The Nation Newspaper

Category: Equities

  • Arbico fails stock market’s minority shareholding limit

    Arbico Plc has fallen below the minimum shareholding requirement for minority retail shareholders as more than 80 per cent of the construction company’s shares are held by core investors, directors and their related parties.

    The overconcentration impinges on liquidity and efficient price discovery and makes the stock to be susceptible to price manipulation.

    A regulatory report at Nigerian Stock Exchange (NSE) indicated that the Lagos-based building construction company now has 19.96 per cent of its issued shares in the hands of minority retail shareholders, four basis points below the 20 per cent requirement for its category of listing.

    Minimum number of shares available for the general minority retail investing public, known as free float, is a major listing requirement at the stock market. 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.

    Under the rules at the Exchange, companies listed on the premium board are required to have 20 per cent free float or more than N40 billion of their capitalisation in the hands of general investing public. Companies on the main board are required to have a minimum free float of 20 per cent of their market capitalisation, implying that 20 per cent of the companies’ shareholdings must be available for minority retail shareholders. However, companies on the Alternative Securities Market (ASeM) are required to have 15 per cent free float.

    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.

    Arbico, which was listed in on the main board of the NSE in December 1978, hitherto had a wide free float with large minority retail shareholders, but changes in capital structure have seen growing concentration of shares in the hands of majority core investors and directors.

    The NSE indicated that it has commenced discussions with Arbico with a view to resolving the fee float deficiency.

    Companies are usually given a timeline to free up shares and cure their free float deficiency. Failure by deficient companies to restructure their share capital at the expiration of the deadline or secure extension of the deadline may lead to delisting of their shares from the NSE.

    Free float deadline is usually in deference to application by the management of a company for some period to comply with the free float. However, the company is required to provide quarterly disclosure report to the NSE on the efforts being made to fully comply by the deadline.

    By the expiration of the deadline, a company is mandatorily required to have completed partial divestments or dilution of the ‘non-public’ shareholdings to free the required percentage of equity stake for public holding, unless the management of the NSE grants fresh waivers and extensions for the companies. In the extreme instance, a company with deficient public float may opt to delist its shares.

    Alternatively, deficient companies may opt to move from the main board to the ASeM or in the extreme cases, opt to delist their shares from the Exchange.

    The Exchange meanwhile usually tags companies with free float deficiencies with a red alert of “Below Listing Standard”, which implies non-conformity with the requisite listing and corporate governance requirements.

    Stock markets maintain minimum public float to prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation. Besides, it provides the general investing public with opportunity to reasonably partake in the wealth creation by private enterprises.

  • Shareholders back African Alliance’s recapitalisation plan

    Stories by Taofik Salako, Capital Market Editor

     

    Shareholders back African Alliance’s recapitalisation plan.

    Shareholders of African Alliance have thrown their weight behind the board and management of the company in their ongoing quest to reposition the firm and fully recapitalise it before the deadline set by the National Insurance Commission (NAICOM).

    At the 50th Annual General Meeting of the company in Uyo, Akwa Ibom State, shareholders expressed supports for the company’s recapitalisation plan.

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

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

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

    Managing Director, African Alliance, Funmi Omo, highlighted the major changes the business has undergone as part of its repositioning for growth.

    According to her, there has been an aggressive effort towards improving its brand visibility and it has opted to explore the power of technology through digital marketing.

    Our recent rebranding is a major part of this process and we are already reaping the gains of that exercise. We have also introduced new products to balance our portfolio and cushion the effect of the accumulated losses the decision on annuity brought on the business while a comprehensive training and retraining plan is being executed in line with the corporate goal to prioritise capacity building and reposition the business to attract the best talents,” Omo said.

    She noted that within the last two years, skilled and experienced personnel have been employed to bolster the company’s online presence, optimise its website and build a more interactive call centre.

    “I dare say we have the most engaging online presence in the industry,” Omo said.

    Recall that recently, African Alliance was rated Bb+ with a ‘stable outlook’ by foremost financial ratings agency in Nigeria, Agusto & co. A publicly quoted life insurance company incorporated in 1960, African Alliance operates out of the corporate headquarters in Ikoyi, Lagos, as well as in 18 branches nationwide.

