Category: Equities

Nigerian equities broke their four-day losing streak yesterday as large-cap stocks rallied the market to net capital gain of N293 billion.

Benchmark indices at the Nigerian Exchange (NGX) indicated average gain of 1.23 per cent, pushing the average year-to-date return to 3.7 per cent.

The All Share Index- the common value-based index that tracks all share prices at the Exchange rose to 44,283.02 points. Aggregate market capitalisation of all quoted equities increased from its opening value of N23.827 trillion to close at N24.120 trillion.

With 23 decliners and nine advancers, the positive overall market situation was driven by gains by large-cap stocks, especially Dangote Cement, FBN Holdings, BUA Foods and Unilever Nigeria.

Dangote Cement led the gainers with a gain of 8.84 per cent to close at N240.00 per share. Chams followed with a gain of 4.35 per cent to close at 24 kobo. Coronation Insurance went up by 2.86 per cent to close at 36 kobo, per share. Oando rose by 2.09 per cent to close at N4.39 while Nigerian Exchange Group appreciated by 1.50 per cent to close at N20.30.

On the negative side, MRS Oil Nigeria led with a drop of 9.65 per cent to close at N11.70 per share. Trans-Nationwide Express followed with a loss of 9.33 per cent to close at 68 kobo. UACN Property Development Company (UPDC) declined by 8.33 to close at N2.75 per share. Unity Bank lost 6.67 per cent to close at 42 kobo while United Bank of Africa (UBA) declined by 4.93 per cent to close at N6.75 per share.

The momentum of activities dropped marginally as total turnover dropped by 10.1 per cent to 155.407 million shares worth N1.526 billion in 3,796 deals. Sterling Bank topped the activity chart with 24.285 million shares valued at N33.499 million. Access Holdings followed with 23.518 million shares worth N185.569 million. FBN Holdings (FBNH) traded 14.257 million shares valued at N140.992 million. Guaranty Trust Holding Company (GTCO) traded 10.213 million shares valued at N180.016 million while Fidelity Bank recorded 10.027 million shares worth N42.085 million.

“We expect mixed sentiments to continue during the week, as pre-election risks amplify,” GTI Securities stated.

The board of Nigerian Breweries (NB) Plc has declared an interim dividend of N3.29 billion as the company’s recorded 80 per cent growth in net profit in the third quarter.

Interim report and accounts of NB for the nine-month period ended September 30, 2022 showed that operating profit grew by 44 per cent while profit after tax went rose by 80 per cent.

Shareholders will receive interim dividend per share of 40 kobo, totaling N3.29 billion.

Total turnover rose by 27.2 per cent to N393.336 billion in third quarter 2022 as against N309.22 billion in the corresponding period of 2021. Cost of sales rose significantly by 20.2 per cent from N198.75 billion in 2021 to N238.92 billion in 2022. Marketing, distribution, and administration expenses also grew by 40.1 per cent from N86.33 billion in 2021 to N120.95 Billon in 2022.

Company Secretary and Legal Director, Nigerian Breweries Plc, Uaboi Agbebaku, said revenue growth in the quarter was driven by pricing but it was however offset by higher input cost arising from increased rate of inflation and higher energy costs.

Agbebaku noted that apart from volume and cost challenges which affected business performance negatively in third quarter2022, there was increased pressure on consumer disposable income as well as heavy rains and flooding.

“Nevertheless, the company performed relatively well in the period led by strong premium portfolio of Heineken, Tiger and Desperados,” Agbebaku stated..

The company assured that while being cautious about the development of input costs and consumer demand in the remaining period of 2022, it remains positive that it has been positioned to take advantage of any upswing in the market and maintain its leadership position.

ABC Transport Plc has successfully raised about N1.157 billion in new equity and debt capital to further expand the company’s balance sheet.

ABC Transport raised N900 million through bond issuance and raised the balance of N257 million through rights issue to existing shareholders.

To mark the end of the capital raising process, ABC Transport has listed 900,000 units of its five-year 16.50 per cent senior secured fixed rate bond due 2027. The bond was listed at par value of N1,000 per unit. The maturity date for the bond is April 12, 2027.

The company also listed 734.92 million ordinary shares of 50 Kobo each at 35 kobo per share. With the listing of the additional shares, the total issued and fully paid up shares of ABC Transport has now increased from 1.658 billion to 2.393 billion ordinary shares of 50 kobo each.

ABC Transport Plc, the only road transportation company quoted on the Nigerian stock market, had offered its shares at a 30 per cent discount of its nominal value to woo investors to its rights issue.

