The Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have raised concerns over several cyber risks that could threaten the global financial system. Nigeria is a member of IOSCO.

In their report on financial market infrastructures’ cyber resilience, CPMI and IOSCO found reasonably high adoption of cyber guidance but highlighted at least five issues of concern.

The report found one serious issue of concern relating to a small number of financial market infrastructures (FMIs) not fully meeting expectations regarding the development of cyber response and recovery plans to meet the two-hour recovery time objective.

The report also found four additional issues of concern relating to shortcomings in established response and recovery plans to meet the two-hour recovery time objective (2hRTO) under extreme cyber-attack scenarios; lack of cyber resilience testing after major system changes; lack of comprehensive scenario-based testing; and inadequate involvement of relevant stakeholders in testing.

Read Also: ‘Cybersecurity key to business sustainability’

According to the report, these findings highlighted clear challenges for FMIs’ cyber resilience that should be addressed with the highest priority.

The report noted that considering their aggregate impact, these issues of concern seemed to pose clear challenges for FMIs’ cyber resilience.

The report – Implementation monitoring of the PFMI: Level 3 assessment on Financial Market Infrastructures’ Cyber Resilience – presented the results of an assessment of the state of cyber resilience as of February 2021 at 37 FMIs from 29 jurisdictions that participated in the exercise between 2020 and 2022. The Level 3 assessment covered all FMI types, including systemically important payment systems (PSs), central securities depositories (CSDs), securities settlement systems (SSSs), central counterparties (CCPs), and trade repositories (TRs).

As set out in the PFMI, the relevant supervisory authorities are responsible for ensuring that individual FMIs implement the principles. The assessment focuses on the implementation of Principles 2-Governance; 3-Comprehensive framework for the management of risks and 17-Operational risk and relevant key considerations of the PFMI.

To also gain a better understanding of the extent to which the cyber guidance has been used by FMIs, this assessment also focused on three important components of the cyber resilience framework including governance, testing and learning and evolving.

As the survey of FMIs was carried out during the COVID-19 pandemic, a section of the report highlighted the challenges recognised by FMIs in the period due to increased remote working arrangements and the use of personal devices and outlined some of the measures implemented or being implemented to address potentially heightened cyber risks.

•Domestic investors account for 83%

 

Investors have staked about N2.08 trillion on Nigerian equities in the past 10 months, an increase of 34.6 per cent over the corresponding period of 2021.

Trading data at the Nigerian Exchange (NGX) for the 10-month period ended October 31, 2022 showed that total turnover stood at N2.08 trillion in 2022 as against N1.545 trillion recorded in corresponding period of 2021.

The improvement in market turnover was driven mainly by increased activities by domestic investors, especially institutional investors. Total transactions by domestic investors in the past 10 months jumped by 42.3 per cent from N1.215 trillion by October 2021 to N1.73 trillion by October 2022. These indicated that the proportion of domestic investors’ trading to total trading turnover increased from 78.66 per cent in 2021 to 83.19 per cent in 2022.

Retail domestic investors accounted for N580.83 billion in 2022 as against N494.87 billion in comparable period of 2021. Retail institutional investors’ turnover rose by 59.4 per cent from N720.34 billion in October 2021 to N1.15 trillion by October 2022.

While total transactions by foreign portfolio investors improved from N329.62 billion in first 10 months of 2021 to N349.59 billion in first 10 months of 2022, the proportion of foreign transactions to total market transactions dropped from 21.34 per cent in 2021 to 16.81 per cent in 2022.

Pricing trend analysis had shown that investors in Nigerian equities lost about N2.8 trillion in October 2022 as massive selloffs across the sectors pushed most stocks to lower prices.

Benchmark indices at the stock market had shown an average loss of 10.576 per cent for the immediate past month, equivalent to net capital depreciation of N2.797 trillion, its worst performance in recent months.