  • ElectHER unveils $10m campaign funds

    Stories by Taofik Salako, Capital Market Editor

     

    The Social Change Network (TSCN) Africa and Women in Leadership Advancement Network (WILAN) have partnered to launch a joint initiative, ‘ElectHER’ to promote an increase female representation in politics.

    ElectHER is an end-to-end solution that will engage multiple stakeholders and challenge existing stereotypes to change behaviour, encourage women to decide, equip them to run and enable them to win elections. Through its $10 million election campaign fund, ElectHER will support up to 1,000 women to run for office in the 2023 elections.

    This initiative – which was launched in Abuja – is an end-to-end women’s political advancement initiative aimed at improving the significantly low representation of women in Nigerian politics by engaging, encouraging, equipping and enabling women to Decide, Run and Win elections.

    At the launch event, founder of TSCN Africa and co-founder of ElectHER, Ibijoke Faborode, expressed disappointment over the statistics of women in Nigeria’s political landscape especially young women and those living with disabilities.

    She said, “With women constituting half of Nigeria’s population, it is underwhelming to see that there are only 8 female senators out of 109 and only 11 female members of the House of Representatives out of 360, which has earned us the poorest record of representation in Africa with only 4.1 per cent of our leaders and policymakers being female.”

    Speaking to some of the challenges that account for these figures, founder of WILAN and co-founder of ElectHER, Abosede George-Ogan highlighted, “Women are faced with an uphill battle when venturing into the political space. From the lack of a formidable support network, inadequate financing, religious and cultural stereotypes, and violence, women are often frustrated out of fulfilling their political ambitions.

    Also commenting in her keynote address, the Nigerian Country Representative, UN Women, Ms. Comfort Lamptey emphasised the significance of women’s political leadership to unlocking socio-economic transformation in Nigeria.

    At the launch which was attended by representatives from the National Democratic Institute (NDI), International Republican Institute (IRI), UN Women, European Union (EU), Accountability Lab, YIAGA and The Election Network amongst others, Ibijoke and Abosede shared the outlook for ElectHER from 2020 to 2023.

    In a world where increasing attention is being paid to addressing gender gaps across all sectors, it is important that an active and progressive approach is deployed to empower half of Nigeria’s population to contribute to Nigeria’s socio-economic development. ElectHER has, therefore, come at an opportune time to turn the tide to deliver transformational, capable and exemplary female leaders.

  • Sovereign Trust Insurance lists 4.17b rights shares

    Taofik Salako

     

    Sovereign Trust Insurance Plc has listed additional 4.17 billion ordinary shares of 50 kobo each on the Nigerian Stock Exchange (NSE), the last step in its recent capital raising process.

    Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai, stated that the additional shares arose from the company’s recent rights issue.

    He explained that while the rights issue recorded 72.5 per cent subscription, the additional ordinary shares listed had been registered by the Securities and Exchange Commission (SEC).

    With the listing of the additional 4.17 billion ordinary shares, the total issued and fully paid up shares of Sovereign Trust Insurance has increased from 8.34 billion ordinary shares of 50 kobo each to 12.51 billion ordinary shares of 50 kobo each.

    STI had sought to raise N2.09 billion from existing shareholders to beef up its capital base to position it in better stead for large-ticket transactions.

    STI offered 4.17 billion ordinary shares of 50 kobo each at a price of 50 per share. As rights, the new shares issued were pre-allotted on the basis of one new share for every two ordinary shares held as at the close of business on January 15, 2019.

    Application list for the rights issue had opened on Monday June 24, 2019 and was scheduled to close on Wednesday July 31, 2019. However, the company secured regulatory approvals to extend the application period to Wednesday August 21, 2019.

    Shareholders of Sovereign Trust had approved a new capital raising plan for the insurance company. Shareholders authorised the board of the company to create 5.0 billion new ordinary shares of 50 kobo each to increase its authorised share capital to N10 billion of 20.0 billion ordinary shares of 50 kobo each.

    Shareholders also approved the proposal to raise “additional equity capital for the company up to the maximum of the authorised share capital” with additional mandate to the board to absorb excess money in the event of oversubscription of the initial offer.

    The National Insurance Commission (NAICOM) recently released new capital requirements for insurance companies. Many insurance companies are expected to raise funds to beef up their capital base. Many analysts also expected a considerable consolidation of the Nigerian insurance sector, with capitalisation as a major benchmark.

