The Nation Newspaper

Category: Equities

  • ‘Global uncertainties scare investors from emerging markets’

    By Our Reporter

    The current cloud of uncertainties in the global markets has made emerging markets such as Nigeria unattractive to foreign portfolio investors.

    Senior Research Analyst, FXTM, Lukman Otunuga, said trade disputes among major advanced economies, Britain’s move to exit the European Union (EU) and other political and economic concerns have reduced global investors’ appetite for emerging markets and risky assets.

    Foreign portfolio transactions in the Nigerian stock market had reduced from N906.86 billion in first eight months of 2018 to N594.46 billion in the first eight months of this year. Foreign portfolio investors (FPIs) play major roles in the Nigerian stock market, where they account for nearly half of total transactions. Total transactions at the Nigerian equities market had also dropped from N1.88 trillion in eight-month period ended August 2018 to N1.32 billion in similar period of 2019.

    Nigerian equities closed weekend with a negative average year-to-date return of -15.85 per cent as selloffs continued to force the market down, despite a near consensus on undervaluation of several Nigerian stocks.

    The International Monetary Fund (IMF) last week downgraded global growth forecast for this year to 3.0 per cent, the fifth downward review from its initial 3.9 per cent forecast in mid-2018.

    This implies that global growth is expected to be at its slowest since the 2008 crisis.

    Otunuga said risk-aversion due to global uncertainties will flow back to the Nigerian equities market noting that Nigeria’s dependence on crude oil also makes the country susceptible to global oil shocks.

    He urged the Economic Advisory Council (EAC) recently constituted by President Muhammadu Buhari to focus on measures to diversify Nigeria’s revenues in order to mitigate possible oil shocks, pointing out that the global outlook for crude oil remains bearish despite current upswing.

    Otunuga said the current managed-float foreign exchange system of the Central Bank of Nigeria (CBN) remains the most viable option for Nigeria given the current economic structure.

    He said Nigerian economy as it stands now cannot successfully run a free float foreign exchange system noting free float policy could have adverse effect on the economy.

    According to him, Nigeria needs a combination of a strong foreign exchange reserves and economic stability to absorb possible pressures from free floating of naira.

    He noted that Nigeria’s external reserves has considerable influence on the stability of the Naira.

    “I am an apostle of free float but that is not feasible now because the external reserves is not strong enough. Recently, the reserves has been experiencing downturn. At $42.5 billion, the external reserves has been experiencing negative trajectory and with this and coupled with the state of the economy, I will say that free float is not desirable now,” Otunuga said.

    He added that before the nation’s currency could be allowed to free float, there should be assurance that it will withstand the initial shock that usually accompany free float.

    General Manager, FXTM Nigeria, Abiola Akinyele said FXTM Nigeria is committed to empowering Nigerian investors and traders through adequate knowledge and cutting-edge know-hows.

    He said FXTM Nigeria organises series of educational workshops and seminars for its clients to ensure they remain abreast of global developments and how such impact on the domestic economy.

  • Equities dip on new pricing rule

    Taofik Salako

    The momentum of activities at the Nigerian stock market slowed down considerably as new share pricing rule by the Nigerian Stock Exchange (NSE) took effect on trading and price movements.

    Turnover volume and value at the NSE declined by more than one-third last week, the first full week after the Exchange cancelled its three-tier share pricing methodology that allowed smaller trades to change prices of large and mid-cap stocks for a universal pricing rule for all categories of stocks.

    Total turnover at the Exchange declined to 896.61 million shares worth N16.56 billion in 12,638 deals last week compared with 1.41 billion shares valued at N31.96 billion traded in 13,616 deals in the previous week. These represented 36.3 per cent and 48.2 per cent drop in turnover volume and value respectively.

    Average return at the equities market, though still negative, however improved to -0.32 per cent last week as against -1.68 per cent recorded in the previous week. Aggregate market value of all quoted equities at the Exchange dropped from its week’s opening value of N12.917 trillion to close weekend at N12.875 trillion, a drop of N42 billion.

    The All Share Index (ASI)- the common value-based index that tracks share prices at the NSE also declined from its week’s opening index of 26,533.78 points to close weekend at 26,448.62 points. This depressed the average return so far this year to -15.85 per cent.

    A breakdown of activities showed that financial services sector continued to dominate activities at the NSE; recording 597.154 million shares valued at N6.72 billion in 7,197 deals, 66.6 per cent of total equity turnover volume. The consumer goods sector followed with 102.13 million shares worth N7.214 billion in 2,027 deals while service sector placed third with a turnover of 84.001 million shares worth N377.02 million in 264 deals.

    The three most active stocks were Guaranty Trust Bank, Global Spectrum Energy Services and Flour Mills of Nigeria. The three most active stocks accounted for 302.29 million shares worth N5.51 billion in 1,290 deals, representing 33.7 per cent and 33.3 per cent of the total equity turnover volume and value respectively.