The massive loss in October exacerbated the downtrend at the stock market, cutting down average year-to-date return from 14.77 per cent by September 2022 to 2.6 per cent in October 2022. Nigerian equities had closed the third quarter ended September 2022 with net capital gain of about N3.3 trillion for the nine-month period.

The performance in the immediate past month had fuelled anxieties that the Nigerian market might be on a downspin to its first loss in three years. The market had lost an average of 1.63 per cent or N430 billion in September 2022, following same trend in previous months. The market had lost about N28.3 billion in August and depreciated by N772 billion in July.

The All Share Index (ASI)- the common value-based index that tracks all share prices at the Nigerian Exchange (NGX)  declined by 10.58 per cent to close October at 43,839.08 points as against 49,024.16 points recorded at the beginning of the month.

Also, aggregate market capitalisation of all quoted equities dropped from its month’s opening value of N26.451 trillion to close October 2022 at N23.878 trillion, a face value loss of N2.57 trillion but a real adjusted loss of N2.797 trillion.

Read Also: Buyback: Investors scramble for Dangote Cement

The difference between the ASI and aggregate market value was due mainly to the listing by introduction of Geregu Power Plc, which led to primary increase in number and value of outstanding shares at the Exchange.

The decline in October was worsened by steep depreciation in the share price of Airtel Africa Plc, Nigeria’s stock market current most capitalised stock.

Investors in Nigerian equities had lost about N1.50 trillion in the third quarter as escalated global energy and commodity crises triggered massive portfolio realignments across markets.

Benchmark indices at the Nigerian stock market closed third quarter with average negative return of 5.39 per cent,  equivalent to net capital depreciation of N1.50 trillion for the three-month period.

The ASI had closed at 49,024.16 points as against 51,817.59 points recorded at the beginning of the quarter while aggregate market value of all quoted equities dropped from third quarter’s opening value of N27.935 trillion to close at N26.451 trillion, a decrease of about N1.50 trillion. The almost perfect correlation between market capitalisation and ASI underlined that the depreciation was mainly due to decline in share prices rather than primary market changes such as reduction in number of shares.

Nine-month segmental analysis had shown no safe haven for investors during the period. All sectoral indices closed negative, driven by selloffs within the large and mid-cap stocks. The NGX 30 Index- which tracks the 30 largest stocks at the NGX, posted average loss of 7.45 per cent in the third quarter. The NGX Banking Index- the most active index, declined by 4.67 per cent.

Also, the NGX Insurance Index, the most populous index, dropped by 5.46 per cent during the period. The NGX Industrial Goods Index recorded the highest decline of 17.61 per cent within the three-month period. The NGX Oil and Gas Index depreciated by 6.80 per cent in third quarter 2022. The NGX Consumer Goods Index declined by 6.30 per cent. The NGX Pension Index, which tracks stocks in line with the stringent pension funds’ investment guidelines, depreciated by 9.00 per cent while the NGX Lotus Islamic Index- which tracks equities that comply with the more stringent Islamic investment rules, declined by 6.51 per cent in the third quarter.

Analysts attributed the market performance to the worsening domestic and global economic risks characterised by rising inflation and higher interest rates.

Most analysts remained cautious of the outlook in the months ahead citing worsening economic fundamentals and political risks.

They noted that the local bourse will remain lull and broadly bearish as the prospect of even higher interest rates and the depressed exchange rate weigh on investor sentiments in the medium term.

Chief Executive Officer, Wyoming Capital and Partners, Mr. Tajudeen Olayinka attributed the decline in market performance in October 2022 to economic headwinds and Airtel Africa Plc’s price correction.

According to him, economic headwinds and Airtel Africa’s price correction were both responsible for the loss seen in October.

“We are actually in a period of prolonged repricing of securities across markets and instruments, due to multiplicity of factors. We expect recovery to begin to take place once economy begins to look more prosperous or stable.

“For those who may wish to invest on long-term basis, the future starts today. For those who may wish to speculate for short-term benefits, they’ll need to exercise caution, as the downside risk is not completely out yet. On a balance of probability, however, prices appear good and reasonable for long-term horizon,” Olayinka said.

