Category: Equities

Taofik Salako, Deputy Business Group Editor

PRESTIGE Assurance Plc has increased the offer size of its rights issue from N6.73 billion to N6.82 billion as the insurance company seeks to strengthen its capital base.

Under the revised terms of the rights issue, Prestige Assurance will now be offering 13.636 billion ordinary shares of 50 kobo each at a per value of 50 kobo. The rights will now be pre-allotted on the basis of 38 new ordinary shares for every 15 ordinary shares held as at January 31, 2020.

Prestige Assurance had initially proposed to offer 13.465 billion ordinary shares of 50 kobo each at 50 kobo per value on the basis of five new ordinary shares for every two ordinary shares held as at January 31, 2020.

Shareholders of Prestige Assurance had created additional new 14 billion ordinary shares to create headroom for the new capital raising. Prestige Assurance increased its authorised share capital from N3 billion of 6.0 billion ordinary shares of 50 kobo each to N10 billion of 20 billion ordinary shares of 50 kobo each through the creation of additional 14 billion ordinary shares of 50 kobo each.

Shareholders also authorised the board of directors of the company to raise “capital by way most suitable to the company in line with the recapitalisation requirement of the National Insurance Commission”.

The New India Assurance Company Limited, Mumbai, the precursor and founder of Prestige Assurance, holds 69.50 per cent majority equity stake in the Nigerian subsidiary while Leadway Assurance Company, an unlisted Nigerian insurance company, holds 11.47 per cent equity stake.

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 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. The deadline was subsequently extended to December 31, 2020.

Nduka Chiejina Assistant Editor, Abuja

THREE hours after the three tiers of government went in for the monthly Federation Account Allocation Committee (FAAC) meeting, they all came out without agreeing on what to share for last month.

Director, Press, Federal Ministry of Finance Mr. Hassan Dodo simply told reporters that the meeting was inconclusive without giving details.

However, a FAAC member who refused to be named confirmed that the meeting was deadlocked between the federal and state governments who are the heavy weights at the meeting.

Another source told The Nation to “cast your mind back to the source of past disagreements at FAAC”. What this means is that there wasn’t enough to be shared because a revenue-generating agency did not remit fully into Federation Account.

In what has become the tradition, the source disclosed that a new date will be fixed for the continuation of the FAAC meeting after the National Economic Council (NEC) meeting scheduled for the Presidential Villa today.

There was no indication that there was anything untoward as the FAAC members gathered for the meeting. However after three hours of deliberations the members were seen filing out of the auditorium of the Federal Ministry of Finance venue of the meeting.

Last month, the meeting ended with the news that the Excess Crude Account (ECA) had been seriously depleted to $71 million.

Also within the month it was disclosed that about 50 crude oil bearing tankers were stranded at sea because of the Coronavirus pandemic.

The Federal Government has hinted that it will review the 2020 budget parameters to accommodate the difficult realities brought on the world economies by the scourge of Coronavirus.

If the deadlock persists beyond this week, civil servants across the country may have to wait longer to get their March 2020 salaries.

Taofik Salako, Deputy Business Group Editor

NIGERIAN equities staged a major recovery yesterday as widespread bargain-hunting for growth and value stocks drove the market to a net capital gain of N128 billion.

For the first time this week, the overall market position at the Nigerian equities market closed positive with average gain of 1.09 per cent.

The recovery came as Nigeria took further drastic steps to curtail possible spread of Coronavirus including travel ban on several countries and increased stimulus support from the Central Bank of Nigeria (CBN). Nigeria’s cases of Coronavirus infection increased to eight persons after confirmation of five new cases yesterday.

Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) rose from its opening value of N11.748 trillion to close at N11.876 trillion, representing a gain of N128 billion. The All Share Index (ASI)- the common value-based index that tracks all share prices at the NSE, increased from its opening index of 22,543.07 points to close at 22,789.64 points. Average year-to-date return moderated to -15.1 per cent.

With 19 advancers to 14 decliners, sectoral indices showed mixed performance. The NSE Banking Index rose by 2.1 per cent. The NSE Oil and Gas Index appreciated by 0.8 per cent. Meanwhile, the NSE Consumer Goods Index declined by 1.5 per cent. The NSE Industrial Goods Index dropped by 1.0 per cent while the NSE Insurance Index dipped by 0.8 per cent.

MTN Communications Nigeria recorded the highest gain of N9.50 to close at N104.50. Guaranty Trust Bank followed with a gain of N1.30 to close at N20.90. Cadbury Nigeria rose by 55 kobo to close at N6.25. PZ Cussons Nigeria added 40 kobo to close at N4.45. Caverton Offshore Support Group appreciated by  22 kobo to close at N2.50 while Oando, Eterna and Custodian Investment rose by N2.21, N2.22 and N5.20 respectively.

On the downside, Nestle Nigeria dropped by N35.30 to close at N880. Okomu Oil Palm lost N4.95 to close at N55.05. Dangote Cement declined by N4.30 to close at N133.40. UAC of Nigeria dropped by 30 kobo to close at N7.20 while Africa Prudential declined by 26 kobo to close at N3.23 per share.

Total turnover declined marginally to 671.5 million shares worth N10.6 billion. Banking stocks dominated the activities’ chart with Guaranty Trust Bank leading with a turnover of 178 million shares worth N3.52 billion. Zenith Bank followed with a turnover of 147 million shares valued at N1.98 billion while Access Bank placed third with 87.96 million shares worth N566 million.

 Taofik Salako, Deputy Group Business Editor

DIRECTORS of Union Bank of Nigeria (UBN) Plc and Zenith Bank International Plc have refuted certain speculation that the two banks had reached agreement on an acquisition deal.

