The Nation Newspaper

Category: Investors

  • eTranzact assures investors of bright future

    Managing Director, eTranzact International Plc, Mr Niyi Toluwalope, has assured investors that the company is on a good stead for better returns.

    Toluwalope, who was recently appointed as chief executive of the company, spoke during a courtesy visit to the Nigerian Stock Exchange (NSE).

    He said the electronic transaction switching and payment processing company would continue to deliver good returns.

    “We are very experienced in processing electronic payment. He assured the brokers present that the future of eTranzact is bright as investment in it will surely continue to yield rewarding returns. We are sure that all our aspirations will come to realization,” Toluwalope said.

    Other senior members of management of the eTranzact International that followed Toluwalope to the NSE included Mrs. Olayimika Philips, Non-Executive Director; Mr. Olufemi Aminu, Chief Risk Officer; Mrs. Adebunmi Wellington-Ogunlewe, Group Head, Product Development; Mr. Emmanuel Ogunji, Chief Financial Officer; Mr. Adeyemi Adeyemo, Group Head, Financial Services; Ms. Eme Godwin, Group Head, Legal; Mrs. Omowumi Adedurotimi, Company Secretary; and Mr. Adeyemi Opene, Head, Brand and Corporate Communications.

  • GTB in N6.18b off-market shares deal

    Five deals were struck for the transfer of about one per cent equity stake in Guaranty Trust Bank (GTBank) Plc in an off-market deal valued at about N6.18 billion. GTBank is Nigeria’s largest financial services institution and the third largest quoted company in Nigeria.

    Transaction report obtained by The Nation indicated that about 193.06 million ordinary shares of 50 kobo each of GTBank were traded in five cross deals at N32 per share. The deals were consummated through the negotiated cross deals window of the Nigerian Stock Exchange (NSE).

    The transaction price of N32 represented a discount of about 7.78 per cent from the bank’s closing share price of N34.70 per share at the consummation of the deals.

    The transaction volume represented to 0.66 per cent of GTBank’s outstanding shares of 29.43 billion ordinary shares of 50 kobo each.

    As an off-market, negotiated cross deal, it means that the deal was not subjected to the dynamics of price discovery for the particular period. Off-market trade implied that the deal was sealed outside the floor of the NSE.

    The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction. By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost.

    GTBank recorded steady growths in the top-line and bottom-line in the first half of this year with profit before tax rising to N109.6 billion within the period. The bank paid N8.83 billion as interim dividend for the first half of 2018, representing a dividend per share of 30 kobo.

    Key extracts of the audited report and accounts of GTB for the six-month period ended June 30, 2018 showed that gross earnings rose by 5.9 per cent to N226.6billion in first half 2018 as against N214.1billion reported in comparable period of 2017. Profit before tax stood also rose by 8.4 per cent from N101.1 billion to N109.6 billion.

    The balance sheet showed that customers’ deposit grew by 10 per cent N2.269 trillion by June 2018 as against N2.062 trillion recorded at the beginning of the year. Total assets rose by 5.9 per cent to N3.549 trillion in June 2018 while shareholders funds stood at N497.1Billion. Assets quality improved as non-performing loan ratio improved to 5.8 per cent by June 2018 from 7.7 per cent in December 2017.

  • Mutual Benefits extends N2b rights issue till Friday

    Mutual Benefits Assurance Plc has extended the application period for its N2 billion rights issue, providing shareholders with more opportunity to pick up their shares.

    Securities and Exchange Commission (SEC) approved the extension  from Friday, September 14, 2018 to Friday, September 28, 2018. The rights issue opened on Monday, August 6, 2018.

    Mutual Benefits Assurance is offering four billion ordinary shares of 50 kobo each to its shareholders at 50 kobo per share. The rights issue was provisionally allotted on the basis of one new ordinary share of 50 kobo each for every two ordinary shares held as at the close of business on November 1, 2017.

    The board of the insurance company has said the net proceeds of the rights issue would be used to deepen the capital base of the company and enhance its ability to create more wealth for shareholders.

