The Nation Newspaper

Category: Equities

  • Nigerian equities rally N1.23tr gains in six days

    By Taofik Salako, Capital Market Editor

    Nigerian equities charged further yesterday to their sixth consecutive positive trading session, chalking up N402.6 billion to push net capital gains for the past six trading sessions to N1.23 trillion.

    The sustained rally since trading started in 2020 signaled a major recovery for Nigerian investors, after the equities market lost about N1.71 trillion in 2019. Nigerian equities closed 2019 with negative average full-year return of -14.60 per cent. It had recorded negative average full-year return of -17.81 per cent in 2018.

    Average return yesterday stood at 2.92 per cent, equivalent to net capital gain of N402.58 billion. Average year-to-date return rallied to 9.51 per cent, implying net capital gains of N1.23 trillion so far this year.

    The listing of BUA Cement meanwhile added N1.2 trillion to total market capitalisation of all quoted equities. With the capital gains and primary listing, total market value of quoted equities at the Nigerian Stock Exchange (NSE) rose from its opening value of N13.787 trillion to close at N15.164 trillion.

    The All Share Index (ASI)- the value-based common index that tracks share prices at the NSE, leapt to 29,395.57 points as against its opening index of 28,562.48 points.

    Read Also: NSE expands scope of Islamic equity index

    With 22 gainers to 21 losers, the market performance was driven by gain recorded by NSE’s most capitalised company, Dangote Cement Plc, which rose by N11 to close at N175 per share. The NSE Industrial Goods Index, where Dangote Cement is listed, rose by 7.89 per cent. On the downside, the NSE Banking Index dropped by 0.39 per cent. The NSE Insurance Index dipped by 0.31 per cent. The NSE Consumer Goods Index slipped by 0.21 per cent while the NSE Oil and Gas Index dipped by 0.07 per cent.

    MTN Nigeria Communications followed Dangote Cement with a gain of N6.50 to close at N116. Presco rose by N5.05 to close at N57.05. BUA Cement added N3.45 to close at N38.45. Guaranty Trust Bank chalked up N1.30 to close at N32.55. Lafarge Africa chalked up 55 kobo to close at N15.40 while UAC of Nigeria added 30 kobo to close at N9.35 per share.

    On the negative side, Union Dicon Salt led the losers with a loss of N1.20 to close at N10.95. Access Bank dropped by 65 kobo to close at N10.95. Unilever Nigeria dropped by 60 kobo to close at N19. United Bank for Africa declined by 50 kobo to close at N8.35 while Flour Mills of Nigeria dropped by 40 kobo to close at N23 per share.

    Total turnover stood at 693.19 million shares valued at N7.44 billion in 6,634 deals. Wapic Insurance was the most active stock with a turnover of 190.10 million shares worth N68.48 million. Transnational Corporation followed with N82.82 million shares valued at N89.81 million while Zenith Bank placed third with 80.78 million shares worth N1.77 billion.

    “Following the recent trend in the market, we maintain our bullish outlook on the market this week,” Afrinvest Securities stated.

    United Capital Plc has projected that Nigerian equities may deliver a modest average return of some 5.3 per cent in 2020, although the overall market outlook remains susceptible to external shocks and domestic policies.

  • Wapic Insurance’s N5.9b rights issue closes

    By Taofik Salako, Capital Market Editor

    Application list for the ongoing capital raising by Wapic Insurance Plc closes today. The rights issue, which opened on Wednesday November 20, 2019, was initially scheduled to close on Tuesday, December 31, 2019 but was extended to today, Friday January 10, 2020.

    Wapic Insurance is offering 15.61 billion ordinary shares of 50 kobo each to existing shareholders at 38 kobo per share. The rights issue had been pre-allotted to shareholders on the register of the insurance company as at the close of business on Thursday September 19, 2019 on the basis of seven new ordinary shares of 50 kobo each for every six ordinary shares of 50 kobo each already held.

