The Nation Newspaper

Category: Equities

  • African Alliance mulls divestment

    African Alliance mulls divestment

    Taofik Salako, Deputy Group Business Editor

     

    AFRICAN Alliance Insurance Plc is considering divestment to raise more capital and boost its recapitalisation plan.

    The board of the insurance company has scheduled the divestment as a special business for the consideration of shareholders at the company’s annual general meeting later this month.

    According to the proposal, shareholders are expected to pass three resolutions authorising the “directors to divest from any existing investment assets in furtherance of the recapitalisation objectives of the company”.

    Shareholders are expected to also authorise the directors to appoint such advisers, professionals and parties that they deem necessary upon such terms and conditions that the directors may deem appropriate with regard to the divestment.

    The meeting is also expected to mandate the board to take all steps and do all acts that they deem necessary for the successful implementation of the divestment.

    Insurance companies are in a hot race to raise new equity capital to meet new minimum capital requirements for various insurance functions as directed by the National Insurance Commission (NAICOM). NAICOM had in May 2019 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.

    Shareholders of African Alliance had at the last annual general meeting thrown their weight behind the board and management of the company in their ongoing quest to reposition the firm and fully recapitalise it before the deadline set by the NAICOM.

    Chairman, African Alliance, Dr Anthony Okocha, explained that the company’s recapitalisation plan involves a combination of strategies including new equity injection by existing and new investors, assets conversion as well as possible merger.

    He commended shareholders for their continuous faith in the business over the years noting that despite the odds, the firm is rapidly on the path to prosperity as evidenced by the improvements in the financial statement.

    “There is no doubt we are on the rise again, considering where we were before now. In the period under review, our profit after tax decreased from a loss of N6.72b in 2017 to a loss of N2.4bn in 2018. It is important to note that the bulk of these year-on-year losses were technical arising from the drop in interest rates which significantly affected the returns on annuity assets that accounted for 96% of the company’s business portfolio. By the time the 2019 results are released, you would see how your company has turned the bend,” Okocha said.

     

     

  • Equities rebound as investors stake N5.02b

    Equities rebound as investors stake N5.02b

    Taofik Salako, Deputy Group Business Editor

     

    AFTER four consecutive negative trading, Nigerian equities returned to the positive side yesterday as increased bargain-hunting overshadowed profit-taking transactions on many stocks.

    Benchmark indices at the Nigerian Stock Exchange (NSE) showed a marginal increase of 0.02 per cent, equivalent to net capital gain of N3 billion, the first positive closing in five sessions. With this, the average month-to-date and year-to-date returns inched up to 5.6 per cent.

    The All Share Index (ASI)-the value-based common index that tracks all share prices at the NSE, rose by 0.02 per cent to close at 28,344.04 points. Aggregate market value of all quoted equities rose from N14.812 trillion to close at N14.815 trillion.

    Most sectoral indices closed positive, underlying the positive sentiments across many sectors.The NSE Consumer Goods Index rose by 0.9 per cent. The NSE Insurance Index appreciated by 0.3 per cent while the NSE Oil & Gas Index inched up by 0.1 per cent. On the negative side, the NSE Banking Index declined by 1.2 per cent while the NSE Industrial Goods Index closed flat.

    The uptrend was impacted by gains recorded in large and medium capitalised stocks such as Stanbic IBTC Holdings, Nigerian Breweries, International Breweries, Eterna and Cadbury Nigeria.

    Read Also: Runsewe frowns at Beware of Nigeria video

    There were 18 gainers to 15 losers. Eterna recorded the highest price gain of 9.77 per cent to close at N4.38. International Breweries followed with a gain 9.56 per cent to close at N4.70 per share.

    Regency Alliance Insurance Company rose by 9.09 per cent to close at 24 kobo. Chams and Courteville Business Solutions appreciated by 5.0 per cent each to close at 21 kobo each.

    On the negative side, E-Tranzact International Plc led the losers’ chart by 9.79 per cent to close at N2.12 per share. Royal Exchange followed with a decline of 7.41 per cent to close at 25 kobo. Portland Paints and Products Nigeria lost 6.98 per cent to close at N2.00 each. Custodian Investment lost 4.76 per cent to close at N5.00 while Africa Prudential dropped by 3.75 per cent to close at N5.39.

     

     

  • Vitafoam to boost earnings with new product campaign

    Vitafoam to boost earnings with new product campaign

    From Nduka Chiejina (Asst. Editor), Abuja

     

    Vitafoam Nigeria Plc is to launch a national marketing and campaign on the relationship between body mass and mattress to promote healthy living, widen customer base and boost its return on investment.