ABC Transport offered 1.127 billion ordinary shares of a nominal value of 50 kobo each to existing shareholders at a price of 35 kobo.

The nominal value, also known as par value, is generally regarded as the presumptive face value of a stock, the basic value of the stock. The market value or offering value of a company is expected to be significantly higher than its nominal value.

Lagos Free Zone Company (LFZC) has listed its trailblazing 20-year corporate bond on FMDQ Securities Exchange (FMDQ Exchange).

LFZC Funding SPV Plc- the special purpose vehicle of LFZC listed its N25 billion Series 2 Fixed Rate Bond on FMDQ Exchange. The bond was issued under the company’s N50 billion bond issuance programme.

The bond set a new record as the longest-tenored corporate bond issue in the Nigerian debt markets.

LFZC SPV  was set up by LFZC to raise finance through the listing of debt securities, which would be used to boost its business expansion exercise and to restructure the company’s debts over a specified period. The Lagos Free Zone, covering an area of 830 hectares, is the first private sector-led initiative in Nigeria.

To commemorate this notable event, FMDQ Exchange hosted Lagos Free Zone Company, represented by the Chief Executive Officer, Mr. Dinesh Rathi and other representatives of Lagos Free Zone Company. Also present at the ceremony were the sponsors of the issue and registration member of FMDQ Exchange – Stanbic IBTC Capital Limited, FCMB Capital Markets Limited and FSDH Capital Limited, as well as other parties to the issue.

Managing Director, FMDQ Exchange, Ms. Tumi Sekoni  said the listing was another highly exemplary and positive step towards addressing some of the infrastructural challenges in the nation.

She said FMDQ Exchange, being an Exchange with a passion for infrastructure and sustainable development in Nigeria, has again demonstrated its unflinching commitment in this regard by providing due diligence and availing its credible and efficient platform for the listing and trading of debt securities.

Rathi said the issuance was a milestone transaction for LFZC as it was a testament to the capacity of the Nigerian debt markets as a veritable source of domestic capital for infrastructural development in Nigeria.

“The response to this bond programme further strengthens our commitment to realise our vision and thereby enhance Nigeria’s competitive positioning with our continuous focus on Ease of Doing Business parameters and world class infrastructure, embedded with all modern facilities.

“We are particularly excited by the confidence demonstrated by pension fund managers and other institutional investors at this milestone issuance, and we appreciate the team at Infrastructure Credit Guarantee Company Limited (“InfraCredit”), Stanbic IBTC Capital Limited and other parties to the transaction for this novel structure, which helps to de-risk the transaction and aligns the interest of different stakeholders” Rathi said.

Chief Executive Officer, Stanbic IBTC Capital Limited, Mr. Funso Akere, said the bond Issuance was 139 subscribed and attracted wide participation from pension funds who have a growing demand for quality long-dated debt instruments.

The success of the transaction demonstrates investors’ confidence in Lagos Free Zone Company and the free zone’s impact on socio-economic and industrial development in Nigeria. We expect this should encourage other corporates to tap the domestic capital markets to raise local currency funding for viable infrastructure projects,” Akere said.

Chief Executive Officer, InfraCredit, Chinua Azubike, guarantor to the bond, noted that the success of special economic zones in Nigeria is critical to accelerating industrialisation, attracting local and foreign direct investment, job creation, and inclusive growth.

He however noted that one key barrier to unlocking this access to funding is enabling companies like Lagos Free Zone Company access up to 20 year local currency finance from domestic pension funds at scale to match the long-term lifecycle of infrastructure investment needed to develop these zones.

“It is evident that local pension fund investors are playing an important role in supporting private sector led infrastructure development in Nigeria,” Azubike said.

RAK Unity Petroleum Company Plc, a company undergoing liquidation process, has increased the remuneration of its liquidators by 100 per cent

At their general meeting in Lagos, shareholders of RAK Unity Petroleum approved a review of the liquidators’ fee from N2 million to N4 million. The meeting also approved in arrear the account of the liquidator’s acts and dealings and of the conduct of the winding-up of the company during the preceding year ended June 4; 2022. Shareholders also accepted that all receipted liquidation expenses shall be borne by the company.

The Nigerian Exchange (NGX) had suspended trading in the shares of Rak Unity Petroleum after the downstream oil company began the process for voluntary winding up of its operations.

Shareholders of Rak Unity Petroleum had at their annual general meeting on June 4 2021 authorised the board of the company to commence the process of voluntarily winding up of the company.