    Read Also: Wapic Insurance extends N5.9b rights issue

    The insurance company will use the net proceeds to beef up its capital base ahead of regulatory deadline for new minimum capital requirements for insurance functions.

    The National Insurance Commission (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.

  • CBN lends N662b to banks for liquidity control

    By Collins Nweze

     

    Commercial and merchant banks accessed N662.44 billion loans from the Central Bank of Nigeria (CBN) to control their liquidity and maintain stability, the CBN’s Economic report for last November has shown.

    The report also showed that the loans, which came through the Standing Lending Facilities (SLF), were meant to allow the lenders raise up their positions.

    Daily average was N41.40 billion from November 1 to 26. Daily request ranged from N0.48 billion to N126.74 billion. Total interest earned was N0.37 billion.

    The SLF is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets.

    The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit. The rates for Standing Deposit Facilities (SDF) and SLF remained at nine and 16 per cent, respectively.

    The report said the total SLF granted, during the review period, was N662.44 billion (made up of N490.29 billion direct SLF and N172.15 billion Intraday Lending Facilities (ILF) converted to overnight repurchase agreement.

    According to the report, the trend at the CBN standing facilities window showed a decline at the SLF window, as against the increased patronage at the SDF window. Applicable rates for the SLF and SDF remained at 15.50 and 8.50 per cent.

    The total SDF granted during the review period was N443.63 billion with a daily average of N26.09 billion  during the transaction days. Daily request ranged from N6.30 billion to N42.75 billion. Cost incurred on SDF stood at N0.16 billion.

    Further analysis of the report showed that total assets and liabilities of commercial banks amounted to N41,425.1 billion as at last October, showing 4.6 per cent increase, compared with the level at the end of the preceding month.

    Funds were sourced, mainly, from increase in unclassified liabilities, and the mobilisation of time, savings and foreign currency deposits. The funds were used, mainly, to acquire unclassified assets, foreign assets and to boost reserves.

    Read Also: World’s central banks launch green bonds fund

     

    Also, commercial banks’ credit to the domestic economy rose by 0.6 per cent to N22,261.0 billion by October, last year, compared with the level at the end of the preceding month. The development was attributed to the rise in its claims on the private sector.

    Total specified liquid assets of banks stood at N14.2 trillion  at last October, representing 59.3 per cent of their total current liabilities.

    At that level, the liquidity ratio was 0.9 percentage point lower than the level at the end of the preceding month, and was 29.30 percentage points above the stipulated minimum liquidity ratio of 30 per cent.

    The loan-to-deposit ratio, at 61.9 per cent, was 0.3 percentage point below the level at the end of the preceding month and was lower than the maximum ratio of 80.0 per cent by 18.10 percentage points.

    Also, at N858.92 billion, the estimated federally-collected revenue (gross) in November 2019 fell below both the monthly budget estimate of N1,246.07 billion and the preceding month’s receipt of N894.09 billion by 31.1 per cent and 3.9 per cent, respectively. The decline, relative to the monthly budget estimate, was attributed to shortfall in both oil and non-oil revenues.

    Oil receipts, at N489.08 billion or 56.9 per cent of total revenue, was below both the monthly budget of N798.83 billion and the preceding month’s receipt of N577.30 by 38.8 per cent and 15.3 per cent, respectively.

    The decrease in oil revenue, relative to the monthly budget estimate, was attributed to shut-ins and shut-downs at some Nigeria National Petroleum Corporation terminals, due to pipeline leakages and maintenance.

     

  • Buhari congratulates FirstBank MD on International Award

    By Collins Nweze

     

    President Muhammadu Buhari has felicitated with the Managing Director/Chief Executive Officer, FirstBank Limited, Dr Adesola Adeduntan, on his award of Distinguished Alumnus of the Year by Cranfield School of Management, United Kingdom.

    Buhari’s congratulatory message was contained in a statement by his Special Adviser on Media and Publicity, Mr Femi Adesina, in Abuja on Wednesday.

    According to the News Agency of Nigeria (NAN), the president said the award was a vote of confidence on Nigerian professionals, many of who rank among the best in the world.