    Already, the company has concluded arrangements to flag off its “Buy Right” campaign that covers mattresses for six distinct categories of body weight, ranging from under 50kg to all weight categories.

    Addressing reporters in Lagos, Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi said that the company decided to educate the entire public on the need to consider body weight before purchasing mattresses in view of the health challenges of using wrong foams.

    He said the company’s new move was borne out of empirical facts and obligation to create awareness as part of its corporate social responsibilities (CSR).

    According to him, many people have suffered from health challenges because of disparity between their body weight and the mattress they use.

    “Our actions are based on empirical facts and not intuition. Some people just buy mattresses on the basis of their pocket. We have found out that there is a need to have basis for buying. One of the questions that our outlets ask customers is their body weight and there are scales to measure it for proper guidance,” Adeniyi said.

    He noted that there is a direct relationship between productivity and healthy sleep pointing out that what one sleeps on determines what one’s day may look like.

    “Bad mattress causes bad dream. People do not bother about what they sleep on. But a lot of health challenges come along. We are taking our campaign, scheduled for three months to both urban and rural areas. We can customize our products to body mass, “ Adeniyi said.

    By the company’s categorisation, people that are under 50kg should go for Vita Shine mattress, up to 70kg, Vita Grand and Vita Corona, up to 100kg, Vita Haven, Vita Supreme and Spring Flex, above 100kg, Vita Spring Firm, up to 120, Vita Sizzier and all weight categories which is not suitable for children, Vita Twill, Vita Galaxy Orthopedic and Galaxy Classic.

    According to Adeniyi, the new development on body weight as a basis for purchase of mattress is a result of the company’s continuous improvement on its existing product categories. He explained that the new categorization of mattresses by body weight did not affect their existing prices.

    “We are good corporate citizen. We are not increasing the prices of our products as a result of our proposed awareness creation on the link between a mattress and body weight. This is part of our ways of giving back to the society. Our stakeholders are assured of superior return on investment. We have a way of measuring the contribution of every product line to the company’s bottom line,” Adeniyi said.

  • Equities open with N40b loss amid profit-taking

    Equities open with N40b loss amid profit-taking

    From Nduka Chiejina (Asst. Editor), Abuja

     

    Nigerian equities reopened yesterday on a negative note as investors opened up market orders to take profit on several mid and large-cap stocks that had accrued substantial gains in recent period.

    Benchmark indices for the stock market indicated average decline of 0.3 per cent, equivalent to net capital depreciation of N40 billion. With this, average year-to-date return moderated to 5.6 per cent.

    The All Share Index (ASI)- the value-based common index that tracks all share prices at the Nigerian Stock Exchange (NSE) dropped from its opening index of 28,415.31 points to close at 28,337.49 points. Aggregate market value of all quoted companies also declined from its opening value of n14.852 trillion to close at N14.812 trillion.

    With more decliners than advancers, most sectoral indices closed on the negative. The NSE Insurance Index dropped by 1.8 per cent. The NSE Consumer Goods Index dipped by 0.9 per cent. The NSE Industrial Goods Index slipped by 0.5 per cent while the NSE Banking Index dropped by 0.1 per cent. Meanwhile, the NSE Oil and Gas Index appreciated by 1.4 per cent.

    Total turnover also dropped marginally by 3.9 per cent to 369.2 million shares valued at N5.1 billion. Banks continued to dominate the activities chart. United Bank for Africa was the most active stock with 95.1 million shares valued at N678.7 million. Guaranty Trust Bank followed with 65.5 million shares valued at N1.9 billion while Zenith Bank placed third with 47.2 million shares worth N944.3 million.

    Read Also: Equities hit five-year high with N708b gains

     

    There were 16 gainers against 13 losers. Flour Mills of Nigeria led the losers with a drop of N1 to close at N21. BUA Cement followed with a loss of 60 kobo to close at N40.90. MTN Nigeria Communications lost 50 kobo to close at N140. International Breweries declined by 13 kobo to close at N4.29 while Africa Prudential dropped by 13 kobo to close at N5.60 per share.

    On the positive side, Seplat Petroleum Development Company led the rally with a gain of N10 to close at N420. Eterna followed with a gain of 36 kobo to close at N3.99 while Access Bank chalked up 10 kobo to close at N7.90 per share.

