The Nation Newspaper

Category: Equities

  • Dangote Sugar Refinery grows Q3 profit by 81% to N26.6b

    Dangote Sugar Refinery grows Q3 profit by 81% to N26.6b

    Dangote Sugar Refinery (DSR) Plc recorded well-rounded performance in the third quarter as net profit rose by 81 per cent to N26.6 billion within the nine-month report.

    Key extracts of the interim report and accounts of DSR for the nine-month period ended September 30, 2020 showed that turnover rose by 36.7 per cent to N160.51 billion as against N117.42 billion recorded in comparable period of 2019. Profit before  tax grew to N29.08 billion in third quarter 2020 as against N22.97 billion in third quarter 2019. After taxes, net profit leapt by 81.1 per cent from N14.7 billion to N26.63 billion.

    Market analysts attributed the improved performance to synergistic gains from scale and operating efficiency. DSR recently concluded acquisition of Savannah Sugar Company Limited  with the listing of the additional shares that arose from the acquisition at the Nigerian Stock Exchange.

    Shareholders of DSR had earlier approved the acquisition of Savannah Sugar Company Limited (SSCL), a subsidiary of DSR in a deal aimed at further integrating the operations of the group.

    With the approval, a total of 146.878 million ordinary shares of Dangote Sugar Refinery was issued as consideration for 162.76 million ordinary shares of 50 kobo each held by shareholders of SSCL.

    Shareholders approved that all assets including all tax attributes, unutilised capital allowances, tax losses, withholding tax credits and any other tax refunds available subject to the approval of the Federal Inland Revenue Service (FIRS)), liabilities and business undertakings, including real property and intellectual property rights of SSCL be transferred to DSR, pursuant to the scheme of arrangement for the business combination.

    With the combination, all legal proceedings, claims and litigation matters pending or contemplated by or against SSCL shall be assumed by DSR after the scheme becomes effective.

    Dangote Sugar is Nigeria’s largest producer of household and commercial sugar with 1.44 million metric tonnes refining capacity at the same location. The refinery located at Apapa WharfPorts Complex, refines raw sugar to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.

    Its subsidiary, SSCL, located at Numan, in Adamawa State, is an integrated sugar production facility, with an installed factory capacity of 50,000 tonnes. Covering 32,000 hectares, the Savannah Estate has considerable opportunity for expansion which is underway as part of the Dangote Sugar for Nigeria Project campaign.

    DSR had explained that its backward Integration goal is to become a global force in sugar production, by producing 1.5 metric tonnes per annum of refined sugar from locally grown sugar cane for the domestic and export markets in 10 years.

    As part of its backward integration project, DSR had strengthened its group with incorporation of four other companies including Nasarawa Sugar Company Limited, Dangote Taraba Sugar Limited, Dangote Adamawa Sugar Limited and Dangote Niger Sugar Limited. The new companies have a combined landmass for agriculture of about 110,000 hectares. The greenfield sites like Savannah Sugar, will be integrated sugar production facilities with new plantation and modern facilities that are located closer to the consumers.

  • Equities lose N27b in profit-taking transactions

    Equities lose N27b in profit-taking transactions

    By Taofik Salako, Deputy Group Business Editor

     

    After rallying net capital gain of N1.93 trillion in October, Nigerian equities opened November with a streak of profit-taking as investors sought to monetise recent capital appreciation and lock in their value.

    Widespread profit-taking transactions across the sectors moderated considerable bargain-hunting and left the market with a net capital depreciation of N27 billion. Benchmark indices at the Nigerian Stock Exchange (NSE) showed average decline of 0.17 per cent yesterday, dropping the average year-to-date return to 13.6 per cent.

    Aggregate market value of all quoted equities at the NSE dropped from its opening value of N15.958 trillion to close at N15.931 trillion. The All Share Index (ASI)- the value-based common index that tracks all share prices at the Exchange, also declined from its opening index of 30,530.69 points to close at 30,479.39 points.

    With 26 decliners to 22 advancers, most sectoral indices closed in the red. The NSE Oil and Gas Index declined by 1.2 per cent. The NSE Banking Index dipped by 0.8 per cent while the NSE Industrial Goods Index slipped by 0.1 per cent. On the positive side, the NSE Consumer Goods Index appreciated by 0.6 per cent while the NSE Insurance Index rose by 0.7 per cent.