    Chairman, Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi said the net proceeds of the rights issue would be used to finance the company’s growth plan, including provision of additional working capital and expansion of information and communication technologies to support the company enlarged operations.

    He said the strategic goal of the company is to become the number one insurance firm in Nigeria in terms of growth and profitability.

    He assured that new investments in technologies would help the company to eliminate delay in its processing and focus more on customer satisfaction.

    At a meeting with shareholders, Ogunbiyi reassured them of the board and management’s commitment to sustainable growth, in line with its five-year strategic plan.

    Last year, Mutual Benefits Assurance started the implementation of a five-year plan to reposition it.

    The plan focused on four key areas of the group’s business, including deepening market penetration and customer acquisition, customer service delivery excellence, transformation of its people and culture and operational effectiveness.

    Ogunbiyi noted that the 2017 business year showed the resilience of the company with 15.6 per cent growth in gross premium to N14.04 billion in 2017 from N12.14 billion in 2016, which placed the company among the top insurance firms. Net benefits and claims grew by 53.9 per cent while the company recovered from a loss of N1.35 billion in 2016 to a profit of N1.02 billion in 2017.

    According to him, the significant growth in gross premium and better management of resources made 2017 a turnaround year for the company.

    He pointed out that the company had demonstrated its commitment to shareholders through the payment of N160 million dividend for the 2017 financial year, assuring that the latest dividend would mark the beginning of consistent dividend payments.

  • Global financiers meet on cyber security

    Key global and regional payment, clearing and settlement operators have met at a roundtable in Paris to discuss cyber security and the resilience of financial market infrastructures (FMIs) and the wider market ecosystem.

    Senior executives, with authorities, discussed continued collaboration, preparation for and responses to cyber incidents, with a particular focus on cross-border actions.

    “Against a backdrop of rising cyber threats, which respect no borders, it is important to have international coordination on these vital issues,” Bank of France Governor François Villeroy de Galhau said.

    The meeting, hosted by the Bank of France, was convened by the international standard setting bodies for FMIs, the Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO), who issued guidance on cyber resilience in 2016.

    “It is vital for authorities and operators to work together to advance FMIs’ ability to withstand increasingly complex cyber-threats, and to restore services in a timely way in the event of a successful attack,” said CPMI Chair Benoît Cœuré.

    “Ongoing industry engagement on this critical issue has been encouraging and it is essential that we continue to develop this partnership to reinforce the cyber resilience of financial market infrastructure,” said IOSCO Board Vice-Chair Jean-Paul Servais.

  • Stock Exchange approves May & Baker Nigeria’s N2.45b rights issue

    The Nigerian Stock Exchange (NSE) has approved the plan by May & Baker Nigeria Plc to raise about N2.45 billion equity fund by offering new ordinary shares to shareholders.

    A regulatory document obtained  by The Nation indicated that the quotation committee of the National Council of the Exchange approved the application filed on behalf of the healthcare company by its professional advisers. Capital Assets Limited and Compass Investments & Securities Limited are the stockbrokers to the rights issue. Cordros Capital Limited and Afrinvest (West Africa) Limited are the issuing houses.

    The approval, a major stage in the share issuance process, will enable May & Baker Nigeria to list the additional shares to be issued under the rights issue on the NSE.

    May & Baker Nigeria will be offering 980 million ordinary shares of 50 kobo each at N2.50 per share to existing shareholders. The rights issue has been provisionally pre-allotted on the basis of one new ordinary share for every one ordinary shares held as at the close of business on Tuesday, September 4, 2018. Shareholders had in 2014 empowered the company to raise up to N3.2 billion new equity capital.

    Chairman, May & Baker Nigeria Plc, Lt. Gen Theophilus Danjuma (rtd), recently told shareholders that directors of the company believed that the time is now right to raise the funds to enable the company harness new opportunities.