    Also, a total of 960 units of Exchange Traded Products (ETPs) valued at N146,643 were traded in 11 deals compared with a total of 9,219 units valued at N1.08 million traded in 24 deals two weeks ago.

    At the sovereign debt market, a total of 1,397 units of Federal Government bonds valued at N1.52 million were traded in nine deals compared with a total of 2,519 units valued at N2.67 million traded in 12 deals penultimate week.

    There were 19 advancers and 23 decliners last week compared with 20 advancers and 33 decliners recorded in the previous week. Notably, 124 equities remained unchanged last week, 10 per cent higher than 113 equities that were unchanged in the previous week.

    Consolidated Hallmark Insurance recorded the highest gain, in percentage terms, of 17.9 per cent to close at 33 kobo. Fidson Healthcare followed with a gain of 11.1 per cent to close at N4 while Custodian Investment rose by 9.7 per cent to close at N6.20 per share.

    On the negative side, Cornerstone Insurance led the losers with a drop of 18 per cent to close at 32 kobo. Cutix dropped by 12.7 per cent to close at N1.31 while PZ Cussons Nigeria declined by 11.9 per cent to close at N5.55 per share.

    Most analysts were cautious about the outlook at the stock market. “In our view, the trend witnessed through the year is likely to persist through the final quarter of the year, although we expect pockets of gains over the final months of the year as fund and portfolio managers realign portfolios prior to the start of 2020. Nonetheless, we note that valuations remain attractive driven by price deterioration throughout the year. Hence, we advise that long-term investors consider appropriately timed investments,” Cordros Securities stated at the weekend.

    Analysts at Afrinvest Securities stated that they expected “the bearish momentum to continue although there is room for gains due to opportunities for bargain hunting in fundamentally sound stocks”.

    The NSE had on Friday October 11, 2019 amended its tiered share pricing rule for a new universal rule that stipulates 100,000 shares as minimum trade quantity required to change prices for all categories of equity securities. The previous rule prescribed minimum volume of 10,000 shares for predominantly large-cap stocks trading above N100 and 50,000 shares for mid-cap stocks trading between N5 and N99.99.

  • Equities continue decline with N27b loss

    By Taofik Salako, Capital Market Editor

    Nigerian equities remained on the downward trend on Tuesday as investors continued to open up market orders to attract demand.

    Benchmark indices at the equities market indicated average decline of 0.21 per cent, equivalent to net capital depreciation of N27 billion.

    The All Share Index (ASI)- the common value-based index that tracks share prices at the Nigerian Stock Exchange (NSE) dropped from its opening index of 26,866.41 points to close at 26,809.92 points.

    Aggregate market value of all quoted equities declined from its opening value of N13.078 trillion to close at N13.051 trillion.

    The continuing depreciation worsened the negative average year-to-date return to -14.70 per cent. In the past six trading sessions, quoted equities have lost an average of 2.97 per cent.

    While there were more losers than gainers, gains recorded by sectoral leaders however buoyed sectoral indices, pushing most to positive closing. The NSE Oil and Gas Index rose by 1.04 per cent. The NSE Industrial Goods Index appreciated by 0.08 per cent. The NSE Insurance Index inched up by 0.06 per cent while the NSE Banking Index rose by 0.05 per cent. However, the NSE Consumer Goods Index declined by 0.09 per cent.

    MTN Communications Nigeria led 14-stock losers’ list with a drop of N1.50 to close at N128.50. Guinness Nigeria followed with a loss of 40 kobo to close at N32.50. Dangote Sugar Refinery declined by 30 kobo to close at N10.20.

    On the positive side, 11 led the 12-stock gainers with a gain of N7.90 to close at N147.90. NASCON Allied Industries followed with a gain of N1.35 to close at N14.85 while Forte Oil added 90 kobo to close at N15.70 per share.

    Total turnover meanwhile rose by 22.56 per cent to 185.94 million shares valued at N2.54 billion in 3,083 deals. Zenith Bank was the most active stock with a turnover of 60.92 million shares valued at N1.1 billion. FCMB Group followed with 37.34 million shares worth N59.74 million while Guaranty Trust Bank placed third with 27.89 million shares valued at N744.38 million.

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

  • Investors upbeat as equities rally N316b gains

    Investors showed improved appetite for Nigerian equities in the immediate past week as attractive valuations, reduced political risk and improved macroeconomic direction spurred a broad-based bargain-hunting for quoted shares.

    Benchmark indices for the Nigerian equities market showed average gain of 2.33 per cent at the weekend, equivalent to net capital gains of N307.7 billion for the week. However, the listing of additional shares by Stanbic IBTC Holdings lifted the total increase in market value of quoted equities to N316 billion at the weekend.

