independent oil company, subsequently acquired a 45 per cent equity interest in SEPLAT; this interest was later spun-off to form Maurel & Prom Nigeria S.A, which is now known as Maurel & Prom International.

    In July 2010, SEPLAT acquired a 45 per cent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil mining leases-OMLs 4, 38 and 41, which are located in the Niger Delta. In June 2013, the company entered into an agreement for the acquisition of a 40 per cent participating interest in the Umuseti/Igbuku marginal field area located within OPL 283 in the Niger Delta.

    SEPLAT is regarded as one of the leading indigenous oil and gas operators in Nigeria with average gross operated oil production of 51,400 barrels per day (bpd) as at December 31, 2013, a substantial mileage from 13,900 bpd in August 2010. The company’s average gross gas production in 2013 was 99 million standard cubic feet per day (MMscfd). SEPLAT is targeting gross operated oil production from its existing assets of 85 Mbpd by the end of 2016.

  • Large transactions drive UBA loans by 42% to N971b

    United Bank for Africa (UBA) Plc grew its loan book by 42 per cent in 2013 as large-ticket transactions in the power, oil and gas sectors pushed the bank’s lending to a new high of N937 billion.

    Analysis of the bank’s audited report and accounts for the year ended December 31, 2013 confirmed that the bank kept to its projection to increase lending support to critical sectors of the Nigerian and African economy. UBA Plc has business operations in 18 other African countries outside Nigeria.

    The bank’s loan to deposit ratio stood at 44.3 per cent, a major achievement that gives it strong headroom to keep expanding its lending portfolio. The financials also showed a healthy liquidity position with a liquidity ratio of 55 per cent in 2013, substantially above the regulatory minimum of 25 per cent.

    Key extracts of the report also showed appreciable improvements in the top-line, operational efficiency and customer’s confidence. The board of the bank has recommended a dividend of 50 kobo per share.

    The report indicated that gross earnings rose from N220.1 billion in 2012 to N264.7 billion in 2013. The top-line performance was largely driven by a growth of 40.4 per cent in loans and advances as well as a 25 per cent growth in the bank’s total deposits.

    Consequently, the bank’s loan-to-deposit ratio improved from 38.7 per cent to 44.3 per cent. It also enhanced its operational efficiency and productivity with the cost-to-income ratio improving by four percentage points from 64.8 per cent to 60.9 per cent. Profit before tax grew by 7.8 per cent to N56.06 billion in 2013 as against N52.01 billion in 2012. This indicated a return on equity of 21.8 per cent. The bank’s balance sheet expanded to N2.64 trillion while total deposit base closed the year at N2.22 trillion.

    The significant increase in lending had a positive impact on the bank’s released financials with interest income rising significantly by 23.8 per cent to N186 billion while fee and commission based income rose 5.1 per cent to N50.01 billion.

    Further analysis also showed impressive lending process. In spite of the significant increase in lending portfolio, the bank was able to reduce the incidence of non-performing loans on its books well below the industry average and regulatory threshold. Non-performing loans averaged 1.19 per cent only in 2013, one of the lowest in the banking industry and well below the regulatory threshold of 5.0 per cent.

    Group managing director, United Bank for Africa (UBA) Plc, Mr Phillips Oduoza, had earlier said the bank committed $700 million in funding to the power sector privatization exercise in Nigeria , financing different investors to acquire the power assets put on sale by the Federal Government of Nigeria in 2013.

    Some of the major deals UBA actively participated in the power sector include taking up $120 million, N19.44 billion, of the financing in respect of Transcorp Ughelli Power Plant. The bank also acted as mandated lead arranger, underwriting the entire facility of $122 million, N20 billion, for Kann Utilities’ acquisition of the Abuja Electricity Distribution Company, financing the payment of 75 per cent acquisition of 60 per cent equity stake in Ikeja Electricity Distribution Company. The bank also threw its financial weight behind Aura Energy for the Acquisition of Jos Electricity Distribution Company, acting as the lead arranger for N9.6 billion to finance the payment of 75 per cent of Aura’s 60 per cent equity stake in Jos Electricity Distribution Company.

    UBA also successfully arranged debt financing of $68 million as well as secured equity investment from a strategic and technical investors for the acquisition of the Shiroro Hydroelectric Power Plc by North South Power Company Limited.

