The Nation Newspaper

Category: Equities

  • UBA Capital promises good performance

    UBA Capital promises good performance

    UBA Capital Plc has assured shareholders and other stakeholders that it is poised to build on its strong fundamentals and expertise to deliver superior performance and enhance returns to investors.

    The assurance was given yesterday when the new chairman of board and chief executive officer of the company paid introductory visit to the Nigerian Stock Exchange (NSE) in Lagos. In January, UBA Capital had announced the appointment of Mrs Oluwatoyin Sanni as the new group chief executive officer and Mr. Chika Mordi as chairman.

    Addressing stockbrokers and investment journalists, Sanni said UBA Capital would continue to leverage on its formidable team of experts to continue to deliver world-class financial and investment services to its stakeholders.

    According to her, as a publicly-listed company on the NSE, shareholders of UBA Capital should be rest assured of high standards of disclosure and transparency, in addition to superior performance in investment banking, trusteeship, asset management and securities.

    “In the coming week, we will unveil a series of leading and industry shaping initiatives which will redefine the financial services landscape, deliver significant value to our stakeholders and clearly set UBA Capital apart from our competitors,” Sanni said.

    In his remarks, Mordi said the company would make great strides in the year.

    “It has been a privilege for us to be honoured in this way by the NSE. Our ringing of the bell at the NSE today is clearly symbolic, because we intend to make great, resonant sounds throughout this year,” Mordi said. Listed on January 11, 2013 at N1.16, UBA Capital closed yesterday at N2.50 per share.

    Meanwhile, the Nigerian stock market, which had witnessed sustained rally since Monday, suffered a major reversal yesterday as the announcement of the suspension of the CBN governor hit the market.

    Aggregate market value of all quoted equities dropped by N187 billion from N12.655 trillion to close at N12.468 trillion. The benchmark index- the All Share Index (ASI), indicated a daily average loss of 1.47 per cent to close at 38,816.19 points as against its opening index of 39,397.09. Most analysts blamed the downtrend at the stock market on the development at the central bank.

    Aggregate market value of all equities at the Nigerian Stock Exchange (NSE) had opened this week at N12.427 trillion and built up successively to N12.528 trillion, N12.530 trillion and N12.655 trillion on Monday, Tuesday and Wednesday respectively. The ASI had also sustained steady rally prior to the reversal on Thursday. ASI opened at 38,767.29 points and built up to 38,964.75 points, 38,972.56 points and 39,397.09 points within the first three trading days.

  • Japaul, foreign investors in N50b capital injection

    Japaul Oil & Maritime Services Plc is in talks with foreign investors in a deal that will see injection of about N50 billion new capital into the company in exchange for equity stake.

    Managing director, Japaul Oil & Maritime Services Plc, Mr. Paul Jegede, who disclosed this at an media interactive session yesterday in Lagos, said that the foreign investors had done their due diligence and decided on Japaul as the preferable company to partner with as entry strategy to the lucrative Nigerian maritime sector.

    He said the deal with the foreign investors might result in injection of some N50 billion new capital into the company through equities and debt issues.

    According to him, the venture capital-like investment would see the foreign investors holding equity stake in a joint-venture with Japaul, which they could probably exit after five years.

    He noted that shareholders of Japaul had earlier approved resolutions that would enable the directors of the company to consummate such deal adding that there is strong possibility that the capital investment will materialize this year.

    He outlined that Japaul plans to acquire several new vessels this year to complement its existing eight new vessels, noting that possession of several new vessels will enable the company to compete effectively with foreign shipping companies.

    According to him, the current high finance cost being paid by the company was due to loans taken to acquire new vessels. The company is fully servicing the loans and will exit the loans within the next two years, leaving the shareholders the long-term benefit of the vessels, which can generate continuous incomes for the next 20 years.

    Jegede assured that while the company is focused on building its asset base and future prospects, it will continue to pay dividends to shareholders.

  • Dangote Cement, NB lose N55b as bears bite harder

    Nigeria’s two most capitalised quoted companies-Dangote Cement (Dancem) and Nigerian Breweries (NB), lost N54.6 billion in market capitalization yesterday as losses by the highly capitalised companies exacerbated the downtrend at the Nigerian Stock Exchange (NSE).

    Dancem, the most capitalised company on the NSE, recorded a loss of N42.6 billion as its share price dropped by N2.50 to close at N238 per share. NB, the second most capitalised stock, depreciated by N11.95 billion with the loss of N1.58 to close at N155.41 per share.

