Category: Equities

 Taofik Salako,  Capital Market Editor

 

NIGERIAN equities reopened on Monday with continuing bearish sentiment as selloffs across the sectors depressed investors’ value by N96 billion.

With about two decliners for every advancer, most transactions were closed at discounts as traders opened up market orders to attract deals.

Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average decline of 0.7 per cent, equivalent to net capital depreciation of N96 billion. With this, Nigerians equities have lost 4.4 per cent so far this month while the continuing decline moderated the average year-to-date return to 2.7 per cent.

The All Share Index (ASI)-a value-based common index that tracks all share prices at the Exchange, dropped from its opening index of 27,755.87 points to close at 27,570.94 points. Aggregate market value of all quoted equities also dropped from its opening value of N14.456 trillion to close at N14.360 trillion.

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All sectoral indices also closed negative with the exception of the NSE Oil and Gas Index, which rose by 0.6 per cent. The NSE Industrial Goods Index dropped by 1.6 per cent. The NSE Banking Index declined by 1.5 per cent. The NSE Consumer Goods Index depreciated by 1.3 per cent while the NSE Insurance Index declined by 0.8 per cent.

There were 18 decliners to 11 advancers. Guaranty Trust Bank led the decliners with a drop of  90 kobo to close at N29. BUA Cement followed with a loss of 80 kobo to close at N35. International Breweries declined by 70 kobo to close at N7.05. Ecobank Transnational Incorporated dipped by 60 kobo to close at N6.40. Dangote Sugar Refinery dropped by 50 kobo to close at N12.35 while Lafarge Africa lost 40 kobo to close at N15.10 per share.

On the positive side, Oando led the advancers with a gain of 15 kobo to close at N3.60. Africa Prudential rose by 7.0 kobo to close at N4.75. Custodian Investments appreciated by 5.0 kobo to close at N6.05 while Jaiz Bank, SAHCOL and NPF Microfinance Bank chalked up 4.0 kobo each to close at 68 kobo, N2.91 and N1.15 respectively.

Total turnover meanwhile rose to 134.61 million shares valued at N1.58 billion in 3,302 deals.  Zenith Bank was the most active stock with a turnover of 22.45 million shares valued at N441.6 million. United Capital followed with a turnover of 17.16 million shares worth N50.98 million while Guaranty Trust Bank placed third with 12.42 million shares worth N362.84 million.

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

 

 

By Taofik Salako, Capital Market Editor

Investors in Nigerian equities lost N162 billion in capital gains as turnover at the stock market declined by more than one-third. The decline moderated the average year-to-date return for Nigerian equities to 3.40 per cent at the weekend.

The All Share Index (ASI), the common value-based index that tracks all share prices at the Nigerian Stock Exchange (NSE) indicated average decline of 1.11 per cent last week, equivalent to net capital loss of N162 billion.

The ASI dropped from its week’s opening index of 28,067.09 points to close weekend at 27,755.87 points. Aggregate market value of all quoted equities on the NSE also dropped correspondingly from its week’s opening value of N14.618 trillion to close at N14.456 trillion.

All sectoral indices also closed negative with the exception of the NSE Industrial Goods Index, which rose by 0.78 per cent. The NSE 30 Index, which tracks the 30 largest stocks, dropped by 1.30 per cent. The NSE Banking Index slipped by 0.21 per cent. The NSE Insurance Index dipped by 2.16 per cent. The NSE Consumer Goods Index dropped by 6.47 per cent while the NSE Oil and Gas Index depreciated by 0.69 per cent.

Total turnover dropped to 912.175 million shares worth N12.126 billion in 17,083 deals last week as against a total of 1.478 billion shares valued at N20.295 billion traded in 23,263 deals two weeks ago.

Read Also: Nigerian equities can repeat 2017 feat in 2020, says Kurfi

The financial services sector led the activity chart with 624.219 million shares valued at N7.129 billion traded in 9,640 deals; thus contributing 68.43 per cent and 58.79 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with 93.204 million shares worth N452.093 million in 861 deals while oil and gas sector placed third with a turnover of 59.267 million shares worth N124.638 million in 1,254 deals.

