Category: Equities

By Taofik Salako, Capital Market Editor

The board of Greif Nigeria Plc has called an extraordinary general meeting (EGM) of shareholders of the packaging company to consider a resolution to delist the shares of the company from the Nigerian Stock Exchange (NSE).

Directors of Greif Nigeria had met at the company’s head office in Lagos and decided to call an EGM to consider the sale of the designated company’s properties in Apapa, Lagos and the delisting of the company’s shares from the NSE.

The EGM is scheduled to hold on Thursday, January 23, 2020 at the company’s Apapa, Lagos office. Shareholders are expected to vote to empower the board to “take such steps or actions and to do all things as may be necessary to give full effect” to the two resolutions on property sale and delisting.

The board of Greif Nigeria had in April 2019 suspended operations of the company as the packaging company continued to wriggle in losses.

The board had resolved that the company should stop receiving new orders from customers and also stop production for an indefinite period.

The board stated that it took the decision because the company recorded a loss of more than N260 million in 2018 and the loss had also continued in the first quarter of the 2019 business year.

According to the board, efforts made to win back key customer and also get price increase from the customers were yet to yield positive result.

“It had, therefore, been resolved that the company stop receiving new orders from customers and also stop production for an indefinite period,” the company stated in a regulatory filing signed by its Managing Director, Mr David Onabajo.

Greif Nigeria had suffered a major contraction in its business in 2018 as the packaging company struggled with significant decline in sales.

Key extracts of the audited report and accounts of Greif Nigeria for the year ended October 31, 2018 showed that sales dropped by 62 per cent from N1.405 billion in 2017 to N534.611 million in 2018. As against modest profit of N77.55 million in 2017, the company posted pre-tax loss of N245.23 million in 2018. After taxes, net loss rose to N262.59 million in 2018 as against net profit of N49.42 million recorded in 2017. Earnings per share consequently declined from N1.16 in 2017 to a loss per share of N6.16 in 2018.

Greif Nigeria had forewarned investors that the immediate past business year was a very challenging year for the company.’

The company had stated that economic and competitive environment in the steel drum and packaging sector gave rise to a very tough situation for its business, which resulted in the closure of two of its branches during the 2018 financial year.

Greif Nigeria could not meet the timeline for the filing of its 2018 audited financial statements for the year ended October 31, 2018 on the due date of January 29, 2019 because it had to carefully scrutinise the operations during the year.

The company stated that the delay of its financial statements was due to the fact that the external auditors had to exercise due diligence on the financial statements during the audit exercise to ensure all tax related issues were resolved, and make certain that the results reflect the actual position of business operations for the year, as well as conform with all relevant statutory requirements.

By Taofik Salako, Capital Market Editor

Nigerian equities suffered a contraction on Thursday as loss by by large-cap telecommunications and consumer goods stocks depressed the market value of quoted companies.

Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average decline of 0.30 per cent, equivalent to net capital depreciation of N38 billion.

The All Share Index (ASI)- the common value-based index that tracks share prices at the Exchange declined from its opening index of 26,665.73 points to close at 26,584.45 points. Aggregate market value of all quoted equities also dropped from its opening value of N12.870 trillion to close at N12.832 trillion. With these, average year-to-date return worsened to -15.42 per cent while month-to-date return stood at -1.55 per cent.

With 14 gainers against 11 losers, most sectoral indices closed on the upside. The NSE Banking Index rose by 0.55 per cent. The NSE Insurance Index appreciated by 0.48 per cent while the NSE Oil & Gas Index rose by 0.19 per cent. However, the NSE Consumer Goods Index slipped by 0.05 per cent while the NSE Industrial Goods Index closed flat.

Total turnover increased by 30.74 per cent to 304.21 million shares valued at N3.15 billion in 2,690 deals. Access Bank was the most active stock with a turnover of 147.72 million shares worth N1.43 billion.
MTN Communications Nigeria led the losers with a loss of N2.80 to close at N112.50. UPDC Real Estate Investment Trust followed with a drop of 35 kobo to close at N3.30. UAC of Nigeria lost 15 kobo to close at N8.60 while International Breweries and Access Bank dipped by 10 kobo each to close at N9.40 and N9.80 respectively.

On the upside, GlaxoSmithKline Consumer Nigeria and Guaranty Trust Bank led the gainers with a gain of 50 kobo to close at N5.75 and N30 respectively. Stanbic IBTC Holdings rose by 20 kobo to close at N37.20 while Fidelity Bank added 12 kobo to close at N2.20 per share.
“We expect a bearish outing in the equities market by the close of the week as investors maintain a risk-off approach,” Afrinvest Securities stated.

