The Nation Newspaper

Category: Investors

  • AIICO Insurance seeks approval for N3.49b rights issue

    AIICO Insurance seeks approval for N3.49b rights issue

    Our Reporter

     

    AIICO Insurance Plc has filed application with the Nigerian Stock Exchange (NSE) seeking approval to raise N3.49 billion from its shareholders.

    AIICO Insurance is seeking to raise N3.49 billion through a rights issue of 4.36 billion ordinary shares of 50 kobo each at 80 kobo per share. The rights issue has been pre-allotted on the basis of five new ordinary shares of 50 kobo each for every 13 ordinary shares of 50 kobo each held by shareholders as at the close of business on June 15.

    The Board of AIICO Insurance had earlier recommended a scrip dividend that will see the insurance company distributing one ordinary share as bonus share for every five ordinary held by the shareholders as at Thursday, June 25, 2020.

    AIICO Insurance had earlier this year consummated a capital injection that saw new strategic investors acquiring 38.83 per cent equity stake in the company. The acquisitions were done through a private placement.

    AIICO Insurance offered 4.4 billion ordinary shares of 50 kobo each at N1.20 per share to raise N5.28 billion. The additional shares issued under the private placement increased AIICO Insurance’s issued share capital from 6.93 billion ordinary shares of 50 kobo each to 11.33 billion ordinary shares of 50 kobo each.

    Shareholders of AIICO Insurance had at the annual general meeting in 2016 authorised the board of directors to raise new capital to bolster the operations of the insurance company. The new equity fund will boost the capital base of AIICO Insurance as the Nigerian insurance industry seeks to meet new minimum capital base for various insurance functions.

    Insurance companies are in a hot race to raise new equity capital to meet new minimum capital requirements for various insurance functions as directed 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.

  • Entrepreneurs in Computer Village to invest in Lekki Trade Centre

    Entrepreneurs in Computer Village to invest in Lekki Trade Centre

    Persuaded by the business potential and returns on investment, some startup owners and entrepreneurs in Computer Village, Lagos, have committed to investing in Lekki Trade Centre.

    In a recent visit to the new site, the entrepreneurs expressed optimism over a prospect of an appreciable return on their investments in a place they considered ‘impressive’.

    Daily Sun gathered that the visit of the entrepreneurs to the new site where they hope to invest soon is linked to the marketing effort of Sure Solution Group, led by Iyke Godfrey Nwosu, Victor Okoli and Chinedu Mbakwe.

    Speaking on the development and what it portends for entrepreneurs, the sole estate agent of the ultramodern market and Chief Executive Officer of M.I. Okoro and Associates, Meckson Okoro, said: “The entrepreneurs visited and inspected the Lekki Trade Centre, along Lekki/Epe Expressway, Lekki, Lagos, and all of them were very impressed with the location and size of the place. They have already accepted to set up the branch of their businesses there. From every indication, the Lekki Trade Centre will be a wonderful destination for every businessman.”

    READ ALSO: Lagos Free Trade Zone exports $30m goods

    Recall that the Lagos State Government had mooted that businessmen in the popular Computer Village market would be relocated, necessitating many of the entrepreneurs to start looking out for a new site with similar potential.

    Speaking with one of the members of Phone and Allied Products Dealers Association (PAPDA) who was part of the delegates who visited, Uzonna Okolie, startups can rest assured of the newly found haven for business.

    “The place is a very good place. We have visited and we all liked it and I am glad to say that again. It is a place we are planning to invest in because of the huge development going on there. As a matter of fact, we are planning to go there with many more of businessmen in Computer Village so we can all invest in the place together.

    The influx of multibillion US dollars investments on landmark projects like the Dangote Petrochemical Industry, the Lekki Deep Sea Port, Lekki Free Trade Zone and the Lekki international Airport is an indicator that the Lekki Trade Centre has become a choice for both multinational and local investors.