Banking stocks dominated the activities chart with three of Nigeria’s top seven banks leading the chart. The three most active stocks-Zenith Bank Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc accounted for 304.089 million shares worth N5.788 billion in 4,290 deals, contributing 33.34 per cent and 47.73 per cent to the total equity turnover volume and value respectively.

Also, a total of 1,540 units valued at N137,421 were traded in five deals compared with a total of 3,840 units valued at N12.029 million traded in eight deals penultimate week.

In the sovereign debt market, a total of 23,923 units of Federal Government bonds valued at N28.986 million were traded in 22 deals compared with a total of 55,246 units valued at N63.094 million traded in 15 deals two weeks ago.

There were 19 gainers and 35 losers last week as against 15 gainers and 49 losers recorded in the previous week. Livestock Feeds led the gainers, in percentage terms, with a gain of 16.67 per cent to close at 70 kobo. United Capital followed with a gain of 15.29 per cent to close at N2.94. Transnation-wide Express rose by 11.11 per cent to close at 90 kobo. Learn Africa appreciated by 9.73 per cent to close at N1.24 while Prestige Assurance rose by 9.26 per cent to close at 59 kobo per share.

On the negative side, Skyway Aviation Handling Company led the decline with a drop of 23.26 per cent to close at N2.87. Guinness Nigeria followed with a drop of 16.56 per cent to close at N25.20. Vitafoam Nigeria dropped by 12.11 per cent to close at N4.79. Nestle Nigeria and Neimeth International Pharmaceuticals lost 10 per cent each to close at N1,242 and 45 kobo respectively while MRS Oil Nigeria dropped by 9.8 per cent to close at N13.80 per share.

By Taofik Salako, Capital Market Editor

THE Securities and Exchange Commission (SEC) has blocked assets valued at about N2.35 billion belonging to ponzi schemes as the Commission vows to further confiscate illegal assets and prosecute operators of unapproved schemes.

Ponzi scheme refers to illegal phony savings and investment scheme often run by unapproved persons in violation of extant rules and guidelines. Ponzi scheme is also known as “wonder bank”.

SEC stated that it blocked four bank accounts and real estate properties linked to operators of ponzi schemes while the Commission also sealed premises of four operators.

The blocked assets included N1.12 billion in various bank accounts and real estate properties valued at N1.23 billion.

Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk, who presented the Commission’s scorecard for last year and plan for 2020 in Lagos, said the Commission recorded significant successes in its efforts to protect the Nigerian public from unscrupulous persons.

She explained that 2019 saw an upsurge in the activities of ponzi schemes in Nigeria and the Commission had to step up its enforcement actions to safeguard the public and deter the illegal operators.

According to her, the Commission went after many of the promoters and directors of such schemes, securing a conviction last year while many others are presently being prosecuted.

“We will continue to combat ponzi schemes this year. We intend to continue leveraging on the Memoranda of Understanding that were signed between the Commission and key stakeholders like the Nigeria Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) to strengthen our ability to do this,” Uduk said.

On the other areas of enforcement and investor’s protection, Uduk outlined that the Commission received 167 complaints and resolved 102 complaints in 2019 with N100.11 million and 8,848 shares recovered for investors. SEC is also prosecuting eight capital market fraud cases while it generated N194.48 million from penalties during the period.

She said the focus of the Commission enforcement program-me in 2020 will continue to be the protection of investors with particular attention to retail and unsophisticated investors in the Nigerian capital market.

“The Commission will continue to adopt a zero-tolerance policy on unethical practices by in the capital market with a view to promoting a culture of compliance and enhanced reporting. We will adopt a more proactive inspection and market surveillance regime to nip unethical practices and misconduct in the bud. We shall be referring more cases of infractions for hearing before the SEC Administrative Proceedings Committee. Furthermore, we shall be referring more matters for criminal prosecution to the office of the Attorney – General of the Federation in line with the provisions of Section 304 of the Investments and Securities Act 2007,” Uduk said.