By Taofik Salako

 

Forensic auditors have concluded their examinations of the books and operations of Ikeja Hotel Plc and the report is currently undergoing board and regulatory reviews.

Speaking at a meeting with stakeholders at the Nigerian Stock Exchange (NSE) yesterday, Chairman of Interim Board of Ikeja Hotel Plc, Chief Anthony Idigbe, SAN, said the forensic audit has been concluded and the report now going through final decision process.

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) had on May 04, 2017 dissolved the former board of directors of Ikeja hotel Plc and appointed an interim board led by Idigbe. The new interim board was then mandated to oversee the conduct of a forensic investigation into the affairs of the company considering the allegations of unauthorized sale of shares and diversion of proceeds from the sale of shares amongst others.

Idigbe said the report is currently on the final stage of feedback, adding that by the first quarter of 2020, a substantial progress would have been made in the decision process.

“We are happy that by the first quarter of next year, substantial progress would have been made in the decision process.  SEC is going through to ensure that rights of fair hearing are not breached. The process is so important. We are trying to get a solution that would be sustainable,” Idigbe said.

He explained that as part of efforts to turnaround the fortunes of the hotel group, the new management of the Hotel had commenced an upgrade of some facilities in the hotel.

According to him, the renovation of 97 rooms of its 500 room facility has begun, while a total of 266 rooms would be put back at the market.

He said the release of the newly renovated rooms in first quarter of 2020 would increase the company’s market share, enhance profitability, boost its visibility and make it a hospitality destination in Abuja and environment.

“We have about 266 rooms to put back at the market out of which we are doing 97 rooms right now with internally generated revenue,” Idigbe said.

He assured that the interim board has no intention of prolonging its stay on the affairs of the company noting that the board will step down once it achieves its mandate.

“I want to assure you that some of us will like to exit as quickly as possible and as soon as necessary.  We continue to see it as a national service to perform this role. We are very proud of the work we have done so far but be assured that we will not stay a minute longer than necessary,” Idigbe said.

By Taofik Salako

 

The Nigerian Stock Exchange (NSE) has warned newly inducted stockbrokers against unethical practices as the Exchange will not hesitate to sanction any stockbroker that violates its rules.

Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, said the Exchange has a zero tolerance policy on all infractions and it is always ready to enforce its rules.

He pointed out that in order to give bite to the criminal and prosecutor aspect of its rules, the Exchange had signed a Memorandum of Understanding (MoU) with the Economic and Financial Crimes Commission (EFCC) to increase cooperation and communication in the fight against financial crimes in the capital market.

“We will support you in developing your capacity and businesses. However, NSE will not hesitate to wield the big stick on any erring member that falls short on any of its rules,” Onyema told newly inducted brrokers.

He explained that out of 47 candidates who wrote the Chartered Institute of Stockbrokers (CIS) examination and went through the mandatory practical Automated Trading System (ATS) training at the Exchange, 27 candidates passed the oral examination.

Onyema assured all stakeholders that the NSE is well-equipped for the emerging fourth industrial revolution noting that NSE’s trading system, X-Gen, has remained a game changer in the capital market.

According to him, through the X-Gen, the NSE has improved market order flow, sustained increase in the number of trades, provided high availability, and enabled direct market access and remote trading.

Taofik Salako, Capital Market Editor

 

NIGERIAN equities suffered a major contraction last week as sustained decline in share prices shaved off N154 billion from the market capitalisation. With more than two decliners to every gainer, the stock market traded mostly on the negative side throughout the week.

Average decline for the five-day trading session stood at 1.19 per cent at the weekend, equivalent to net capital depreciation of N154 billion. The decline depressed the average year-to-date return to -15.57 per cent.

The All Share Index (ASI)-the common index that tracks share prices at the Nigerian Stock Exchange (NSE) declined from its week’s opening index of 26,855.52 points to close the week at 26,536.21 points. Aggregate market value of all quoted equities dropped from its week’s opening value of N12.962 trillion to close the week at N12.808 trillion.

With 44 decliners to 18 advancers, most sectoral indices also closed on the negative side. The NSE 30 Index, which tracks the 30 most capitalised companies at the Exchange, declined by 0.88 per cent. The NSE Banking Index dropped by 1.20 per cent. The NSE Consumer Goods Index depreciated by 0.46 per cent while the NSE Industrial Goods Index declined by 1.15 per cent. On the positive side, the NSE Insurance Index and the NSE Oil and Gas Index inched up by 0.03 per cent each.