    “The fact that Cranfield School of Management is giving Adeduntan the award because ‘he exemplifies the values of the school’ and serves as ‘role model to students and potential students’, is an endorsement that should make every Nigerian proud,’’ the president noted.

    Adeduntan, who attended Cranfield School of Management in 2004 as British Chevening Scholar, is a Fellow of the Chartered Institute of Banking of Nigeria (CIBN) and the Institute of Chartered Accountants of Nigeria (ICAN).

    The bank chief has positioned FirstBank  as a leader in promoting financial inclusion in Nigeria. The bank has continually reached the underbanked and un-banked population to reduce poverty, bolster economic growth and development of Nigeria and these milestones have earned  him the award.

    Adeduntan is one of the 21st century  visionary men who dared, achieved and moved longstanding businesses to enviable heights. He has succeeded where others feared to try.

    As a global thought leader, Adeduntan is well-sought after and has shared his experience and expertise at notable events across the world espousing and even envisioning financial inclusion in the next 125 years.

    These events include the 2019 Ethical Finance Conference in the UK which had in attendance over 500 leading finance practitioners from all over the world, including with Sarah Breeden, Bank of England; Dame Susan Rice, Banking Standards Board; Gary Gillespie, Chief Economist, Scottish Government; a keynote speaker at 2019 University of Edinburgh Sustainable Business in Africa Forum; The Africa CEO Forum 2018, Abidjan; the London School of Economics and Political Science (LSE) Annual State of Nigeria Conference as well as 2019 LSE Africa Summit.

    Read Also: Obaseki congratulates Buhari on his 77th birthday

     

    Adeduntan has won other laurels due to his sustained professional achievements; significant economic and social impact; leadership qualities as well as a role model. These include the 2018 African Banker of the Year in African Leadership Magazine Persons of the Year Award in South Africa.

    Analysts believe that the award of the 2019 Cranfield University Distinguished Alumnus of the Year Award, United Kingdom to Adeduntan was in recognition of key milestones the bank has achieved under his leadership.

    Adeduntan who took the role to run one of Nigeria’s biggest Tier-1 bank since January 1, 2016 has kept in on a path of sustainable growth and contributions to the nation’s domestic economy.

    Prior to his appointment, he was an Executive Director and Chief Financial Officer for the Bank since 2014 when he was appointed to the Board of the Bank. Before joining FirstBank in 2014, Adeduntan was a Director and the pioneer Chief Financial Officer/Business Manager of Africa Finance Corporation (AFC).

    He has served as a Senior Vice-President & Chief Financial Officer at Citibank Nigeria Limited, a Senior Manager in the Financial Services Group of KPMG Professional Services and a Manager at Arthur Andersen Nigeria, among other exciting career paths.

     

     

  • Nigerian equities hit seven-month high with N471b gain

    By Taofik Salako, Capital Market Editor

     

    Nigerian equities leapt on the back of the bulls to their highest gain in more than seven months yesterday, rallying net capital gains of N471 billion in five hours.

    Benchmark indices at the  stock market indicated an average gain of 3.54 per cent, the highest gain since May 28, last year.

    The All Share Index (ASI)- the value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), crossed the 28,000 mark to close at 28,562.48 points as against its opening index of 27,586.93 points.

    Aggregate market value of quoted companies rose from N13.316 trillion to close at N13.787 trillion.

    The sustained rally so far this year pushed the average year-to-date return to 6.41 per cent. Equities have been on the upswing for the past five trading sessions.

    The momentum of activities also increased significantly as turnover rose by 66.2 per cent to 741.82 million shares valued at N9.22 billion in 7,622 deals.

    With more than three advancers for every decliner, all sectoral indices also trended upward with the NSE Industrial Goods Index leading with a return of 6.07 per cent.

    The NSE Banking Index rose by 3.87 per cent. The NSE Insurance Index appreciated by 2.72 per cent. The NSE Consumer Goods Index rallied by 0.36 per cent while the NSE Oil and Gas Index inched up by 0.17 per cent.

