Category: Equities

Nigerian equities recorded a marginal dip yesterday as a wave of profit-taking transactions moderated the overall market position.

 Benchmark indices at the Nigerian Exchange (NGX) indicated average decline of 0.02 per cent, equivalent to net capital depreciation of N5 billion.

The All Share Index (ASI)- the common value-based index that tracks all share prices at the NGX, declined by 8.83 points or 0.02 per cent to close at 51,944.58 points as against its opening index of 51,953.41 points.

 Aggregate market value of all quoted equities dropped by N5 billion to close at N28.295 trillion compared with its opening value of N28.300 trillion.

 The negative market position was due largely to losses recorded by some medium and large-capitalised stocks including May & Baker Nigeria, Zenith Bank, Nigerian Exchange Group, Fidelity Bank and Africa Prudential.

 There were 21 losers to 18 gainers. May & Baker Nigeria  led the losers’ chart with a drop of 10 per cent to close at N4.05 per share. Ikeja Hotel followed with a decline of 9.24 per cent to close at N1.08. Multiverse Mining and Exploration lost 7.60 per cent to close at N2.31. Academy Press lost 6.67 per cent to close at N1.26 while NPF Microfinance Bank shed 6.32 per cent to close at N1.78, per share.

 On the positive side, Transnational Corporation (Transcorp)  recorded the highest price gain of 10 per cent to close at N1.54, per share. Wapic Insurance followed with a gain 9.69 per cent to close at 42 kobo. Champion Breweries rose 7.64 per cent to close at N4.93 per share. Mutual Benefits Assurance went up by 6.25 per cent to close at 34 kobo while Prestige Assurance appreciated by 5.26 per cent to close at 40 kobo, per share.

 Meanwhile, total turnover at the market rose by 18.72 per cent to 302.920 million shares valued at N2.023 billion in 3,743 deals. Transcorp topped the activity chart with 107.213 million shares valued at N162.832 million. Fidelity Bank followed with 39.308 million shares worth N206.008 million. United Bank for Africa (UBA) traded 22.603 million shares valued at N190.356 million. Zenith Bank traded 20.614 million shares valued at N521.286 million while FCMB Group recorded 12.611 million shares worth N47.830 million.

Africa’s richest man and chairman, Dangote Cement Plc, Alhaji Aliko Dangote yesterday assured shareholders of his flagship cement group of improved returns in the years ahead as the group leverages on technology to optimize production across Africa.

Speaking at the annual general meeting (AGM) of Dangote Cement yesterday in Lagos, Dangote said the cement group remains resolute to sustain its growth trend by leveraging on strategic innovations for the continuous growth of its investments.

He said the prospects of the cement company remains bright as the management will continue to innovate on quality products delivery to millions of its customers across Africa while touching the lives of its host communities.

Shareholders approved the payment of a dividend per share of N20 to all shareholders for the 2022 business years, representing total dividend payout of N340.81 billion. The dividends become payable today, April 14, 2023, to all shareholders on the register of the company as at the close of business of March 30, 2023.

Key extracts of the audited report and accounts of Dangote Cement Group for the year ended December 31, 2022 showed sustained growths across major indices, with group turnover rising by 17 per cent from N1.38 trillion in 2021 to N1.62 trillion in 2022. Gross profit rose from N832.62 billion in 2021 to N955.43 billion in 2022.  Group net profit increased by 5.0 per cent from N364 billion to N382 billion. Earnings per share thus improved to N22.27 in 2022 as against N21.34 in 2021.

The balance sheet of the group also emerged stronger. Total assets increased from N2.39 trillion in 2021 to N2.62 trillion in 2022. Shareholders’ funds crossed the trillion naira mark to N1.08 trillion in 2022 as against N983.67 billion in 2021.

On a standalone basis, the parent company showed stronger performance with total sales rising by 21 per cent from N993 billion to N1.21 trillion. Company’s net profit increased by 6.0 per cent N403 billion in 2022 as against N381 billion in 2021. Company’s earnings per share rose from N22.42 in 2021 to N23.87 in 2022.

Dangote said the company would continue to make sure that shareholders and other stakeholders are happy with its performance.

“Our strategy remains steadfast, focused on organic growth in Nigeria and Pan-Africa while ensuring that Africa’s regional integration becomes a reality.

We will continue to contribute to improving regional trade within Africa by building plants across West and Central Africa, guided by our vision of making the region cement and clinker self-sufficient. In addition, we aim to deliver higher returns and value to our shareholders,” Dangote said.

He pointed out that despite the challenging macroeconomic environment in 2022, the company still made great strides, performed admirably, and remains Africa’s largest and leading cement producer.

 He explained that in the face of the unexpected challenges in 2022, the company implemented robust cost reduction strategies to manage the inflationary environment, and thus enhanced its competitiveness while maintaining high levels of product quality and customer service delivery.