A year-to-date analysis showed that nearly all investors are carrying losses, underlining the bearishness that had gripped the market since 2018. The NSE 30 Index carried above average year-to-date return of -20.64 per cent. The NSE Consumer Goods Index posted average return of -26.75 per cent. The NSE Oil and Gas Index dipped by 22.56 per cent. The NSE Industrial Goods Index declined by 14.63 per cent. The NSE Banking Index dropped by 11.60 per cent while the NSE Insurance Index slipped by 5.76 per cent.

Total turnover stood at 1.04 billion shares worth N14.63 billion in 14,974 deals last week compared with a total of 952.697 million shares valued at N12.77 billion traded in 17,279 deals in the previous week. The financial services sector remained the most active with a turnover of 556.905 million shares valued at N5.678 billion traded in 8,267 deals, representing 53.33 per cent and 38.81 per cent of the total equity turnover volume and value respectively. The healthcare sector followed with 215.03 million shares worth N122.60 million in 412 deals while the conglomerates sector placed third with a turnover of 89.60 million shares worth N466.29 million in 874 deals.

The trio of Union Diagnostics and Clinical Services Plc, United Bank for Africa Plc and Guaranty Trust Bank Plc were the most active stocks, accounting for 379.095 million shares worth N3.066 billion in 1,704 deals, representing 36.3 per cent and 20.96 per cent of the total equity turnover volume and value respectively.

A total of 211,474 units of Exchange Traded Products valued at N2.379 million were traded in 22 deals compared with a total of 6,140 units valued at N103,759 traded in 17 deals two weeks ago.

In the sovereign debt segment, a total of 7,300 units of Federal Government bonds valued at N8.073 million were traded in four deals as against 27,096 units valued at N27.630 million traded in 25 deals penultimate week.

“In the coming week, we expect market performance to remain bearish due to profit-taking activities and the absence of economic buffers,” Afrinvest Securities stated.

 

United Bank for Africa (UBA) Plc on Monday awarded millions of Naira as education grants to winners of its annual national essay competition.

A 14 year-old student of Louisville Girls High School, Ogun State, Miss Oluwatoroti Jolaosho emerged the overall winner of the 2019 edition of the UBA Foundation National Essay Competition, winning the grand prize of an educational grant of N2 million to study in any African university of her choice.

Jolaosho clinched the first position at the grand finale of the competition which was held yesterday at the UBA Head Office, Marina Lagos. Her essay was declared the best out of over 5000 entries received by the UBA Foundation from students of senior secondary schools across Nigeria.

This year’s NEC had12 finalists made up of eight girls and four boys with over 500 per cent increase in participation from pupils across every single state of the federation.

Jolaosho who was visibly elated expressed her profound excitement as the winner of the competition, adding that the experience has given her more confidence with which she can face great challenges in the years ahead. She noted that the grant will help in the pursuit of her dream towards becoming a pediatrician.

“This is something I worked very hard to achieve. I read and studied very hard for this competition, and I am very happy that my hard work paid off in the end. I am indeed very grateful to UBA and the UBA Foundation for this huge opportunity and for making me believe in myself, and I would like to encourage other students not to stop trying,” Jolaosho said.

Her mother, Mrs Jaiyeola Jolaosho, said, “This grant will go a long way to support my bid for quality education for Oluwatoroti. Now our dream to give her an education at the African Leadership Academy will be fulfilled with this grant. I am so happy about this, because I noticed that she has a penchant for writing, and we are so elated that she won. I will encourage all her siblings to apply for  for this competition going forward.”

The second prize was bagged by Precious Ifeoma Okey, aged 15, of Oladipo Alayande School of Science, Oyo State, who won a N1,500,000 educational grant, whilst the third prize of N1,000,000 went to Aimeé Okoko, 18 years old. Aimeé attends Beautiful Beginning Academy, FCT Abuja. All 12 finalists received brand new laptops from the UBA Foundation.

This year, the Foundation introduced a prize for the school with the highest number of essay entries and the Livingstone College, Lagos came tops. They will  be receiving gifts worth over N1m from the UBA Foundation  for their participation in the competition.

Congratulating the winners at the event, Managing Director, UBA Foundation, Bola Atta, commended them for their exceptional brilliance.  “Every student who sent in an entry is a winner. To be confident about your writing skills and ambitious enough to enter a competition to further enhance your educational path is laudable.  For those that did not win, I would say do not be discouraged. Take it as a challenge to perfect your writing skills and enter for the competition again in 2020,” Atta said.