    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.

    Market analysts had expressed fears that the huge price difference between the rights’ price and STI’s market price might adversely affect retail subscription to the rights issue as investors will rationally opt for the best price on offer.

    STI’s offer price of 50 kobo per share was about 150 per cent above trading price of around 20 kobo at the NSE.

    Some analysts however noted that rights issue may provide opportunity for strategic investors who may be willing to premium price to increase their shareholdings in the insurance company through additional subscription and purchase of traded rights.

     

     

  • Equities lose N11b on Yuletide cash squeeze

    Taofik Salako

     

    Nigerian equities lost N11 billion in the last trading session before the Christmas holidays as investors opened up market orders in last-minute efforts to close their deals ahead of the two-day holiday.

    Sell pressure on mid and large-cap stocks weighed on the overall market position, shaving off N11 billion from the overall market value of quoted equities. Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average decline of 1.0 per cent yesterday, depressing the negative average year-to-date return to -16.99 per cent.

    The momentum of activities also increased significantly as turnover rose by 71.83 per cent to 324.40 million shares valued at N1.66 billion in 1,993 deals.

    The Federal Government had declared Wednesday December 25 and Thursday December 26, 2019 as public holidays in celebration of Christmas and Boxing Day respectively.

    With more decliners than advancers, aggregate market value of all quoted equities dropped from its opening value of N12.607 trillion to close at N12.596 trillion, representing a drop of N11 billion. The All Share Index (ASI)- the common value-based index that tracks all share prices at the Exchange, declined from its opening index of 26,115.80 points to close at 26,090.88 points.

    Sectoral indices meanwhile showed a largely positive performance, indicating underlying bargain-hunting for value stocks. The NSE Consumer Goods Index rose by 0.13 per cent. The NSE Oil & Gas Index appreciated by 0.31 per cent. The NSE Banking Index inched up by 0.04 per cent while the NSE Industrial Goods Index closed flat. However, the NSE Insurance Index dropped by 0.71 per cent.

    “We expect bearish momentum to persist as investors continue to take a risk-off approach towards the equities market,” Afrinvest Securities stated.

    Stanbic IBTC Holdings led the 12-stock losers’ list with a drop of N1.10 to close at N36.40. Dangote Sugar Refinery followed with a drop of 80 kobo to close at N13.65. Guaranty Trust Bank eclined by 35 kobo to close at N29. UAC of Nigeria dropped by 20 kobo to close at N8.10 while Zenith Bank lost 15 kobo to close at N18.15.

    On the positive side, Unilever Nigeria led the 10-stock gainers’ list with a gain of N1.95 to close at N22.15. Cadbury Nigeria followed with a gain of 65 kobo to close at N10.25. UPDC Real Estate Investment Trust rose by 35 kobo to close at N3.95. Ecobank Transnational Incorporated added 30 kobo to close at N6.30 while Access Bank chalked up 20 kobo to close at N9.90 per share.

  • IB Plc’s N164b rights issue closes

    By Taofik Salako, Capital Market Editor

     

    Application list for the N164 billion right issue by International Breweries Plc closes on Tuesday. Application list had opened on Thursday, December 5, 2019.

    International Breweries is raising N164.39 billion through a rights issue of 18.266 billion ordinary shares of 50 kobo each at N9 per share. The rights issue is pre-allotted on the basis of 17 new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at the close of business on November 6, 2019.

    In a statement Secretary and Legal Counsel of International Breweries, Muyiwa Ayojimi, the company stated that its capital structure is expected to be remarkably changed as long-term debt will be replaced with equity, thereby easing the burden of interest payments, increasing management’s flexibility as well as removing volatility in earnings.

    This offer, the largest rights issue in Nigeria, will have full impact in 2020 while presenting a positive outlook for dividends for shareholders in 2021.

    With a fair post rights issue valuation range of between N471 billion and N504 billion, International Breweries, by this rights issue, is most likely to become the seventh most capitalised company on the Nigerian Stock Exchange (NSE).

    The statement noted that through International Breweries Plc, its parent company, ABInBev, by this offer certainly has a long-term outlook for Nigeria. AB InBev had invested in capacity expansion including about N90 billion or $250 million in its Sagamu plant while it will be injecting N124 billion or $341 million through the rights issue.