“In addition, we achieved giant strides in transitioning to cleaner energy, with our cost containment initiative propelling the use of Alternative Fuel (AF) to replace more expensive fossil fuels, such as coal and gas. We also increased the use of Compressed Natural Gas (CNG) for our trucks due to the rising diesel cost environment.

“These efforts have helped us reduce our cost base and enhanced our flexibility, enabling the Company to respond more effectively to changes in the market. As a result, we recorded revenue and earnings before interest, tax, depreciation and amortization (EBITDA) growth of 17.0 per cent and 3.5 per cent from the prior year respectively, albeit under unprecedented inflationary pressure. We also achieved a profit after tax of N382.3 billion, up 4.9 per cent compared to 2021,” Dangote said.

He outlined that the company achieved its highest revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) in history in 2022 at N1.62 trillion and N708.2 billion respectively.

He said the exceptional EBITDA was supported by its numerous cost containment measures, substituting higher-cost fuel for cheaper alternative fuel products.

Over the last twelve years, volumes have grown by a double-digit compound annual growth rate of 11.2 per cent. Similarly, EBITDA has grown at a compound annual growth rate of 16.3 per cent, over the same period, implying a five-fold increase and revealing a true growth story.

“Accordingly, we closed the year with a profit after tax of N382.3 billion and an Earning per Share (EPS) of N22.27. Despite these accomplishments, we are not resting on our laurels. We recognise that the business environment remains volatile, so we will continue to evolve with the changing times while embracing technological advancement,” Dangote said.

Shareholders who spoke at the meeting commended the performance of the cement group.

National Coordinator, Pragmatic Shareholders Association, Mrs Bisi Bakare said the management of Dangote Cement had shown resilience by being able to exceed shareholders’ expectation in view of the inclement economic weather under which companies operated in recent period.

She explained that the shareholders were happy for the returns, pointing out that it only means that the company was living up to its billing as the largest in Sub-Saharan Africa, adding that if not for the resilience of the management, the company would not be able to post such an impressive performance in 2022.

Bakare alluded to the successful listing of the N300 billion series bond by the company, saying the company succeeded largely due to the confidence reposed in the company and its management by the investing public.

“It is not all companies that could record such a feat given the huge amount involved and the biting economic situation,” Bakare said.

Stories by Taofik Salako, Deputy Business Editor

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has assured investors that the interest of minority shareholders would be protected during all transactions in the capital market.

Director General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda  gave the assurance yesterday in Abuja while briefing journalists on the outcome of the first quarter Capital Market Committee  (CMC) meeting.

He noted that protecting the interests of both majority and minority shareholders was the primary responsibility of the commission.

“Protection of investors is the central mandate of the commission and when the commission protects investors, we do not discriminate between minority and majority shareholders.

“When there is a case of delisting, the application for the delisting comes to the commission and we go through it very carefully to ensure that the shares of the company being delisted are fairly valued because fair valuation is what protects all the shareholders,” Yuguda said.

He spoke against the background of recent delistings including ongoing decision of Oando Plc to delist from the Nigerian Exchange (NGX).

Yuguda also noted that the commission was working at ensuring that foreign and retail investors were retained and more attracted to the capital market, observing that relative to other markets on the continent, the NGX has performed very well.

 He expressed optimism that President Muhammadu Buhari will sign the Investors and Securities Bill (ISB) into law before leaving office in May, noting that the new law was long overdue.

“The meeting was officially informed about the passage of the Investments and Securities Bill (ISB) 2023 by the Senate. Some of the provisions in the ISB include stiffer punishment for operators of Ponzi schemes, expansion of the categories of issuers of securities, and better coverage of some new products among others.

“The ISB also has provisions for regulation of commodities exchanges and other operators in the commodities trading ecosystem,” Yuguda said.

A United States-based venture capital firm, Tekedia Capital, has launched a new syndicate funding cycle to attract individuals and organisations to co-invest in early-stage tech startups in Africa.

This is to advance the spirit of entrepreneurial capitalism through the creation of viable funding opportunities to deepen economic growth and advance local communities across Africa.

The Tekedia Capital Syndicate investment cycle, which will end on May 8, 2023, seeks to pool funds from investing entities to upscale the business activities of promising African-based tech firms irrespective of the sectors they operate in.

This is in a bid to leverage the firm’s extensive grassroots connections to enhance the process of building tech unicorns out of Africa.

Speaking on the launch of the new funding cycle, Prof. Ndubuisi Ekekwe, Chairman of Tekedia Capital, noted that there is a dire need to support early-stage tech companies across the African continent.

“Economic projections about Africa indicate that the continent is on the path to economic ascension due to the innovation and ingenuity of young people. This is made evident as recent developments reveal that the African continent is experiencing a Cambrian moment where tech-anchored startups are rapidly re-wiring markets, leading to transformations in industrial sectors.”