    “Following the recent trend in the market, we maintain our bullish outlook on the market this week,” Afrinvest Securities stated.

    There were 37 gainers against 11 losers. Nigeria’s largest capitalised company, Dangote Cement led the rally with a gain of N14 to close at N164. Presco followed with a gain of N3.85 to close at N52. Okomu Oil Palm rose by N3.50 to close at N60. Stanbic IBTC Holdings appreciated by N2.50 to close at N42.50. Julius Berger Nigeria added N1.95 to close at N21.85 while MTN Nigeria Communications chalked up N1.90 to close at N109.50 per share.

    On the negative side, Total Nigeria led the losers with a drop of N3.90 to close at N107. Unilever Nigeria followed with a loss of 40 kobo to close at N19.60. UAC of Nigeria declined by 20 kobo to close at N9.05 while UACN Property Development Company slipped by 8.0 kobo to close at N1 per share.

    Banking stocks dominated the activities chart with United Bank for Africa (UBA) the most active stock with 156.01 million shares worth N1.40 billion. Zenith Bank followed with 86.06 million shares worth N1.89 billion. Access Bank placed third with 82.44 million shares worth N963.67 million while FBN Holdings recorded a turnover of 69.4 million shares worth N524.56 million.

    Read Also: Nigerian equities rally N62b gain in bullish start

     

    United Capital Plc has projected that Nigerian equities may deliver a modest average return of some 5.3 per cent in 2020, although the overall market outlook remains susceptible to external shocks and domestic policies.

    Investors in Nigerian equities lost about N1.71 trillion in 2019 as the market closed 2019 with negative average full-year return of -14.60 per cent. It had recorded negative average full-year return of -17.81 per cent in 2018.

    In its 2020 economic outlook report titled “A Different Playing Field”, United Capital stated that its base case scenario sees equities market returning +5.3 per cent in 2020, driven by local demand for high-quality dividend-paying stocks and increased system liquidity.

    The report carefully considered events in the international economic environment, including the effects of the United States-China trade wars on the global economy, as well as piecing together the stance of the world’s biggest central banks from their decisions over the course of 2019.

    The report takes these parameters into consideration, combined with local happenings on the political and economic policy scene, to project the nature and movement of the economy and the financial market in 2020.

    According to the report, the continued auction of high yield Open Market Operation (OMO) bills to foreign portfolio investors (FPIs) may keep foreign interest in local equity market tepid amid fears of a naira devaluation and confidence deficit in the economy.

    The report noted that FPIs are likely to continue their flight to safety by swapping or selling equities for low-risk OMO bills pointing out that the outlook for stocks in 2020 was anchored on developments in the domestic and global economy with monetary policy as the biggest factor to watch.

    “From all indications, the only justification for an uptick in the equities market is the lower yield environment, supported by increased local currency liquidity. However, this will not be enough to trigger a major rally in the absence of the demand from FPIs,” United Capital stated.

     

     

  • NAICOM to liquidate Investment and Allied Assurance, Spring Life

    By Omobola Tolu-Kusimo

     

    The National Insurance Commission (NAICOM) is set to liquidate two troubled insurance companies – Investment and Allied Assurance Plc and Spring Life Assurance, the Acting Commissioner for Insurance, Sunday Thomas, has said.

    He made this known at the NAICOM Seminar for reporters in Kano.

    He said the Commission has appointed Odion Unuakhe as the receiver/liquidator to wind up Investment and Allied Assurance.

    NAICOM Secretary/Legal Adviser, Dr. Talmiz Usman, further disclosed that the commission had, on August 6, 2018, cancelled the licence of Investment and Allied Assurance.

    In February 2011, NAICOM  assumed control of the firm to stem the tide of fraudulent practices, leading to corporate governance failure and  lapses.

    Read Also: Insurance digitalisation a must, says NAICOM

     

    NAICOM removed the company’s executive management team and replaced it with an interim management.

    Shortly after, it engaged a firm of chartered accountants to probe the company’s affairs and the accounts.