  • ‘COVID-19 won’t affect capital market integrity’

    ‘COVID-19 won’t affect capital market integrity’

    By Taofik Salako, Deputy Group Business Editor

     

    The coronavirus (COVID-19) pandemic will not have any  affect the integrity of the operations at the capital market as operators had proactively adopted enabling technology and processes as well as supervisory frameworks that safeguard the integrity of the market.

    Chairman, Association for Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu said the  capital market was not caught unprepared by COVID-19 because stockbroking firms had been subjected to minimum operating standards (MON) by the Nigerian Stock Exchange (NSE) over the years.

    According to him, the minimum operating standards are prescribed and enforced by the Exchange to enable dealing member firms to develop strong robust control and governance framework as well as effective human capital that will enable them achieve best-in-class operations.

    “The pandemic has not taken away the level the market has attained in terms of technology and ability to reach out to customers.  The operators have been prepared for a situation where customers are connected online real time and we have been engaging in virtual trading,” Ezeagu said.

    According to him, the minimum standards cover the entire structure of market operations, including corporate governance and human capital.The philosophy is to globalise business and the policy has always been religiously enforced by the Exchange for enhanced healthy competition among dealing members.

    He noted that the COVID-19 pandemic period only serves to put operators’ potentials into real test, adding that dealing members are equal to the task which is evident in that trading was never disrupted by the lockdown.

    He added that the Chartered Institute of Stockbrokers (CIS) has also embarked on series of training sessions to equip its members with technical know-how for identifying options for survival and business expansions despite the negative impacts of the pandemic on all economic activities.

    Appraising the attitude of investors at the commencement of lockdown, Ezeagu described it as mixed saying initially, some investors did not know that the NSE was open for business but when they realised this, it was a great relief and they started to patronise the market.

    He however admitted that there were concerns in the entire ecosystem such as the degree by which COVID-19 would affect the economy already badly hit, ability of investors to keep faith, health concerns of workers across the board in the capital market and investors.These issues cannot be ignored.

    “It is a healthy man that will invest and so we are concerned about the rate of spread and containment of Coronavirus.  We are equally concerned about the sustainability of our business continuity plan deployment,” Ezeagu said.

    Ezeagu assured the public that the market has always been resilient, urging operators to support the government in propagating campaign of adherence to safety  by the authorities that are handling the pandemic.

     

  • CWG posts N634m profit

    CWG posts N634m profit

    By Taofik Salako, Deputy Group Business Editor

     

    CWG Plc recorded profit before tax of N634 million in 2019 as the pan-African information and communications technology company continued to grow its market share.

    Key extracts of the audited report and accounts of CWG for the year ended December 31, 2019 showed that the company’s gross revenue increased by 23.4 per cent to N9.6 billion in 2019 as against N7.8 billion in 2018. The company recorded a positive earnings before interest, tax, depreciation and armotisation (EBITDA) of N892 million.

    Profit before tax stood at N634 million while profit after tax closed at N73 million. The growth in revenue and profit was achieved with a reduction of 23 per cent in operating expenses. Meanwhile, net assets grew by 67.4 per cent to N192 million as against N115 million.

    Chief Executive Officer, CWG Plc, Mr Adewale Adeyipo, who took over on January 1, 2019, had in a preview outlined that the company was well prepared to deal with uncertainties by drawing on its strengths and being proactive with creating scenarios for varying outcomes.

    A former executive director for sales and marketing at CWG, Adeyipo took over from Mr James Agada, who completed his three-year tenure as the chief executive of the company on December 31, 2018.

    “So, it is not so much of fear, but more of being better prepared for any economic ups and downs. I think as an organisation we have been on this road many times before and we clearly know what needs to be done in time like this. I am sure CWG is prepared to weather all outcomes that the year brings,” Adeyipo said.

    He said CWG had been able to rekindle its markets with some of the developmental initiatives taken in recent years noting that the group now has more products in the market, with some other products in their maturity state while many products were under research and development.