    “Therefore our rights issue will soon open and I hope shareholders will take up their rights to support our company in achieving its new vision. We shall all reap the rewards in the immediate future and beyond,” Danjuma said.

    He outlined that the company has envisioned a new vision that will see it dominating the Sub-Saharan Africa (SSA) markets in line with its new vision of being the leading healthcare brand in SSA.

    According to him, the new five-year strategic plan of the company entails focus and expansion along the company’s competitive advantage of healthcare and it will soon begin to establish footprints and seek dominance in this area in the SSA region.

    “Your company has turned the corner and is now solidly on the path of growth and strong profitability. Our plan in the next few years is to focus on driving our new vision, strategic goals and establishing our footprint as a leading healthcare brand in Sub-Saharan Africa. The company will strive to acquire required competencies in related business areas, expand its regional reach to explore new markets, improve capacity utilisation at our WHO GMP pharmaceutical facility in Ota and continue to deliver value and returns on investments to our loyal shareholders,” Danjuma said.

    Key extracts of the interim report and accounts of May & Baker Nigeria for the six-month period ended June 30, 2018 showed that total comprehensive income-which included profit after tax and extra ordinary income rose to N601.37 million in first half 2018 as against N94.86 million recorded in the comparable period of 2017.

    The 534 per cent increase in net distributable earnings has raised strong prospect of possible significant increase in dividend payout to shareholders. The healthcare company had increased its dividend payout by 233 per cent for the 2017 business year after it rounded off the year with significant growths in profitability.

    The report showed a well-rounded improvement in the bottom-line of the healthcare company as key underlying profitability margins improved considerably during the period. Pre-tax profit margin-which measures average pre-tax profit per unit of sale and serves as benchmark for profitability of the company, tripled from 3.13 per cent in first half 2017 to 8.44 per cent in first half 2018. Gross profit margin had increased from 30 per cent in first half 2017 to 33 per cent in first half 2018 while operating margin also grew to 12.7 per cent in 2018 as against 10.11 per cent recorded in corresponding period of 2017.

    Market analysts said the increase in gross margin, operating margin and pre-tax profit margin showed that the company’s performance in the first half was driven by improved business operations, increased efficiency and better cost management.

     

     

     

    The report showed that group’s profit before tax rose by 178.76 per cent to N388.90 million in first half 2018 as against N139.51 million recorded in comparable period of 2017. Profit after tax also leapt by 178.78 per cent from N94.86 million to N264.45 million. Earnings per share thus increased from 9.68 kobo in first half 2017 to 26.98 kobo in first half 2018. With the addition of N336.92 million gain from discontinued operations of its food business , total net earnings jumped to N601.37 million in first half 2018 compared with N94.86 million recorded in first half 2017.

    Group operating profit had increased by 29.9 per cent from N452.25 million to N587.35 million. Gross profit also rose from N1.34 billion to N1.52 billion. Group turnover had increased from N4.47 billion in first half 2017 to N4.61 billion in first half 2018. Further analysis had shown that the company’s finance costs reduced by 36 per cent from N326.87 million in first half 2017 to N209.34 million in first half 2018.

    Business segmentation analysis showed that the performance of the company was driven by its core pharmaceuticals business, which saw 22 per cent growth in sales during the period. The company recorded improvement in sales in all its principal geographical business areas of Lagos, West, East and North.

  • LASACO Assurance to sell 40b shares

    LASACO Assurance Plc plans to issue up to 40 billion ordinary shares of 50 kobo each to raise new equity funds as insurance companies race to beef up their capital ahead of the implementation of new capital requirements.

    In a regulatory filing at the Nigerian Stock Exchange (NSE), the board of directors of LASACO indicated the company would create and issue new 40 billion ordinary shares of 50 kobo each to raise new capital from the investing public.

    According to the proposal, LASACO will increase its authorised share capital from N5 billion of 10 billion ordinary shares to N25 billion of 50 billion ordinary shares through the creation of additional 40 billion ordinary shares.