    NAICOM’s audit uncovered about N14.7 billion realised from the private placement made by the company between 2006 and 2008 that was not accounted for.

    Usman said: “We appointed two receiver managers in 2018. One is Investment and Allied Assurance. It has been troubled for quite some time.The trouble started during the last recapitalisation of insurance companies in 2007.

    “The company did a Private Placement Offer (IPO). At the end, we didn’t know where the money raised from the IPO was put into. We found that some billions were diverted.

    “The second company whose license has been cancelled and under receiver/liquidator is Spring Life. It is a life company and the law says you don’t liquidate the company immediately.

    First of all, you have to transfer the life portfolio of the company and the second thing is to transfer the asset to another life insurance company. So we are the stage where Investment and Allied and Spring Life are under receivership”, he added.

     

     

     

  • Stanbic IBTC boosts Nigeria’s debt capital markets

    Stories by Taofik Salako, Capital Market Editor

     

    Stanbic IBTC Holdings Plc has reaffirmed its commitment to the growth of the debt capital markets.

    Its Chief Executive, Demola Sogunle, disclosed this at the Bonds, Loans and Sukuk Nigeria conference in Lagos.

    Sogunle noted that the Stanbic IBTC group was constantly driving innovation to encourage growth and development in the markets.

    The Stanbic IBTC Chief Executive added that the organization would continue to facilitate value added engagement between market participants to further increase understanding of the initiatives required to grow the debt capital markets in the country.

    In 2019, Stanbic IBTC won several awards such as the Best Foreign Investment Bank, Best Debt House, Best Equity House and Best Loan House in Nigeria at the EMEA finance African Banking Awards. Stanbic IBTC was also awarded Africa’s Best Investment Bank at the Euromoney 2019 Awards of Excellence. The Association of Issuing Houses, Nigeria, also recognized Stanbic IBTC as the Best Investment Bank and Commercial Paper House.

    According to Sogunle, these achievements are a demonstration of the organisation’s position as a leading, end-to-end, financial services provider in Nigeria.

    While speaking on how the Nigerian debt capital markets fared in 2019, he said that capital markets activities were at its peak in the months of of May, June and July. He added that N439 billion incorporate paper has been issued in comparison with N470 billion over the same period in 2018.

    He said: “We expect the total volume issued in 2019 to eclipse 2018 as markets have seen yields fall to levels unseen since 2015 and a number of issuers are gearing up to take advantage to lock in lower funding rates for extended tenors. Despite the undulating nature of the market, there has been increased sophistication, amongst issuers, of the different financing options available in the local debt markets with issuers effectively timing capital markets issuance to maximize cost savings relative to bank debt. We have witnessed an increasing number of corporate issuers exploring alternative funding options such as Green Bonds and Infrastructure Bonds, in addition to conventional bonds, commercial paper and Eurobonds.”

    The Bonds, Loans and Sukuk Nigeria Conference, organized by GFC Media, is regarded as Nigeria’s only annual debt finance event, covering developments of both onshore and offshore markets. With an audience of over 250 government officials, corporates, banks, funds and advisors, the event connects fundraisers with lenders and investors within the Nigerian capital markets space.

    It has been successful in bringing together all parties and stakeholders in the Nigerian debt capital markets to discuss real issues and developments affecting the local bond and loan markets.

  • Afreximbank tops Bloomberg 2019 book running league table

    Stories by Taofik Salako, Capital Market Editor

     

    The African Export-Import Bank (Afreximbank) has emerged on top of the Bloomberg 2019 Africa Capital Markets League Tables.

    The Africa Capital Markets League Tables released yesterday by Bloomberg showed that Afreximbank was the top Bookrunner for Africa Borrower Loans, ahead of Mitsubishi UFJ Financial Group Inc. and Standard Chartered Bank.

    Afreximbank recorded a loan transaction volume of over $2.79 billion or 8.7 per cent of the market share while Mitsubishi UFJ Financial Group Inc. and Standard Chartered Bank accounted for 6.8 per cent and 6.4 per cent of the market shares.