    “UBA had a good performance for full year 2013. This performance puts us in a position to continue to pursue our goal to achieve Industry leadership in the medium term. We were also able to gain considerable strides in our project Alpha initiatives by improving customer service delivery and leveraging our balance sheet to participate in emerging growth sectors of the economy,” Oduoza said in a comment on the 2013 performance.

    According to him, the performance in 2013 was largely due to prudent cost management policies, enhanced efficiency of the bank’s network and the impact of other productivity initiatives.

    “Our bank achieved a good result despite a challenging operating environment, demonstrating the strength and resilience of our people and their dedication to implementing our growth plans in 2013,” Oduoza said.

  • New masterplan to push Nigerian market beyond N100tr in 10 years

    A new comprehensive masterplan for the Nigerian capital market will push the market capitalisation to more than N100 trillion over the next 10 years as Securities and Exchange Commission (SEC) leads efforts to make Nigerian stock market one of the top 20 global markets.

    The masterplan, being developed under the auspices of the Capital Market Committee (CMC), seeks to aggregate collective inputs of all stakeholders in the capital market into a development blueprint that will guide policies, regulations and implementation over the next 10 years.

    Addressing a press briefing yesterday at the end of the CMC’s meeting for this quarter, director general, Securities and Exchange Commission (SEC), Ms Arunma Oteh, said the underlining aim of the masterplan is to raise Nigerian capital market capitalisation from the current position of 27 per cent of the nation’s Gross Domestic Product (GDP) to more than 100 per cent of the GDP in the next 10 years.

    Nigeria’s GDP is currently about $263 billion. The rebasing of the GDP, which is expected over the next few weeks, is expected to push the GDP to $405 billion. Nigeria’s economy is projected to grow by an average of five per cent over the next years. The official Naira-Dollar exchange rate is N156 to $1. Nigerian market capitalisation is about N12 trillion.

    Oteh said the masterplan would also see Nigerian capital market emerging as one of the top 20 markets in the world.

    According to her, the commission will undertake comprehensive review of the various segments of the market including the regulatory framework, transaction costs, market size, listing and products.

    She said SEC has engaged experts to review transaction costs in the Nigerian market and benchmark these with other Exchanges of the world.

    She said the transaction cost analysis would be concluded very soon and there would be more flexibility noting that reduced costs will boost the market.

    “What we say to the market is that if the costs are down, the volume will go up. So, I think it is an evolutionary process and sometimes I think liquidity is what really reflects in our market. With the introduction of market making, we have a 20 per cent increase in terms of daily trading volume, but it is nothing compared to where it should be,” Oteh said.

    She outlined that the CMC is looking at boosting the market’s efficiency in such a way that allows seamless transactions on the Nigerian market and other global markets.

    “We have to look at our market to see that dual listing can be done anywhere in the world, you can list a company today and also list in other countries. We are also looking at creating other products because we cannot achieve our target without creating new products that would deepen the market and enhance diversification of portfolio,” Oteh said.

    She however noted the need for stakeholders’ supports for the evolution of the market to mirror the depth and diversity of the Nigerian economy noting that Nigerians wants to participate in the wealth creation in the power, telecommunications and oil and gas sectors.

    According to her, the market must reflect the economy and the companies must understand the importance of the capital market.

  • Sterling Bank declares N5.4b dividend as profit rises to N9.3b

    The board of Sterling Bank Plc yesterday recommended distribution of N5.4 billion as cash dividends t shareholders as the bank continued to consolidate its growth and profitability.

    Key extracts of the audited report and accounts of Sterling Bank for the year ended December 31, 2013 released yesterday at the Nigerian Stock Exchange (NSE) showed considerable growths in gross earnings and profitability while the bank’s balance sheet was stronger.

    The report indicated that gross earnings rose by 33.1 per cent while pre and post tax profits grew by 24.1 per cent and 19 per cent. Basic earnings per share rose by 18.2 per cent from 52 kobo t0 44 kobo.

    A breakdown of the dividend recommendation indicates that shareholders would receive a dividend per share of 25 kobo, 25 per cent above 20 kobo distributed in the previous year.