    Acknowledging challenges, Adeyipo said the team at CWG was committed at ensuring performance to the highest standards while achieving a more profitable organisation.

     

  • Lockdown easing may lead to investment volatility, says FXTM

    Lockdown easing may lead to investment volatility, says FXTM

    The gradual reopening of economies across the globe may lead to volatility in the investment markets, FXTM has stated.

    Chief Market Strategist, FXTM, Hussein Sayed said there were indications that investors expected volatility in the period ahead as global economies reopen.

    “Hopefully not, but when looking at how investors traded the VIX last week they seem to be expecting some turbulence ahead. Often referred to as the fear gauge, the index climbed 14 per cent last week to settle around 32 in the biggest upside move since late March. Futures on the index also moved higher with July contracts rising 6.5 per cent and closing the week at 32.6,” Sayed said.

    In his latest appearance, Federal Reserve Chairman Jerome Powell has said the economy could recover steadily through the second half of the year under the condition that there is no second wave of the coronavirus.

    Sayed, however, noted that when listening to the head of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci and other experts, many are warning that a second wave is inevitable if United States states ease restrictions too quickly.

    According to Powell, there needs to be a vaccine for the economy to fully recover and that may be more than a year away.

    “Trying to say with a high degree of confidence where the markets will be heading in the upcoming weeks is mission impossible. The current state of the economy is already priced in with the existing monetary and fiscal measures taken. So, do not expect to see big moves with each economic data release. I think it is better to monitor the rate of growth in Covid-19 infections as this might provide a better indicator for market moves,” Sayed said.

    According to him, the other risk factor investors need to keep an eye on is US-China tensions. After US Secretary of State Mike Pompeo last week blamed China for covering up the origins of the virus, White House trade advisor Peter Navarro is accusing China of using travelers to seed the virus in Milan and New York.

    He added that whether Friday’s move to block global chip supplies to blacklisted telecom company Huawei will restart another tit-for-tat tariff war remains to be seen, but the odds are now increasing.

    “At this stage, that’s the last thing investors want to see,” Sayed said.

     

  • NSE hosts virtual broker certification programme

    NSE hosts virtual broker certification programme

    By Taofik Salako, Deputy Business Editor

     

    The Nigerian Stock Exchange (NSE) has sustained its digital adaptation with the commencement of its first online Automated Trading System (ATS) certification training for graduate members who desire to become Authorised Dealing Clerks of the Exchange.

    The first cohort under the new remote framework consisted of 33 participants and had successfully gone through the training.

    The ATS certification training is an intensive training organised by the NSE for individuals who have passed the Chartered Institute of Stockbrokers (CIS) qualification examination. It is part of the mandatory, eligibility and admission procedure for any individual who wishes to become an Authorised Dealer of the Exchange.

    Speaking on the transition to virtual training, Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said since the activation of the business continuity plan that saw NSE transition to remote trading and working, the NSE has remained resolute in its commitment to maintaining business and trading operations.

    According to him,  the review of the ATS from the pre-existing classroom training to a virtual set up is just one of efforts in leveraging digital assets to maintain the flow of information and market activity; deliver on its mandate for capacity building; and continue to enhance stakeholders’ experience in the market.

    Head, Trading Business Division, NSE, Mr. Jude Chiemeka, added that at the impact of the Coronavirus pandemic has necessitated that NSE comes up with more digital friendly solutions to keep activities in the market moving.

    He noted that the volume of sign-ups received for this virtual ATS Training was, therefore, a testament to the appetite of Nigerians to engage in the capital market as operators.

    “The NSE is pleased about the keen interest we have seen and will continue to provide learning and trading opportunities that will benefit our stakeholders,” Chiemeka said.