“It is against this backdrop that we at Tekedia Capital support these companies, and are inviting interested persons, organisations, and governments to co-invest through our syndicate funds in these tech companies. Here, we are funding future economic empires for shared prosperity in Africa,” he said.

Tekedia Capital is a leading Pan-African venture syndicate company that is passionate about funding the foundations of the next African economy.

This is evident as the firm has invested millions of dollars in multiple tech companies like Touch and Pay (the team behind Lagos State Cowry Card), Mintyn, OurPass, Mecho Autotech, Kladot, and Bitmama.

The naira depreciated by 0.17 per cent yesterday at the official Investors and Exporters (I & E) Window as the Central Bank of Nigeria (CBN) struggles to sustain its float-management stance.

Trading report obtained yesterday indicated that naira deprecated to N463.67 per dollar as against its previous close of N462.88 per dollar.

Most participants at the official foreign exchange (forex) window maintained bids between N460.00 and ?466.00 per dollar.

The depreciation in naira at the forex market comes as the apex bank seeks to sustain its controlled rate at the official window, despite some 300 basis points gap between the official rate and the parallel market rate.

Most non-government, private independent users source forex from the parallel market, which is being funded by private sources seeking higher margins and round-tripping of funds from the official window.

Nigeria’s foreign exchange (forex) reserves had hit a new low at $35.39 billion last weekend amidst dwindling inflows and apprehensions over the country’s forex management framework.

The nation’s external reserves had dropped by $111.10 million to $35.39 billion at the weekend, its 11th consecutive weeks of decline.

Nigeria’s forex reserves had lost more than $1.82 billion in nearly three months of a free fall. Official forex reserves status data report obtained from the CBN indicated that forex reserves had depleted from $37.211 billion by January 16, 2023 to $35.39 billion at the weekend.

Nigeria’s external reserves, which closed 2022 at about $37.08 billion, had picked at $37.211 billion on January 16, 2023. It has since been on the decline, dropping to lower level every week over the past 10 weeks.

Most analysts agreed that Nigeria’s shaky forex reserves position and currency crisis were directly due to the CBN’s currency management stance. The apex bank’s fixed-rate, controlled exchange policy has seen the emergence of parallel markets with some 290 basis points between the official rate and the market-driven, unofficial parallel market.

Analysts have called for major forex and macroeconomic reforms to stem decline and encourage direct and indirect forex inflows into the country.

Analysts at Cordros Capital said they believed the forex crisis “will remain over the short-to-medium term” as there is no positive signal that denotes an improvement in forex supply relative to the pre-COVID-19 levels.

“Moreover, considering the tepid accretion to the reserves given low crude oil production and elevated premium motor spirit (PMS) under-recovery costs, foreign portfolio investors (FPIs) who have historically supported supply levels in the Investors & Exporters Window will be needed to sustain forex liquidity levels in the medium to long-term,” Cordros Capital stated at the weekend.

Analysts at Cordros Capital attributed the persistent slowdown in capital importation to foreign investors’ lacklustre interest in the country “given an unclear foreign exchange framework, an uninspiring macro narrative, elevated global interest rates, and heightened global uncertainties”.

“While we believe a new government will be a breather for the country in the short term as sentiments are likely to improve, we think foreign capital inflows will remain low compared to pre-COVID levels over the medium term in the absence of significant reforms in the forex, fiscal and monetary policy frameworks,” Cordros Capital stated.

Analysts at Afrinvest (west Africa) said Nigeria’s capital importation continues to weaken below its pre-Covid level of $24 billion, “primarily due to the investors’ aversion to subsisting forex policies”.

“Specifically, the prominence of capital controls to manage the ongoing forex crisis complicates fund repatriation from Nigeria and, by the same token, discourages new investments by offshore players,” Afrinvest stated.

According to analysts, the existence of a multiplicity of forex windows muddles clarity around forex administration, subsidises the government sector at the expense of the large private economy, and contributes to the widening premium of parallel market rates to the official market.

Nigerian equities recorded marginal gains yesterday as a renewed wave of bargain-hunting moderated the underlying profit-taking sentiment that had marked trading in recent period.

With more gainers than losers, transactions at the Nigerian Exchange (NGX) trended towards positive sentiment, although the overall market outlook was moderated by losses recorded by some mid-to-large cap companies.

The All Share Index (ASI)- the value-based common index that tracks all share prices at the NGX, inched up from its opening index of 51,952.99 points to close at 51,953.41 points.

Aggregate market value of all quoted equities was almost flat at N28,300.27 trillion as against its opening value of N28,300.04 trillion.