In separate statements on Tuesday, the Board of Union Bank said it had no such offer or agreement from Zenith Bank.

UBN stated that there was no agreement on business combination with Zenith Bank, noting that “no binding offer has been made by anyone to either its shareholders or the board of directors of Union Bank”.

Zenith Bank also stated that it has not made “any binding offer to acquire any financial institution”.

UBN is making its first dividend payment this year after 11 years of corporate restructuring. The bank has recommended payment of about N7.3 billion for the 2019 business year. Shareholders will receive a dividend per share of 25 kobo.

The dividend was a major highlight of considerable improvements in the commercial bank’s top-line and bottom-line. Key extracts of the audited report  and accounts of UBN for the year ended December 31, 2019 released yesterday at the Nigerian Stock Exchange (NSE) indicated that gross earnings grew by 14 per cent from N140.1 billion in 2018 to N159.9 billion in 2019. Interest income had grown by 11 per cent from N104.8 billion to N116.5 billion. Non-interest income also rose by 23 per cent from N35.3 billion to N43.3 billion.

The report further showed that operating expenses declined marginally from N71 billion to N70.8 billion. Net operating income increased from N89.7 billion to N95.5 billion. Profit before tax grew by 33 per cent from N18.7 billion to N24.7 billion. Profit after tax also rose by 32 per cent from N18.4 billion to N24.4 billion.

The balance sheet also emerged stronger. Gross loans rose by 20 per cent from N496.8 billion in 2018 to N595.3 billion. Customer deposits increased by 5.0 per cent to N886.3 billion in 2019 as against N844.4 billion in 2018.

Taofik Salako, Deputy Group Business Editor

NIGERIAN equities showed strong underlying rally on Tuesday but losses suffered by large-cap stocks depressed the market situation.

With 27 advancers to 12 decliners, benchmark indices at the Nigerian stock market indicated average decline of 0.71 per cent, equivalent to net capital depreciation of N84 billion. Average year-to-date return worsened to -16.0 per cent.

The negative market situation was driven largely by losses suffered by large-cap stocks, especially Dangote Cement, Nigeria’s most capitalised stock.

The All Share Index (ASI)-the value-based index that tracks all share prices at the Nigerian Stock Exchange (NSE), declined from its opening index of 22,705.19 points to close at 22,543.07 points. Aggregate market value of all quoted equities also dropped from its opening value of N11.832 trillion to close at N11.748 trillion.

Sectoral indices showed mixed performance. The NSE Banking Index rose by 5.6 per cent while the NSE Insurance Index appreciated by 0.9 per cent. However, the NSE Industrial Goods Index declined by 2.2 per cent. The NSE Oil & Gas Index dropped by 0.61 per cent while the NSE Consumer Goods Index dipped by 0.04 per cent.

Dangote Cement led the losers’ list with a drop of N15.30 to close at N137.70. CAP followed with a loss of N1.95 to close at N18. Ardova Oil declined by N1.50 to close at N13.80. Nascon Allied Industries lost 95 kobo to close at N8.55 while International Breweries dipped by 55 kobo to close at N5.20 per share.

On the positive side, Nigerian Breweries led the gainers with a gain of N2.05 to close at N30. MTN Communications Nigeria followed with a gain of N1.90 to close at N95. Lafarge Africa rose by N1 to close at N11. Stanbic IBTC Holdings rose by 95 kobo to close at N30.25. Zenith Bank chalked up 70 kobo to close at N13.50 while Guaranty Trust Bank added 60 kobo to close at N19.60 per share.

Total turnover increased by 22.6 per cent to 675.8 million shares worth N8.1 billion. Banking stocks dominated the activities’ chart with Zenith Bank leading with a turnover of 173.94 million shares worth N2.32 billion. Guaranty Trust Bank followed with a turnover of 131.06 million shares worth N2.57 billion while FBN Holdings placed third with 119.27 million shares valued at N478.91 million.

“We expect the bearish sentiment to persist for the rest of the week. However, we note that there are opportunities for bargain hunting,” Afrinvest Securities stated.

Managing Director/Chief Executive, Heritage Bank Limited Ifie Sekibo has advised Small and Medium Enterprises (SMEs) to reinvent themselves to remain competitive and overcome the challenges of the COVID-19 pandemic.

Speaking on “Converting ideas into reality with focus on SME’s”, Sekibo also stressed the needs for SMEs to continually embrace partnership and function as an integral part of a value chain.

He said: “For SMEs to strive, they must continually re-invent themselves, one big plus for SMEs is that they are quite small, and they can easily change.

“Cooperation is key at this very time. I advocate always, competition is good but complementing each other is better, it comes with value chain principle.

“When you plan yourself in a value chain, you gain more because the big dinosaurs need the small SMEs to survive. The economy of Nigeria needs the SME to survive.

“I recommend that partnerships are developed in the space of SMEs, one-man business find it difficult to survive in an economy that is changing on daily basis or even hourly.

“If you want to remain viable, your dreams being viable, partnerships are good way to go.”

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Sekibo also counselled SMEs on the need to adapt to the realities of a new world occasioned by the COVID-19 pandemic, especially the increased adoption of electronic channels (E-Channels) for productivity and product marketing.

He said: “The truth is that even after this pandemic, we can never return to the normal way because this is the new normal and in our desperation to find solution, mistakes abound, failures will set in and most of us will hide from our failures other than face it.

“We will blame everybody for it and some of us will throw in the towel. My advice to SMEs at this critical time is that since this is a failure not caused by you or anybody, you should accept the failure. Let us begin to make amends.”