    11, formerly Mobil Oil Nigeria, led the losers with a drop of N6.10 to close at N190. Ecobank Transnational Incorporated followed with a drop of 50 kobo to close at N5.15. Julius Berger Nigeria declined by 45 kobo to close at N17.40. C & I Leasing lost 44 kobo to close at N3.96. International Breweries dropped by 37 kobo to close at N7 while FCMB Group lost 31 kobo to close at N2.82 per share.

    On the positive side, Dangote Sugar Refinery led with a gain of N1.35 to close at N15.15. Nascon Allied Industries appreciated by 85 kobo to close at N13.95. Flour Mills of Nigeria added 70 kobo to close at N28.85. Fidson Healthcare rose by 22 kobo to close at N4.40 while GlaxoSmithKline Consumer chalked up 20 kobo to close at N6.20 per share.

    Total turnover stood at 376.6 million shares valued at N3.8 billion. Banks continued to dominate activities chart. Fidelity Bank was the most active with a turnover of 49.9 million shares. Zenith Bank followed with 47 million shares. Dangote Sugar Refinery placed third with 30.9 million shares.

    “We expect market performance to be directed by corporate earnings releases,” Afrinvest Securities stated.

    Investors in Nigerian equities had netted N1.93 trillion in capital gains in October 2020, sustaining a four-month consecutive upswing that had seen Nigerian equities outflanking global equities performance in most instances. Last week alone, Nigerian equities played the global contrarian with average return of 6.39 per cent, equivalent to net capital gains of N959 billion within four trading sessions, even as nearly all advanced and emerging global markets closed negative.

    Benchmark indices at the NSE indicated average return of 13.79 per cent in October 2020, equivalent to net capital gains of N1.93 trillion, more than a double of N785 billion recorded as net capital gains in September 2020. Average year-to-date return thus closed the 10-month period up at 13.74 per cent, representing net capital gains of N1.78 trillion for the 10-month period ended October 2020.

    The ASI closed October at 30,530.69 points, its highest since June 2019. It had closed September 2020 at 26,831.76 points as against 25,327.13 points recorded in August 2020 and 24,479.22 points recorded at the beginning of the third quarter, the closing index for June 30, 2020. The ASI had opened the year at 26,842.07 points.

    Aggregate market value of all quoted equities crossed the N15 trillion mark to close October at N15.957 trillion as against N14.025 trillion recorded as the opening value for October 2020. It had opened the year at N12.958 trillion but slipped to N12.770 trillion by the end of the first half.

    Most analysts appeared to have a consensus on the positive influence of third quarter earnings on share prices, fuelling bullish trading in a market already filled with bargain-hunters seeking higher returns in the face of declining yields in the fixed-income market.

  • CBN: N75b youth fund begins with N12.5b seed capital

    CBN: N75b youth fund begins with N12.5b seed capital

    By Collins Nweze

    The Central Bank of Nigeria has said the  Nigeria Youth Investment Fund will take off with N12.5 billion seed capital.

    In a guidelines for NIRSAL Microfinance Bank to begin the disbursement of the Fund, the apex bank said the N75 billion total cash will not be disbursed at the initial state of the intervention.

    Read Also: CBN sets to assess banks over looting

    The CBN said the Nigerian Youth Employment Action Plan was developed by the Federal Ministry of Youth and Sports Development as a built-in strategy to respond effectively to the youth employment challenge in Nigeria.

    The major objectives of the plan were to address fragmentation of youth initiatives that prevented assessment of impact, and to provide Nigerian youths with investment inputs required to build successful businesses.

    This, according to the framework, will enable them to become sustainable employers of labour and contributors to Nigeria’s development.

    It said the NIRSAL MFB window would be funded with an initial take-off seed capital of N12.5 billion.

    The plan targeted young people between the ages of 18 and 35 years and detailed the needed actions required to support business establishment, expansion and consequent employment creation for youths in critical economic and social sectors.

     

  • PEARL Awards 2020 cancelled

    PEARL Awards 2020 cancelled

    Our Reporter

     

    THE Board of Governors of PEARL Awards Nigeria and its Central Working Committee have resolved to step down the 2020 PEARL Awards Nite.