    Afreximbank also ranked second among the Mandated Lead Arrangers for Africa Borrower Loans on the League Tables, moving up one place from last year’s ranking. Its market share was 6.7 per cent on a volume of $2.51 billion.

    Afreximbank came in behind the Standard Bank of South Africa, which accounted for 8.1 per cent of the market share but was ahead of Eastern and Southern African Trade and Development Bank whose market share stood at 4.5 per cent.

    In the Administrative Agent ranking category, Afreximbank came in ninth with a five per cent market share and a volume of $8.85 billion. The category leader was Standard Chartered Bank, with a market share of 14.3 per cent, followed by BNP Paribas with 8.4 per cent market share and the National Bank of Egypt with 8.1 per cent market share.

    Bloomberg Africa Capital Markets League Tables rank the top arrangers, bookrunners and advisors across a broad array of deal types in Africa.

  • Nigerian Stock Exchange delists AG Leventis

    Stories by Taofik Salako, Capital Market Editor

     

    The Nigerian Stock Exchange (NSE) Tuesday delisted AG Leventis (Nigeria) Plc, closing more than four decades of public listing at the stock market.

    The delisting yesterday was due to a request for voluntary delisting after AG Leventis’ core investors pushed through a plan to buy out minority shareholders.

    The Leventis family, which remains the majority core investor in the conglomerate with some 88 per cent controlling shareholding, had launched a process and succeeded in buying out minority shareholders in order to implement a turnaround programme. AG Leventis had some 30,000 minority shareholders.

    One of Nigeria’s oldest and largest conglomerates, AG Leventis was incorporated in Nigeria as a private limited liability company in 1952 and was converted to a public limited liability company and listed on the Nigerian Stock Exchange in 1978. At the last count, the AG Leventis Group consists of eight subsidiaries, three associates and three Joint Ventures, all of which were incorporated in Nigeria.

    The group’s operations span the wide gamut of the economy from foods and beverages to automobile, real estate, hotel, general trade and merchandise.

    AG Leventis had been under regulatory watch-list for failing to meet the minimum free float requirement for its listing category. The company has a free float of 11.64 per cent, 8.36 per cent below the 20 per cent free float for companies listed on the main board.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market in their securities.

  • Wapic Insurance extends N5.9b rights issue

    Stories by Taofik Salako, Capital Market Editor

     

    Wapic Insurance Plc has received regulatory approval to extend the offer period for its rights issue till Friday, January. The rights issue, which opened on November 20, 2019, was initially scheduled to close on  December 31, 2019.

    The insurance company yesterday stated that it had received approval of the Securities and Exchange Commission (SEC) to extend the offer period.

    Wapic Insurance is offering 15.61 billion ordinary shares of 50 kobo each to existing shareholders at 38 kobo per share. The rights issue had been pre-allotted to shareholders on the register of the insurance company as at the close of business on Thursday September 19, 2019 on the basis of seven new ordinary shares of 50 kobo each for every six ordinary shares of 50 kobo each already held.

    The insurance company will use the net proceeds to beef up its capital base ahead of regulatory deadline for new minimum capital requirements for insurance functions.

    The National Insurance Commission (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. Insurance companies are required to comply fully with the new minimum capital base by June 30, 2020.

    In anticipation of increase in minimum capital requirements for insurers, shareholders of Wapic insurance had in 2017 given approval to the board of the company to raise up to N10 billion in new capital to bolster the insurance company’s capital base.

    Chairman, Wapic Insurance Plc, Mr. Aigboje Aig-Imoukhuede, had explained that the company was being proactive with the new capital raising plan.

    “The company is approaching its shareholders at this time to seek approval to raise additional capital as a proactive step towards getting the company ready and set for a much-anticipated regulatory increase in the minimum capital of insurance companies,” Aig-Imoukhuede said.

    He noted that a similar regulatory capital increase was imposed on the banking industry during the consolidation era and only the banks that were proactive in raising the required capital emerged as winners.