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She said the Commission plans to introduce major rules in 2020 to regulate activities of retail online foreign exchange (forex) trading, crowdfunding, nominee companies and margin lending.

The proposed rules will seek to provide a framework for the regulation of retail online forex trading in the Nigerian capital market which has since 2005 to date remained unregulated.

Also, to foster economic development and deepen the market, a rule is being considered to provide a regulatory framework permitting private companies with the required structure and mechanism in place to raise capital from the public through crowdfunding.

Another proposed rule will enable the Commission to bring all nominee companies under proper regulation and make provision for registration requirements, ownership structure, code of conduct and other matters incidental thereto.

Also, the Commission will amend the margin lending rules to mitigate and tackle market abuse practices by dealers or member companies by restricting the excessive use of credit for purchasing or transacting in securities by dealers or member companies.

She expressed optimism that the Nigerian capital market will record positive performance in 2020 citing macroeconomic policies and activities by the Commission and other stakeholders.

“Going forward into 2020, we expect the equities segment to benefit from various government initiatives targeted at improving the country’s business environment as well as efforts to lower interest rate and increase liquidity through increase in loan to deposit ratio,” Uduk said.

She added that the debt segment of the capital market will equally benefit from increased sovereign bond issuances coming from the need to finance the high deficit of 2020 budget.

“Aided by the various Commission’s and market’s initiatives to further deepen the market, our outlook on the Nigeria’s capital market for 2020 is therefore generally positive,” Uduk said.

 

 

Polaris Bank is rewarding its customers with cash prizes and other exciting gifts through its Polaris “I Love Purple” Valentine’s Day campaign: “To win in the 10-day “I Love Purple” campaign.

 Customers are required to spend a minimum of N5,000 using their Polaris debit Card between February 6 and 13; and take a picture of themselves wearing any Purple item.

They are expected to follow the bank’s official Social Media handle @polarisbankltd; tag the Bank and share the picture using the hashtag #ILovePurple.

Top 20 highest liked posts will win N100,000 each, while another set of 10 customers win free movie tickets. The winners will be published on the Bank’s social media pages and subsequently rewarded at the end of the campaign

According to the bank’s Head of Strategic Brand Management, Nduneche Ezurike, the 10-day “I Love Purple” campaign will give Friends and lovers “visiting our Instagram social media handle the opportunity to win mouth-watering cash prizes and other exciting gifts”.

By Colins Nweze

Fifteen Nigerians have  won in the MTN Nigeria’s ‘Turn It Up’ campaign in  Aba. This is coming after the Information Community Telecommunication (ICT) company launched the campaign with an inspiring TVC in Lagos.

 At the Aba leg of the activation, 10 Nigerians received grants to boost their businesses and careers as MTN explored interesting ways to ‘turn it up’ for the exciting audience.

One of the winners, Mary Thomas, a recycler who collects leather waste from  Aba market and turns them into beautiful products shared her challenge of not having the best tools to turn her business into a big enterprise.

MTN Nigeria has supported her with N1 million  grant to improve her business within the next few weeks. Through the MTN Foundation, these Nigerians who were selected randomly from the audience will receive support to ‘Turn Up’ their businesses.

They will also undergo a  capacity building session sponsored by the Foundation, to enhance their entrepreneurial capacity.

With Turn it Up, MTN Nigeria aims to encourage Nigerians to search within, think out of the box and ‘turn up’ their businesses, personal lives, their imaginative and innovative energies with the company’s extensive portfolio of products and services. These will serve as the medium to achieve their goals and dreams.

By Colins Nweze

Fidelity Bank Plc has expanded the scope of the Fidelity Youth Empowerment Academy (YEA) to accommodate new areas of vocational training.

The bank in strategic partnership with Gazelle Academy started the seventh edition of the YEA at the Sokoto State University (SSU), Sokoto.