    Then, the insurance company will proceed to issue up to 40 billion ordinary shares by way of public offer, private placement or preference shares.

    The board of directors of the company has scheduled an extraordinary general meeting for early October when shareholders are expected to approve many resolutions increasing the share capital and authorising the board to raise the new capital.

    The Nation had recently reported exclusively that insurance companies have launched plans for emergency fund raising at the capital market as consolidation looms in Nigeria’s most populous quoted industry. There are 27 insurance companies quoted on the NSE.

    The Nation’s check had indicated that many insurance companies have started fund raising process, in what may become an industry-wide rush as the National Insurance Commission (NAICOM) moves to implement new capital requirements for the industry.

    Under the new NAICOM’s tier-based minimum solvency capital policy, insurers will be classified into three tiers according to the minimum capital base and risk-bearing capacity. Tier 1 insurance companies are required to have minimum capital base of N9 billion for general insurance and N6 billion for life insurance, implying a composite capital base of N15 billion. Tier 2 companies are divided into two categories, with N4.5 billion minimum capital base for general insurance and N3 billion for life assurance. Thus a composite insurance-general and life insurance, will be required to have minimum capital base of N7.5 billion. Tier 3 companies will continue to operate on the existing minimum capital base of N3 billion for general insurance and N2 billion for life insurance, implying a composite capital base of N5 billion for a composite tier 3 insurance company.

    Under the risk-based capitalisation approach, tier 1 companies will be able to undertake all risks including annuity and high-level special risks such as energy and aviation risks. Tier 2 companies will undertake retail insurance as prescribed under Tier 1, including commercial and industrial risks and group life assurance while tier 3 companies will only be able to write retail insurance only including micro insurance, motor, fire, agriculture, compulsory liability insurances, individual life, health and miscellaneous insurance.

     

  • Stanbic IBTC wins NSE’s race against cancer

    The Nigerian Stock Exchange (NSE) has organised its annual 5.0km race as the Exchange continues its commitment to raising funds and creating awareness on the fight against cancer.

    The annual race, known as NSE Corporate Challenge was held at the weekend in Lagos. In the keenly contested race, Austin Ani of Stanbic IBTC emerged the overall winner with a completion time of 18.45 minutes, after coming second in the 2017 edition. Paul Alabi of Aluko & Oyebode and Danladi Verheijen of Vetiva came second and third, finishing the race in 19.57 minutes and 20.04 minutes respectively. Paul, who is also not new at the NSE Corporate Challenge, was the overall winner in the 2016 edition.

    Ngozi Dozie-Madubuike of Vetiva, with a completion time of 22.48 minutes, emerged the Fastest Female while Sadhisha Dave of PZ Cussons, also female, emerged the winner of the Senior Citizen category for runners aged 50 and above, with a race time of 29.10 minutes.

    The over 500 runners at the race were joined by outstanding race ambassadors such as Ikechukwu Onunaku, Immaculate Dache, Monica Ogah, Wole Arole the Prophet, Asiri Comedy to mention a few.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema noted that the cancer epidemic in Nigeria is high and set to rise if urgent actions are not taken to raise awareness about early detection of the disease, and to develop practical strategies to address the increasing cancer burden.

    “The NSE Corporate Challenge was birthed to minimise cancer and maximise life by stimulating additional awareness about cancer, advocating for the importance of early testing and detection and more importantly raising funds towards the purchase of Mobile Cancer Centres to provide free screening and treatment in Nigeria,” Onyema, who was represented by Executive Director, Regulations, Nigerian Stock Exchange (NSE), Ms Tinuade Awe, said.

    Started in 2014, the NSE Corporate Challenge is a one-day competitive and fun-filled five-kilometre walk, jog and run event aimed at promoting health and wellbeing in the Exchange’s operating environment. It is a professionally organised and volunteer-driven initiative involving companies listed on the Exchange, broker dealer firms, non-listed companies and individuals who identify with the initiative.