    Losses by highly capitalised stocks orchestrated the downtrend at the stock market. With 35 losers and 27 gainers, aggregate market value of all quoted equities dropped by N60 billion to N13.104 trillion as against N13.164 trillion. The All Share Index (ASI), the common index that tracks all quoted equities, dropped by 0.45 per cent from 41,064.91 points to 40,878.71 points. The average year-to-date return at the stock market worsened to -1.09 per cent.

    Other top losers included Guinness Nigeria, with a loss of N2.96 to close at N219; Conoil dropped by N1.99 to close at N50 while Presco dipped by N1.45 to close at N43.50 per share.

    Total turnover was below recent average with the exchange of 251.07 million shares valued at N7.29 billion in 5,200 deals. Investors concentrated on the banking stocks.

    FBN Holdings was the most active stock with a turnover of 28.44 billion shares valued at N412.67 million in 469 deals. Zenith Bank followed with a turnover of 25.86 million shares valued at N594.58 million in 266 deals. Guaranty Trust Bank placed third with 23.87 million shares worth N656.93 million in 328 deals.

    On the upside, Total Nigeria led the contrarian stocks with a gain of N4.50 to close at N175. Forte Oil rallied N2.81 to close at N102.21. Lafarge Cement Wapco Nigeria rose by 90 kobo to close at N108.90 while Berger Paints added 42 kobo to close at N9.92 per share.

  • Transcorp rallies on General Electric’s power agreement

    •Unity Bank offers 50.3% equity in UnityKapital Assurance for sale

    Transnational Corporation of Nigeria (Transcorp) Plc played the contrarian stock at the weekend as the conglomerate’s power subsidiary, Transcorp Ughelli Power Ltd (TUPL), signed a capacity-expansion agreement with General Electric to its Ughelli power plant by 1000 megawatts over the next three to five years.

    Transcorp’s share price rose by 9.80 per cent at the Nigerian Stock Exchange (NSE), nearly the maximum 10 per cent allowable daily change, as the news of the agreement filtered into the stock market at the weekend. Transcorp and GE also signed a separate agreement to rehabilitate the damaged GT 15 turbine at the Ughelli plant, which will add 115 megawatts to the plant’s output.

    Currently, the Transcorp Ughelli power plant generates 360 megawatts, up from 160 megawatts on November 1, 2013 when Transcorp took ownership of the plant. With the additional 115 megawatts, as well as other rehabilitation works planned at the plant, the company projects that output at Ughelli will increase to 700 megawatts by December 2014. The Ughelli power plant is Nigeria’s largest gas-fired electricity generation asset. It was purchased by Transcorp for $300 million during the 2013 power privatization programme.

    The agreements were signed at a closed door meeting between executives of both companies, led by chairman, Transnational Corporation of Nigeria, Mr. Tony Elumelu and Global Chairman of General Electric, Jeffrey Immelt. The agreement followed a cooperation agreement executed by Transcorp and GE in 2013.

    Elumelu expressed satisfaction with the partnership noting that GE would bring its proven global leadership in power technology development to bear on the Ughelli plant expansion project.

    “With this, we’ve taken a bold step in fulfilling our promise to Transcorp’s stakeholders and the people of Nigeria. In a very short period of time, we have achieved significant impact – power production has more than doubled, and with this agreement, we will see increased output before the end of this year. We are confident that this partnership with GE will further accelerate the achievement of our goals in the power sector,” Elumelu said.

    Immelt affirmed the readiness of GE to support Nigeria’s power development programme.

    “GE fully appreciates the confidence expressed by Transcorp. We are happy to bring the considerable resources of GE to support Transcorp’s audacious vision for Nigeria’s Power industry. This partnership with Transcorp underlines GE’s deep commitment to developing the Nigerian power sector,” Immelt said.

    Meanwhile, Unity Bank Plc is seeking to dispose its majority 50.3 per cent equity stake in UnityKapital Assurance Plc as part of its efforts to comply with the current banking regulatory regime. The Central Bank of Nigeria (CBN) had directed all banks in Nigeria to either divest from non-banking subsidiaries or adopt a holding company structure.

    The bank has already appointed Capital Assets Limited as financial advisers in the divestment of the equity stake. Both Unity Bank and UnityKapital Assurance are quoted on the

    Total turnover at the NSE last week stood at 2.22 billion shares worth N21.05 billion in 27,855 deals. Financial services sector accounted for 1.26 billion shares valued at N12.02 billion in 14,923 deals. The three most active stocks were Champion Breweries Plc, FCMB Group Plc, and Transcorp, which altogether accounted for 775.93 million shares worth N1.96 billion in 1,563 deals, about 34.9 per cent of aggregate turnover volume.