Apart from the training on tailoring and make-up, participants will also be provided with requisite skills and first-hand knowledge in Fashion Designing, Cloth Embellishment, Cocktail and Phone Engineering among others.

Over 200 undergraduates of SSU will benefit from this programme. So, why does the bank invest in young people?

When the Fidelity Bank says, “turn your passion into a pay cheque”, that’s a message of empowerment.

As a bank, it recognises that the youth look at the world with fresh eyes and such lively determination, and create much-needed change by throwing convention out the window. That’s why the bank, through its laudable interventions, continues to develop innovative programmes that unleash the creative energies of Nigerian youths which in turn represents formidable new frontiers for sustainable national development, says Fidelity Bank Managing Director, Nnamdi Okonkwo.

YEA is a skills acquisition, training and productivity improvement scheme targeted at youths, especially undergraduates in higher institutions. This empowerment programme, which is part of the bank’s Corporate Social Responsibility (CSR) initiatives, is primarily targeted at creating a new breed of entrepreneurs among Nigeria’s boisterous youth population.

Over 3,000 students have benefited from YEA programmes at the University of Nigeria, Nsukka; Waziri Umar Federal Polytechnic, Birnin-Kebbi; Federal Polytechnic, Oko, Anambra State; Rivers State University of Science and Technology, Port Harcourt; Bayero University, Kano and Nnamdi Azikiwe University, Awka.

By Colins Nweze

The Simba Den, a retail chain dedicated to inverters has opened a new store in Kano.

The chain, which promises end-to-end solutions to customers’ power backup and power protection needs, is already the most trusted name in the business with stores across the country, including Lagos, Abuja, Ibadan and Port Harcourt.

The company is offering opening month discounts on the leading brands of inverters in the country – Luminous and Genus, as well as on leading power protection devices brand, Sollatek.

The showroom was inaugurated by Alhaji Yahaya Inuwa Abbas, Dan Majen Kano and District Head of Gwale.

Other dignitaries at the event included Atinuke Ahamed – Team Lead, Africa Field Epidemiology Network, Kano state and Hajiya Aisha Alama – Director of Alama Pharmaceuticals and senior executives of Simba Group, operators of The Simba Den.

Inverter solutions have  gained prominence across the country, as people flock to their unique benefits – solutions which allow users to enjoy always-on power, whilst also saving them money.

While many people have heard about these solutions, there are still some who would like to learn more.  Using a consultative approach to customising power solutions is the mission of The Simba Den, and is testament to their success and rapid expansion.

The Simba Den is also Nigeria’s premier online portal for inverters, batteries and other power products. Mr Ravi Srivastava, Business Head Simba Power Products said, “our core value is to bring world-class innovations and technologies to Nigeria while extending the best customer-centric and user-friendly services to our clientele across the nation. We all desire always-on power, and we hope that by being nearer to our customers in Kano, we can serve them better and support them with our award-winning Simba Service offering”.

The Simba Group is one of the country’s most respected business groups and has been in operation in Nigeria for over 30 years. In that time, the group has contributed greatly to the economy, and its portfolio of widely recognised brands, continue to dominate industries in which Simba operates. Their Luminous inverter line is the bestselling inverter in the country.

By Taofik Salako, Capital Market Editor

 

The Nigerian Stock Exchange (NSE) will change from a member-owned mutual company limited by guarantee to a public limited liability company with authorised share capital of 2.5 billion ordinary shares, with about two billion expected to be issued in the immediate period of the conversion.

The scheme of arrangement for the demutualisation of the NSE obtained yesterday by The Nation indicated that the NSE will transit into a holding company, Nigerian Exchange Group (NEG) Plc, which will be the parent company for the Nigerian Exchange Limited, the successor that will carry on the securities trading business of the Exchange, and other subsidiaries.

The NSE will transfer its securities  exchange  licence and other assets necessarily required to carry out the securities exchange function; which will   include human   resources,   securities   exchange   function related contracts, the  trading facilities  comprising of the  trading floors, work stations, telephones and other office equipment, such as cabinets and others, quotation board,  stock  price  electronic  display  device,  stock  printers,  inquiry display equipment and other assets to Nigerian Exchange Limited pursuant to the scheme.