    “We expect losses in the market to be sustained as investors book profit,” Afrinvest Securities stated.

    Nigerian equities had last week recorded the highest gain in a global survey of major advanced, emerging and frontier stock markets as sustained rally left Nigerian investors with net capital gains of N747 billion at the weekend.

    Benchmark indices for the Nigerian stock market indicated average return of 5.3 per cent last week, equivalent to net capital gains of N747 billion.

  • Fed Govt lists N294m savings bonds

    Fed Govt lists N294m savings bonds

    Our Reporter

    The Federal Government yesterday listed its latest savings bonds on the Nigerian Stock Exchange (NSE), paving the way for bondholders to trade on their investments.

    The Debt Management Office (DMO), which oversees sovereign debt issuances, listed a N91.62 million 3.501 per cent Federal Government of Nigeria Savings Bonds (FGNSB) with maturity in September 16, 2022. It also listed a N202.665 million 4.501 per cent FGNSB with maturity in September 16, 2023.

    The two bonds were issued last month in continuation of government’s FGNSBs issuance. The coupon for the bonds will be paid quarterly on December 16, March 16, June 16 and September 16.

    The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilisation of savings and investments. Minimum subscription to the FGNSB is usually N5,000 while the bond pays coupon or interest rate quarterly.

    Read Also: Nigerian stocks hit five-year high with N708b gains

    GTI Securities Limited, one of the authorised distribution agents for the FGNSB, noted that the savings bonds would help to deepen national savings culture while providing opportunity to all Nigerians irrespective of income level to contribute to and benefit from national development.

    According to the stockbroking firm, FGNSB enables all Nigerians opportunity to participate in and benefit from the favourable returns available in the capital market.

    GTI Securities noted that the savings bonds are acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity.

    “The bond will be listed on the Nigeria Stock Exchange for trading and provides liquidity for investors who want to exit before maturity,” GTI Securities stated.

    It noted that the savings bonds are good for savings towards retirement, marriage, school fees and house projects among other targets while assuring on its safety as the bonds are backed by  the Federal Government.

  • Equities hit five-year high with N708b gains

    Equities hit five-year high with N708b gains

    By Taofik Salako Deputy Group Business Editor

     

    Nigerian equities yesterday broke all limits to hit their highest gain in more than five and a half years as intense bargain-hunting  for value and growth stocks saw the market with net capital gain of N708 billion.

    With nearly six advancers for every decliner, average price gain at the stock market surged to 4.92 per cent, the highest daily gain since March 2015. Average year-to-date return jumped to 7.7 per cent, putting equities’ investors comfortably ahead of most fixed-income securities.

    Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) rose from its opening value of N14.402 trillion to hit N15.110 trillion, representing net capital gain of N708 billion in a single trading session.

    The All Share Index (ASI)- the value-based common index that tracks share prices at the NSE also rose from its opening index of 27,554.49 points to close at 28,909.37 points.

    Market analysts attributed the continuing upswing to sustained buy interest in several companies, especially large-cap stocks in major sectors of the economy.

    “We expect the rally in the equities market to continue in the next trading session, with strong buy interest mainly in low-priced bellwethers and high dividend yielding stocks,” Afrinvest Securities stated.

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    The momentum of activities also improved considerably as turnover volume and value rose by 24.1 per cent and 27.9 per cent to 749.5 million shares valued at N9.5 billion in 8075 deals. Banks dominated the activities chart with Zenith Bank leading with a turnover of 135.7 million shares. United Bank for Africa (UBA) followed with a turnover of 112.9 million shares while FBN Holdings placed third with 89.9 million shares.

    With 45 advancers to eight decliners, all sectoral indices closed positive, underlining the market-wide positive sentiment driving share trading in recent period. The NSE Banking Index appreciated by 7.5 per cent. The NSE Industrial Goods Index rose by 5.6 per cent.

    The NSE Consumer Goods Index chalked up 3.0 per cent. The NSE Oil & Gas Index appreciated by 1.2 per cent while the NSE Insurance Index posted average gain of 0.3 per cent.

    According to analysts at Cordros Securities, bargain buying of large-cap stocks continued yesterday as investors continue to seek real returns, amidst abysmal fixed income yields.

    Nigeria’s most capitalised quoted company, Dangote Cement led the rally with a gain of N14.20 to close at N158.20. MTN Nigeria Communications followed with a gain of N7.70 to close at N142.70. Presco rose by N5.50 to close at N60.50. Nigerian Breweries added N3.50 to close at N52.30 while Stanbic IBTC Holdings appreciated by N2 to close at N42.50.