    In a statement by Olalekan Adekoya, Secretary, PEARL Awards Board of Governors, the board stated that the decision to step down this year’s awards was necessitated by the horrendous effect of the pandemic both on businesses and humanity, which has negatively impacted private sector organisations and government institutions alike, coupled with the subsisting need for social distancing globally.

     

  • Globus Bank expands operations

    Globus Bank expands operations

    Our Reporter

     

    GLOBUS Bank Limited celebrated the 2020 Customer Service Week with the opening of three new branches in strategic locations in Lagos, in furtherance of its efforts to offer customers endearing experience.

    The three new branches included Plot 17, Admiralty Way, Lekki; Plot 2B,Aromire Street, Allen Avenue, Ikeja and Plot 17, Warehouse Road, Apapa, Lagos.

    Managing Director, Globus Bank Limited, Elias Igbinakenzua said the bank was poised to strategically branch out in a manner that aligns with its vision to offer the banking public a viable alternative that is designed to provide ultimate and endearing customer experience.

    According to him, Globus Bank began operations on November 6, 2019, and in accordance with its service promise, it has continued to roll out branches in very strategic locations across the country.

    Read Also: Bank closure leaves customers stranded in Abakaliki

    He noted that opening three new branches in one week demonstrated the bank’s commitment to match words with action.

    He pointed out that in order to serve the retail customers, the bank is currently active on USSD code, *989# and has a mobile banking application, Globus Mobile, that is seamless and provide end-to-end solution for retail customers.

    “Accounts are fully opened in two minutes without the need to physically visit any branch. The transfer service on Globus Mobile is the most enjoyable in the industry. Individuals can switch between personal and corporate accounts on Globus Mobile and do transactions seamlessly, including bulk payments. With Globus Mobile, your corporate account is on your palm. This is a robust solution for individuals and micro, small and medium enterprises (MSMEs),” Igbinakenzua said.

  • Equities rally N388b in three days

    Equities rally N388b in three days

    Taofik Salako, Deputy Group Business Editor

     

    NIGERIAN equities has gained N388 billion so far this week as continuing bargain-hunting amid steady third quarter earnings pushed most equities on the bid.

    Investors opened up most buy orders to attract deals at premium prices, enabling sellers to in most instances demanded for higher valuations.

    Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) opens today at N15.387 trillion, N388 billion above the week’s opening value of N14.999 trillion. The All Share Index (ASI)- the value-based common index that tracks all share prices at the Exchange, stands at 29,437.60 points as against the week’s opening index of 28,697.06 points.

    At the last trading session, quoted shares had on Wednesday recorded net capital gain of N239 billion, the fifth day of consecutive rally that had seen several stocks trading at new recent highs.

    Read Also: We’ll pay for consequences of mass gatherings – NCDC

    Benchmark indices at the equities market showed average return of 1.6 per cent, equivalent to net capital gains of N239 billion. This nudged the average year-to-date return to 9.7 per cent.

    Aggregate market value of all quoted equities rose from its opening value of N15.148 trillion to close at N15.387 trillion. The ASI also rose from its opening index of 28,980.29 points to close at 29,437.60 points.

    The positive overall market position was driven by widespread gain across the sectors, especially within the large-cap stocks.

    With 41 advancers to five decliners, all sectoral indices closed positive. The NSE Consumer Goods Index led with a gain of 5.7 per cent. The NSE Oil & Gas Index appreciated by 2.1 per cent. The NSE Insurance Index rose by 1.5 per cent. The NSE Banking Index rallied 1.2 per cent while the NSE Industrial Goods Index inched up by 1.1 per cent.

     

  • ‘2021 capital budget not enough’

    ‘2021 capital budget not enough’

    The 29 per cent allocation to capital budget in the 2021 appropriation bill is not sufficient to bridge the nation’s infrastructural gap and there I need to explore the capital market to bridge the gap.

    President, Chartered Institute of Stockbrokers (CIS), Mr Olatunde Amolegbe, said the 29 per cent allocation to capital expenditure –about N3.4 trillion, is not sufficient to bridge the gap given the neglect in the past compared to about $14 billion annual requirement so the capital market and the private sector should provide support.

    He noted that the outbreak of the COVID-19 pandemic has aggravated the Nigeria’s fragile economy with sharp drop in government revenue has made it more difficult for the government to weather the crisis.

    According to him, the resulted decline in consumption, aggregate demand, investment, net export and increasing government spending had led the Federal Government to review the budget downwards to N10.8 trillion.