    Some of the corporate sponsors of this 5th edition include, Dangote Cement, Stanbic IBTC, Beta Glass Plc, FCMB, FBN Holdings, Unilever and IHS Towers, while in-kind contributions and media support were received from Aquadana Water, Emergency Rescue, Bodyline Fitness and Gym Ltd, Airtel Nigeria, Duracell, Lotus Fitness and Spa, PZ Cussons and LASAA.

  • NSE lifts suspension on RT Briscoe

    The Nigerian Stock Exchange (NSE) has lifted suspension on trading in the shares of RT Briscoe Plc, after the automobile and allied company submitted its full-year audited reports for the 2017 business year and interim reports for the first and second quarters of 2018.

    The NSE had on July 5, 2018 suspended trading on shares of eight companies for failing to adhere to best corporate governance and extant post-listing requirements that require quoted companies to submit their periodic financial statements and reports within stipulated timelines.

    Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.

    Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of annual report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.

    “RT Briscoe Plc, which was among the companies suspended, has submitted its audited financial statement for the year ended 31 December 2017. The company has also submitted its unaudited financial statements for the periods ended 31 March and 30 June 2018,” the NSE stated.

    According to the Exchange, in view of the submission of the company’s accounts, the suspension placed in the trading of the company’s shares was lifted effective Friday, September 14, 2018.

     

  • Low GDP increases Nigeria’s risk, says FSDH

    The low growth rate of the real Gross Domestic Product (GDP) may stifle credit creation and increase the risk of doing business in Nigeria.

    In its latest review, investment banking group – FSDH Merchant Bank stated that Nigeria’s real GDP growth rate of 1.50 per cent recorded in second quarter 2018 was below the expectations of most analysts.

    FSDH noted that the GDP rate reflects the impact of the rising uncertainties in the country as the low growth and contraction across many sectors of the economy underscore the need for an urgent set of policies and engagements to rescue the economy.

    “The current low GDP growth rate is not strong enough to stimulate credit creation. It has also increased the risk of doing business in Nigeria. Therefore, urgent measures are required so that low GDP growth rate does not become a new norm in Nigeria,” FSDH stated.

    According to the investment banking group, although the fragile growth was driven by the non-oil sector, the fact that dominant sectors of the economy either recorded low growth or contracted in second quarter 2018 indicated that urgent actions are required.

    FSDH pointed out that the slow growth of 1.19 per cent in the agriculture sector, if not checked, may lead to food shortage in the country and consequently escalating food prices and rising inflation rate. Agriculture is the largest sector of the economy and accounts for 22.86 per cent.

    The trade sector, which is the second largest sector of the economy entered a recession in second quarter 2018.

    The weak purchasing power, occasioned by non-payment of salaries, high unemployment rate and high consumer prices, is responsible for the contraction in the trade sector.

  • Foreign portfolio investments decline by 65%

    Foreign portfolio investments in the stock market have declined by about 65 per cent as political risks and tough macroeconomic outlook continued to moderate investors’ appetite for equities.

    Latest report on foreign portfolio investments (FPI) showed that transactions by foreign investors dropped by N66.24 billion or 64.68 per cent to N36.17 billion in July 2018 compared with N102.41 billion recorded in June 2018.

    Trading data on domestic and foreign portfolio investments (FPI) at the Nigerian Stock Exchange (NSE) obtained by The Nation indicated a slump in foreign transactions, which dragged down the overall market turnover by 22.2 per cent. However, investors increased their turnover by 28.7 per cent.

    The FPI report used two key indicators-inflow and outflow, to gauge foreign investors’mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE. The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers.

    However, for the first time in three months, FPI recorded positive net inflow with more inflow than outflow. Foreign inflow stood at N19.83 billion as against outflow of N16.34 billion in July 2018 as against inflow of N47.96 billion and outflow of N54.45 billion in June 2018.