Members of the NSE are scheduled to meet on March 3, 2020 in Lagos at a court-ordered meeting to consider and approve the scheme of arrangement. Already, Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has granted the scheme its “no objection” approval, paving the way for the continuation of other processes.

According to the scheme, the demutualised NEG will take off with authorised share capital of N1.25 billion comprising of 2.50 billion ordinary shares of 50 kobo each, which will be registered with the Corporate Affairs Commission. The NEG will subsequently set aside 2.0 billion ordinary shares of 50 kobo each as issued share capital, which will be registered with the SEC.

A total of 40.08 million ordinary shares, representing 2.0 per cent of the proposed issued shares of NEG will be set aside for allotment to parties who are adjudged as being entitled to shares in the demutualised Exchange, otherwise known as claims review shares, pursuant to the provisions of the Demutualisation Act 2018. The apportionment of 2.0 per cent as the claims review shares is based on an analysis of the probable quantum of shares that would be required to settle each claim.

This was determined given the rigorous and robust process undertaken to verify and confirm the names on the Register

However, in the event the claims review shares are insufficient to satisfy successful claims, additional shares will be allotted from the demutualised Exchange’s authorised share capital.

A total of 1.96 billion ordinary shares, representing 98 per cent of the issued shares, the balance of the issued shares following the reservation of the claims review shares, will be apportioned between dealing and ordinary members on the basis of a ratio of 78:22, respectively.

The shares shall be allotted on an equal basis within each block of the dealing and ordinary member groups, based on a share allotment established on the basis of the valuation of the Exchange and the distribution rationale1 approved by the council of the NSE

Accordingly, each dealing member shall receive 6.01 million ordinary shares of 50 kobo each in NEG credited as fully paid while each ordinary member shall receive 2.44 million ordinary shares of 50 kobo each in NEG credited as fully paid.

The scheme indicated that the NSE reported a net asset value of N25.6 billion as at December 30, 2018, which had been factored into the valuation that was undertaken.

With the approval of the scheme, all assets, liabilities and undertakings including real property and intellectual property rights of the NSE- with the exception of the securities exchange licence and all assets and appurtenances in relation to the securities trading business of the NSE – shall be retained by NEG.

Nigerian Stock Exchange (NSE) President, Otunba Abimbola Ogunbanjo, said the conversion of the NSE to NEG Plc will make the Exchange the 57th to demutualise among the 70 members of the World Federation of Exchanges as at June 27, last year; with benefits and opportunities becoming available to members and other stakeholders of the Exchange.

He said the NEG will benefit from improved liquidity and capital management as the Exchange easily raise funds to finance strategic objectives and expansion.

According to him, the opportunity for a potential initial public offer or strategic investment is created, opening up opportunities for domestic and institutional investors and creating liquidity for existing members.

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“Demutualisation enables the Exchange to raise capital efficiently and effectively at market determined pricing. Members can realise the economic value of their interest by exercising the right to sell.

Capital management is critical to an Exchange’s sustenance, demutualisation enables the Exchange to optimise the level and mix of capital reserve,” Ogunbanjo said.

He outlined that with demutualisation, the Exchange will be a public company and its shares will be tradable on an available exchange in accordance with the SEC’s regulations.

He added that demutualised Exchange and its subsidiaries will be subject to high standards of corporate governance expected of public companies to take decisions that are in the interest of all members as well as the Exchange.

“In regards to regulatory functions; the separation of ownership and trading rights will give the Exchange and its subsidiaries greater independence from its professional intermediaries.

As a public company, the board of directors of the Exchange is required to act in a manner that benefits the company and its shareholders including minority shareholders.

The board of directors must also take decisions that have benefits to a broader scope of stakeholders such as employees, suppliers, shareholders, government etc,” Ogunbanjo said.

