The Nation Newspaper

Category: Equities

  • Equities lose N10b in tight trades

    Equities lose N10b in tight trades

    By Taofik Salako, Deputy Group Business Editor

     

    Nigerian equities reopened yesterday with a tight mix of bargain-hunting and sell pressure as investors sought to reevaluate their portfolios ahead of the release of the half-year results of quoted companies.

    With 12 advancers to 13 decliners, the market was almost on a tit-for-tat pattern with decline in the banking and industrial goods sectors counterbalanced by gains in the insurance and oil and gas sectors.

    Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average decline of 0.07 per cent, equivalent to net capital depreciation of N10 billion. Average year-to-date return thus worsened to 9.6 per cent, with 0.9 per cent lost so far this month.

    The All Share Index (ASI)- the common value-based index that tracks share prices at the Exchange (NSE) declined from its opening index of 24,287.66 points to close at 24,269.58 points.

    Aggregate market value of all quoted equities also dropped from its opening value of N12.670 trillion to close at N12.660 trillion.

    Sectoral indices showed mixed performance, underlining the tight market situation yesterday. The NSE Insurance Index appreciated by 0.4 per cent.

    The NSE Oil & Gas Index inched up by 0.3 per cent while the NSE Consumer Goods Index closed flat. However, the NSE Banking Index declined by 0.5 per cent while the NSE Industrial Goods Index slipped by 0.01 per cent.

    The momentum of activities, however, improved as total turnover volume and value increased by 90.1 per cent and 42.6 per cent to 305.1 million shares valued at N2.1 billion. Sovereign Trust Assurance was the most active stock with a turnover of 75.56 million shares worth N15.11 million.

    United Bank for Africa (UBA) trailed with a turnover of 70.71 million shares worth N441.89 million while Guaranty Trust Bank placed third with 36.97 million shares worth N795.13 million.

    Cutix led the decliners with a drop of 18 kobo to close at N1.64. Neimeth International Pharmaceuticals followed with a loss of 15 kobo to close at N1.35 while Access Bank, Zenith Bank and Ecobank Transnational Incorporated dropped by 10 kobo each to close at N6.10, N15.65 and N4.25.

    On the positive side, Ardova led the gainers with a gain of 90 kobo to close at N13.45. GlaxoSmithKline Consumer Nigeria rose by 45 kobo to close at N5.20 while Fidson Healthcare added 25 kobo to close at N2.90 per share.

    Most analysts expected the market to recover in the next trading sessions citing the potential for stronger bargain-hunting.

    “We expect bargain hunting to drive gains in the next trading session,” Afrinvest Securities stated.

    “We expect bargain hunting to drive gains in next trading session but maintain that investors should buy high quality stocks with a medium to long term horizon,” FSDH Group stated.

     

  • Airtel Africa scales up operations with WorldRemit

    Airtel Africa scales up operations with WorldRemit

    By Taofik Salako, Deputy Group Business Editor

     

    Airtel Africa Plc is scaling up its operations with WorldRemit, the global digital money transfer service that operates in over 50 send countries to over 150 receive countries.

    Building on the connection to Airtel Money in Democratic Republic of Congo, Uganda, Zambia, Tanzania, Malawi and Niger, customers can also send to Airtel Money in Rwanda through WorldRemit.

    WorldRemit will enable customers from across the globe to receive money into Airtel Money wallets. Users can visit WorldRemit.com or download the free mobile App; choose Mobile Money and Airtel as the operator, then follow the prompts.

    The diaspora living in more than 50 countries around the world can quickly and easily send money transfers at any time via WorldRemit to Airtel Money customers back home.

    Chief Executive Officer, Airtel Africa, Raghunath Mandava said the company was committed to enhancing financial inclusion in the countries where it operates through building a huge infrastructure of cashing in and cashing out locations in the markets and increasing its distribution.

    “This means that our customers can now receive fast digital payments via WorldRemit from around the world directly to their mobile phones, as well as access their funds at our exclusive kiosks and branches at their convenience,” Mandava said.

    He noted that Airtel Money enables mobile money users to send local and international money transfers, make utility payments, pay merchants, save money in their mobile wallets, purchase airtime and access a range of mobile financial products.

    Managing Director, Middle East & Africa, WorldRemit, Andrew Stewart, said the connection to more mobile money accounts through Airtel Africa allows the company to expand its payout network and options available to customers across the continent.

    “It is really exciting and important to us that we continue to increase financial inclusion for our customers in Africa whilst delivering a fast, affordable and secure service,” Stewart said.