    Gross earnings rode on the back of a 24 per cent and 31 per cent growth in non-interest income and interest income respectively to N91.6 billion in 2013 as against 68.86 billion in 2012. Non-interest income, which rose to N21.7 billion as against N15.3 billion in 2012 was largely due to a 139 per cent increase in trading income in addition to a 46 per cent increase in fees and commission; while Interest income rose to N70.0billion compared with N53.5 billion in 2012, driven by a 39 per cent increase in gross loans and advances to N328.7 billion.

    Profit before tax rose from N7.50 billion in 2012 to N9.31 billion in 2013 while profit after tax increased from N6.95 billion to N8.27 billion. As a demonstration of confidence in the bank, customer deposits rose 23 per cent to N570.5 billion as against N466.8 billion. This, according to the Bank, also reflects progress in the execution of its retail strategy

    Sterling Bank’s total assets including contingent liabilities increased by 28 per cent to N909.4 billion compared with N708.2 billion in 2012, while Shareholders’ funds grew by 36.1 per cent to N63.5 billion as against N46.6billion due to profit accretion and net proceeds of N12.1 billion from the rights Issue.

    The report also showed improvement in the asset quality of the bank as the proportion of gross loans to non-performing loan dropped to 2.1per cent in 2013 as against 3.8 per cent in 2012, notwithstanding a 40 per cent growth in loans and advances.

    Commenting on the results, managing director, Sterling Bank Plc, Mr. Yemi Adeola, said the performance in 2013 highlighted the underlying institutional strength citing the top-line and bottom-line growths.

    According to him, the results underlined the steadiness of the bank against the macroeconomic and regulatory challenges.

    He assured that the bank has been positioned to sustain the performance in the years ahead.

  • Private equity fund eyes Nigeria, Kenya

    One Thousand & One Voices LLC, an Africa-focused private-equity fund, said it’s in talks about investing in two Nigerian companies and another in Kenya.

    In Nigeria, “one is a purely consumer-facing opportunity the other is also in the manufacturing space with a consumer theme to it,” Hendrik Jordaan, president and chief executive officer of the fund, said in an interview yesterday. “The companies we’re looking at are all private.”

    One Thousand & One Voices, started by John Coors, the great grandson of Coors Brewing Co.’s founder, is hunting for private-equity investments that tap Africa’s growing consumer markets. The fund, which hired former TPG Capital partner Dag Skattum, has received commitments from more than 15 of the world’s richest families since starting last May and expects to meet a goal of raising $300 million by December, Jordaan said.

    “We have sufficient capital from over 15 families that allows us to close on all the transactions in our pipeline,” Jordaan told Bloomberg in Lagos, Nigeria’s commercial capital, adding that the fund is also in talks with potential family investors in Latin America, Southeast Asia and Africa. “I’m going to be in London and Paris later this week, meeting with leading families in those geographies.”

    The fund is in talks with wealthy Nigerian families, said Jordaan, who declined to be more specific. Since November one South African family has joined the fund, he said.

    One Thousand & One Voices will probably lead a delegation of families to the World Economic Forum’s conference in Nigeria’s capital, Abuja in May, Jordaan said.

    The fund, which expects to close at least one deal in southern Africa in the second quarter of this year, said today that Skattum, 53, will be the firm’s London-based managing director. It also hired Kate Matheny, 45, as chief financial officer, based in Denver, according to a statement from the fund. She held the same position at KRG Capital, the fund said.

  • Stakeholders explore funding for healthcare sector

    Stakeholders in the healthcare sector and the capital market have called for continuous collaboration with a view to deepening funding and unlocking the immense opportunities in the healthcare sector.

    At the quarterly sectoral dinner of the Nigerian Stock Exchange (NSE) for the healthcare sector, the Federal Government, NSE, capital market operators and chief executives of healthcare companies brainstormed on the ways the capital market can foster the development of the healthcare sector.

    The dinner themed “Tapping the Opportunities in the Capital Market for the Development of the Health Sector’ was partly sponsored by May & Baker Nigeria Plc, Africa Prudential Registrars Plc and Fidson Healthcare Plc.

    Minister of Health, Prof. Onyebuchi Chukwu, said there are several opportunities in the healthcare sector that capital market operators and investors can collaborate on that will contribute to national development and yield good returns for investors.