    The sustained rally coincided with the Wednesday September 11, 2019’s decision of the Presidential Election Petition Tribunal affirming the election of President Muhammadu Buhari. Total market value of quoted equities rebounded with net gain of N52 billion on Wednesday, rose further by N141 billion on Thursday and capped the rally with a net gain of N172 billion on Friday.

    Many analysts had said investors might have interpreted the decision of the presidential election tribunal as a sign of stability that gives clearer direction of the macroeconomic direction, notwithstanding the discontent in the opposition camp and possible appeal to the Supreme Court.

    The rally, the highest in recent weeks, moderated the negative average year-to-date return to -11.62 per cent. On a quarterly basis, average return so far for the third quarter improved, though still negative, to -7.30 per cent. Meanwhile, the benchmark turned positive for August with a month-to-date return of 0.92 per cent.

    The All Share Index (ASI)-the common value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), rose from its week’s opening index of 27,146.57 points to close weekend at 27,779.00 points. Aggregate market value of all quoted equities also rallied from its opening value of N13.207 trillion for the week to close weekend at N13.523 trillion.

    With 39 advancers to 19 decliners, most sectoral indices also closed positive underlining the broad bargain-hunting that drove the overall market performance. The NSE 30 Index, which tracks the 30 most capitalised stocks at the Nigerian Stock Exchange (NSE), rose by 2.72 per cent. The NSE Banking Index appreciated by 5.06 per cent. The NSE Consumer Goods Index rallied average gain of 0.57 per cent while the NSE Oil and Gas Index rose by 7.19 per cent. However, the NSE Industrial Goods Index declined by 0.41 per cent while the NSE Insurance Index dropped by 2.13 per cent.

    UACN Property Development Company, which is being unbundled by its parent company, UAC of Nigeria, led the rally with a double of its share price by 51.52 per cent to close weekend at N1.50 per share. FBN Holdings followed with a gain of 24.1 per cent to close at N5.40. Seplat Petroleum Development Company placed third with a gain of 15.67 per cent to close at N460. Forte Oil appreciated by 14.1 per cent to close at N16.55. Ecobank Transnational Incorporated rallied by 11.9 per cent to close at N8 while Cornerstone Insurance rose by 11.1 per cent to close at 30 kobo per share.

    On the negative side, Thomas Wyatt Nigeria recorded the highest loss of 9.52 per cent to close at 38 kobo. Continental Reinsurance followed with a drop of 7.98 per cent to close at N1.50. Oando dropped by 7.3 per cent to close at N3.80. Livestock Feeds declined by 7.1 per cent to close at 39 kobo while Cutix depreciated by 6.67 per cent to N1.40 per share.

    The momentum of activities also improved considerably. Total turnover stood at 1.15 billion shares worth N14.08 billion in 17,980 deals compared with a total of 1.10 billion shares valued at N17.08 billion traded in 15,431 deals in the previous week.

    The financial services sector, traditionally the most active, remained atop activities chart with 840.704 million shares valued at N10.765 billion in 11,331 deals, representing 73.30 per cent and 76.45 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with 111.231 million shares worth N243.124 million in 963 deals while the information and communication technology (ICT) sector occupied a distant third with a turnover of 95.087 million shares worth N605.135 million in 404 deals.

    Banking stocks dominated activities’ chart with the trio of Guaranty Trust Bank, Access Bank and FBN Holdings accounting for 484.003 million shares worth N8.306 billion in 4,265 deals, representing 42.20 per cent and 58.99 per cent of the total equity turnover volume and value respectively.

    Besides equities, a total of  6,540 units of Exchange Traded Products valued at N23,650 were also traded in five deals last week compared with a total of 3,692 units valued at N1.974 million traded in 10 deals two weeks ago.

    On the sovereign bond market, a total of 274 units of Federal Government bonds valued at N280,932 were traded in seven deals compared with a total of 47,690 units valued at N51.008 million traded in 15 deals penultimate week.

    Beyond Nigeria, investors’ sentiment for quoted equities appeared to improve globally last week with most global markets closing positive. In the United States of America, the Dow Jones Industrial Average (DJIA), S & P 500 Index and NASDAQ Index appreciated by 1.4 per cent, 1.2 per cent and 1.1 per cent respectively. In United Kingdom, the UK FTSE ASI appreciated by 1.1 per cent. France’s CAC 40 Index rose by 1.0 per cent. Germany’s XETRA DAX Index rallied by 2.2 per cent. Hong Kong’s Hang Seng Index advanced by 2.5 per cent. Japan’s Nikkei 225 Index rose by 3.7 per cent. China’s Shanghai Composite Index appreciated by 1.1 per cent. Russia’s RTS Index rose by 1.6 per cent. India’s BSE Sens Index also rose by 1.1 per cent while Brazil’s Ibovespa Index posted average gain of 1.5 per cent.

