By Taofik Salako, Capital Market Editor

The Corporate Affairs Commission (CAC) has said companies that opt to conduct their annual general meetings (AGMs) through the use of proxies must comply with the relevant provisions of Companies and Allied Matters Act (CAMA) and the guidelines issued by the Commission.

CAC had last weekend issued guidelines on the conduct of AGM through the use of proxy as part of measures to circumvent the disruptions created by the Coronavirus pandemic.

Nigeria heightened its state of emergency as the confirmed cases of Covid-19 continue to rise with Lagos, the nation’s economic centre, remaining the epicentre of the spreading Coronavirus. Lagos State, where most annual general meetings usually hold, has placed restriction of not more than 25 persons on public gathering, automatically closing down large-group assembly like AGM. Most other states are enforcing restrictions.

The average number of shareholders for a quoted company is more than 1,000 and it is estimated that at least 20 per cent of shareholders attend AGM. Besides, representatives of regulatory authorities, professional advisers, independent observers and the mass media also usually attend AGM.

CAC, in a statement, stated that companies can take advantage of Section 230 of the Companies and Allied Matters Act (CAMA) on the use of proxies to hold their AGMs.

The rules on proxy allow shareholders to appoint personal representative or to appoint the chairman of the board or any presiding official or any of the directors of a company to act for them. The rules also allow shareholders to vote on the agenda or resolutions of the meeting ahead of the meeting date by indicating their vote on the proxy form.

Under the guidelines provided by CAC, companies shall obtain the approval of CAC before such a proxy-based meeting is held and such application for approval can be submitted to CAC’s head office in Abuja or any of the branch offices in any of the states.

Such a proxy-based meeting shall only discuss the ordinary business of an AGM as provided in Section 214 CAMA while CAC shall send representatives as observers to the meeting.

The company shall be guided by the provisions of its Articles or CAMA as regards to a quorum. However, for the purpose of determining quorum, each duly completed proxy form shall be counted as one.

According to the guidelines, notice of meeting and proxy form shall be sent to every member in accordance with the requirements of CAMA and the companies will be required to provide the CAC with the evidence of postage or delivery of such notices after the meeting.

“All the members shall be advised in the notice that in view of the Covid-19 pandemic, attendance shall only be by proxy with names and particulars of the proposed proxies listed for them to select therefrom. The invitation shall be issued at the companies’ expense as well as the stamp duties which shall be prepaid by the company.  The proxies need not be members of the company,” CAC stated.

Nigeria’s largest financial institution, Guaranty Trust Bank (GTB) Plc, was the first to conduct its AGM under the proxy arrangement. GTB, which had scheduled to hold its AGM in Lagos on March 30, 2020, successfully conducted the AGM by proxy after obtaining relevant regulatory approvals.

GTB explained that it decided on the proxy arrangement to minimise social contact and to allow the bank complies with restrictions on public gathering by the Lagos State Government.

By Taofik Salako, Capital Market Editor

The Chartered Institute of Stockbrokers (CIS) has postponed its professional examination for March Diet earlier scheduled for end of the month and early April.

Registrar and Chief Executive, Chartered Institute of Stockbrokers (CIS), Mr Adedeji Ajadi, said the institute’s Annual General Meeting (AGM), which holds yearly in April and other activities, would be decided later.

“ Following the spread of the global pandemic, Covid-19 to over 140 countries, including Nigeria, and the directives issued by the Federal and State Governments to curtail its spread, it has become necessary for the Chartered Institute of Stockbrokers (CIS) to review its programmes and events.

Read Also: COVID-19: Police to arrest violators in Ondo

To this end, in the overriding interest of the safety and well-being of all our stakeholders and in support of the proactive measures taken by the Nigerian authorities,” Ajadi stated.

He pointed out that the institute has also put on hold all training as each event would attract more than 50 participants, which is at variance with the government’s directive to prevent further spread of Coronavirus.a

By Taofik Salako, Capital Market Editor

A healthcare investment firm, Cedar Advisory Partners Limited, has launched a N492.75 million bid to acquire all equities stakes held by minority shareholders in Union Diagnostic and Clinical Services Plc.

Cedar, which holds 20.04 per cent equity stake Union Diagnostic, is offering to acquire the entire 39.62 per cent equity stake held by sundry minority retail shareholders. Cedar seeks to increase its shareholdings to 59.66 per cent after the transaction, making it the single largest shareholder in the company.

The board of Union Diagnostic confirmed that it had received a binding offer from Cedar, seeking to acquire a total of 1.408 billion ordinary shares of 50 kobo each held by all minority shareholders at an offer price of 35 kobo.

Read Also: Why we partnered with Indian firm, by Agbakoba

Cedar currently holds 711.92 million ordinary shares of 50 kobo each. The transaction is being proposed through a scheme of arrangement.