    The overall market situation last week was negative as equities witnessed consecutive decline throughout the five-day trading session. The main index at the stock market, the All Share Index (ASI), indicated a week-on-week decline of 3.21 per cent dropping from opening index of 41,917.55 points to close at 40,571.62 points. The downtrend last week depressed the average year-to-date return to -1.83 per cent.

     

  • Heineken acquires 57% equity in Champion Breweries

    •Investors dump equities

    Raysun Nigeria Limited, a wholly-owned subsidiary of Heineken International BV, has acquired 57 per cent equity stake in Champion Breweries Plc, making the breweries part of the Heineken’s sprawling operations in Nigeria. Heineken holds the majority shareholding in Nigerian Breweries, Nigeria’s second most capitalised quoted company.

    Raysun Nigeria acquired its majority stake from Consolidated Breweries Plc, which on Tuesday completed the sale of 513 million ordinary shares of 50 kobo each to Raysun Nigeria through cross deals on the Nigerian Stock Exchange (NSE).

    The cross deals on the NSE completed the transaction, which had earlier received approvals of the Securities and Exchange Commission (SEC) and the NSE as well as endorsement of shareholders of Consolidated Breweries.

    Managing Director, Consolidated Breweries Plc, Mr. Boudewijn Haarsma yesterday confirmed the transaction.

    The Nation had on Wednesday reported the movement of the 513.0 million shares valued at N949 million on the NSE.

    Meanwhile, the stock market remained in the red yesterday as apprehensive investors continued to flood market with open-market sale orders in their bids to lock in profits. Aggregate market value of all quoted equities on the NSE dropped from N13.076 trillion to N13.015 trillion, its fourth consecutive loss this week.

    The All Share Index (ASI), the common value-based index that tracks all equities on the NSE, also indicated a generally negative market situation, dropping from its opening index of 40,792.07 points to close at 40,601.74 points.

    With 37 losers to 16 gainers, market pricing trend remained on the same breath with several highly capitalised stocks leading the downtrend. Nestle Nigeria, NSE’s highest-priced and third most capitalised stock, topped the losers’ list with a drop of N19.05 to close at N1,120.95. Guinness Nigeria lost N4 to close at N226. Nigerian Breweries dropped by N2.25 to close at N159.45. Oando slipped by N2.04 to close at N18.98. Forte Oil declined by N1.60 to close at N90.20. UAC of Nigeria dwindled by N1.35 to close at N69. Stanbic IBTC lost 99 kobo to close at N21.01 while National Salt Company of Nigeria dropped by 54 kobo to close at N13.21 per share.

    On the upside, Zenith Bank recorded the highest gain of 90 kobo to close at N23.90. CAP followed with a gain of 33 kobo to close at N46.99 while Diamond Bank added 25 kobo to close at N6.90 per share.

    Total turnover stood at 343.35 million shares valued at N4.03 billion in 5,415 deals.

  • ‘Equities will record modest return in 2014’

    Nigerian equities will swim in a torrent of potentially impac-tful global and national macroeconomic and political situations, which will moderate share prices and result in modest return by the end of this year.

    Managing director, Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane, yesterday at the 2014 Investors’ Forum of Investment One Financial Services Limited in Lagos, called for cautious optimism outlining several fiscal and monetary as well as political risks that could adversely impact on the investment market this year.

    According to him, though the market may not likely suffer a crash, most variables indicate possibility of price correction.

    He however pointed out that there are several sectors still with significant upside potential including insurance, banking and building materials sectors.

    Other financial and investment experts also expressed similar cautious optimism. Chief executive officer, wealth management, Investment One Financial Services, Mrs Abimbola Afolabi-Ajayi said 2014 would be a year of mixed fortune.

    She advised investors to seek professional advice and invest with a long-term as a way to mitigate possible short-term fluctuations that may occur during the year.

    According to her, good professional advice and investor’s education are two crucial supports that will enable investors to profitably navigate the year.

    Executive director, market operations and technology, Nigerian Stock Exchange (NSE), Mr. Ade Bajomo, said the NSE would further implement medium-term strategic initiatives that would enhance corporate governance and market integrity.

    According to him, NSE would champion the development of enabling laws and policies that would lead to improved corporate governance and corporate social responsibility, enhanced government relations, integrated investor education and capital market and economic development programme.

    He assured that the Exchange would continue to strive to operate a fair and orderly market with world-class surveillance programme embedded with risk-based supervision framework.

    Rewane said investors will exercise more caution this year given the quantitative easing and tapering in the United States and the tightening macroeconomic condition in Nigeria.