Executive Vice Chairman, Highcap Securities Limited, Mr. David Adonri also attributed the decline in stock market to profit-taking in Airtel Africa.

He also noted that the political environment was impacting the market pointing out that right from the penultimate year to the election period, the socio-political atmosphere has become charged with politicians resorting to violent rhetoric and divisive tactics, which deepened the country’s socio-political fault lines.

“During this period, the economy becomes overloaded with money arising from excessive election spending, which spikes inflation.

“Historical antecedents indicate that on average, both equities and bonds show positive or negative performance in the penultimate year and immediately after the election.

“While the drama of general elections can make your imagination run wild, what you need to watch out for is how the unfolding scenario will affect the economy, the capital market, and your portfolio,” Adonri said.

Analysts at Cardinalstone Limited, said they expected the “aversive cloud over equities” to linger longer till year-end citing aggressive monetary rhetoric, bandwagon effects and election-related fears.

“Notwithstanding the possibility of more market churn, we maintain that this bearish iteration presents attractive but disciplined re-entry opportunities for long-term investors,” Cardinalstone stated

The Chartered Institute of Stockbrokers (CIS) has said it decided to confer its Honourary Fellowship on former Military Head of State, General Ibrahim Babangida because of his laudable contributions to the development of the capital market and the stockbroking profession.

Presenting the fellowship to Babangida in Minna, Niger State; President, Chartered Institute of Stockbrokers (CIS), Mr. Oluwole Adeosun, said Babangida’s  administration  set up Technical Committee on Privatization and  Commercialization (TCPC) of Enterprises  in Nigeria, which transformed into Bureau of Public Enterprises (BPE).

According to him, the fellowship was also due to Babangida’s exceptional contributions to the growth and development of the institute from its formative years in continuation of phase two of the institute’s 30th Anniversary celebration.

He noted that Babangida, who ruled Nigeria from 1985 to 1993, was credited with the promulgation of the Decree that granted Chartered status to the institute in 1992, which later became an Act.

Adeosun noted that Babangida’s administration was also instrumental to some radical economic policies that transformed the Nigerian financial system.

“Under his administration, the Structural Adjustment Programme (SAP) was initiated in 1986 and this economic policy brought radical transformation to the Nigerian financial industry. His administration promulgated the Decree that established the Technical Committee on Privatisation and Commercialisation (TCPC), now Bureau of Public Enterprises (BPE) in order to ensure transparency, credibility and widespread ownership of shares of the privatized enterprises. The shares were divested through the Nigerian Stock Exchange (now NGX), thus enabled more Nigerian citizens to become shareholders of companies in commanding heights of the economy.

“Most importantly for us, it was under General Ibrahim Badamasi Babangida that the Decree that established the Chartered Institute of Stockbrokers, Act 105 of 1992, was promulgated. So, the history of this great institute cannot be complete without mentioning this great leader,” Adeosun said.

Babangida expressed his heartfelt gratitude to the institute’s governing council and management for the honour and assured them of his support at all times.

Adeosun pointed out that as part of the phased 30th anniversary celebration, the institute had scheduled more worthy Nigerians for the unique award in due course.

The first eminent Nigerian to be conferred with the institute’s Honourary Fellowship was a former Head of State, General Yakubu Gowon. Other beneficiaries were leading investment banker, Mr Atedo Peterside,    Chief Executive Officer, Bank of Industry, Mr Olukayode Pitan, former Presidents of the Nigerian Stock Exchange, Alhaji Aliko Muhammed and Mr Goodie Ibru respectively.

Shareholders have decried the negative impact of continuing charges and levies being paid by banks to the Asset Management Corporation of Nigeria (AMCON) , calling for a review of the necessity and operations of the bad debt agency.

Shareholders under the aegis of Independent Shareholders Association (ISAN) said they were concerned over the role of AMCON on sustained depressed returns on investments as the agency’s levies and charges on banks have constituted major drains on profits.