The offer price of 35 kobo per share represents a premium of 75 per cent on the company’s last closing price on March 16, 2020 and 70.1 per cent on 90-day volume weighted average share price.

Directors of Union Diagnostic said they had fully considered the offer and will recommend the offer to shareholders for consideration at a court ordered meeting, subject to the approval by relevant regulatory authorities.

By Taofik Salako, Capital Market Editor

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) plans to deploy a real-time automated market surveillance system that will enable it to monitor real-time activities at the capital market and proactively forestall market abuses.

The planned deployment is the highpoint of the capital market development agenda of the apex regulator for the year.

A real-time surveillance system allows SEC to monitor live trading across the registered exchanges and other channels, thereby providing the Commission with independent eyewitness evaluation of market activities.

Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk, at the weekend outlined the development agenda of the Commission in teh year as part of efforts to restore investor confidence and increase participation in the capital market.

She listed other initiatives to include driving the growth of Collective Investment Schemes (CIS), capital market literacy and completion of the infusion of capital market into schools’ curricula and further robust engagement with sister agencies like the Central Bank of Nigeria, National Pension Commission and National Insurance Commission to ensure consideration of the capital market in policy making.

She added that the Commission would also be leveraging the success of the e-dividend initiative to drive implementation of direct cash settlement with a view to solving the problem of multiple subscription.

Speaking at a Capital Market Correspondents Association of Nigeria’s (CAMCAN) forum sponsored by SEC in Lagos, Uduk outlined other major initiatives to be implemented this year to include minimum operating standards for operators, reduction of time-to-market for issues, mainstreaming the Capital Market Master Plan (CMMP) into national economic policies, driving adoption and development of financial technology (FinTech) and innovation in our market and development of the commodities and derivatives segment of the market among others.

She noted that the capital market requires concerted efforts by stakeholders to improve domestic participation and insulate the market from the frequent shocks due to fluctuation in the global investment markets.

“Our market’s performance is reasonably influenced by activities of foreign investors such that their instantaneous exit poses a challenge.

This is a problem faced by many other countries but efforts are continually being made by the Commission to increase retail investors’ participation in the Nigerian capital market.

The Commission believes that there is a nexus between increased market participation and market efficiency,” Uduk said.

She urged investors to embrace collective investment scheme, otherwise known as mutual funds as a way to mitigate risks and tap into diversified portfolios being managed by professionals.

She projected that the size of mutual funds in the country would rise to N1.5 trillion in the year as the Commission was working on strategies to deepen the mutual fund segment.

Uduk, who was represented by the Head, Office of Economics at SEC, Mr Okey Umeano, noted that mutual fund forms a major part of most advanced markets.

“We, at the Commission, have discovered that some of the investors who lost their savings during the crisis in 2008 are low in confidence.

That is the reason we are encouraging retail investors to go through these mutual funds because they are set up and approved by capital market operators and SEC regulates them,” Uduk said.

SEC Divisional Head, Economic, Research and Policy Management,  Dr Afolabi Olowookere, said the Commission expects to see a significant rise to N1.5 trillion or N2 trillion in mutual funds.

Olowookere noted that about 480,000 investors had keyed into that the investment segment pointing out that mutual fund brings some form of stability for investments.

By Taofik Salako, Capital Market Editor

Investors should look beyond the market situation and begin to build up their portfolios with stocks with strong fundamentals ahead of the expected recovery in the second half of the year.

Analysts at Afrinvest Securities in their investment advisory report stated that while the spreading impact of Covid-19 and crude oil crash might adversely impact the performance of the stock market in the immediate period, the steep price depreciation and steady fundamentals of several stocks imply strong potential for considerable returns in the medium to long-term.

According to analysts, there are opportunities in the stock market for medium to long-term investors as the market valuation, the lowest since 2015, has built up potential for capital gains and high dividend yields.

“Given the effectiveness of social distancing measures to fighting the spread of Covid-19 and its wide adoption in countries most vulnerable to the virus, we could see a resumption of economic activities in second half of 2020 which would support crude oil prices and market performance. Thus, we advise a gradual entry approach, buying in tranches, into the Nigerian equities market given the uncertainties both on the global and domestic fronts,” Afrinvest Securities stated.

Analysts selected a portfolio of 12 stocks which they considered as liquid stocks with high dividend yields and strong fundamentals for consideration by investors. These stocks included Guaranty Trust Bank (GTB), Zenith Bank International, Flour Mills of Nigeria, Stanbic IBTC Holdings, United Bank for Africa (UBA), MTN Communications Nigeria, Nestle Nigeria, Okomu Oil Palm, Dangote Cement, United Capital, Access Bank and Nascon Allied Industries.