     

  • United Capital grows net profit by 16% to N1.91b in H1

    United Capital grows net profit by 16% to N1.91b in H1

     Taofik Salako, Deputy Group Business Editor

     

     

    UNITED Capital Plc braced the lockdown in the second quarter to sustain double-digit growths in key performance indices in the first half with net profit rising by 16 per cent to N1.91 billion.

    Key extracts of the interim report and accounts of United Capital for the six-month period ended June 30, 2020 released at the weekend indicated that total turnover rose by 37 per cent to N4.45 billion in first half 2020 as against N3.24 billion recorded in comparable period of 2019. Operating income leapt by 45 per cent from N2.82 billion to N4.10 billion. Profit before tax improved by 14 per cent to N2.27 billion as against N1.99 billion. After taxes, net profit stood at N1.91 billion in first half 2020 compared with N1.65 billion in first half 2019. With these, earnings per share increased from 28 kobo in first half 2019 to 32 kobo in first half 2020.

    Further analysis showed that the total assets expanded by 46 per cent to N219.73 billion in June 2020 as against N150.46 billion recorded by the year ended December 31, 2019.                 Total liabilities however increased by 54 per cent from N130.88 billion in December 2019 to N201.60 billion in June 2020. Shareholders’ funds thus dropped marginally by 7.5 per cent from N19.59 billion in December 2019 to N18.12 billion in June 2020.

    The increase in total liabilities was due largely to 95.22 per cent growth in managed funds, 22.56 per cent increase in current tax liabilities and 15.96 per cent rise in other liabilities. The decline in shareholders’ funds was due to decline in retained earnings and considerable increase in the negative other reserves.

    The top-line performance was driven by significant increases across the income lines. Net interest margin rose by 347.65 per cent while net trading income and fee and commission incomes grew by 85.03 per cent and 77.15 per cent respectively.

    Group Chief Executive Officer, United Capital Plc, Mr. Peter Ashade,  said United Capital remains a leader in the financial and investment services space as it continues to leverage on innovation, technologies and bespoke services to meet private and public sector’s finances.

    He noted that while the COVID-19 pandemic has lasted than envisaged and caused greater speculations of global recession and slower global recovery from the pandemic, the company’s well-articulated plans have ensured that it was still able to deliver growth.

    “The Nigerian economy has been greatly affected by the pandemic as seen in the increasing depreciation of the exchange rate, inflation rate and other economic indicators. As we stated at the release of our last quarter result, our business was not immune to these challenges; however, the group was able to endure the challenges- thanks to the well-articulated and diligent implementation of our plans set out last year,” Ashade said.

    According to him, with its well-articulated plans, business continuity plan in economic crisis and solid risk assessment framework, the group was able to deliver increased revenue of over 37.26 per cent, increased pre-tax profit of 14.10 per cent and profit after tax growth of 15.98 per cent.

    He pointed out that during the first half, the company successfully issued its N10 billion Series 1 bond under the N30 billion medium-term debt programme with over 24 per cent oversubscription.

    “Going into the remaining half of the year, we remain assiduously committed to deliver greater returns to our shareholders, by constantly reviewing our strategy in the light of global and domestic happenings, ensuring that we provide value to all our stakeholders from time to time,” Ashade said.

    He outlined that in line with the company’s initial strategy for the 2020 business year, it shall continue to push further its arket diversification and cost-optimisation initiatives as well as implement phased automation of its business processes while upholding its commitment to ensuring a significant improvement in value delivery to all stakeholders.

  • Investors scout for value stocks amid H1 optimism

    Investors scout for value stocks amid H1 optimism

     Taofik Salako, Deputy Group Business Editor

     

    BARGAIN-HUNTING for value stocks drove activities at the stock market as investors sought to take positions ahead of the expected inflow of first-half results of quoted companies. Nigerian equities held steady pricing throughout the week and closed weekend with marginal average decline of 0.08 per cent, equivalent to net capital depreciation of N10 billion.

    Transactions in three low-priced banking stocks- Sterling Bank, FCMB Holdings and FBN Holdings accounted for more than one-thirds of total transaction volume at the Nigerian Stock Exchange (NSE) last week. Total turnover at the NSE increased by 12.8 per cent to 1.02 billion shares worth N7.44 billion in 18,092 deals last week compared with a total of 901.54 million shares valued at N13.45 billion traded in 18,676 deals two weeks ago.

    The trio of Sterling Bank, FCMB Holdings and FBN Holdings were the most active stocks, accounting for 416.99 million shares worth N791.08 million in 2,752 deals, representing 41.06 per cent of the total equity turnover volume.