    The ongoing ATS Training covers the standardised course outline and is being facilitated by subject matter experts within the capital market ecosystem, including the Securities and Exchange Commission (SEC), Central Securities Clearing System (CSCS), Registrars, Association of Issuing Houses of Nigeria (ASHON), Chartered Institute of Stockbrokers (CIS), and internal stakeholders within the NSE.

     

  • ‘Database on delinquent debtors launched’

    ‘Database on delinquent debtors launched’

    By Taofik Salako, Deputy Business Editor

     

    An independent searchable database of recalcitrant and delinquent debtors in Africa has been launched.

    The database, known as Debtors Africa, was unveiled alongside  a Debtors Report, a comprehensive analysis of the debts and non-performing loans in the Nigerian banking industry.

    Team Lead, Debtors Africa, Mr Bayo Awoyemi, said the Debtors Africa website is a searchable database of delinquent borrowers which enables speedy assessment of the character of a prospective customer.

    He noted that investors can use the database as a starting node for assessing the quality of the management of a business they intend to either partner or invest in.

    “The searchable database is designed to allow contributors, such as banks, loan fintech and credit companies, cooperatives, tax authorities, private businesses, government agencies and utility providers among others to list their delinquent debtors and their indebtedness on the platform as a contributor to the platform,” Awoyemi said.

    According to him, with the listings, a moral and business burden is placed on delinquent borrowers as prospective lenders would use the library to fact-check the borrowing history of a loan applicant and use the history to set up a character rating index that would guide credit appraisal memorandums (CAMs) and inform acceptance or decline of credit requests.

    He explained that by subscribing to the platform which is free, users are able to search for delinquent debtors in Africa using the company name or the name of the directors of a company, track the repayment progress of a delinquent debt and other related information to the debt, receive and monitor credible and reliable information on debt related activities in Africa and mine delinquent debtors data by sector, amount owed, and many other details.

    “Over the years, the names of delinquent debtors have been published on various media platforms with no central portal to harness the information published or achieve the objective creditors desire, which is repayment and resolution.

    With Debtors Africa, the new model provides a central hub to access this information and goes beyond naming and so-called “shaming” to informing prospective creditors and other institutions that require character validation, while name removal from the database is subject to the review and removal by the contributor after debt resolution is attained,” Awoyemi said.

    According to him, unlike the days when banks published their delinquent debtors list on online digital platforms in which they had no control of content update, modification and removal , the Debtors Africa platform puts the burden on creditors who are expected to take the action of delisting themselves further to showing proof of resolution, such that it also serves as an independent check on contributors who may choose to delist a debtor based on mutually agreed terms of settlement.

    He noted that the emerging global economy requires more credit but it also requires more confidence in the credit-to-debt-to-credit loop.

    “The stronger the integrity and the deeper the financial resources that support the loop the better the financial system and economy becomes.

    The spread of the digital economy, big data, artificial intelligence and informatics will lead to new approaches of credit evaluation, initiation, monitoring and recovery,” Awoyemi said.

    Managing Editor, Proshare, said the Debtors Report, which was done in partnership with Proshare, represented a culmination of a detailed review of the credit experiences of  Nigerian banks in the last two decades and reveals the challenges of a local lending cycle that has seen lenders become victims of the tyranny of bad and delinquent debtors.

    He pointed out that the report makes a case for a new approach to the lending cycle to ensure that integrity, professionalism and evidence-based best lending practices are strictly followed to guarantee the sustainability of the financial system and the prosperity of the larger economy.

    According to him, key highlights of the report included the industry and its debt position, definition of a delinquent debtor and how this has changed over the years including how banks end up with bad debtors, the sectors and regions affected and impact on GDP, provisions of the law as regards credit collection and recovery in Nigeria, the AMCON approach, lessons learnt, and the way for banks to adopt a revised credit recovery framework, case study of approaches adopted in recovering debt; and fresh methods a new approach offers to banks troubled by delinquent debts.