They also called on the Central Bank of Nigeria (CBN) to review its interpretation of insider credits in banks in line with the Bank and Other Financial Institutions Act (BOFIA) , describing the interpretation that bars directors from obtaining loans as faulty and antithetical to the growth of the banking sector and the economy generally.

Founding Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu said almost 12 years after its establishment, AMCON has failed to achieve its mandate and rather becoming another problem in the banking industry.

“Specifically, our disappointment stemmed from the fact that the federal government’s debt recovery agency, recovered only a paltry N1.4 trillion since its inception. On the other hand, available data showed that non-performing loans across the financial sector has again increased by more than 150 per cent,” Nwosu said.

He outlined that at the commencement of its operations, the agency purchased 12,743 non-performing loans or eligible bank assets (EBAs) valued at N3.8 trillion from 22 eligible financial institutions (EFIs) for N1.8 trillion while the corporation earned about N327.6 billion from 0.5 per cent charges on banks’ total assets on and off-balance sheet items imposed on nine banks between 2020 and 2021.

According to him, AMCON’s levies on commercial banks increased from N146.9 billion in 2020 to N180.67 billion in 2021 and as part of the quick intervention in the banking sector bad debts, by Central Bank of Nigeria (CBN) through AMCON, the debt recovery agency equally received N125.9 billion from 12 commercial banks listed on the Nigerian Exchange as part of the Sector’s resolution funds in the first quarter of 2022. In the same period AMCON bank charges increased by 29.5 per cent from N97.18 billion paid in the corresponding period of 2021 to N125.9 billion in the first quarter of 2022.

“But after 12 years of the agency’s operations, Nigerian shareholders have come to the conclusion that the funding of AMCON with levies from commercial banks’ cannot be continued because of its negative impact on returns on investment and the incapacitation of commercial banks to adequately intervene in the nation’s real sector.

“The fundamental of our argument is premised on the fact that AMCON was not set up by the banks, but by the federal government, which must take responsibility for its operations. We are troubled as a corporate entity and as individual investors’ because Nigerians normally run to government for cover but now government through the instrumentality of policy, as in AMCON levies on banks are robbing the banks and shareholders. Who do we run to?

Read Also; AMCON’s bad debtors may be barred from government’s contracts

“Indeed most commercial banks and numerous corporate concerns indebted to AMCON currently struggle to remain afloat in the face of numerous litigations as the corporation appears unlikely to meet its set goals. Our conclusion is that the corporation is on the verge of losing the Nigerian tax payers’ money spent in repurchasing critical toxic assets from troubled banks and other entities.

“As concerned domestic investors, our patriotism is not in doubt as we demand once again the complete review of AMCON to determine its relevance to the economy or totally abrogate the agency following the declining values of companies taken over by the corporation and the current national economic challenges.

“We make bold to say that the lack of due diligence on the troubled banks bad debts, the appalling board and mana gement of the agency are majorly the reasons behind AMCON’s inability to turn around the toxic assets. As we speak, AMCON is currently reported to have about N1.7 trillion worth of assets under litigation across the country. As at August 2022, the total recoveries so far by the corporation are pegged at about N1.4 trillion,” Nwosu said.

He pointed out that with its mandate to acquire toxic loans from troubled banks at a discount, AMCON was expected to dispose the loans within the stipulated time frame and use the proceeds to leverage the national economy.

He said the corporation’s delay in turning around the ‘toxic’ loans remains worrisome, especially now that the federal government is facing dwindling revenue and challenges in executing critical capital projects.

He said shareholders were worried that AMCON was reporting losses despite collecting huge levies from banks and having challenges in selling recovered assets from debtors, which called to question the rationale for the extension of the life span of the debt recovery agency.

He also decried alleged CBN’s misinterpretation of the insider credits moderating laws, noting that BOFIA Act of 2020 only bars commercial banks from lending more than five per cent of its paid-up share capital to any one of its directors or significant shareholders.