    Total transactions at the NSE reduced from N187.78 billion recorded in June 2018 to N146.07 billion in July 2018. Domestic investors accounted for 50.48 per cent of total turnover in July 2018 as total domestic transactions increased by 28.72 per cent from N85.38 billion in June 2018 to N109.9 billion in July 2018. Domestic transactions were largely driven by the 55.48 per cent increase in the retail domestic participation which increased from N29.12 billion in June 2018 to N65.42 billion in July.

    Total transactions for the seven-month period ended July 2018 increased by 54.38 per cent from N1.129 trillion recorded in 2017 to N1.743 trillion in the year.

    Foreign portfolio investors were the dominant group in the equities market in first half of this year with about N800 billion. Foreign investors’ transactions accounted for N799.7 billion within the six-month period ended June 30, 2018, representing an increase of 85.9 per cent on N430.23 billion FPI trading recorded in the comparable period of 2017.

    Foreign investors had marginally outpaced Nigerian investors with 50.07 per cent of total value of transactions in first half of 2018 compared with the first half of 2017 when investors accounted for 54 per cent of total value of transactions.

    Domestic investors traded N797.47 billion worth of equities during the first half of 2018, 57.9 per cent increase on N505.03 billion traded in comparable period of 2017. Altogether, total transactions at the equities market rose from N935.26 billion in the first half of 2017 to N1.597 trillion in first half of 2018.

    The report, however, showed a negative trend in FPI trading with more outflows than inflows. Net FPI deficit stood at –N38.41 billion in first half of 2018 compared with net positive position of N1.71 billion recorded in the first half of 2017. Foreign inflows and outflows stood at N380.65 billion and N419.06 billion in first half 2018 compared with inflows and outflows of N215.97 billion and N214.26 billion respectively in the first half of 2017.

    Month-on-month analysis showed that FPI transactions totalled N102.41 billion in June, consisting of inflows of N47.96 billion and outflows of N54.45 billion. Total transactions at the equities market had dropped from N318.27 billion in May to N187.78 billion in June.

    The report indicated that foreign investors’ outflows from the equities market increased by 124.7 per cent to about N131 billion in May as against N58.25 billion in April. However, there was a 3.45 per cent decrease in foreign inflows to N62.06 billion in May as against N64.28 billion recorded in April.

    Total transactions at the equities market increased by 49.96 per cent from N212.23 billion recorded in April to N318.27 billion in May.

    A five-month report showed that the cumulative transactions from January to May increased by 97.13 per cent to N1.409 trillion in 2018 compared with N714.99 billion recorded in the same period of 2017.

    The latest report stated that the institutional composition of the domestic market increased by 97.87 per cent from N46.51 billion in April to N92.03 billion in May. The retail composition declined by 22.92 per cent from N43.19 billion in April to N33.29 billion in May.

    In April, there was a positive net foreign inflow of N6.03 billion in April 2018 and N36.91 billion for the four-month period ended April 2018. In the comparable period ended April 2017, Nigerian equities had suffered net FPI deficit of N79.73 billion. Further analysis indicated positive net foreign inflow of N30.88 billion in first quarter 2018 compared with a negative net foreign investment position of N86.36 billion in comparable first quarter of 2017.

    Month-on-month analysis had shown a positive trend in net foreign investment inflow throughout the first quarter 2018. Foreign inflow totalled N91.75 billion in January 2018 as against outflow of N74.64 billion. Foreign inflow and outflow stood at N44.89 billion and N38.33 billion respectively in February 2018 while foreign inflow and outflow recovered to N69.71 billion and N62.50 billion in March 2018.

    Total transactions at the equities market in the first quarter of 2018 had stood at N878.97 billion compared with N454.48 billion recorded in first quarter 2017. Nigerian domestic investors had accounted for N497.15 billion in first quarter 2018 as against N243.42 billion in comparable period of 2017.

    FSDH, however, noted that despite strong growth in the information and communication and the construction sectors, the two sectors can achieve higher growth rates given the enormous potentials inherent in these sectors.

    FSDH pointed out that observed contraction in the real estate sector can be reversed if government at all levels partners with private sector operators to provide affordable housing units for Nigerians.