  • SEC approves investors protection fund’s rules

    Securities and Exchange Commission (SEC) yesterday approved the rules of the Investors Protection Fund (IPF) of the Nigerian Stock Exchange (NSE), paving the way for the investor compensation scheme to begin effective operations.

    The NSE confirmed that it has received approval of SEC for the IPF rules, describing it as a welcome development that will enable the board of trustees of the IPF to carry out the duties for which the Fund was established.

    “The Exchange looks forward to continuing to work closely with the Fund’s board of trustees to sustain and promote investor confidence in the Nigerian capital market,” NSE stated in a short confirmation of the approval.

    The Nation had exclusively reported the finalisation of the rules and imminent commencement of operations.

    Part XIV of the Investment and Securities Act (ISA) 2007 requires the Exchange to establish and maintain an investors protection fund to compensate investors with genuine claims of pecuniary loss against dealing member firms resulting from insolvency, bankruptcy or negligence of a dealing member firm of a securities exchange or capital trade points; and defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received by the dealing member firm in its course of business as a capital market operator.

    The NSE had in 2012 inaugurated a nine-man board of trustees under the chairmanship of Mr Gamaliel Onosode. Other members of the board included managing director of Nigerian Stock Exchange (NSE), Oscar Onyema; Misan Kofi-Senaya, managing director of Central Securities Clearing System (CSCS), Mr. Kyari Bukar, Chairman, Ibadan Zonal Shareholders Association (IBZA), Chief Sola Abodurin; Fubara Anga, Edosa Kennedy Aigbekaen, Sam Onukwe and Umaru Modibo.

    The IPF rules empower the board of IPF to have at anytime a written policy on the maximum compensation payable to an investor who has suffered a loss. The board can review this maximum compensation limit from time to time according to prevailing circumstances at the market.

  • SEC releases audit report on ETI

    Securities and Exchange Commission (SEC) yesterday released the report of its investigation and audit of the corporate governance at the Ecobank Transnational Incorporated (ETI) Plc outlining several weaknesses in the board of the financial conglomerate and urging it to implement a one-year remedial plan.

    Following a series of publications in the local and international media regarding breaches of corporate governance at ETI, SEC had launched an investigation into corporate governance practices within ETI in August 2013. SEC also engaged KPMG to supplement its efforts and make recommendations on the way forward.

    In a statement made available yesterday, SEC stated that the audit and investigation identified gaps in corporate governance at ETI including absence of a clear vision and strategy to drive the institution; inadequate transparency in the recruitment procedures and mechanisms for board members and executive staff which fostered conflicts of interest and weaknesses in governance culture, communication, remuneration for board members and executive level personnel and decision making.

    The report also noted absence of dedicated channels for whistleblowers to report instances of anomaly as well as what it described as “the often compromised autonomy of governance mechanisms such as internal control, and the audit and compliance committee of the board”.

    “The SEC has now advised ETI that the findings constitute an important basis for convening an Extra – Ordinary General Meeting (EGM) of shareholders to deliberate and pass resolutions on the critical findings and recommendations of the corporate governance audit. The SEC further advises that the EGM should be held before the end of February 2014,” the statement noted.

    According to the apex capital market regulator, ETI needs to develop a one-year remedial plan with specific measures to address the specific governance gaps observed. In the public interest, ETI will also have to provide a quarterly report on progress being made on the remedial plan.

    SEC said that ETI will need to appoint a substantive board chairman who will lead the effort to attain an improved governance climate adding that it will be important that such an appointment is the result of a credible selection process.

    “Such a chairman also needs to have the relevant experience and skills to guide this remedial plan. The chairman should have integrity, independence and should not have the potential for conflict of interest in the discharge of the role. Steps should also commence to ensure that ETI has board members and a management team that have the requisite skills and experience to oversee or manage the affairs of ETI at this time,” the report stated.

    SEC noted that the implementation of the recommended remedial plan will eliminate the governance lapses and will further strengthen ETI.

  • NSE to place Cadbury Nigeria on full suspension

    The Nigerian Stock Exchange (NSE) will place Cadbury Nigeria Plc on full suspension with effect from Wednesday January 8, 2014 to enable the foods and confectionery company concludes its capital reduction exercise.

    Full suspension implies that there will be no trading or movement in price on the shares of Cadbury Nigeria throughout the period of the suspension. The full suspension will last until the company completes the reduction and fully satisfies regulatory requirements.