    “In the coming week, we expect market performance to improve on bargain hunting activities,” Afrinvest Securities stated.

    Companies quoted on the NSE are expected to submit their interim report and accounts for the six-month period ended June 30, 2020 within the next few weeks, in line with extant regulations and regulatory consideration granted to quoted companies in the wake of Coronavirus pandemic.

    The benchmark index for Nigerian equities, the All Share Index (ASI) closed weekend at 24,287.66 points, 0.08 per cent below the week’s opening index of 24,306.36 points. Aggregate market value of all quoted equities at the NSE dropped marginally from the week’s opening value of N12.680 trillion to close weekend at N12.670 trillion. Average year-to-date return now stands at -9.52 per cent.

    Senior Research Analyst, FXTM, Lukman Otunuga, said Nigerian equities were steady despite Coronavirus cases topping 34,000 in Africa’s largest economy.

    He noted that while economic fundamentals might not be impressive, Nigerian equities may find support from vaccine hopes and expectations of further stimulus for pandemic-hit economies.

    Analysts at Cordros Securities, however, remained cautious about the market outlook noting that increasing number of COVID-19 cases in Nigeria and weak economic conditions remain considerable risk factors.

  • Chams’ shareholders okay recapitalisation plan

    Chams’ shareholders okay recapitalisation plan

     Taofik Salako, Deputy Group Business Editor

     

    SHAREHOLDERS of Chams Plc on Thursday endorsed the company’s plan to raise new equity funds and deleverage its balance sheet through debt-to-equity conversion as the intelligent business solutions company begins implementation of its medium-term strategic plan.

    Chams plans to raise N500 million through a rights issue to existing shareholders while also executing debt-equity conversion to boost its working capital and  enhance implementation of its five-year strategic plan.

    The proposed capital injection had earlier been approved by the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE).

    Addressing the shareholders at the 36th Annual General Meeting (AGM) yesterday, Chairman, Chams Plc, Sir Ademola Aladekomo explained that the company had embarked upon a new five-year strategic plan and vision to grow shareholder value by focusing on African digital solution with emphasis on Nigeria.

    Aladekomo, who presided over the meeting on behalf of the immediate past Chairman, Dr. Mrs. ‘dere Awosika, who signed the company’s annual report, noted that Chams would take advantage of COVID-19 pandemic to expand its innovative solutions in order to boost income.

    Read Also: CSCS’ shareholders approve N4.3b dividend

    Shareholders praised the company’s ability to weather the storm despite the tough operating environment and urged the management to ensure proper approach towards the re-financing plan, especially, the need to connect with the major stakeholders in order to exercise the rights issue.

    A shareholder, Pastor Peter Owolabi, urged the company to encourage the high networth shareholders to take up their rights, and further advising that the company should work hard to pay dividend next year.

    Another shareholder, Mrs Ayodele Kudaisi, said the company should maximise emerging opportunities in online businesses to boost its income in the domestic and international markets

    In the review period, the company’s gross profit rose by 29 per cent from N1.01 billion to N0.786 million, total assets was up by 13 per cent from N5.25 billion to N5.95 billion, finance expenses which consist of interests paid on loans and overdraft declined by 94.7 percent, year-on-year due to prudent management.

    Group Managing Director, Chams Plc, Mr Gavin Young, said the management of the company would continue to explore opportunities to create and improve value for all stakeholders.

  • NAHCO’s shareholders get N487m dividends

    NAHCO’s shareholders get N487m dividends

     Taofik Salako, Deputy Group Business Editor

     

     

    SHAREHOLDERS of Nigerian Aviation Handling Company (NAHCO) Plc on Thursday approved the distribution of N487 million as cash dividends for the 2019 business year. The dividend payment came as the company grew its profit before tax by 166 per cent to N1.34 billion in 2019. Shareholders will receive a dividend per share of 30 kobo.

    Chairman, Nigerian Aviation Handling Company (NAHCO) Plc, Dr. Seinde Fadeni, said the company’s pre-tax profit rose from N503.237 million in 2018 to N1.34 billion in 2019, a growth that was due to several measures put in place during the financial year to control costs and income revenue by the company.

    According to him, profit after tax increased significantly from N196.8 million in 2018 to N717.2 million in 2019, representing 264 per cent increase within the period. The group closed the year ended December 31, 2019 with total revenue of about N9.99 billion, a marginal increase of 2.3 per cent over the 2018 figures of about N9.8 billion.

    Read Also: NAHCON awaiting Saudi Arabia decision on 2020 Hajj

    Fadeni spoke on Thursday at the annual general meeting (AGM) in Lagos, which was transmitted virtually to shareholders in compliance with the World Health Organisation (WHO) and Presidential Taskforce (PTF) on COVID-19 pandemic.