According to her, UBA Foundation, being the CSR arm of UBA Plc, makes it a point of duty to give back to communities where UBA operates. Education in any capacity, Atta noted, remains  the Foundation’s focus area as it is the bedrock of any nation.

In his remarks, Managing Director, United Bank for Africa (UBA) Plc Mr. Kennedy Uzoka said UBA was very happy to be touching lives and making a solid impact through its Foundation’s National Essay Competition and the grant it gives out annually to those who emerge winners. He specifically commended the fact that more females emerged winners this year, adding that it is in line with the bank’s commitment to women empowerment.

Uzoka who is also the Chairman, UBA Foundation said, “What we are doing today in unique in Africa, we are doing this to continue to encourage our young ones to study hard because we noticed that overtime, the level of education has been going Southward.  For 9 years now, we have been supporting students with grants to further their educational pursuits’.

Uzoka informed the gathering made up of parents, students and the media, that the essay competition has produced well over 100 winners, since its inception in 2011 in Nigeria – many have already graduated, and a few are studying varied courses at Universities in Nigeria and across the African continent.

He encouraged the winners to be of good character, and ensure that apart from striving for academic excellence, to avoid any negative action that might dent the foundation’s image and that of their families as they are now UBA ambassadors.

The judges, led by Professor of English (Gender Studies) and Director of Pre-degree Studies, University of Uyo, Mrs. Ini Uko, stated that they were impressed with the participants who showed great promise, noting that most of the students wrote intelligently and their ideas were well articulated, new and refreshing. She added that the judges were also encouraged by the fact that entries came in from students from all parts of the country.

The UBA Foundation’s National Essay Competition initiative has been operational in other countries in Africa including Ghana and Senegal whilst Mozambique and Kenya are expected to kick off in 2020. The initiative .is mapped out to spread to more African countries in the very near future.

Nigeria’s premium soft drink brand, Fayrouz, has launched its new sleek 33cl can drink at an exclusive event which took place at the RSVP Restaurant, Victoria Island, Lagos.

Tagged ‘Find Your Difference’, the launch campaign celebrates drinkers who thirst for excitement and innovation, with the aim to be special and set the winning difference that makes them exceptional.

Speaking at the event, Portfolio Manager, Non-Alcoholic Brands , Nigerian Breweries Plc, Ngozi Nkwoji said, “With the unconventional refreshing blend of great-tasting malt and natural fruit flavour, Fayrouz has always differentiated itself from other soft drink brands, and stands out as the only soft drink with 100% natural ingredients. Our new sleek can looks cooler, fashionable and innovative as it is the only soft drink in Nigeria with this sleek design”.

“We are expanding the options for Fayrouz drinkers across the country, while still maintaining its unique formulation of malt and sparkling water,” she said.

Guests at the event include Denola Grey, Bam Bam, Ozinna, Ahneeka, Linda Osifo, and more.

Fayrouz is a premium sparkling soft drink for the discerning, matured consumer, and is very popular for its smooth, well-balanced fruit flavours that blend beautifully with different elements that make up the perfect cocktail.

The new 33cl Fayrouz sleek can drink is also available in exclusive Citrus and Pineapple flavours.

By Taofik Salako, Capital Market Editor

 

Private and public sectors experts have advised governments at all levels to use the capital market to bridge funding gap and develop much-needed infrastructure.

At the 2019 annual conference of the Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos, experts were unanimous that the capital market represents a veritable platform for raising funding for infrastructure development.

Citing recent landmark transactions, they noted that considering the huge financial outlay of many trillions of Naira needed for infrastructure development, Nigeria should embrace the capital market model for infrastructural funding.

An investment banker and Head, Debt Capital Markets, FBNQuest Merchant Bank Limited,  Mr Oluseun Olatidoye noted that the market has funded more than 26 roads across the six geopolitical zones in the country with the sum of N200 billion raised through the two sovereign Sukuks issued by the Federal Government.

“We have raised N11.4billion for the development of primary, middle and secondary schools facilities in Osun State, we have funded the development of affordable housing on the Mixta Real Estate Plc bond issues and we have developed a number of roads, bridges, health facilities using the opportunity presented by the capital markets,” Olatidoye said.

He however noted that to successfully tap into the capital market for infrastructural financing, the existence of sound macroeconomic and policy frameworks are pre-conditions, hence, freedom must be given market forces to take its course.

According to him, as much as the government has its roles, political interference must be limited. This insures investors against any form of political risk, and most importantly corruption which has the potential of crippling the entire endeavour.