    Unarguably the number two brewer in Nigeria, International Breweries Plc, in spite of the difficult competitive environment that features weak macroeconomics, tough excise tax regime and fierce price war, now controls about 25 per cent of the Nigerian beer market through its hold of market share on the back of its two core brands.

    According to him, with the new capacity on stream and ramped up investments in route to the market, the company is expected to consolidate on its leadership and continue to take share of market.

    The Nation had reported that Anheuser-Busch InBev (AB InBev), the majority core investor in International Breweries, will be investing more than N123 billion in the Nigerian business in a major capital injection expected to consolidate Anheuser-Busch InBev’s push for the greater share of the Nigerian and Sub Saharan African markets.

    Anheuser-Busch InBev holds the majority equity stake of 75.1 per cent in International Breweries Plc. With the pre-allotment ratio, about 13.72 billion ordinary shares of 50 kobo each have been pre-allotted to AB Inbev.

    The N164.39 billion recapitalisation exercise, one of the largest indirect capital injections in the Nigerian capital market, came on the heels of the consolidation of AB InBev’s Nigerian operations under a single corporate entity.

    AB InBev had in 2017 merged its three indirect Nigerian subsidiaries-International Breweries Plc, Intafact Beverages Limited and Pabod Breweries Limited. The merger was done through a scheme of merger with International Breweries subsisting as the post-merger company.

    The merger was seen as a major strategic move by Anheuser-Busch InBev to upend competition and consolidate its Nigerian base for further expansion into the Sub-Saharan Africa (SSA).

    With the 2017 business combination, AB InBev’s majority equity stake in International Breweries increased to 75.1 per cent. A total of 5.302 billion ordinary shares were issued for the merger. With the supplementary listing of 5.302 billion ordinary shares, the total issued and fully paid up shares of International Breweries had increased from 3.294 billion to 8.596 billion ordinary shares.

    The merger was believed to be a major competitive move by AB InBev to give its operations a major nationwide push to increase its market share. International Breweries is located in Ilesa, Osun State in the South West region. Intafact Beverages’ brewery is situated in Onitsha, Anambra State in the South-East region while Pabod Breweries is located in Oginigba, Port Harcourt, Rivers Sate in the South-South region.

    Prior to the merger, AB InBev held 72.17 per cent majority equity stake in International Breweries through its subsidiary-Brauhaase International Management GMBH. SABMiller Nigeria Holdings BV-another subsidiary of AB InBev had held 75 per cent and 82.81 per cent majority equity stakes in Intafact and Pabod respectively. Ministry of Finance of Anambra State had held 10 per cent equity stake in Intafact while Ministry of Finance Incorporated of Rivers State held 14.52 per cent equity stake in Pabod.

    After the merger of the three companies-SABMiller Nigeria Holdings BV and Brauhaase International Management GMBH hold 47.4 per cent and 27.7 per cent equity stake respectively in International Breweries, giving the foreign majority core investor controlling equity stake of 75.1 per cent. Ministry of Finance of Anambra State holds 4.7 per cent equity stake while other minority shareholders hold the remaining 20.2 per cent equity stake.

  • The Initiates increases share capital to 3.0b shares

    By Taofik Salako, Capital Market Editor

    Shareholders of The Initiates Plc have approved increase in the authorised share capital of the waste managing and industrial cleaning company to N1.5 billion comprising 3.0 billion ordinary shares of 50 kobo each.

    In a regulatory filing, the company indicated that shareholders had at their annual general meeting in Port Harcourt; Rivers State approved the increase in authorised share capital and mandated the board to take all necessary steps to amend the Memorandum and Articles of Association of the company to reflect the new share capital of N1.5 billion.

    The increase in authorised share capital provides headroom for the company to raise additional capital.

    Read Also: Greif Nigeria moves to delist shares from NSE

    The Initiates had made history in 2016 as the first waste management company to be listed on the stock market. The Initiates was listed by way of introduction on the Alternative Securities Market (ASeM) of the NSE, a less stringent board for the listing of emerging small and medium enterprises. A total of 889.98 million ordinary shares of 50 kobo each were listed at 85 kobo per share on the ASeM.