According to him, the laws only require that banks aggregate exposure in lending to its directors and significant shareholders must not exceed 10 per cent of its paid-up share capital while the Act also provides that credit extended by a bank to any of its directors or significant shareholders must be on the same terms and conditions prevailing.

He said it was the misinterpretation of insider related credits that recently led the Nigerian Deposit Insurance Corporation (NDIC) during the last public hearing on the bill to amend the BOFIA, to submit a memorandum to the Senate Committee on Banking, Insurance and other Financial Institutions, seeking the prohibition of insider loans in the banking industry.

“But in spite of the figures and policy document brandished by the apex bank and the stringent laws proposed by NDIC, most financial industry shareholders believe that insider lending was wrongly interpreted by the CBN and other regulators.

“We believe that the misinterpretation of insider credits will if care is not taken limit the ability of commercial banks to lend to very large corporates. Our concern and understanding is that the stretching of insider related loans beyond elastic limit is unhealthy to the kernel of real sector growth and healthy competition.

“To us as domestic investors, abuse on insider related loans remain the failure of the CBN to effectively moderate the nation’s banking industry and carry out its oversight functions. CBN must be proactive in implementing the laws as contained in the Banking and Other Financial Institutions Act (BOFIA).

“Under BOFIA 2020, the duty with respect to secured loans is simply one of disclosure. This is governed by section 17 of the Act, which stipulates that a manager or other officer of a bank who has personal interest in any advance, loan or credit facility must declare the nature of such interest to his or her bank.

“Where it is a director of a bank who is in anyway, directly or indirectly, interested in the grant of an advance, loan or credit facility by the bank, he or she shall declare the nature of such interest before the meeting of the board of directors of the bank at which the request for the advance, loan or credit facility is first taken into consideration.

“Where the interest is in respect of an advance, loan or credit facility to be granted by another bank, the director shall declare the nature of the interest to the CBN in writing prior to the grant of the advance or credit facility.

“Failure to make the applicable disclosures constitutes an offence punishable with fine or imprisonment or both. A director is, however, not duty bound to disclose, where his or her interest in a company seeking the credit facility is less than 5 percent of the shares, or where the CBN regards the interest of the director as immaterial.

“However, the provisions with respect to unsecured loans are more stringent and require approvals of the CBN. They are governed by the provisions of Section 19 of the Act, which states that a bank requires the prior approval of the CBN to give unsecured advances, loans or unsecured credit facilities of an aggregate amount in excess of N1 million to its directors, significant shareholders; or any firm, partnership or company in which it or its director(s) or significant shareholder(s) have an interest.

A bank also requires the prior approval of the CBN to extend and secured advances, loans or unsecured credit facilities to its officers and employees which in the aggregate for the officer or employer is in excess of his or her one year’s emolument,” Nwosu explained.

He pointed out that under the CBN’s Code of Corporate Governance for Banks and Discount Houses in Nigeria, banks are also required to disclose their “insider-related credits” in their annual reports.

He also noted that Section 305 of the Companies and Allied Matters Act (CAMA) 2020 makes provision for a director to act at all times in what he believes to be the best interests of the company as a whole, so as to preserve its assets, further its business and promote the purposes for which it was formed.

“The adjectives used by CAMA for a director in relation to his company are ‘faithful’, ‘diligent’, ‘careful’, and ‘skillful’. In this wise, the CAMA in section 296 generally prohibits companies from giving loans to its directors or directors of its holding company or giving guarantees or providing any security in connection with a loan made to such director. This does not, however, apply to companies whose ordinary business includes lending of money or giving of guarantees such as banks.

“With these laws, we as shareholders then argue that insider lending if appropriately managed and moderated by CBN will checkmate conflict of interests and compelled the directors, executive management and shareholders of banks to regularly uphold the interests of commercial banks.

“We emphasis that the current loose CBN regulations governing insider lending makes the director’s position susceptible to abuse as has been the case in recent times in the Nigerian banking industry.