    Major African markets also showed positive sentiment. South Africa’s FTSE/JSE Index posted a week-on-week gain of 2.8 per cent. Egypt’s EGX 30 Index indicated average gain of 1.2 per cent while Kenya’s NSE 20 Index appreciated by 0.9 per cent. However, Ghana’s GSE Composite Index dipped by 0.2 per cent.

    Analysts meanwhile remained cautious about the outlook for the Nigerian equities market, although improved macroeconomic direction is expected to impact the market positively.

    “Our view continues to favour cautious trading owing to the fact the gains recorded this week were not broad-based. Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury bills. Hence, we advise that long-term investors consider appropriately timed investments,” Cordros Securities stated.

    Most analysts believed the delivery of the presidential election judgement would spur government activities in the period ahead and provide additional impetus for market performance.

    Managing Director, APT Securities & Funds Limited, Mallam Kasimu Garba Kurfi, said the decision of the presidential election tribunal would provide a clearer direction for the market.

    “We are expecting positive response, especially in view of the early presentation of the underlying assets for the 2020 national budget,” Kurfi said.

    Chief Executive Officer, Sofunix Investment and Com

  • CCNN: Bigger, more profitable

    Cement Company of Northern Nigeria (CCNN) Plc triples its top-line and bottom-line as the gains of recent strategic initiatives and business combination strengthen the outlook of the company. In this report, Capital Market Editor, Taofik Salako, looks at the underlying performance and outlook for the cement producer

    Cement Company of Northern Nigeria (CCNN) Plc is one of the highpoints of this earnings season. With three-digit growth in all key performance indices, CCNN recorded well-rounded performance in the first half of 2019. The six-month report for the period ended June 30, 2019 showed that total turnover rose by 166.14 per cent to N32.15 billion in first half 2019 as against N12.08 billion in comparable period of 2018. Gross profit grew by 163.07 per cent from N5.47 billion to N14.39 billion. Profit before tax jumped by 165.3 per cent from N3.66 billion to N9.71 billion. After taxes, net profit leapt by 180 per cent from N2.60 billion in first half 2018 to N7.28 billion in first half 2019. Underlying performance ratios showed a generally stable outlook. Gross profit margin stood at 44.76 per cent. Pre-tax profit margin was steadied at 30.21 per cent while net profit margin improved to 22.64 per cent.

    The balance sheet also showed a stronger and better-positioned company with reduced leverage and increased working capital. Total assets rose to N356.75 billion in June 2019 compared with N347.75 billion recorded for the year ended December 31, 2018. Total equity increased from N333.49 billion in December 2018 to N340.77 billion in June 2019. Current assets had risen from N17.28 billion to N23.13 billion while non-current assets had increased from N330.46 billion to N333.6 billion.

    The first half 2019 performance places CCNN in good stead to sustain its impressive year-on-year growth and cement its leading position as the fastest growing  cement company. The company had increased total dividend payout for the 2018 business year by 235 per cent to N5.26 billion after turnover and net profit jumped by 62 per cent and 77 per cent respectively. In the audited report and accounts for the year ended December 31, 2018, CCNN’s turnover rose to N31.7 billion in 2018 as against N19.58 billion in 2017. The top-line growth was due largely to increased domestic sales and exports.  CCNN produced 0.76 million metric tonnes of cement and sold over 0.74 million metric tonnes, an increase of about 59 per cent. Sale of cement in Nigeria rose by 49 per cent to N28.9 billion while exports jumped from N0.2 billion in 2017 to N2.9 billion in 2018. Earnings before interest and taxes rose by 86 per cent to N7.9 billion profit before tax increased by 81 per cent to N7.6 billion. Profit after tax rose to N5.86 billion in 2018 as against N2.91 billion in 2017.

    New Growth Momentum

    CCNN had in December 2018 strengthened its competitiveness and laid out new strategic growth plan with the business combination with Kalambaina Cement Company, a larger and newer Sokoto-based cement company. With CCNN’s pre-merger 500,000 metric tonnes per annum capacity and Kalambaina Cement Company-‘s 1.5 million metric tonnes per annum capacity, the emergent CCNN boasts of 2.0 million metric tonnes capacity, strengthening CCNN’s dominance as North-West Nigeria’s largest cement company and giving the company the volume for aggressive expansion in Nigeria and beyond. Kalambaina Cement plant uses primary fuels such as coal, heavy oils and AGO and it is expected to help solve the power problem with limited downtime and further opportunities for growth and expansion. These competitive advantages are visible in the emerging results. CCNN and Kalambaina Cement Company had related core investor. Damnaz Cement Company Limited held 50.7 per cent majority equity stake in CCNN. Alhaji Abdul Samad Rabiu, who chairs the board of CCNN, held the majority equity stake in Damnaz while his company-BUA International Limited held the 100% stake in Kalambaina. The business combination not only made CCNN a stronger competition in the cement market, it pivoted its ranking at the Nigerian stock market, scaling up to become Nigeria’s 12th largest quoted company.