There were 17 gainers to 11 losers. Skyway Aviation Handling Company recorded the highest gain, in percentage terms, rising by the maximum daily allowable price change of 10 per cent to close at N5.50 per share. Associated Bus Company trailed with a gain of 9.68 per cent. Berger Paints rose by 8.57 per cent to close at N7.60 per share. International Breweries rallied by 7.41 per cent to close at N4.35 while Multiverse Mining and Exploration gained 4.17 per cent to close at N2.50 per share.

On the negative side, Royal Exchange led the losers’ chart by 10 per cent to close at 54 kobo per share. Champion Breweries trailed with a loss of 9.84 per cent to close at N4.58. CWG declined by 7.53 per cent to close at 86 kobo. Mutual Benefits Assurance declined 5.88 per cent to close at 32 kobo while Nigerian Exchange Group dropped by 4.23 per cent to close at N24.90 per share.

However, the momentum of activities slowed down considerably with turnover dropping by 85.2 per cent to 255.161 million shares valued at N1.787 billion in 3,890 deals. Transactions in the shares of Transnational Corporation (Transcorp) topped the activity chart with 117.529 million shares valued at N163.057 million. Fidelity Bank followed with 38.031 million shares worth N200.387 million. United Bank for Africa (UBA) traded 19.816 million shares valued at N169.194 million. Zenith Bank traded 11.385 million shares valued at N290.036 million while Royal Exchange recorded 5.933 million shares worth N3.263 million.

Nigerian Exchange Group of Companies and its partners have called on private and public sector stakeholders to close the gender gap by creating more opportunities for women to thrive.

This was made known at the International Women’s Day symposium wih the theme: “Embrace Equity: Setting the Standard for a Sustainable Future” which held yesterday.

The event brought together stakeholders across sectors to chart the cause for driving sustainable outcomes for women and men to thrive.

Other included the World Federation of Exchanges (WFE), Sustainable Stock Exchanges (SSE) Initiative, United Nations (UN) Women, United Nations Global Compact and International Finance Corporation (IFC).

Group Chief Executive Officer, Nigerian Exchange Group (NGX Group), Mr Oscar Onyema, noted that the group is committed to prioritising equity, diversity and inclusion in its workplace.

“Gender equity is an ongoing journey that requires sustained efforts and commitment from all of us. We must commit to continuing to push the boundaries of what is possible, embrace new ideas to challenge ourselves and each other for a more equitable and sustainable future,” Onyema said.

Chief Executive Officer, Nigerian Exchange (NGX), Mr. Temi Popoola spoke on the Exchange’s strides in promoting diversity and inclusion in the capital market, citing the progress made on NGX’s collaboration with IFC on the Nigeria2Equal Initiative.

“With Nigeria2Equal, we have been able to galvanise private sector action to close the gender gap, the most recent program of which is the launch of the Gender-Based Violence and Harassment in Workplaces research,” Popoola said.

The fireside talk on gender diversity and inclusion in the boardroom between Ms. Tinuade Awe, Chief Executive Officer, NGX Regulation Limited, and Mrs. Rosie Bichard, Co-chair, Women Executives on Boards, underlined that culture transformation remained crucial to address inclusion on the board, despite the need to introduce younger women to the board as well as complete transparency with proven metrics in relation to the corporate governance structure.

Royal Exchange Plc has launched a process to raise about N2.06 billion in new equity funds from its shareholders as the insurance group pursues a voluntary recapitalisation of its businesses.

Regulatory filing at the Nigerian Exchange (NGX) indicated that Royal Exchange plans to issue 4.116 billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share.

The rights issue will be pre-allotted on the basis of four new ordinary shares of 50 kobo each for every five ordinary shares held as at the close of business on Monday.

The Board of Directors of the group has already submitted application to the NGX for the approval of the rights use and subsequent listing of the issued shares after the completion of the offer.

Shareholders of Royal Exchange had last month authorised the board of the company to raise new equity capital of up to N2.06 billion from existing shareholders.

At an extraordinary general meeting, shareholders approved resolutions authorising the issuance of 4.112 billion ordinary shares of 50 kobo each to existing shareholders with a view to raising N2.058 billion.

The meeting mandated the board to fix the offer price and shareholders also waived their pre-emptive rights to allow the company offer unsubscribed shares to interested investors, on the same terms as the rights issue.

An investment fund set up by the German government recently acquired 39.25 per cent in Royal Exchange General Insurance Company (REGIC) Limited, a subsidiary of Royal Exchange. The investment fund- InsuResilience Investment Fund (IIF) was set up on behalf of German government by KfW and managed by Swiss-based Impact Investment Manager BlueOrchard Finance Limited. 

The proceeds of the acquisition would help REGIC to spur growth by increasing its risk capital and supporting its underwriting capacity in agriculture, thus extending its outreach to low income farmers.

Based in Luxembourg, IIF was set up by KfW, the German Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The overall objective of IIF is to contribute to adaptation to climate change by improving access to and the use of insurance in developing countries.