    According to him, facilities such as specialist hospitals, diagnostics centres, ambulance services, trauma centres, mobile clinics, pharmaceutical manufacturing, generic drugs and small holder specialist clinics among others are investment opportunities with good prospects.

    He highlighted the impressive prospects of the healthcare sector noting that a robust and growing economy, large market as denoted by high demand for healthcare services and incentives such as zero duty on medical equipment and flexible expatriate personnel quota make room for enormous potential in the sector.

    Managing Director, May & Baker Nigeria Plc, Mr, Nnamdi Okafor, called for a special collaboration among capital market regulators, operators and pharmaceutical and healthcare companies to create a special funding window for the industry.

    According to him, the NSE, Securities and Exchange Commission (SEC) , pharmaceutical manufacturers and other healthcare operators need to work together to create a special window of investment funding for the healthcare industry through the capital market.

    He noted that the demand for drugs and medical care remain an advantage to domestic producers as well as an opportunity for growth and development of the sector.

    “With an improved situation, pharmaceutical manufacturers have confidence to approach the capital market for funds knowing that their investments will be quick to recover. The market has capacity to identify foreign investors interested in the pharmaceutical business and I hope it will not be improper to arrange collaborative meetings for local companies with such investors,” Okafor said.

    He pointed out that May & Baker Nigeria had undertaken several significant investments in recent period through its internally generated revenue and borrowed funds noting that the recovery at the capital market provides opportunity to better funding through the market.

    “With the recovery in the capital market it is our hope that more conducive funding windows will be available to us and we shall count on the support of the NSE and other operators in the capital market if we decide to approach the market,” Okafor said.

    Encouraging other healthcare companies to list their shares, Okafor said that listing has added values to May & Baker Nigeria pointing out that it will in November celebrate its 20 years of listing on the NSE.

    According to him, the company has gone to great lengths to improve value for its shareholders as it invested heavily in the construction of a world class pharmaceutical manufacturing facility which its asset holding by more than 100 per cent by an additional N4 billion.

    He commended the courage and patience of shareholders and investors who willingly sacrificed their dividends when the company was building the Pharmacentre, assuring that with the progress it has made, the company is in good position to continue its tradition of robust dividends to shareholders soon.

    “With the PharmaCentre, we have been able to raise our capacity for producing medicines by about 200 per cent. From a total capacity of 2 billion tablets and 19 million bottles of liquid preparations of 60 ml, we now have capacity to produce 6.5 billion tablets and 56.5 million bottles of 60 ml liquid preparations annually. With that investment also we are at the forefront of the country’s pursuit of international quality standard. Along with few other companies we have reached an advanced stage in the process of WHO pre-qualification for locally manufactured pharmaceuticals. When that is accomplished, we shall be in a position to compete for international tenders, export our products to all parts of the world and reduce drastically the use of foreign drugs by international agencies who are undertaking intervention programmes in Nigeria and other African countries,” Okafor said.

    He pointed out that May & Baker PharmaCentre has capacity for contract manufacturing for local and foreign brand owners adding that some foreign pharmaceutical manufacturers are currently signing up with the company to manufacture their products in Nigeria.

    Managing director, Fidson Healthcare Plc, Mr. Fidelis Ayebae, said listing on the NSE will provide major boost to healthcare companies.

    He outlined the benefits of listing on the NSE to include easy access to adequate and amenable capital to grow and expand the business, diversification of shareholders’ base and resultant broadened idea base for the company, perpetuity of the company irrespective of the absence of the original founders and wealth creation.

    Relating his experience, Ayebae, who founded Fidson, said listing the company has proved to be a beneficial decision than any disadvantage.

    “The advantages of listing far outweigh the disadvantages, my experience in the lst seven years has been more sweet than bitter,” Ayebae said

  • CBN approves Aso Savings’ acquisition of Union Homes

    The Central Bank of Nigeria (CBN) has cleared Aso savings and Loans Plc to proceed with its acquisition of Union Homes Savings and Loans Plc, paving the way for the two quoted companies to conclude shares purchase and transfer side of the transaction.