Analysts noted that while the domestic incidence of Covid-19 has been moderate, the domestic equities market has been reeling from a global contagion that has wiped off initial 10.7 per cent gains and caused a slump of -15.4 per cent on year-to-date basis.

“This is the worst start to a year since 2016, and the reaction of investors reflects concerns about Nigeria’s vulnerability to external shocks, mainly oil,” Afrinvest Securities stated. The slowdown in global oil demand, in addition to the decision of oil producing countries to abandon output cuts, had caused a 50.2 per cent drop in oil prices to $32.9 per barrel by the weekend, the lowest in over four years.

Analysts pointed out that with oil price below the budget benchmark of $57 per barrel, there is a risk of poor implementation of the 2020 budget, thus less support for growth.

According to analysts, with the external reserves fallen by 6.3 per cent so far this year to $36.2 billion, and with little prospect for accretion given capital flight and low oil prices, there is a risk of currency devaluation.

“In light of these risk factors, domestic and foreign investors have maintained a risk-off approach towards Nigerian equities, leading to massive sell-offs. However, this presents interesting opportunities for medium to long-term investors. With the increasing adoption of social distancing measures, which is proven to have worked in some countries, there is a higher chance that the world would defeat Covid-19 and economic activities would pick-up in second half of 2020,” Afrinvest Securities.

Nigeria’s largest financial institution, GTBank is distributing N82.4 billion as cash dividend for the 2019 business year as the bank’s pre-tax profit rose to N231.71 billion.

The board of the bank had indicated that shareholders would receive a final dividend per share of N2.50 in addition to interim dividend of 30 kobo paid earlier, bringing the total dividend per share for the 2019 business year to N2.80. The bank had distributed N80.94 billion as cash dividend for the 2018 business year, representing a dividend per share of N2.75.

Key extracts of the audited report and accounts for the year ended December 31, 2019 showed modest growths across key performance indices. Gross earnings rose from N434.7 billion in 2018 to N435.31 billion in 2019. Profit before tax increased by 7.5 per cent from N215.6 billion to N231.7 billion. After taxes, net profit improved from N184.71 billion to N196.87 billion. Earnings per share thus increased from N6.54 in 2018 to N6.96 in 2019.

UBA has also increased dividend payout to shareholders as the pan-African financial group achieved record earnings and balance sheet in 2019. Gross earnings crossed the milestone of N500 billion while total assets crossed N5 trillion for the first time.

The board of the bank has recommended increase in dividend payout to N34.2 billion, implying a total dividend per share of N1 for the 2019 business year as against 85 kobo paid for the 2018 business year. The bank will be paying a final dividend of 80 kobo per share in addition to an interim dividend of 20 kobo per share paid earlier in 2019.

Key extracts of the audited report and accounts for the year ended December 31, 2019 released at the Nigerian Stock Exchange (NSE) at the weekend indicated that gross earnings grew by 13.3 per cent to N559.8 billion in 2019 compared with N494.0 billion recorded in 2018. Total assets also grew significantly by 15.1 per cent to an unprecedented N5.6 trillion in 2019. This is the first time the bank’s gross earnings and assets will cross the N500 billion and N5 trillion marks respectively.

Profit before tax rose from N106.8 billion to N111.3 billion. Profit after tax grew by 13.3 per cent to N89.1 billion in 2019 compared with N78.6 billion in 2018. On the cost side, operating expenses grew by 10.1 per cent to N217.2 billion in 2019 as against N197.3 billion in 2018, well below average inflation rate within the period, a reflection of cost efficiency gains.

Stanbic IBTC Holdings recorded a net profit of N75.04 billion in 2019 as the financial holding company sustained steady growths across key performance indicators.

The board of the holding company yesterday indicated that it has recommended payment of N21 billion as dividend for the 2019 business year, implying a dividend per share of N2, 33.3 per cent increase on N1.50 per share paid for the 2018 business year.

Key extracts of the audited report and accounts of Stanbic IBTC Holdings for the year ended December 31, 2019 showed that gross earnings rose from N222.36 billion in 2018 to N233.81 billion. Profit before tax increased from N88.15 billion in 2018 to N90.93 billion in 2019. Profit after tax also improved marginally from N74.4 billion to N75.04 billion. Earnings per share however dropped from N7.04 in 2018 to N6.92 in 2019. The decline in earnings per share was due to additional shares due to cash-to-scrip dividend conversion policy of the company.

By Taofik Salako, Capital Market Editor

Custodian Investment Plc has launched a plan to raise additional capital as the non-bank financial group seeks to bolster its capital base in order to harness opportunities in the emerging insurance sector consolidation.

Directors of Custodian Investment yesterday stated that they will be proposing a resolution for new capital raising to shareholders at their annual general meeting scheduled for mid next month.