    On the negative side, Berger Paints Nigeria led the decliners with a drop of 40 kobo to close at N6.10. NPF Microfinance Bank dropped by 12 kobo to close at N1.25 while Neimeth International Pharmaceuticals declined by 10 kobo to close at N1.85 per share.

     

  • Investors’ protection in focus as world marks Fourth Investors’ Week

    Investors’ protection in focus as world marks Fourth Investors’ Week

    Global securities market regulators yesterday launched their Fourth World Investor Week (WIW) with more organisations participating in the event than ever before.

    Under the auspices of the International Organisation of Securities Commissions (IOSCO), securities regulators, stock exchanges, international organisations, investor associations and other stakeholders from some 100 countries will during the period offer a variety of activities to raise awareness about the importance of investor education and protection in their own jurisdictions, particularly during the COVID- 19 pandemic.

    While WIW is scheduled for the October 5 to 11, jurisdictions can choose alternative weeks in October or November to stage their events, given the logistical issues and other challenges posed by the pandemic. Many participants have opted to hold their campaigns in a digital format.

    The World Federation of Exchange has organised a “Ring the Bell for Financial Literacy” ceremony. More than 35 Exchanges and CCPs around the world will ring the bell for financial literacy during the week or offer financial literacy-related activities in support of World Investor Week. The New Zealand Exchange (NZX), in partnership with the NZ Financial Markets Authority, kicked off the event early yesterday with the first ringing of the opening bell.

    According to IOSCO, a key objective of the WIW is to encourage members, international organisations and other relevant parties to coordinate their activities to promote investor education and protection while also delivering key messages for all investors to help them make sound investment decisions.

    Part of this year’s campaign is to warn investors not to be tempted to invest in risky products by misleading information.

    The WIW key messages for  the year highlight the basics of investing, including, among other things, the importance of assessing the impact of fees when choosing an investment and understanding that all investments entail risks.

    The WIW will again stress last year’s messages regarding online investing, initial coin offerings, crypto-assets and ed-Tech issues, such as digital learning and online education. It will also deliver a new key message about the risk of   investing in these uncertain times caused by COVID-19.

    IOSCO Secretary General, Paul Andrews noted that every year, WIW attracts growing international support and new participants, thereby underpinning IOSCO´s steadfast commitment to investor education and protection.

    “This fourth reiteration of WIW is particularly relevant, given the impact of COVID 19 on global capital markets and investor protection,” Andrews said.

    Chair of IOSCO´s Committee on Retail Investors, José Alexandre Vasco said it was encouraging to see that the number of WIW campaign participants continues to increase, reflecting the growing importance of this event.

    “I would like to commend the dedication and enthusiasm of the WIW Working Group, and I am confident that this campaign will contribute to enhancing retail investor education and protection in member jurisdictions,”Alexandre Vasco said.

     

  • Nigeria to launch West Africa’s first exchange traded derivatives

    Nigeria to launch West Africa’s first exchange traded derivatives

    Arrangements are ongoing to launch West Africa’s first Exchange Traded Derivatives (ETDs) on the Nigerian stock market.

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), last week granted approval-in-principle to two central counterparty clearing houses (CCP), NG Clearing and FMDQ Clear.

    The Nigerian Stock Exchange (NSE), the major promoter of NG Clearing, stated that the approval-in-principle will allow it to launch ETDs, to be supported by NG Clearing in the risk management process.

    According to the Exchange, NG Clearing will play a key role in the financial market ecosystem by driving the safety and stability of Africa’s global marketplace through efficient and timely settlement of derivative trades.

    Chief Executive Officer, Nigerian Stock Exchange (NSE) and Chairman, NG Clearing, Mr. Oscar Onyema, said with NG Clearing’s association with a member exchange of the World Federation of Exchanges (WFE), capital market players can expect NG Clearing to align with the highest standards of global best practices in delivering clearing and settlement services.

    “Our main role is to improve the safety of our financial market by delivering best-in-class post-trade services that manage counterparty credit risk and reduce systemic risk. To mitigate these credit risks in an efficient and robust manner, we will interpose ourselves as a guarantor to both parties in a transaction, thus ensuring the successful execution of derivatives and other trades from various trade points,” Onyema said.