    A regulatory filing by Aso Savings made available by the Nigerian Stock Exchange (NSE) indicated that the CBN, which supervises the two financial services companies, has issued a “no objection letter” to the Transaction Implementation Agreement (TIA), which spelt how the acquisition transaction between Aso Savings and Union Bank of Nigeria (UBN) Plc, the parent company of Union Homes; Union Homes and Union Homes Investment Nigeria Limited.

    UHNL is the special purpose vehicle through which Aso Savings will acquire the UBN divestment shares and recapitalised UHSL.

    The “no objection” from the apex bank is required to enable Aso proceed with the signing of a share purchase agreement (SPA) between Aso and UBN.

    In furtherance of the acquisition, Aso Savings last week filed notice of intention to notify the NSE about the impending acquisition. Both Aso Savings and Union Homes are quoted on the NSE. As part of the listing requirements, NSE requires all quoted companies to inform it of any information ahead of its release to the public and before the party takes any action on it.

    As part of Central Bank Nigeria’s (CBN) approved restructuring exercise, Union Bank of Nigeria Plc decided to sell UHSL Plc. After a bidding process, Aso Savings was selected as the preferred bidder in October, 2013.

    Towards achieving this objective, Aso Savings proceeded to execute a Memorandum of Understanding (MOU) with UBN Plc under the supervision of the CBN.

    The board of Aso had approved and subsequently submitted the TIA to the CBN on December 31, 2013.

    UBN is divesting from its non-core-banking subsidiaries to comply with CBN’s regulatory regime which requires banks to either sell non-core-banking subsidiaries or form a holding company to hold such businesses.

    The 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.

    Most other banks including Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank (GTB) Plc, Skye Bank Plc, Sterling Bank, Zenith Bank, Unity Bank and Wema Bank have chosen to divest from non-banking subsidiaries. However, First Bank, Stanbic IBTC and FCMB have formed holding companies to sustain their non-core banking businesses.

  • JPMorgan, HSBC plan to bid for $4b Saudi IPO

    JPMorgan Chase & Co. and HSBC Holdings Plc (HSBA) are among banks planning to compete for a role in the largest Saudi Arabian share sale in at least 12 years, according to five people with knowledge of the matter.

    The banks will vie with local lenders including Banque Saudi Fransi (BSFR) and Gulf International Bank to be appointed as financial adviser on the sale of a 15 percent stake in Jeddah-based National Commercial Bank, the people said, asking not to be named as the information isn’t public. NCB, as the lender is known, sent out a request for proposals to banks to manage the initial public offering earlier this week, the people said.

    The first Saudi bank IPO since 2008 could raise about 16 billion riyals ($4.3 billion) based on NCB’s profits and trading values of other Saudi banks, according to Asim Bukhtiar, head of research at Riyad Capital, the investment-banking unit of Riyad bank. That would surpass the 15 billion-riyal offering by Saudi Telecom Co. (STC) in 2002, according to data compiled by Bloomberg.

    Saudi Arabia’s Public Investment Fund is selling part of its 69 percent holding in NCB, bank chairman Mansoor Al Maiman said Feb. 27.

    A request for proposals “was sent to a selected number of authorized persons to act as the financial advisor for the IPO process as per CMA requirements,” NCB said in an e-mailed statement yesterday, referring to the Saudi financial market regulator. “Once the selection is made, the selected financial advisor will be announced.”

    Saudi Arabia’s stock market is the Gulf’s largest, with a market value of about $506 billion. Foreign investors cannot trade directly on the exchange, instead they have to invest through swaps or funds.

    Bloomberg reported that NCB is one of several companies planning IPOs to take advantage of the surging Tadawul All Share Index, which has gained 9.2 percent this year.

  • Govt, investors parley on listing of power firms

    The Federal Government and investors in privatized power companies are discussing the possibilities of reducing the five-year holding period for the owners of the new power companies to about three years to enable them sell their shares to the investing public.

    Minister of Power, Professor Chinedu Nebo, disclosed this yesterday during a courtesy visit to the Nigerian Stock Exchange (NSE). Nebo came to discuss ways that the capital market can support the realization of the objectives of the power reforms.

    Nebo said the hindrance to the public sale and possible listing of shares of the privatized power generation companies (gencos) and distribution companies (discos) is a clause in the sale agreement which stipulates that the new owners must hold on to the companies for five years before they can sell the shares.