“As an investment pressure group, we cannot equally deny the impact of the CBN’s poor, weak and inefficient regulatory approach on the nation’s commercial banks, which for us, cannot curtail insider abuses. There has to be tougher protocols.

“The prohibition of insider lending as suggested by NDIC is too stringent and harsh. CBN must remain proactive in its oversight functions. More stringent rules are required to balance the interests of directors and/or shareholders with those of depositors and other stakeholders,” Nwosu said

Titan Trust Bank Limited will today close application list for a N13.5 billion takeover bid for minority shareholdings in Union Bank of Nigeria (UBN) Plc, in a move that may lead to delisting of the first generation bank from the Nigerian Exchange (NGX).

Offer circular for the mandatory takeover offer (MTO) showed that Titan Trust Bank is offering to acquire about 1.928 billion ordinary shares of 50 kobo each of UBN held by minority shareholders at N7 per share. The application list for the MTO is scheduled to close today.

With the acquisition of 1.928 billion shares under the MTO, Titan Trust Bank, which had acquired 27.337 billion ordinary shares or 93.41 per cent majority equity stake in UBN in May 2022, will have 100 per cent holding of the first generation bank.

Titan Trust Bank had in May 2022 completed the acquisition of the shares of UBN’s major shareholders, including Union Global Partners Limited (UGPL), Atlas Mara Limited (ATMA), Standard Chartered Bank (SCB), Montane Partners West Africa Limited (Montane) and Mr. Emeka Emuwa, resulting in a transfer of 93.41 per cent of Union Bank’s issued share capital to Titan Trust. UGPL and ATMA had taken over the first generation bank in 2012.

After the full acquisition of the minority shares, Titan Trust Bank at the weekend indicated it will delist UBN and reregister the bank as a private limited liability company, ending 52 years of active listing and trading on the shares of the first generation bank at the stock market.

Re-registration of UBN as a private company implies that beyond delisting from the NGX, its shares will also not be traded on the NASD OTC Securities Exchange, the platform for trading in the shares of unlisted public limited liability companies. Incorporated in 1969, UBN was listed on the NGX in 1970.

Read Also; Titan Trust to delist Union Bank as N13.5b full takeover bid begins

The MTO was primarily triggered by Section 131, Part XII of the Investment and Securities Act, No. 29, 2007 and Rule 445 of Securities and Exchange Commission (SEC) Rules and Regulations, 2013. Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders. The MTO is usually at the transaction price for the deal that led to the emergence of the major shareholding.

While many MTOs in recent period have been for part of shares held by minority shareholders, Titan Trust Bank’s offer is for full acquisition of the minority shares, which will enable the new major investor to take over UBN fully and turn it into a private company.

The decision to accept MTO generally is at the instance of the targeted minority shareholders. Sources however indicated that parties to the Titan Trust Bank MTO have launched aggressive marketing to woo hard-pressed minority shareholders of the first generation bank to accept the MTO.

Titan Trust Bank has indicated that Luxis International DMCC and Magna International DMCC – the two majority shareholders of Titan Trust Bank will provide about N13.493 billion being the total amount required to settle the full acquisition of the remaining 6.59 per cent minority equity stake. Luxis International DMCC holds 48.09 per cent equity stake in Titan Trust Bank while Magna International DMCC holds 46.46 per cent equity stake. Three other individual shareholders- Winston Udeh, Mmr. Tunde Lemo and Mr Andrew Ojei hold 3.63 per cent, 0.91 per cent and 0.91 per cent equity stake respectively.

Titan Trust Bank was incorporated in December 2018 and obtained its National Banking license in April 2019 from the Central Bank of Nigeria; to operate as a commercial bank with national authorisation. It currently has paid up share capital of N29.20 billion and shareholders’ funds of N36.39 billion. Total assets stood at N246.24 billion. Gross earnings stood at N13.62 billion while net profit was N4.40 billion.