The board of the company is seeking shareholders’ consideration and approval to raise additional capital through the issuance of debt instruments, preference shares or ordinary shares or a combination of any of these options through any of the offer methods including private placements, rights issue or public offering.

Other details of the new issue including the offered size, price and period of the issuance will also be determined by the directors in consultation with relevant professional advisers.

Custodian Investment is a leading non-bank financial institution with investments in life and non-life insurance, pension fund administration, trusteeship and property holding businesses.

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 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. The deadline was subsequently extended to December 31.

Most analysts agreed that the recapitalization would open up opportunities for mergers and acquisitions, putting the top insurance companies with a large capital base in good stead to acquire other companies and build up their base.

Taofik Salako, Capital Market Editor

WAPIC Insurance Plc raised N4.03 billion during its rights issue, 32 per cent below the company’s target of N5.93 billion.

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

The rights issue, which opened  last  November 20, was initially scheduled to close on December 31, but was extended to January 10, this year.

Regulatory filing indicated that shareholders picked up 10.61 billion ordinary shares of 38 kobo out of the 15.61 billion ordinary shares of 50 kobo each offered by the company.

The listing of more shares of 10.61 billion ordinary shares of 50 kobo each increased the total issued and fully paid up shares of Wapic Insurance from 13.38 billion ordinary shares of 50 kobo each to 23.99 billion ordinary shares of 50 kobo each.

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

The National Insurance Commission (NAICOM) had last May 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 with the new minimum capital base by December 31.

Taofik Salako, Capital Market Editor

DIRECTORS of Neimeth International Pharmaceuticals Plc have expressed their determination to grow the turnover of the company to the N4 billion mark in the immediate future.

At the company’s Annual General Meeting (AGM) in Lagos, shareholders approved the balance sheet restructuring that enables the company to offset accumulated losses with reserves, thus putting the company in good stead to declare dividend from current net earnings.

Shareholders gave the board of the company the nod to reduce the share premium account of the company from N1.02 billion to N122.439 million, with the reduced amount of N898.164 million being credited to a capital restructuring reserve account and applied to write off accumulated losses.

Shareholders commended the improvements in the operations of the company. Key extracts of the full-year audited report and accounts for the year ended September 30, 2019 and the first quarter of this current business year period ended December 31, 2019 had shown sustained growth in both sales and profitability.

Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu commended the board and the management of the pharmaceutical company for the performance in recent period, noting that the balance sheet restructuring was in the interest of shareholders.

Another shareholder, Mr Matthew Akinlade expressed confidence in the new management, citing recent growths in performance indicators.

He said shareholders were hopeful that this effort would soon translate into returns in terms of dividend payment.

Addressing the shareholders, Chairman, Neimeth International Pharmaceuticals Plc, Dr Ambrose Orijiako reiterated the commitment of the board and management to shareholders’ value creation.

He assured that the directors would not rest until there is return for investment of shareholders, promising the shareholders dividend in the nearest future.

He said company had, last year, began the articulation of strategies meant to drive vigorous expansion initiative, adding that the company would launch a five-year strategic plan to reposition it to play a greater role in the wider healthcare industry and ensure good returns on investment for shareholders.

Speaking further on the strategic direction for 2020-2024, Managing Director, Neimeth International Pharmaceuticals Plc, Matthew Azoji, said the strategic focus of the company in the years ahead is to initiate bold and gradual expansion initiative that would see the company increasing market share in the healthcare industry.

He said the five-year strategic plan would guide the company’s vigorous expansion programme, which include the upgrade of the company’s factory at Oregun, Lagos State, development of new manufacturing facilities and expansion of the company’s marketing drive to Sub-Saharan Africa.

He added that to achieve the expansion plans, more investments would be needed during the five-year period, thus shareholders might be called upon for support.

Azoji said part of the new strategic focus of the company is to partner  local and international brand owners in contract manufacturing.

“We have excess capacity in some product lines and challenges in others. We plan to engage in contract manufacturing for other companies for those lines we have spare capacity and use that to grow our turnover.  We also plan to secure the good manufacturing practice (GMP) certificate  of the World Health Organisation,” Azoji said.

The audited results showed that Neimeth’s turnover rose from N2.27 billion in 2018 to N2.37 billion in 2019. Gross profit also indicated similar modest growth rising from N1.16 billion in 2018 to N1.20 billion in 2019. Operating profit rose by 47.9 per cent to N413.38 million in 2019 as against N279.42 million in 2018. Finance costs also declined from N112.96 million to N108.9 million. Profit before tax jumped by 82.9 per cent from N166.46 million in 2018 to N304.44 million in 2019. After taxes, net profit increased by 48.7 per cent from N148.02 million to N220.15 million. With these, earnings per share rose by 50 per cent to 12 kobo in 2019 as against 8.0 kobo in 2018.