    He pointed out that the current macroeconomic trend informed the focus of the institute’s 2020 Stockbrokers’ Conference with the theme: “Navigating through the Storms-Reenergising the Economy through the Capital Market”.

    He noted that numerous sub-themes on contemporary issues in the financial market with a view to dissecting current macroeconomic challenges militating against the country.

    “Capital market provides better funding options in terms of cost and tenor, relative to bank loans. Our panelists shall also examine investment options for diversification of portfolios across asset classes and beyond the traditional asset classes. We plan to examine how the proposed CAMA 2020 will benefit the capital market as well as provide context on how the Nigerian Stock Exchange’s demutualisation shall benefit the capital market stakeholders,” Amolegbe said.

    Read Also: 2021 budget scales second reading in Senate

     

    He said the flagship conference, the 24th edition and the first hybrid of physical and virtual presence; is unique as the presentations shall generate raw materials for the government’s economic blueprint in this era of tough operating environment.

    “We have invited seasoned speakers from within and outside the country to provide their perspectives on the focus areas. Barring unforeseen circumstances, the high profile conference, scheduled for Wednesday, November 4 and Thursday, November 5 by physical and virtual mode, is designed to address some of the fundamental economic challenges in Nigeria,” Amolegbe said.

    He said the conference would sensitise all tiers of government, particularly, the Federal Government to leverage investment opportunities in the capital market to raise medium and long term capital  to bridge the mounting infrastructure deficit.

    He added that the overriding objective for the conference is to provide direction for both fiscal and monetary authorities to deploy expansionary policies for sustainable growth and development.

  • Shareholders approve UPDC’s UPDC REIT unbundling

    Shareholders of UACN Property Development Company (UPDC) Plc yesterday approved the scheme for the unbundling of UPDC’s equity stake in UPDC Real Estate Investment Trust (UPDC REIT). Both UPDC and UPDC REIT are quoted on the Nigerian Stock Exchange (NSE).

    At the court-ordered meeting yesterday in Lagos, which was streamed virtually in line with COVID-19 protocols, shareholders considered and approved the scheme for the unbundling. Shareholders were able to vote through proxies and online links.

    UPDC has a total of 1.516 billion ordinary shares of 50 kobo each in UPDC REIT, which the real estate company is seeking to unbundle.

    In September 2019, the boards of directors of UACN and UPDC jointly announced three significant strategic initiatives. These  included a rights issue to recapitalise the business, plans for UACN to transfer UACN’s equity interest in UPDC pro-rata to UAC’s shareholders (UPDC unbundling), and plans for UPDC to unbundle the UPDC REIT to its shareholders (UPDC REIT unbundling). The N16 billion UPDC rights issue was successfully completed in April 2020, proceeds of which were used to reduce borrowing costs and significantly improve UPDC’s capital position.

    However, in the process of progressing the unbundling initiatives, UACN stated that it received a credible offer from Custodian, which compelled the board to re-evaluate the planned approach to deconsolidate UPDC and influenced the board’s decision to proceed with the sale of a portion of UACN’s interest in UPDC to Custodian, effectively putting an end to the UPDC unbundling.

     

  • Shareholders approve N1.4b Conoil dividend

    Shareholders approve N1.4b Conoil dividend

    By Taofik Salako, Deputy Group Business Editor

     

    Shareholders of Conoil Plc at the weekend approved payment of N1.39 billion as cash dividend for the 2019 business year. Shareholders will receive a dividend per share of N2.

    At the virtual 50th annual general meeting (AGM) held by proxies in Lagos, shareholders unanimously approved the dividend payment while commending the board and management for consistency in the payment of dividend.

    Key extracts of the audited financial results for the year ended December 31, 2019 showed that Conoil’s gross revenue grew by 14.4 per cent to N139.8 billion. Profit before tax grew by 10.4 per cent to N2.83 billion while profit after tax also grew by 9.8 per cent to N1.97 billion. Total assets rose by 4.4 per cent to N63.6 billion while interest expence dropped by 26 per cent to N1.1 billion.

    Conoil stated that the modest dividend payout was predicated on the need to consolidate its cash management effort in the face of the liquidity squeeze in the economy and also to continue to ensure improvement in its overall performance in order to meet the expectations of the shareholders.