RAK Unity Petroleum was incorporated as a private limited liability company in December 1982. It converted to a public limited liability company in November 1987.

Citing Section 622 of Companies and Allied Matters Act (CAMA)  2020 which states that “a voluntary winding-up shall be deemed to commence at the time of the passing of the resolution for voluntary winding-up”, NGX Regulation Limited (NGX RegCo) stated that it has placed full suspension trading in the shares of RAK Unity with effect from July 26 2021

According to the NGX, the suspension was to ensure a smooth winding up process.

The NGX noted that the suspension was in line with Section 624 of CAMA 2020 which provides that “A transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members of the company, made after the commencement of a voluntary winding-up, shall be void”.

The voluntary winding up comes barely four years after the board of directors of Rak Unity Petroleum assured shareholders that its proactive strategies would sustain improvements in the operations of the company in the years ahead.

The board had assured that company would maintain its strong customer base by adhering to its four key pillars of quality assurance, innovative approach to meeting customers’ demands, great customer service and consistent on-time product delivery.

RAK Unity had recorded a turnover of N8.27 billion and gross profit of N460.45 million for the nine-month period ended December 31, 2016. The petroleum-marketing company had reported a turnover of N6.68 billion and gross profit of N448.70 million for the 12-month period ended March 31, 2016.

The board of directors then stated it decided to pay a dividend of 10 kobo per share to shareholders for the period ended December 31, 2016 after considering future growth and expansion of the company.

The retained earnings were to be reinvested in order to ensure sustainable growth, expansion and stability.

Nigerian equities opened the week on a bearish note as investors appeared to be realigning their portfolios.

Benchmark indices at the Nigerian Exchange (NGX) indicated average decline of 0.14 per cent yesterday, equivalent to net capital depreciation of N38 billion.

The All-Share Index (ASI)-the common value-based index that tracks all share prices at the NGX; declined by 0.14 per cent to close at 49,625.71 points. Aggregate market value of all equities also dropped by N38 billion to close at N26.767 trillion

The negative overall market position was driven largely by losses suffered by mid and large-cap stocks including Beta Glass, Lafarge Africa, NEM Insurance, FBN Holdings (FBNH) and Fidelity Bank.

As measured by market breadth, market sentiment closed at par, recording both 13 gainers and losers. Multiverse Mining and Exploration recorded the highest price gain of 9.32 per cent to close at N2.58, per shae. FTN Cocoa processors followed with a gain 6.67 per cent to close at 32 kobo, while Chams Plc up by 6.45 per cent to close at 33 kobo, per share.

Academy Press went up by 4.76 per cent to close at N2.20, while Regency Alliance Insurance rose by 4.17 per cent  to close at 25 kobo, per share.

On the other hand, Beta Glass led the losers’ chart by 9.96 per cent, to close at N46.10, per share. NEM Insurance followed with a decline of 7.96 per cent to close at N5.20. Japaul Gold & Ventures fell by 6.90 per cent to close at 27 kobo, per share. Fidelity Bank went down by 6.58 to close at N3.41 while FCMB Group shed 5.71 per cent to close at N3.30, per share.

Meanwhile, the total volume traded declined by 72.86 per cent to 86.594 million units valued at N1.170 billion and exchanged in 3,377 deals. Transactions in the shares of Guaranty Trust Holing Company (GTCO) topped the activity chart with 19.471 million shares valued at N385.589 million. Sterling Bank followed with 6.213 million shares worth N9.351 million. Zenith Bank traded 5.915 million shares valued at N118.676 million. Fidelity Bank traded 5.829 million shares valued at N20.022 million while Chams  transacted 5.634 million shares worth N1.868 million.

“Looking ahead, we expect market activity to remain quiet, as investors would stay on the sidelines following the continued hike in Nigerian Treasury Bills (NT-Bills)  stop rates” analysts at United Capital stated.

The first 20-year corporate bond issued in the capital market recorded nearly a double of the offer size, setting a new trend in the primary issuance market.

The Lagos Free Zone (LFZ)‘s N25 billion 20-year, 13.25 per cent Series 2 Senior Guaranteed Fixed Rate Infrastructure Bond recorded a subscription rate of 1.7 times, implying that it was oversubscribed by some 70 per cent.

The Nigerian Exchange (NGX) and the Lagos Free Zone (LFZ) yesterday commemorated the landmark issuance and listing with a closing gong ceremony. LFZ is the infrastructure development company of the Tolaram Group and the first private free trade Zone in Nigeria.