    The Initiates was incorporated in Nigeria in March 1995 and began operation with five employees in 1997. The company operated as a consultancy service provider in her first decade laying foundation through development of operational systems. In June 2015, the company converted to public limited liability status citing the need for continuous improvement in its operating standards and institutionalisa-tion of transparency in its system.

  • Stanbic IBTC Holdings lists 31.5m scrip shares

    By Taofik Salako, Capital Market Editor

    Stanbic IBTC Holdings Plc has listed additional 31.51 million ordinary shares of 50 kobo each on the Nigerian Stock Exchange (NSE), increasing the holding company’s total outstanding shares to 10.50 billion ordinary shares of 50 kobo each.

    The additional shares resulted from the scrip dividend offered to eligible shareholders of Stanbic IBTC Holdings who elected to receive new ordinary shares in lieu of cash dividends with respect to the N1 final dividend declared for half year ended June 30, 2019.

    With the new listing of 31.52 million ordinary shares, the total issued and fully paid up shares of the company increased from 10.47 billion ordinary shares of 50 kobo each to 10.50 billion ordinary shares of 50 kobo each.

    Read Also: Stanbic IBTC attracts $1.6b capital Inflow in Q3, says NBS

    Under a resolution passed at its extraordinary general meeting in August 2016, shareholders of Stanbic IBTC Holdings may choose to receive dividends declared by the company, up to year 2020, either in cash or as new ordinary shares in the company.

    Under the conversion programme, the reference price to be used in determining any scrip dividend allotment shall be the volume weighted average price (VWAP) of the company’s shares on the NSE for the five business days commencing on the day the ordinary shares are first quoted ex-dividend.

    Where a shareholder elects to receive the whole or a part of his dividends by way of new ordinary shares, such scrip shares shall only be allotted after receipt of any required regulatory. In order to be valid, any scrip dividend election by shareholders must be made to the company’s Registrars, not later than seven days prior to any dividend payment date.

  • Investors stake N15.5b on equities ahead of Santa Claus rally

    By Taofik Salako, Capital Market Editor

    The momentum of activities at the Nigerian equities market has increased as investors opened up more orders in early positioning for the often-expected Santa Claus rally. Investors staked N15.5 billion on 1.38 billion ordinary shares in 14,528 deals last week, 32.3 per cent increase on total turnover volume of 1.04 billion ordinary shares valued at N14.63 billion in 14,974 deals traded in the previous week.

    The Santa Claus rally is the tendency for stock prices to go up in the week after Christmas, mostly in anticipation of expected positioning for dividends by the first month of the New Year.

    Bank-led financial services sector remained the toast of the investing public with 1.02 billion shares valued at N11.81 billion in 8,275 deals, representing 73.8 per cent and 76.2 per cent of the total equity turnover volume and value respectively.

    The healthcare sector occupied a distant second with a turnover of 170.91 million shares worth N49.10 million in 281 deals while conglomerates sector placed third with a turnover of 83.56 million shares worth N205.79 million in 736 deals.

    Investors showed a mixed portfolio allocation of low and large-cap stocks, underlining the expectations of year-end rally. The three most active stocks were Access Bank, Union Diagnostics and Clinical Services and Zenith Bank. The three most active stocks accounted for 687.1 million shares worth N6.51 billion in 2,964 deals, representing 49.76 per cent and 41.99 per cent of the total equity turnover volume and value respectively.

    A total of 11,839 units of Exchange Traded Funds (ETFs) valued at N8.57 million were also traded in 21 deals compared with a total of 211,474 units valued at N2.38 million traded in 22 deals.

    In the sovereign debt market, a total of 4,990 units of Federal Government bonds valued at N5.54 million were traded in eight deals as against a total of 7,300 units valued at N8.07 million in four deals.

    Read Also: Equities relapse with N38b loss

    With more advancers to decliners, price depreciation in the highly capitalised industrial goods and oil and gas sectors weighed on the overall market position. While most sectoral indices closed at the weekend on the upside, market-wide indices recorded marginal decline.

    The All Share Index (ASI)- the common value-based index that tracks all shares at the Nigerian Stock Exchange (NSE) declined marginally by 0.04 per cent to close weekend at 26,526.35 points as against its week’s opening index of 26,536.21 points. Aggregate market value of all quoted equities dropped by 0.03 per cent or N4 billion from its week’s opening value of N12.808 trillion to close at N12.804 trillion. Average year-to-date return worsened slightly to -15.6 per cent while average return so far this month stood at -1.8 per cent.