    He said government, through the National Council on Privatisation (NCP) and the power companies are already reviewing the possibility of the downward review of the five-year timeline to about three years.

    “I don’t see why five years was put in other than the government did not want people to strip these companies and then sell the scrap to the general public. Be that as it may, with the things that are afoot today, we are encouraging a dialogue between the successor companies, privatised from PHCN and government of Nigeria, especially the National Council on Privatisation, to see if these five years can be negotiated downward so that within the next two – and – a – half years, we will be able to see them go to the stock market because we believe that the most veritable way of getting the financing they need to expand their facilities and give much better services to our people will be by going to the stock market,” Nebo said.

    According to him, the delay in approaching the capital market was both legal and operational as the Nigerian Stock Exchange also expects at least three years of due diligence, paperwork and submission of annual reports before a company is listed.

    He said government was already the impediments in the power supply system, especially the issue of finance.

    “Government is already addressing some of the issues, the major issue, actually, is financing for expansion and consolidation and that is where the stock market is very critical. Government has even organised a global financing summit that attracted more than 350 non-Nigerians, just about a month ago. So, government is working on that. Other constraints have to do with generating of more power because the more power you generate, the more power is sold, the more money is made by the generation companies, the transmission company and the distribution companies. So, we need to generate more power and the challenge there is the issue of gas. But government is working very hard to make sure that at the end of this year and the beginning of next year, there is a match – no longer a mismatch – in the availability of gas and the need of the generating companies,” Nebo said.

  • Equities recover with N54b gain

    After six days of scary downtrend that shaved off about N685 billion in market values, Nigerian equities rallied back to the positive as investors sought substantial stakes in underpriced banking stocks.

    Aggregate market value of all quoted equities rose by N54 billion from N11.929 trillion to N11.984 trillion. The All Share Index (ASI), the common index that benchmarks price movement at the Nigerian Stock Exchange (NSE), inched up by 0.45 per cent to 37,308.60 points as against its opening index of 37,136.60 points.

    While there were still more decliners than advancers and several highly capitalised stocks remained on the downtrend, gains by large-cap banking and petroleum-marketing stocks boosted the overall market situation.

    Mobil Oil Nigeria topped the 24-stock gainers’ list with a gain of N3.86 to close at N124.86 per share. Guaranty Trust Bank followed with a gain of N1.90 to close at N25. Oando added 69 kobo to close at N14.56. Nigerian Breweries rose by 50 kobo to N146. FBN Holdings gained 34 kobo to close at N11.99. United Bank for Africa appreciated by 29 kobo to N6.99. Zenith Bank chalked up 28 kobo to close at N20.79 while National Salt Company of Nigeria and Red Star Express added 19 kobo each to close at N7.60 and N4.47 respectively.

    On the other hand, the bearish sentiment remained rampant in the background with Nestle Nigeria leading 25 other stocks on the losers’ list. Nestle Nigeria dropped by N9.20 to close at N958.80. Cadbury Nigeria trailed with a loss of N7.40 to close at N78. Total Nigeria declined by N5 to close at N148. Guinness Nigeria dropped by N3.15 to close at N165. UAC of Nigeria slipped by N3.10 to close at N58.90. PZ Cussons Nigeria lost N1.70 to close at N32.30. Lafarge Cement Wapco Nigeria dropped by 90 kobo to N109.10. Ashaka Cement declined by 51 kobo to close at N14.23. Dangote Cement lost 49 kobo to close at N228.51 while Nigeria Aviation Handling Company (Nahco) dropped by 27 kobo to close at N4.73 per share.

    Investors staked a total of N3.76 billion on 320.34 million shares through 5,009 deals. Financial services sector was the most active with 243.41 million shares worth N2.21 billion in 2,862 deals. Banking stocks dominated the top activities’ chart.

    Access Bank was the most active stock with a turnover of 57.31 million shares valued at N424.36 million in 239 deals. Zenith Bank placed second with a turnover of 25.62 million shares worth N541.27 million in 410 deals. United Bank for Africa (UBA) trailed with a turnover of 22.95 million shares worth N155.95 million in 216 deals.