LFZ, through its special purpose vehicle, LFZC Funding SPV Plc, had listed its first issuance of N25 billion, 20-Year 13.25 per cent Series 2 Senior Guaranteed Fixed Rate Infrastructure Bonds Due 2042 on the NGX. The bond was issued under the company’s N50 billion bond issuance programme.

Divisional Head, Capital Markets, Nigerian Exchange (NGX), Mr. Jude Chiemeka described the 20-year bond as a milestone transaction and a testament to the capacity of the Nigerian debt market as a veritable source of domestic capital for infrastructural developments in Nigeria.

According to him, with the second issuance of the N25 billion series 2 bond, the first 20-year corporate infrastructure bond in Nigeria, LFZC has established a new standard in the domestic debt capital market of the country.

“It has elongated the yield curve on corporate bonds and improved the prospects for Nigerian corporates to raise long-term financing in the market. The LFZC Bonds confirm the desire of institutional investors and domestic pension funds to finance viable long-term infrastructure assets,” Chiemeka said.

He urged LFZC and other private issuers to utilise the NGX platform more in meeting future financing needs to support their business expansion in line with their overall corporate strategy.

Chief Executive Officer, LFZC, Mr. Dinesh Rathi explained that the bond was a part of N50 billion bond programme, which was initiated last year.

He noted that 20-year fixed rate instrument has set a mark as the longest tenure bond in Nigeria’s debt capital market.

He pointed out that the bond recording 1.7 times over subscription was clearly a reflection of the appetite of Nigerian investors for a long term note paper within the Nigerian debt capital market.

“This financing will further strengthen our commitment to realise our vision and thereby enhance Nigeria’s competitive positioning with our continuous focus on Ease of Doing Business parameters,” Rathi said.

Chief Operating Officer, InfraCredit, Mr. Daniel Mueller, said the bond further demonstrated  commitment towards inclusive access to long term local currency finance for infrastructure development.

“The LFZC Bonds validates the appetite of domestic pension funds and other institutional investors in financing viable long-term infrastructure assets,” Mueller said.

LFZ was established to provide organizations access to the full potential of the West African market by offering access to top-tier facilities and services that enable ease of doing business.

An indigenous agribusiness firm, Johnvents Industries Limited plans to raise N30 billion to expand its operations and boost agricultural businesses in Nigeria.

Johnvents Industries plans to issue commercial papers (CPs) up to the value of N30 billion. As part of arrangements for the issuance, Johnvents Industries has registered the N30 billion CP issuance programme at the FMDQ Securities Exchange.

The registration of the CP programme provides Johnvents Industries the opportunity to raise short-term finance from the Nigerian debt markets within the programme limit.  

Johnvents Industries Group engages in provision of modern information and communication tools, macro-loans, and farm inputs, such as seedlings and fertilisers, to support farmers and finance their businesses in Nigeria. The group includes three subsidiaries – Johnvents Procurements, Johnvents Cocoa Factory and Johnvents AgriTrade.

FMDQ Securities Exchange confirmed the registration noting that access to capital remains a top priority for corporates as capital is required to fund business expenditure, expansion aspirations and meet debt obligations.

FMDQ pointed out that the debt markets fulfil critical funding requirements by availing competitive financing to corporates and governments.

“As Nigeria’s largest securities exchange by market turnover, FMDQ Exchange will continue to provide a liquid, transparent and efficient market geared towards supporting the aspirations of corporates, such as Johnvents Industries, to unlock the required capital to bridge the funding gap in Nigeria’s agriculture sector” FMDQ stated.

MTN Nigeria Communications (MTN Nigeria) Plc yesterday opened application list to raise about N23 billion in new short-term debt capital through the issuance of commercial papers.

MTN Nigeria is offering 184-day series three commercial  papers (CPs) with discount rate of 10.42 per cent and implied yield of 11 per cent. The issuance is under the company’s N150 billion CP programme.

Minimum subscription to the offer is N5 million and thereafter in multiples of N1 million. Application list closes on September 12.

The CP issuance comes ahead of the ongoing arrangements by MTN Nigeria to raise about N200 billion under a new capital raising programme.

The Nation had reported that MTN Nigeria plans to issue two tranches of bonds ranging from four to 10 year tenors to raise new funds to partly finance its expansionary drives and further deepen its balance sheet for stable growth.

While the opening date for the new bond issue is yet to be decided, sources in the know said the new capital raising would be undertaken through the book-building method, an auction-like, bid-based process that usually targets investment firms and high networth investors.