Acting Director General, Securities and Exchange Commission (SEC), Ms Mary Uduk, said Nigeria has a huge gap in infrastructure base measured through levels of physical capital of roads, public education, electricity production, health infrastructure, and access to treated water.

She said that the Nigerian government like other developing countries continues to face significant challenges in implementing programmes to build basic infrastructure, as the traditional source of infrastructure funding was through public expenditure and development finance aids.

According to her, these sources of infrastructure financing have been found to be inadequate as evidenced by the country’s infrastructure gap.

She added that the establishment of an active infrastructure funds through the market being pursued by capital stakeholders would be immensely beneficial in closing the infrastructure gaps in the country.

According to her, there are various sources of funds available in the market which can be harnessed for infrastructure development such as the pension funds, real estate investment trust and collective investment scheme.

Uduk, who was represented by Mr Sufyan Abdul karim, SEC’s Head of External Relations, said government cannot be the sole provider of infrastructure, noting that active private sector participation is also needed.

She urged government to leverage on the alternative sources of infrastructure financing in the capital market in a bid to diversify the economy and develop infrastructure in Nigeria.

“The international capital markets are the largest and deepest pool of financing in the world, and in conjunction with local capital markets, which represent an essentially untapped source of funds for infrastructure projects, they can make a huge contribution to economic development, if effective transaction structures are developed,” Uduk said.

She pointed out that infrastructure development is important for a country’s sustained economic growth and competitiveness.

Chief Executive Officer, FMDQ Securities Exchange (FMDQ) Plc, Mr Bola Onadele, said the Exchange was committed to tackling the housing infrastructural deficit facing Nigeria through mobilisation of funds from the capital market.

He pointed out that infrastructure is central to the development of the economy, noting that FMDQ is poised to provide workable means of housing provision in the country, amongst other programmes to address infrastructural gap in Nigeria.

Onadele who was represented by Associate Executive Director, Corporate Development, FMDQ, Ms Kaodi Ugoji, noted that the Exchange had set up a housing development project team to work directly with the office of the Vice President.

He added that the Exchange has been working with stakeholders and government to develop products that will drive the capital market and the Nigerian economy in the last four years.

Taofik Salako

Universal Insurance Plc is considering raising new equity funds to bolster its operations and strengthen its capital base ahead of deadline for new capital requirements for the insurance sector.

The board of the insurance company is expected to meet shareholders next week to seek approval for a new capital raising exercise.

At the annual general meeting scheduled for Lagos, the board is expected to table two resolutions before shareholders to facilitate the new fund raising.

Shareholders are expected to authorise the board to raise additional equity capital up to the maximum limit of the company’s authorised share capital. The fund raising may be by any means of issuance including by special placement and rights issue as may be determined by the board.

To provide headroom for absorption of oversubscription, the board is also requesting shareholders to authorise it to capitalise excess money and allot additional shares to the extent that can be accommodated by the company’s unissued share capital.

Insurance companies are in a frenzy for additional capital to meet new capital requirements stipulated by the National Insurance Commission (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. Insurance companies are required to comply fully with the new minimum capital base by June 30, 2020.

Key extracts of the audited report and accounts of Universal Insurance for the year ended December 31, 2018 showed that gross premium rose from N753.07 million in 2017 to N1.69 billion in 2018. The company posted a pre-tax loss of N39.55 million in 2018 as against pre-tax profit of N666.21 million in 2019. Net loss after tax stood at N46.567 million in 2018 as against net profit of N634.18 million in 2018. Loss per share thus stood at 0.29 kobo in 2018 compared with earnings per share of 3.96 kobo in 2017.

Also, interim report and accounts of the insurance company for the first quarter ended March 31, 2019 showed that gross premium doubled from N346.47 million in first quarter 2018 to N650.91 million in first quarter 2019. Profit before tax dropped from N131.95 million to N61.44 million. Profit after tax also dipped from N118.1 million to N47 million. Earnings per share declined from 0.74 kobo in first quarter 2018 to 0.29 kobo in first quarter 2019.

The management of Universal Insurance had recently announced a partnership with the Nigerian Union of Road Transport Workers (NURTW) as the official underwriter of the union’s Passengers Manifest Scheme (PAMS).

PAMS is designed to ensure that passengers travelling by road across the country have their names authenticated on the union’s digital manifest and are covered with genuine insurance policy.

Universal Insurance stated that the partnership will go a long way in improving insurance awareness and penetration in Nigeria while boosting public confidence in the insurance industry through prompt settlement of claims.