    He said the Exchange intends to deliver an unparalleled CCP experience for the African financial markets noting that the introduction of ETDs on the NSE will deepen Africa’s position in the global financial markets, as well as enhance liquidity and help mitigate against price, duration and other financial risks that may arise from sophisticated financial transactional activities.

    The NSE, being the leading securities Exchange in West Africa with global memberships that include World Federation of Exchanges (WFE) and International Organisation of Securities Commission (IOSCO), will introduce the first set of equity-linked products such as index-futures or single-stock futures and options that meet global financial structuring standards allowing global and domestics investors and investment managers to appropriately hedge against downside risk.

    Onyema explained that in laying the groundwork to build a standardised derivatives market, NSE has worked with SEC and the Central Bank of Nigeria (CBN) to establish the optimal regulatory and legal framework for derivatives in the Nigerian capital market.

    In addition, NSE has partnered global investment banks, such as JPMorgan Chase, to facilitate in-depth capacity building programme on the derivatives market.

    He added that as arrangements are being concluded to the launch of ETDs, the Exchange will issue its first set of trading licenses in over 20 years as it continually welcomes and onboards trading and clearing members.

     

  • Equities surge ahead with N297b gains in five hours

    Equities surge ahead with N297b gains in five hours

    By Taofik Salako, Deputy Group Business Editor

     

    Nigerian equities continued their rally yesterday at the Nigerian Stock Exchange (NSE) as increased bargain-hunting across the sectors netted N297 billion gains in five hours of trading.

    With nearly four advancers for every decliner, the benchmark index at the stock market indicated average gain of 2.11 per cent yesterday, equivalent to net capital gains of N297 billion. This increased net capital gains in the two trading in October to N377 billion. Average year-to-date return improved to 2.7 per cent.

    The All Share Index (ASI)- the common value-based index that tracks share prices at the Exchange crossed to 27,554.49 points from its opening index of 26,985.77 points. Aggregate market value of all quoted equities rose from its opening value of N14.105 trillion to close at N14.402 trillion.

    With 36 gainers to 10 losers, all sectoral indices closed positive. The NSE Banking Index led with average gain of 3.4 per cent. The NSE Insurance Index rose by 2.0 per cent. The NSE Oil & Gas Index appreciated by 0.8 per cent while the NSE Consumer Index and NSE Industrial Goods Index inched up by 0.4 per cent each.

    Total turnover leapt to 603.95 million shares valued at N7.42 billion in 5,984 deals. Zenith Bank was the most active stock with a turnover of 204.7 million shares. Sterling Bank followed with 55.2 million shares while United Bank for Africa (UBA) placed third with 51.3 million shares.

    “We are optimistic about a sustained positive performance in the equities markets, given strong investors sentiment amid discounted valuation of stocks,” Afrinvest Securities stated.

    Airtel Africa led the gainers with a gain of N20.20 to close at N400.20. Seplat Petroleum Development Company followed with a gain of N10 to close at N410. MTN Nigeria Communications rose by N5 to close at N130. Presco chalked up N2 to close at N55 while Guinness Nigeria added N1 to close t N15.

    On the negative side, Nigerian Breweries and Oando led the decliners with a drop of 20 kobo each to close at N48.80 and N2.09. Union Bank of Nigeria lost 10 kobo to close at N4.90.

    UACN Property Development Company dipped by 6 kobo to close at 86 kobo while UAC of Nigeria declined by 5 kobo to close at N6.45 per share.

     

  • Stanbic IBTC’s shareholders get 601m scrip shares 

    Stanbic IBTC’s shareholders get 601m scrip shares 

    By Taofik Salako, Deputy Group Business Editor

    Stanbic IBTC Holdings Plc on Wednesday listed 601.03 million new ordinary shares of 50 kobo each at the Nigerian Stock Exchange (NSE).

    The additional shares of 601.03 million ordinary shares of 50 kobo each resulted from the scrip dividend offered to eligible shareholders of Stanbic IBTC who elected to receive new ordinary shares in lieu of N2 final dividend declared for the financial year ended last December 31.

    With the listing of the additional shares, the total issued and fully paid up shares of Stanbic IBTC Holdings increased from 10.50 billion ordinary shares of 50 kobo each to 11.106 billion ordinary shares of 50 kobo each.

    READ ALSO: Oyedeji appointed Stanbic IBTC Non-Executive Director

    Shareholders of the holding company had approved a convertible dividend policy that allows willing shareholders to convert their cash dividends, final or interim, to ordinary shares in the company.

    The conversion is usually through an approved framework based on existing pricing at the secondary market.