    Most analysts believe the business combination would further boost efficiency, productivity, output and better returns for CCNN.

    “The opportunities within CCNN’s key markets and its export potential are almost endless. Situated just about 100km from Niger Republic and as the nearest cement plant to key markets in Northern Nigeria, the enlarged CCNN is now poised to compete effectively and serve those markets better at a lower cost with more energy efficiency through our use of coal,” Rabiu said. Rabiu also hinted of plan to increase the company’s production capacity, while pointing out that the merger has led to introduction of new technology, reduction in operational costs and increase in the number of transport fleet.

    “The company recorded its highest domestic exports sale during the year (2018). This was facilitated by the additional output from the enlarged entity. In 2019, we hope to have the full combined capacity of the two entities. With the new capacity, CCNN is now the dominant player in its home market of North West Africa,” Rabiu said.

    The Founder and Chief Executive Officer of BUA Group said CCNN is taking advantage of its proximity to the neighbouring West African borders, which has opened a new window for the export operations and revenue generation in foreign exchange.

    Managing Director, Cement Company of Northern Nigeria (CCNN) Plc, Engineer Yusuf Binji said the company will sustain its positive growth trajectory as it is now in better and more competitive position to drive growth in its home market and exports.

    He said the more benefits of the 2018 business combination and ongoing strategic initiatives will become more pronounced in the period ahead as the company continues to growth with economies of scale, enhanced operations and administrative efficiencies.

    Analysts’ opinions

    Most analysts are positive about CCNN’s outlook. On the back of the first half 2019 performance, analysts at Cordros Securities flagged CCNN as a high-return stock with potential total return of 124 per cent over the next 12 months. Analysts noted that CCNN’s half-year earnings per share of 55 kobo is tracking well ahead of Bloomberg consensus full-year 2019 estimate of 86 kobo and Cordros’ estimate of N1.01. Analysts described CCNN’s top-line performance as impressive.

    According to analysts, CCNN is an attractive buy and its three-digit operational growth could translate into similar three-digit returns. Analysts pointed out that CCNN is trading at significantly below its peers in the Middle East and Africa, making it a more attractive stock.

    In its review of the Nigerian cement industry outlook, Cordros noted that irrespective of the constraints in the overall economy, there are still strong triggers for cement producers in Nigeria, especially in the light of government’s aggressive infrastructure development and growing private sector demand.

    According to analysts, although there could be competition for cement demand growth from infrastructure development in Nigeria and neigbouring countries, CCNN tops scale of preference because of its proximity to fast growing markets.

    “From the perspective of users, CCNN’s new cement plant in Sokoto is the best cement plant in Nigeria, due to the high level of technological configurations which makes end products cure and dry faster. Beyond that, we are encouraged by the company’s potential for margin expansion over the next few years – which should drive earnings per share growth – as the company is able to optimise energy costs, increase capacity utilisation rate, and slightly increase prices,” Cordros stated.

    Analysts at Investment One Financial Services Limited also remained positive about the outlook for CCNN, citing the synergies from its recent business combination and market advantage. Analysts said the top-line growth in first half 2019 suggested the company may be recording success in its plan to expand market share to other northern regions of Nigeria, as the North-west region may not have the capacity to absorb new volumes.

    According to analysts, while the third quarter may be a tepid quarter due to the rainy season, which slows construction, the company’s top-line performance may see support from potential increase in Federal Government capital expenditure spending following the appointment of executive cabinet and implementation of 2019 budget.

    While noting the decline in margin due to increased costs, Investment One said CCNN has potential to deliver improved sales and profitability. “In addition, the cement producer should continue to reap benefits of its merger with Kalambaina Cement if its plans to enter new market and expand market share continues to be successful. We also draw attention to a potential drop in cost in the medium term as its new factory is designed to run on multiple energy sources (such as gas and coal); this is unlike its old factory which is run predominantly with Low Pour Fuel oil (LPFO) which is the most expensive of all energy sources. If a switch in energy sources is effectively implemented, we see potential improvements in margin performance of CCNN as we have previously seen in other players operating in the sector,” Investment One stated.

    With almost a consensus on the positive outlook for CCNN, the company appears to be on the right track to further consolidate its impressive growths over the years and increase returns to shareholders.