    Fadeni  noted that the 2019 business year would have ended on a better note, but the United States – China trade issues and the virus in the Asian country affected importation and reduced flight frequencies at the tail end of 2019.

  • Chams’ shareholders okay recapitalisation plan

    Chams’ shareholders okay recapitalisation plan

     Taofik Salako, Deputy Group Business Editor

     

    SHAREHOLDERS of Chams Plc yesterday endorsed the company’s plan to raise new equity funds and deleverage its balance sheet through debt-to-equity conversion as the intelligent business solutions company begins implementation of its medium-term strategic plan.

    Chams plans to raise N500 million through a rights issue to existing shareholders while also executing debt-equity conversion to boost its working capital and  enhance implementation of its five-year strategic plan.

    The proposed capital injection had earlier been approved by the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE).

    Addressing the shareholders at the 36th Annual General Meeting (AGM) yesterday, Chairman, Chams Plc, Sir Ademola Aladekomo explained that the company had embarked upon a new five-year strategic plan and vision to grow shareholder value by focusing on African digital solution with emphasis on Nigeria.

    Aladekomo, who presided over the meeting on behalf of the immediate past Chairman, Dr. Mrs. ‘dere Awosika, who signed the company’s annual report, noted that Chams would take advantage of COVID-19 pandemic to expand its innovative solutions in order to boost income.

    Shareholders praised the company’s ability to weather the storm despite the tough operating environment and urged the management to ensure proper approach towards the re-financing plan, especially, the need to connect with the major stakeholders in order to exercise the rights issue.

    A shareholder, Pastor Peter Owolabi, urged the company to encourage the high networth shareholders to take up their rights, and further advising that the company should work hard to pay dividend next year.

    Another shareholder, Mrs Ayodele Kudaisi, said the company should maximise emerging opportunities in online businesses to boost its income in the domestic and international markets

    In the review period, the company’s gross profit rose by 29 per cent from N1.01 billion to N0.786 million, total assets was up by 13 per cent from N5.25 billion to N5.95 billion, finance expenses which consist of interests paid on loans and overdraft declined by 94.7 percent, year-on-year due to prudent management.

    Group Managing Director, Chams Plc, Mr Gavin Young, said the management of the company would continue to explore opportunities to create and improve value for all stakeholders.

  • Transcorp Hotels seeks nod for N10b rights issue

    Transcorp Hotels seeks nod for N10b rights issue

    By Taofik Salako, Deputy Group Business Editor

    Transcorp Hotels Plc has submitted application to authorities at the Nigerian Stock Exchange (NSE) for the approval of the hotel and tourism company’s new capital raising.

    A regulatory filing obtained  by The Nation indicated that Transcorp Hotels is seeking approval to raise N10 billion in new equity funds from existing shareholders.

    Transcorp Hotels, owners of Transcorp Hilton Abuja and Transcorp Hotels Calabar, plans to raise N10 billion through the issuance of 2.66 billion ordinary shares of 50 kobo each at N3.76 per share to prequalified shareholders. The rights will be pre-allotted to existing shareholders on the basis of seven new ordinary shares for every 20 ordinary shares of 50 kobo each held as at July 13.

    The shares will be issued from the authorised share capital of the company which is currently at N7.50 billion of 15 billion ordinary shares of 50 kobo each. Post-offer fully paid-up share capital will be N5.13 billion of 10.26 billion ordinary shares of 50 kobo each.

    Shareholders had earlier at an extraordinary general meeting last month in Lagos approved the N10 billion rights issue.

    Chairman, Transcorp Hotels Plc, Mr. Emmanuel Nnorom said the approval and endorsement by shareholders empowers the board and management to look to the future with confidence despite the harsh  environment.

    Managing Director, Transcorp Hotels Plc, Mrs. Dupe Olusola, said the company’s track record of excellent service delivery has positioned it as the first choice for international and local guests.

    “We are not resting on our oars but working round the clock to innovate new products and services to further delight our guests, notable of such is the launch of asset-light strategies to deepen our hospitality footprints across Africa,” Olusola said.

    She added that while the world has been greatly impacted by the COVID-19 pandemic, with the hospitality industry being one of the hardest hit, Transcorp Hotels is optimistic about a great recovery for the sector.

    She noted that shareholders’ approval for new capital raising shows that shareholders have confidence in the future of the company, assuring that the company will continue to play their part in ensuring a significant recovery to the Nigerian hospitality industry.