He pointed out that the demutualised Exchange will benefit from global competitiveness as the new Exchange will be forced to examine its role as a trading venue and take on necessary improvements to facilitate more competitive strategies.

He noted that technological improvements will allow for efficient and effective matching of buy and sell orders of clients at lower transaction costs, whilst offering transparency, trader anonymity and extended trading hours demonstrating the Exchange’s role as a ‘Niche’ player.

“Improved global trading facilities will maximize economies of scale and scope and increase our accessibility and market reach. The Exchange will be better positioned to seek strategic alliances and consolidation, introducing greater geographical collaborations and merger and acquisition possibilities.

A demutualised Exchange affords all Nigerians and the foreign investors the opportunity to become shareholders and creates opportunities for strategic partnerships and inorganic growth. In addition, demutualisation will enhance our access to skills, knowledge and technical efficiencies from strategic shareholders.

Our brand will achieve global visibility thus enhancing the profile of the Exchange,” Ogunbanjo said.

He said the post demutualisation entities would be subject to companies’ income tax and other relevant taxes payable by for-profit organisations, thereby providing additional source of tax revenue for the Nigerian government.

 

Our Reporter

Access Bank Plc will be listing its trail-blazing N15 billion green bond on the Luxembourg Stock Exchange (LuxSE), making it the first company to take advantage of the cooperation agreement between Nigeria and Luxembourg on green bond.

In a regulatory filing yesterday, Access Bank stated that it has applied to the LuxSE for the listing of the N15 billion green bond on the official list of LuxSE. However, the bond will not be traded on the LuxSE. The N15 billion green bond, the first of its kind to be issued by an African corporate, had earlier been listed on the Nigerian Stock Exchange (NSE) and FMDQ Securities Exchange

The five-year fixed rate senior unsecured N15 billion green bond was issued in 2019 and carried a coupon of 15.50 per cent. It will mature in 2024. The bond was awarded an Aa- rating by Agusto & Co while the underlying framework verified by PwC (UK).

The bond was certified by the Climate Bonds Initiative as having met the global climate bonds standard. The offer for the green bonds was achieved by way of a book build which was fully subscribed. The bonds priced at a coupon of 15.5 per cent, with participation from a wide range of asset managers and pension fund administrators.

Group Managing Director, Access Bank Plc, Mr. Herbert Wigwe, said the green bond issuance highlighted the bank’s commitment to sustainability and its status as a pioneer in green financing in both the domestic and international capital markets.

He noted that the bond comes amidst a global drive for responsible and sustainable green financing and will allow the financing of new loans and refinancing of existing loans in accordance with the bank’s green bond framework.

He said the green bond will support projects directed at flood defense, solar generation facilities and agriculture.

“At Access Bank we are a pioneer in both domestic and international capital markets, leading the way with our commitment to sustainable banking. We hope that this bond issuance inspires other African companies to support the long-term development of the green finance market whilst simultaneously realizing the growth potential of the fast-developing low carbon economy,” Wigwe said.

The NSE and Luxembourg Stock Exchange (LuxSE ) had in 2019 signed a Memorandum of Understanding (MoU) that would see the two exchanges cooperating in promoting cross listing and trading of green bonds in Nigeria and Luxembourg. The MoU also established an agreement for the two exchanges to collaborate with a view to sharing best practices and organising joint initiatives in their respective markets.

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The MoU also establishes an agreement for the two exchanges to collaborate with a view to sharing best practices and organising joint initiatives in their respective markets.

With more than 35,000 listed securities, including more than 29,000 bonds, from 3,000 issuers in 100 countries, LuxSE is one of the world’s leading exchanges for the listing of international financial securities.

In 2016, LuxSE launched the Luxembourg Green Exchange (LGX) and became the first exchange in the world to operate a platform dedicated entirely to sustainable financial securities. LGX has become a meeting place for impact-conscious issuers and investors, and now has a 50 per cent market share of listed green, social and sustainability bonds worldwide. LuxSE also operates a specialist subsidiary, Fundsquare, which provides services to support and standardise cross-border distribution of investment funds.