  • NSE lists Greenwich ETF

    The Nigerian Stock Exchange (NSE) on Monday listed Greenwich Alpha ETF (Greenwich Alpha), an exchange traded fund (ETF) promoted by Greenwich Asset Management Limited.  The Greenwich Alpha ETF was listed at N100 per unit following the success of the fund’s initial public offering (IPO).

    Greenwich Alpha is an open-ended ETF that tracks the NSE 30 Index; an index which comprises of the 30 most liquid and capitalised stocks on the Exchange. It is designed for investors to access the constituent companies of the NSE 30 index, thereby getting the performance of the index.

    Managing Director, Greenwich Asset Management Limited, Mr Dayo Obisan, said, the Greenwich Alpha ETF Fund was designed for investors seeking exposure to the Nigerian equities market, particularly to the constituents of the NSE-30 index.

    According to him, the portfolio offers the full benefits of diversification through a single transaction thereby reducing associated transaction cost and helping investors spread their risk.

    “We will continue to encourage retail and institutional investment in this fund based on its potentials,” Obisan said.

    Head, Trading Business Division, Nigerian Stock Exchange (NSE), Mr Jude Chiemeka, said ETFs have continued to make a global impact as effective tools for accessing the market, diversifying investments, and serving as an alternative investment solution for intermediaries to recommend to their clients.

    He pointed out that given the position of the NSE as the leading stock exchange for listing and trading ETFs in West Africa, the Exchange will continue to lead innovation in the market as well as support the issuance of products and investment vehicles that meet the objectives of investors.

  • Zenith Bank declares N9.42b interim dividend

    The board of Zenith Bank International Plc yesterday said it would be distributing N9.42 billion to shareholders as interim dividend as the bank sustained steady growths across key performance indices in the first half of this year.

    Shareholders on the register of the bank as at August 29, 2019 will receive an interim dividend per share of 30 kobo. The dividend will be paid on September 2, 2019.

    Key extracts of the audited report and accounts for the six-month report ended June 30, 2019 released at the Nigerian Stock Exchange (NSE) showed that gross earnings grew by 3.0 per cent from N322.2 billion in first half of 2018 to N331.6 billion in first half 2019. The top-line performance was driven by a significant growth of 24 per cent in non-interest income from N88.6 billion to N109.7 billion. Fees from electronic products increased by 168 per cent from N10 billion to N27 billion, underlining significant progress in the bank’s retail banking initiatives.

    Profit before tax rose by 4.0 per cent to N111.7 billion in first half 2019 compared with N107.4 billion in comparable period of 2018. After taxes, net profit rose from N81.74 billion in first half 2018 to N88.88 billion in first half 2019. With this, earnings per share improved by 9.0 per cent from N2.60 to N2.83.

    The balance sheet also improved with increases in deposits and total assets. Group’s total deposit increased by 3.0 per cent from N861 billion by the close of the year on December 31, 2018 to close June 30, 2019 at N1.1 trillion. Despite the growth in deposit base, the bank optimised interest expense leading to a 4.0 per cent reduction from N74.7 billion to N72.1 billion due to the bank’s improved funding mix and profound treasury management skills.

    Net interest margins (NIMs) however depressed from 10 per cent in first half 2018 to 8.6 per cent in first half 2019, as a result of the declining yield environment but cost of funds improved from 3.4 per cent to 3.0 per cent.

    Further analysis showed that gross non-performing loans (NPLs) remained flat. The marginal movement in NPL ratio was as a result of the 3.0 per cent reduction in loan book from N2.02 trillion as at December 2018 to N1.95 trillion at the end of the period.

    “We are creatively deploying new retail loan products to ensure we capture a reasonable share of the retail loan market. We remain committed to maintaining our strong balance sheet with liquidity ratio at 74.6 per cent and Capital Adequacy Ratio (CAR) at 25 per cent, ensuring we remain above regulatory thresholds,” the bank stated yesterday.

    The bank assured that it will in the second half continue to consolidate its leadership in the corporate space as well as its retail banking franchise with a view to delivering drive will continue unabated.

    “We expect to see an improvement in economic activities even as we maintain our promise of delivering a unique service experience to our customers,” Zenith Bank stated.

  • Equities rebound with N93b gains

    Nigerian equities reopened yesterday to a streak of bargain-hunting as investors sought to take advantage of the steep depreciation in share prices in recent days. Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average gain of 0.71 per cent yesterday, equivalent to net capital gains of N93 billion.

    The All Share Index (ASI)- the value-based common index that tracks share prices at the NSE, appreciated from its opening index of 26,925.29 points to close at 27,115.89 points. Aggregate market value of all quoted equities also improved from opening value of N13.121 trillion to close at N13.214 trillion. The negative average year-to-date return improved to -13.73 per cent.