    Regulatory notice released by the NSE at the weekend indicated that the qualification date for the capital reduction is tomorrow while the qualification date will be on Wednesday. This implies that only shareholders in the register of the company as at the close of business on Tuesday will be allowed to participate in the capital reduction exercise.

    Under the capital reduction plan, which has been approved by shareholders of the company and subsequently sanctioned by the Federal High Court; Cadbury Nigeria plans to return excess capital of N11.9 billion to its shareholders by cancelling two out of every five ordinary shares currently held by the shareholders.

    Consequently, it will reduce the share capital account by an amount equivalent to the par value of the cancelled shares and share premium accounts by about N11.27 billion. Also, each shareholder will receive returned capital per cancelled share at N9.50 per share. The company will use the 30-day volume weighted average price of the stock at the Nigerian Stock Exchange (NSE) to pay for fractional shares that may arise from the transaction.

    Cadbury Nigeria’s share price however declined by 7.01 per cent last week as Nigerian equities built on the momentous close in 2013 with early gain in 2014. The main benchmark index at the NSE-the All Share Index (ASI), rallied by 3.03 per cent last week, underlining the continuing uptrend that stretched from 2013 to 2014. The ASI closed the week at 41,450.48 points as against its week’s opening index of 40,231.68 points and 2013’s closing index of 41,329.19 points.

    Aggregate market value of all equities on the NSE rallied to a high of N13,265 trillion at the weekend compared with the week’s opening value of N12.875 trillion and 2013’s closing value of N13.226 trillion. The market situation was overtly bullish with 66 advancers against 18 decliners.

    Total turnover stood at 2.0 billion shares worth N15.91 billion in 17,378 deals. The financial services sector accounted for 1.55 billion shares valued at N7.55 billion in 9,244 deals; thus contributing 77.5 per cent of total equity turnover. The trio of Sterling Bank Plc, Unity Bank Plc and NEM Insurance Plc accounted for 811.50 million shares worth N1.18 billion in 1,100 deals, representing 41 per cent of aggregate turnover.

    On the over-the-counter (OTC) market, where Nigeria’s sovereign bonds are traded, turnover stood at 1.03 million units valued at N425.08 million in four deals.

  • Equities open 2014 negative as profit-taking begins

    After hauling more than N4.25 trillion in capital gains in 2013, the Nigerian equities market opened the 2014 year expectedly with profit-taking as investors sought to lock in gains from some of the best-performing stocks in the previous year.

    However, while the profit-taking transactions on large and dominant stocks overshadowed the overall market situation, the market remained broadly bullish with more than two advancers for every decliner.

    Aggregate market value of all equities quoted on the Nigerian Stock Exchange (NSE) slipped from its value-on-board of N13.226 trillion to close at N13.194 trillion, indicating a decline of N32 billion.

    The main index at the NSE, the All Share Index (ASI)-a common value-based index that tracks all quoted equities; also slipped by 0.24 per cent from index-on-board of 41,329.19 points to close at 41,228.49 points.

    Nigerian equities had closed 2013 with its best performance in six years with capital gains of N4.252 trillion, equivalent to average full-year return of 47.19 per cent. Market capitalization of all equities closed 2013 at N13.226 trillion as against its opening value of N8.974 trillion for the year. The ASI recorded full-year return of 47.19 per cent rising from its opening index for the year of 28,078.81 points to close the year at 41,329.19 points.

    The average return of -0.24 per cent yesterday mainly reflected losses suffered by highly capitalised fast moving consumer goods companies (FMCGs), most of which had driven the bullish rally in 2013. Nestle Nigeria topped the losers’ list with a loss of N18 to close at N1,182. Forte Oil followed with a loss of N4.88 to close at N92.87. Nigerian Breweries lost N2.89 to close at N165.01. Zenith Bank dropped by N2.40 to close at N25. Guinness Nigeria lost 91 kobo to close at N235.09. Cadbury Nigeria and Dangote Sugar Refinery slipped by 40 each kobo to N58.61 and N11.30 respectively. Red Star Express lost 16 kobo to close at N4.26 while National Salt Company of Nigeria dropped by 14 kobo to N14.85 per share.

    Turnover stood at 489.41 million shares valued at N3.93 billion in 3,966 deals. Financial services sector, which is dominated by banks, accounted for 400.05 million shares valued at N2.23 billion in 2,233 deals. Sterling Bank was the most active stock with a turnover of 104.83 million shares valued at N262.08 million in 91 deals.

    On the upside, Total Nigeria led the bullish stocks with a gain of N3.30 to close at N173.30. Oando followed with addition of N2.48 to close at N26.73 while Dangote Cement chalked up N1.01 to close at N220 per share.