     

  • Dangote Cement raises N50b short-term capital

    Dangote Cement raises N50b short-term capital

    By Taofik Salako, Deputy Business Editor

     

    Dangote Cement Plc is seeking to raise N50 billion in additional short-term debt capital as the Sub-Saharan Africa’s largest cement group is leveraging its top-notch rating to deepen balance sheet and drive overall growth.

    Dangote Cement, Nigeria’s most capitalised quoted company, is offering Series 15 and 16 under its N150 billion commercial paper (CP) issuance programme. Application lists for the two offers close today. Dangote Cement plans to raise N50 billion across the two series.

    Dangote Cement is offering 175-day CP with effective yield of 5.0000 per cent and a discount rate of 4.8833 per cent under its 15th series. The 16th series CP is a 266-day instrument with effective and discount yield of 6.0000 per cent and 5.7492 per cent.

    Minimum subscription for the two offers was N5 million and thereafter in multiples of N1,000. The CPs, which are not subjected to withholding taxes, would be allotted today, after the closure of the application list.

    With an installed capacity of 45.6 metric tonnes across its operations in 10 African countries, Dangote Cement is assigned AA+ long-term rating by GCR and Aa2.ng long-term rating by Moody’s. It is one of the few companies in Nigeria with a rating of AA+.

    Dangote Cement had last month successfully launched its debut bond issuance, a N100 billion bond. The debut bond was the first series under the company’s N300 billion shelf bond issuance programme.

    The Dangote Cement’s N100 billion Series 1 five-year Fixed Rate Senior Unsecured Bonds would pay fixed coupon twice a year.

    Dangote Cement stated that it would use the net proceeds of the bond to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.

    Dangote Cement will be distributing N272.6 billion to shareholders as cash dividend for the 2019 business year. At its forthcoming annual general meeting, shareholders are expected to approve a board recommendation to distribute a dividend per share of N16. The dividend will become payable on June 16, 2020 to shareholders on the register of the company as at the close of business on May 25.

    Key extracts of the audited report and accounts for the year ended December 31, 2019 showed that turnover dropped from N901.21 billion in 2018 to N891.67 billion in 2019. Gross profit also declined marginally from N517.90 billion to N511.68 billion. Profit before tax stood at N250.48 billion in 2019 as against N300.81 billion in 2018 while profit after tax dropped from N390.33 billion to N200.52 billion.

    The report, meanwhile, indicated that the group’s investments across Africa have started yielding desired results as Pan-African sales volume grew in the year 2019, hitting 9.6 Mt from 9.4 Mt. Dangote Cement Plant, Mtwara, Tanzania, recorded an increase of 94 percent increase in volume within the review period. Dangote Cement Plant, Pout, Senegal put up a remarkable performance with sales up more than 100 percent of rated capacity.

    Dangote Cement is Africa’s leading cement producer with nearly 46Mta capacity across Africa. it is a fully integrated quarry-to-customer producer, with a production capacity of 29.25Mta in its home market, Nigeria. Obajana plant in Kogi State, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and Gboko plant in Benue state has 4Mta.

    In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), and Zambia (1.5Mta).

  • We are focused on emerging opportunities, says Union Bank

    We are focused on emerging opportunities, says Union Bank

    By Taofik Salako, Deputy Business Editor

    Union Bank of Nigeria (UBN) Plc has aligned its focus to harnessing emerging opportunities during and after this COVID-19 pandemic.

    Against the background of double-digit growths in key performance indicators in the first quarter of 2020, the management of the bank stated that it would leverage its enhanced digital platform and focus on emerging opportunities to mitigate the impact of the pandemic on its operations.

    Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa, said the pandemic presents daunting challenges for the global economy and consequently Nigeria and UBN’s business.

    He said the bank has reinforced its digital platforms to continue delivering value and convenience to its customers while aligning focus areas to where opportunities emerge during and after the pandemic.

    According to him, the bank’s focus in the short term is on ensuring business continuity through its strong operational risk framework while ensuring the health and well-being of its employees by adopting stringent health and safety protocols at its operating branches and offices.