    With 20 advancers against 13 decliners, the positive overall market position was driven by widespread bargain-hunting transactions, especially within the large and mid-cap stocks. Sectoral indices however showed mixed performance as losses by some large-cap stocks weighed down many indices.

    The NSE Banking Index appreciated by 1.34 per cent while the NSE Oil & Gas Index rose by 0.59 per cent. However, the NSE Insurance Index depreciated by 2.41 per cent. The NSE Consumer Goods Index declined by 1.59 per cent while the NSE Industrials Goods Index dipped by 0.25 per cent.

    MTN Communications Nigeria led the gainers with a gain of N3.70 to close at N138.70. Stanbic IBTC Holdings followed with a gain of N1 to close at N34. Dangote Cement rose by 50 kobo to close at N164.50. Zenith Bank added 40 kobo to close at N17. Dangote Flour Mills chalked up 35 kobo to close at N21 while Guaranty Trust Bank and UAC of Nigeria added 30 kobo each to close at N26.30 and N4.80 respectively.

    On the negative side, Nestle Nigeria led the losers with a drop of N29.10 to close at N1,113.90 per share. Cadbury Nigeria followed with a loss of N1 to close at N9.30. Dangote Sugar Refinery declined by 50 kobo to close at N9.10. Lafarge Africa dropped by 25 kobo to close at N13.75. Eterna and AXA Mansard lost 10 kobo each to close at N2.50 and N1.70 respectively while Continental Reinsurance slipped by 5.0 kobo to close at N1.40 per share.

    Total turnover stood at 250.74 million shares valued at N4.17 billion in 4,116 deals. Lafarge Africa was the most active stock with a turnover of 47.15 million shares worth N660.02 million. Transnational Corporation of Nigeria followed with a turnover of 41.07 million shares valued at N36.96 million while Zenith Bank placed third with 26.72 million shares worth N452.63 million.

    “In the absence of a positive catalyst that would move the market, we expect investor sentiment to remain weak,” Afrinvest Securities stated in a post-trading review.

  • Conoil shareholders get N1.4b dividend

    The board of Conoil Plc at the weekend assured shareholders that the company has been positioned to continue to grow and deliver better returns despite operating challenges.

    The assurance came at the annual general meeting in Uyo, Akwa Ibom State where shareholders approved the payment of N1.4 billion as cash dividend for the 2018 business year. Shareholders will receive a dividend of N2  per share.

    In his address to shareholders at the meeting, Chairman, Conoil Plc, Dr. Mike Adenuga (Jr), stated that Conoil has continued to improve on its performance and shareholder’s value despite the tough operating environment in the downstream oil sector.

    Key extracts of the audited report and accounts for the year ended December 31, 2018 showed that profit before tax rose by 11.4 per cent N2.57 billion in 2018 as against N2.30 billion in 2017. Profit after tax grew by 13.8 per cent from N1.58 billion to N1.80 billion. Turnover had risen by 5.8 per cent to N122.21 billion in 2018 as against N115.51 billion in 2017. Earnings per share consequently increased from N2.27 in 2017 to N2.59 in 2018. The company’s net assets per share rose from N25.78 in 2017 to N26.37 in 2018.

    Adenuga said Conoil has been able to weather the challenges in the downstream oil sector and the general economy by remaining focused on its strategic growth plans, drawing from its inherent resilience and dynamism as a world-class company and the marketer of choice.

    According to him, the company had embarked on strategic cost reduction without hampering the future growth potential of the business while it took pragmatic steps to tackle the turbulent conditions in some of its key markets.

    “Every segment of our business will continue to receive the desired attention with a view to maintaining world class levels of operating and capital discipline. We believe that the future holds a lot of promise for our shareholders, the company will surely reward them for their steadfastness and unwavering faith in its prospects,” Adenuga said.

    He assured that the company would not relent in its efforts to maintain its leading position in the downstream petroleum sector by continuously developing its product portfolio, improving service delivery and best practices while delivering value to all stakeholders.

    He said Conoil would leverage on its proven pedigree and cutting-edge advantage in technical expertise and service delivery to take maximum advantage of any emerging growth opportunities in the economy, noting that the company has significantly invested in new facilities and level of support behind its brands.

    “In the face of uncertainties, what counts is being trusted to deliver, we are committed to delivering excellent returns and building value for our customers, our employees and of course, our distinguished shareholders,” Adenuga said.

    Shareholders who spoke at the meeting praised the performance of the company and lauded the board and management for sustaining growth and profitability. Shareholders particularly noted the company’s unbroken dividend payment records.

    Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu said the continuing profitability and dividend payment by Conoil has set it apart as a resilient and leading company in the downstream oil sector.

    “I must commend the board and management of Conoil for sustaining profitability and also able to pay dividend to its shareholders notwithstanding the very tough operating environment during the financial year in review. I know of some companies in the downstream oil sector that could not pay dividend to shareholders,” Nwosu said.