    A Non-Executive Director, who also represents the Ministry of Finance Incorporated on the board, Mr. Alexander Adeyemi, pointed out that given the challenging times the hospitality industry faces, it has become critical to inject funding into the business for a stronger balance sheet.

    “Transcorp Hotels has maintained a history of excellent performance in the hospitality industry, and this is a bold step towards the achievement of its long term goals,” Adeyemi said.

    Transcorp Hotels is the hospitality subsidiary of Transnational Corporation of Nigeria Plc. It owns and operates Transcorp Hilton Abuja.

    The company also holds 100 per cent interest in Transcorp Hotels Calabar Limited, which owns the Transcorp Hotels in Calabar.

  • Equities rebound with N8b gain

    Equities rebound with N8b gain

    By Taofik Salako, Deputy Group Business Editor

    Nigerian equities on Wednesday recorded  their first positive closing this week as bargain-hunting for large-cap stocks lifted the market to a marginal net capital gain of N8 billion.

    The All Share Index (ASI)- the common value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), inched up by 15.67 points or 0.06 per cent to close at 24,130.26 points as against opening index of  24,114.59 points.

    Aggregate market capitalisation of all quoted equities also improved by N8 billion to close at N12.587 trillion compared  with opening value of N12.579 trillion.

    The upturn was driven largely by gains recorded by highly capitalised stocks including Airtel Africa, Dangote Sugar, Guaranty Trust Bank and Access Bank.

    Sunu Assurances led the gainers, in percentage terms, rising by 10 per cent to close at 22 kobo per share. Cutix followed with 7.69 per cent to close at N1.82. Dangote Sugar improved by 5.17 per cent to close at N12.20, per share.Mutual Benefits Assurance rose by 4.76 per cent to close at 22 kobo while Airtel Africa rose by 3.44 per cent  to close at N340 per share.

    On the negative side, Julius Berger led the losers’ chart, in percentage terms, losing 9.88 per cent, to close at N15.50, per share. Nigerian Breweries followed with a decline of 9.84 per cent to close at N30.70. Linkage Assurance lost 9.80 per cent to close at 46k, per share.Wapic Insurance dipped 9.09 per cent to close at 30k while Caverton Offshore Support Group dropped by 6.15 per cent to close at N1.83 per share.

    Total turnover stood at 208.21 million shares, valued at N1.76 billion in 3,648 deals.

    Sterling Bank was the most active stock with a turnover of 77.19 million shares valued at N95.71 million. United Bank for Africa followed with 19.82 million shares valued at N119.99 million. Zenith Bank traded 15.95 million shares worth N247.89 million.

    FBN Holdings recorded 12.86 million shares valued at N64.97 million while FCMB Group traded 9.34 million shares worth N17.74 million.

  • E-payments value drops by N96b

    E-payments value drops by N96b

    By Taofik Salako, Deputy Group Business Editor

    The Central Bank of Nigeria (CBN) has said the total volume of payments across payment channels fell by 26 per cent in April compared to the preceding month.

    The Federal Government imposed a lockdown on economic activities in Lagos and Ogun states and Abuja between March and April.

    The data available were for cheques, ATM, PoS, E-bills and NIP transactions. The CBN data for April excluded other transaction channels, such as Web, Mobile, and NEFT.

    According to provisional data available in CBN, total volume of transactions was 251.9 million in March, but dropped to 186.6 million in April.

    Transaction values also dropped from N12.3 trillion in March 2020 to N7.6 trillion in April 2020 a N4.6 trillion drop or 37.7 per cent drop in transaction value. The last time Nigeria recorded payment transactions of less than 190 million for the payment channels was in February 2018 at 159.9 million.

    In terms of value, the NIBBS or (NIP) platform remains the dominant form of transferring money by value but suffered a N3.9 trillion drop in transaction values. This, perhaps, reflects the lockdown of economic activities as most companies that rely on this platform to make transfers operated minimally. Cheque channels performed worse with only N10.3 billion in transaction value.

    PoS transactions, which reflects spending pattern of Nigerians via merchant outlets, such as supermarkets, retail markets and shops, and shopping malls. dipped by 26.2 per cent from N368.9 billion in March 2020 to just N272 billion in April.

    Despite this drop, the value of PoS transactions recorded in April appears to be an improvement, especially when you consider that average value.

    PoS transactions in 2019 was N267 billion monthly. Nigerians spent more on food, medical supplies and household items during the lockdown period. Payment transactions are closely monitored by the financial sector participants particularly FinTechs as they form the basis for the billions of Naira in fees and commissions earned on transactions.