    In his address to the shareholders, Chairman, Conoil Plc, Dr. Mike Adenuga (Jr.), said the financial results recorded by the company against the background of the tough challenges that marked the operating environment of the downstream oil sector, was in fulfillment of the promise to shareholders of better execution of value-added products and services especially in the areas of marketing and growing the bottom-line.

    He said the company had set an ambitious growth strategy for the next five years, driven by innovation and market penetration.

    “Thus far, significant investments have been made in strengthening the company’s retail network and important progress recorded on all fronts for the benefit of all stakeholders. We are proud of the attainments of the management. It was a challenging year with impressive results,” Adenuga said.

    He assured Conoil shareholders that the company would consolidate on its achievements to deliver a strong and sustainable performance that enhances juicy returns on their investment, stating that the company has strategically positioned its business to take advantage of emerging opportunities in the downstream oil sector.

    President, Pragmatic Shareholders Association, Mrs. Adebisi Bakare praised the company for being able to reward shareholders despite the tough time faced by all fuel-marketing companies in the last financial year.

     

  • NSE suspends Sunu Assurances

    NSE suspends Sunu Assurances

    By Taofik Salako, Deputy Group Business Editor

    The Nigerian Stock Exchange (NSE) has placed Sunu Assurances Nigeria Plc on full suspension, implying a total cessation of trading on the shares of the company.

    With the suspension, there will be no trading, including buying and selling, in the shares of the company and it will also not witness any price change.

    The full suspension, which took effect yesterday, will run till the close of business on October 30.

    In a circular, the NSE noted that the suspension was in relation to the Sunu Assurances’ ongoing share capital reconstruction.

    According to the Exchange, the suspension was necessary to allow for closure of the company’s register of members in order to determine shareholders eligible for the share capital reconstruction as at the qualification date of October 16.

    Sunu Assurances Nigeria is undertaking share capital reconstruction, which will see cancellation of 11.2 billion ordinary shares of 50 kobo each, 80 per cent of the company’s current issued share capital.

    Sunu Assurances plans to cancel 11.2 billion ordinary shares of 50 kobo each out of its existing issued 14 billion ordinary shares of 50 kobo each as part of a recapitalisation plan aimed at increasing the capital base of the insurance company to the new minimum capital base.

    Regulatory filing showed that the share capital reconstruction will result in the cancellation of four existing ordinary shares out of every five ordinary shares held by shareholders as at the close of business last Friday.

    With this, the total number of issued ordinary shares post capital reconstruction exercise will be 2.80 billion ordinary shares of 50 each while a total of 11.2 billion ordinary shares of 50 each will become cancelled and unissued.

    Shareholders of Sunu Assurances Nigeria had at an extra-ordinary general meeting in March 2020 approved the share capital reconstruction. It has also filed application for approval from the NSE.

    The company had stated that the purpose of the share capital reduction was “to allow for the issuance of new ordinary shares by way of a rights issue and private placement, in order for the company to comply with the recently revised share capital requirement by the National Insurance Commission (NAICOM) for insurance companies”.

    The company explained that the share capital reconstruction was adopted as the more efficient approach to creating room for new equity capital issuances.

    “The share capital reconstruction will lead to the cancellation of 11.2 billion ordinary shares and result in an increase in the share price to N1. This will enable the rights issue, private placement and any subsequent equity capital raising to be priced above the nominal value of 50 kobo,” the company stated.

    According to the company, the shortfall between its paid up capital and NAICOM’s new capital requirement of N10 billion for non-life insurance companies was N7.71 billion as at September 30, 2019.

    The company stated that it is exploring a recapitalisation plan to augment the shortfall ahead of the December 30, 2020 deadline for compliance with the new minimum capital base.

    NAICOM had in May, last year released new capital requirements for insurance businesses with a 13-month compliance period for operators to shore up their minimum capital base to the required level. The minimum paid-up share capital of a life insurance company was increased from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion while re-insurance companies were directed to raise their capital base from N10 billion to N20 billion.

    SUNU Assurance Group had in 2016 acquired 60 per cent equity of the former Equity Assurance Plc and renamed the company SUNU Assurances Nigeria Plc. SUNU Assurance has operations in not less than 12 Franco-phone African countries and the acquisition of Equity Assurance was a major entry strategy into the Anglo-phone countries.