    Another shareholder, Barrister Ganiat Shiyanbola praised the company for its hard work as shown in its impressive performance.

  • Ekiti woos investors with ease of doing business

    Ekiti State has started the implementation of policies and legislations that would create conducive environment for investors and forge a strong alliance between the government and the private sector.

    Governor Kayode Fayemi, said the state was working to become one of the top three states in ease of doing business in Nigeria through implementation of relevant policies, incentives and legislations to support the growth of the private sector.

    Fayemi spoke during the presentation of “Facts Behind the State Economy” at the weekend at the Nigerian Stock Exchange (NSE) in Lagos. Fayemi, who doubles as Chairman, Nigerian Governors Forum (NGF) was honoured with the ceremonial beating of the closing gong for the stock market.

    He noted that Ekiti State that used to be number four before he left office in 2014 had moved to number 32, assuring investors that his administration is working hard to bring it back to a top three position through creation of a conducive environment for investors and businesses.

    “We have also passed the Law establishing the Ekiti State Development and Investment Promotion Agency (EKDIPA).  Once the agency commences full operations, it will drive our Ease of Doing Business reforms, and provide investors with a one-stop shop to deal with investment related matters,” Fayemi said.

    According to him, Ekiti State’s focus on agriculture, especially through such initiatives such as Special Agric Processing Zone (SAPZ), would not only improve the productivity of farmers, but also provide the infrastructure required for processing activities.

    He said the state would at the appropriate time, seek investors for some of its existing assets as well as several Greenfield opportunities.

    He pointed out that the state’s tourism assets also provide significant investment opportunities.

    He added that the state’s economic and investment drives would be complemented by a clear strategy on attracting business, recreational, medical and wellness tourists to Ekiti State.

    He noted that investors have started to appreciate the business-friendly disposition of his administration.

    “Already, the market is responding to our approach, and we expect to close a partnership on the currently unutilised Ikun Dairy Farm, with a leading dairy company in Nigeria soon. Our belief is that Ekiti is ready for more of such investments, and we are available to answer questions on the investment opportunities that exist,” Fayemi said.

    He pointed out that Ekiti State has a long history of partnership with the NSE, noting that the bond raised by the state had been fully repaid while assuring that the state would continue to partner with the Exchange to grow the economy.

    He urged investors to see Ekiti State as a destination of choice for investment.

    He said the security in the state has improved as the state was actively involved in inter-state collaboration with neighbouring states to get rid of criminals and bandits and end the menace of kidnapping.

    “We have renewed our focus on peace and security, which is the foundation of any economic development; and started investing in developing the infrastructure required to make Ekiti State a competitive destination for business,” Fayemi said.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, commended the governor for his reform-minded leadership and grassroots development, which are positively impacting the lives of citizens of the state.

    According to him, Fayemi’s strategies towards revitalising the agricultural, manufacturing, mining, trade and tourism sectors, which together account for 75 per cent of the state’s gross domestic product (GDP) are commendable.

    He noted that the state had increased the proportion of capital spending in the 2019 budget to 44 per cent from 31 per cent in 2018; and channelled budgetary resources towards pro-growth projects including development of a land bank for the state, establishment of one-stop investment promotion centre and enterprise zone industrial clusters, widespread road constructions, electrification and information and communication technology infrastructure, rehabilitation of Fountain Hotels and commencement of Ekiti State Airport project among others.

    He assured the governor that the Exchange stands ready to support the growth aspirations of the state by providing access to capital and investments.

    “At the Nigerian Stock Exchange, we recognise that to build a sustainable economy for the estimated 3.5 million citizens of Ekiti State, supported by vibrant sectors, both state-owned and private sector enterprises will require access to right-sized capital. We have been longstanding partners with Ekiti State in accessing such capital,” Onyema said.

    He noted that during Fayemi’s previous term in office between 2010 and 2014, the Exchange supported the issuance and listing of the N20 billion Fixed Rate Infrastructure Development Bond, which financed a number of projects including the Ikogosi warm spring redevelopment, the Ekiti Water Works construction, as well as the refinancing of high-interest borrowings by the state.

    According to him, the Exchange is now more strategically positioned, having transformed into a multi-asset class exchange hub, to further support the developmental goals of Ekiti State in unlocking significant investment value through the listing of public utilities and state-owned enterprises, issuance of subnational bonds, as well as promoting the knowledge economy within the state in terms of public sector capacity building through its technology based learning management system – the NSE X-Academy.

    “We have also convened key players in our capital market ecosystem – our top dealing member firms and a cross-section of our listed companies – as a way of bringing interested parties closer to the investment prospects of vibrant state economy because we realise that the ambitions of the state and the capital market are inextricably linked,” Onyema said.