    All sectoral indices closed positive with the exception of the NSE Oil and Gas Index and NSE Industrial Goods Index that depreciated by 0.68 per cent and 0.49 per cent respectively. The NSE Consumer Goods Index appreciated by 1.31 per cent. The NSE Insurance Index rose by 1.04 per cent while the NSE Banking Index inched up by 0.78 per cent.

    There were 33 advancers against 25 decliners last week, a significant improvement on 18 advancers and 44 decliners recorded in the previous week. Low-priced stocks led the gainers’ list, in percentage term. AG Leventis, which is the majority core investor is pursuing a buy-out of minority shareholders, topped the list with a gain of 28.2 per cent to close at 50 kobo. Chams Plc followed with a gain of 20 per cent to close at 36 kobo. Royal Exchange rose by 11.5 per cent to close at 29 kobo. Nigerian Breweries appreciated by 10 per cent to close at N57.95 while Ikeja Hotel rose by 9.8 per cent to close at N1.12 per share.

    On the downside, Cornerstone Insurance led the decliners with a drop of 36.4 per cent to close at 42 kobo. UPDC Real Estate Investment Trust followed with a drop of 23.6 per cent to close at N3.40. UACN Property Development Company dropped by 16 per cent to close at 84 kobo. Nascon Allied Industries declined by 14.6 per cent to N11.95 while Neimeth International Pharmaceuticals dropped by 13.6 per cent to close at 57 kobo per share.

    At the NASD OTC Securities Exchange, the over-the-counter (OTC) market for trading in unlisted securities, the market was also upbeat. NASD’s market capitalisation increased from the week’s opening value of N498.04 billion to close weekend at N501.14 billion, representing an increase of 0.62 per cent. The NASD Securities Index (NSI) also improved from the week’s opening index of 693.22 points to close weekend at 697.54 points.

    Globally, quoted equities mostly trended upward as investors responded to preliminary trade agreement between the United States and China. In United States, the Dow Jones Industrial Average (DJIA) and Standards and Poors rose by 1.2 per cent and 1.2 per cent respectively. In United Kingdom, the FTSE 100 Index posted average return of 3.2 per cent while the Europe-wide Euro Stoxx Index appreciated by 1.1 per cent. Emerging markets showed improved investors’ sentiment. The MSCI EM Index- which tracks emerging markets’ stocks, posted average return of 1.8 per cent while the MSCI FM Index- which tracks frontier markets, appreciated by 0.7 per cent.

    “We see the level of activity and volatility being sustained over the final days of the year, with some pockets of gains expected, as fund and portfolio managers realign portfolios prior to the start of 2020,” Cordros Securities stated.

    Analysts at Afrinvest Securities stated that they expected market performance to remain bearish due to the absence of market buffers.

  • Stockbrokers optimistic on multiple streams of incomes

    By Taofik Salako, Capital Market Editor

    The Nigerian capital market is believed to have opened up multiple options for securities dealers in Nigeria as Stockbrokers await the take-off of demutualization of the Nigerian Stock Exchange.

    At the last count, the capital market boasts of Over-The-Counter (OTC) exchange with the emergence of NASD PLC and FMDQ which has become a full-fledged exchange. Besides, the Lagos Commodities and Futures Exchange (LCFE) is expected to commence operations soon as a Pan African Exchange among others.

    Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Oyinyechukwu Ezeagu, described the development as heartwarming, saying the it had brought multiple income streams to stockbrokers’ table.
    “The new trend in the financial market is that operators have multiple options for professional practice. These go along with multiple income streams on the table of market operators.

    We are looking at a broad range of markets and the readiness of operators to participate in these markets. We have seen an expansion in fixed income investments, in Government Securities and renewed interests in the Commodities Market. The listing of two telecommunications companies excited the market within the year,” said Ezeagu.

    According to him, equity market represents the market of the real owners of the firm, taking into consideration the features of the theoretical common stock and the performance of the equity market in Nigeria is not different from its worldwide nature of performance.

    Ezeagu noted that equities had been dwindling all over the world becoming enigmatic for traders who could not keep up with continuous price volatility, especially, where other asset classes like fixed income proved better alternatives.