    Read Also: Union Bank reassures shareholders of sustained profitability

    He assured that the bank would continue to support its customers as well as government, other private entities and communities in the fight against COVID-19.

    He pointed out that the bank had maintained focus on executing its strategic priorities in first quarter of the year, which led to sustained growth across all its major income lines.

    Key extracts of the interim report and accounts of UBN for the three-month period ended March 31, 2020 showed that gross earnings rose by 18 per cent to N42.6 billion in first quarter 2020 as against N36.1 billion in first quarter 2019. Interest income had grown by 18 per cent from N25.2 billion to N29.7 billion. Net interest income before impairment increased by 38 per cent to N14.8 billion as against N10.8 billion in comparable period of 2019. Profit before tax grew by 19 per cent to N6.2 billion in first quarter 2020 as against N5.2 billion in first quarter 2019.

    After more than a decade without dividend payment, UBN recently distributed N7.3 billion to its shareholders as cash dividend for the 2019 business year, implying a dividend per share of 25 kobo.

    The dividend was a major highlight of considerable improvements in the commercial bank’s top-line and bottom-line in 2019. Key extracts of the audited report and accounts of the bank for the year ended December 31, 2019 indicated that gross earnings grew by 14 per cent from N140.1 billion in 2018 to N159.9 billion in 2019. Interest income had grown by 11 per cent from N104.8 billion to N116.5 billion. Non-interest income also rose by 23 per cent from N35.3 billion to N43.3 billion.

    The report further showed that operating expenses declined marginally from N71 billion to N70.8 billion. Net operating income increased from N89.7 billion to N95.5 billion. Profit before tax grew by 33 per cent from N18.7 billion to N24.7 billion. Profit after tax also rose by 32 per cent from N18.4 billion to N24.4 billion.

    The balance sheet also emerged stronger. Gross loans rose by 20 per cent from N496.8 billion in 2018 to N595.3 billion. Customer deposits increased by 5.0 per cent to N886.3 billion in 2019 as against N844.4 billion in 2018.

  • Stock Exchange downgrades Transcorp Hotels to low-priced stock

    Stock Exchange downgrades Transcorp Hotels to low-priced stock

    By Taofik Salako, Deputy Business Editor

    Authorities at the Nigerian Stock Exchange (NSE) have downgraded Transcorp Hotels Plc from medium-priced stocks to low-priced stocks following steep depreciation in the share price of the hotel and tourism company.

    The Exchange stated that the review of share price of Transcorp Hotels over the most recent six months provided the basis for reclassifying the company from medium-priced stock group to the low-priced stock group.

    Transcorp Hotels’ reclassification took effect from Monday. With the reclassification, the tick size for the company will change from five kobo to one kobo, implying that the share price will move slowly going forward.

    The NSE classifies quoted companies into three categories-high-priced, medium-priced and low-priced stocks, based on their market price. A company must have traded for at least four out of the most recent six month period within a stock price group’s specified price band to be classified into the category.

    The high-priced stocks consist of large-cap equities that are priced at N100 per share or above for at least four of the last six trading months, or new security listings that are priced at N100 or above at the time of listing on the Exchange.

    The medium-priced stocks  consist of medium-priced equities that are priced at N5 per share or above but less than N100 per share for at least four of the last six months, or new security listings that are priced at N5 per share or above but less than N100 per share at the time of listing on the Exchange.

    The low-priced stocks, where majority of listed companies fall, consist of equities that are priced at one kobo per share or above but below N5 per share for at least four of the last six months, or new security listings that are priced at one kobo per share or above but below N5 per share at the time of listing on the Exchange.

    According to the Exchange, Transcorp Hotels’share price dropped below the N5 price level on December 23, 2019 and traded below N5 up till close of business on May 04, indicating that the company’s share price has traded below N5 in the last six months.