MTN Nigeria will use the net proceeds of the new bond issue to support its capital expenditure, working capital and other corporate purposes.

Under the arrangements, MTN Nigeria will offer a tranche of four-year bonds and another tranche of 10-year bonds; all as fixed rate senior unsecured bonds under its new N200 billion bond issuance programme.

The bond will be offered at a par value of N1000 with minimum subscription of 10000 or N10 million.The new bonds are expected to be listed on the FMDQ Securities Exchange Limited after the completion of the issuance.

Market analysts said they expected the offer to be fully subscribed citing MTN Nigeria’s industry position and rating. The telecommunication group is rated AAA by Global Credit Rating )GCR) and Aa+ by Agusto & Co. Limited, underlining its strong financial position.

MTN Nigeria has been active in the domestic capital market this year; leveraging its strong market position to access funds. It had in May 2022 successfully raised N127 billion new debt capital, placing it in better position to diversify its capital funding.

MTN Nigeria had in My 2022 issued two commercial papers worth N127 billion. The two issuances were under its N150 billion commercial paper (CP) issuance programme. The net proceeds of the CPs were used by MTN Nigeria to support its short-term working capital and funding requirements.

MTN Nigeria is one of Africa’s largest providers of communications services and Nigeria’s premier provider of connectivity, communication and collaboration solutions. MTN Nigeria is a member of MTN Group – a multinational telecommunications group, which operates in 21 countries in Africa and the Middle East. The company serves over 77 million subscribers with national coverage and a fibre network that reaches every state in the nation.

Latest audited report of MTN Nigeria showed mobile subscribers of 68.5 million, with active data users of 34.3 million and active fintech subscribers of 9.4 million.

Key extracts of the audited report and accounts of MTN Nigeria for the year ended December 31, 2021 showed that gross revenue increased by 23.3 per cent to N1.7 trillion. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 27.9 per cent to N877.1 billion with EBITDA margin increasing by 2.1 percentage points to 53.0 per cent. Profit after tax rose by 45.5 per cent to N298.7 billion, implying earnings per share of N14.67.

Half-year results for 2022 showed profit after tax of N181.63 billion; representing 28.06 per cent growth in net profit. Total assets stood at N2.53 trillion; an increase of 16.44 per cent. Recent reports estimated that MTN Nigeria has 74.1 million mobile subscribers and 36.8 million active data users.

Market analysts said MTN Nigeria was well positioned for long-term sustainable growth due to its infrastructure investments; including the impending deployment of 5G technology due to commence this quarter. It already has 90.01 per cent 2G population coverage, 82.63 per cent 3G population coverage, and 70.75 per cent 4G population coverage.

President Muhammadu Buhari, Vice President Yemi Osinbajo, Lagos State Governor Babajide Sanwo-Olu, and  the Minister of Finance, Mrs Zainab Ahmed, are among the dignitaries billed to attend the 15th Annual Banking and Finance Conference organised by the Chartered Institute of Bankers of Nigeria (CIBN).

The two-day conference scheduled for Transcorp Hilton Hotel, Abuja from September 13 to 14 is themed “Repositioning the Financial Services Industry for an Evolving Glocal Context”.

According to a statement by the Media & Publicity Sub-Cimmittee Chair of the Conference Planning Consultative Committee, Rasheed Bolarinwa, the conference would draw session chairs, speakers, panellists and participants from the banking, finance, health, telecommunications, media, entertainment, financial technology (fintech) and other key sectors of the economy.

The conference, which would go via zoom teleconferencing is organised by the consultative committee of the CIBN, chaired by the Managing Director, Sterling Bank Plc, Mr. Abubakar Suleiman.

The business session would feature the following topical issues: Banking in Africa: The Role of AfCFTA and PAPSS; Nigeria’s economy in the last five years: lessons learnt and choices to make in the next five years; Workforce globalisation: Opportunities and threat; Banking & Fintech: The nexus and opportunities; Climate change: The role of financial services sector.

A session will address the following: Sustainable financing: Opportunities, challenges and solutions for the energy sector; Food security: Unlocking Nigeria’s potentials to feed Africa; Creating economy: Scaling for jobs; and Harnessing the untapped opportunities in Nigeria’s healthcare system.

The President, CIBN, Ken Opara, at a pre-conference media parley in Lagos, said the conference would provide a veritable platform for stakeholders to share ideas on how to address changing trends in the industry and  how new development are evolving in the sector.