Key extracts of the audited report and accounts of UBN for the year ended December 31, 2021 showed that gross earnings rose by 8.9 per cent to N175 billion in 2021 as against N160.7 billion recorded in 2020. Net operating income after impairments slipped by 3.6 per cent to N99.7 billion as against N103.4 billion. Profit before tax followed the downtrend with a drop of 19.3 per cent from N25.4 billion in 2020 to N20.5 billion in 2021. Gross loans rose by 22 per cent to N899.1 billion in 2021 as against N736.7 billion in 2020. Customer deposits also grew by 20.4 per cent from N1.1 trillion to N1.4 trillion.

Nigerian equities sustained their upswing yesterday as investors continued mopping up quoted shares despite another increase in the benchmark interest rate by the Central Bank of Nigeria (CBN).

With nearly four advancers for every decliner, the momentum of activities and pricing trend at the stock market was bullish. Average return stood at 0.62 per cent, equivalent to net capital gain of N145 billion. Average year-to-date return rallied to 5.18 per cent.

The Monetary Policy Committee (MPC) of the CBN yesterday increased the Monetary Policy Rate (MPR), the benchmark interest rate by 100 basis points to 16.50 per cent.

Although an increase in interest rate enhances the attraction of fixed-income securities, and technically could limit inflows into the equities market, bargain-hunters upped demand for quoted shares.

The All Share Index (ASI)-the benchmark index that tracks all share prices at the Nigerian Exchange (NGX) rose by 0.62 per cent from 44,662.96 points to close at 44,929.33 points.

Aggregate market value of all quoted equities also rose correspondingly from its opening value of N24.327 trillion to close at N24.472 trillion.

Read Also: IMF asks CBN to allow banks control dollar rates

The positive overall market position was driven by widespread buy sentiments, especially within the large and mid cap segments.

There were 27 gainers against seven losers. UPDC Real Estate Investment Trust recorded the highest price gain of 10 per cent to close at N2.75. International Breweries followed with a gain of 9.41 per cent to close at N4.65. Sovereign Insurance rose by 8.33 per cent to close at 26 kobo. Fidson Healthcare rallied 6.99 per cent to close at N8.72 while UAC of Nigeria gained 6.74 per cent to close at N9.50 kobo.

On the negative side, RT Briscoe led with a drop of 10 per cent to close at 27 kobo. Presco followed with a loss of 7.17 per cent to close at N110 kobo. Chams lost 4.17 per cent to close at 23 kobo. Sunu Assurance lost 3.45 per cent to close at 28 kobo while Consolidated Hallmark Insurance dipped by 3.28 per cent to close at 59 kobo per share.

The momentum of activities however, slowed down as total turnover dropped by 20.7 per cent from 159.562 million shares valued at N1.950 billion in 3,607 deals recorded on Monday to 126.56 million shares worth N3.85 billion in 3,383 deals.

Zenith Bank was the most active stock with a turnover of 1355 million shares valued at N298.637 million.

“The market closed with strong bullish momentum about to test the 45,000 resistance level. We still expect to see a test of the 45,000 psychological level in subsequent sessions. Additionally, a failure to close above the resistance level, may confirm the strength of the resistance and possible retracement to the support level of 44,000.

“Investors should pay close attention to global indicators as well as trends under the current global situation. We would like to reiterate that investors should go for stocks with good fundamentals with regards to their portfolio” analysts at Arthur Steven Asset Management stated.

The Debt Management Office (DMO), the agency that manages Nigeria’s public debts, is expected to lead a major review of Nigeria’s public debt management with a view to aligning strategies with the country’s outlook.

Director-General of the Debt Management Office (DMO), Ms Patience Oniha, will lead other market regulators to discuss the prospects of Nigeria’s public debt at the 2022 annual workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN).

The workshop scheduled to hold on December 3, 2022 is being organised by the association as part of its efforts to contribute to the development of the country’s capital market and economy.

The theme of the programme is: “Nigeria’s Public Debt and the Capital Market,” and the Director-General of the DMO, Oniha is the guest speaker.

Read Also; Nigeria faces debt servicing challenges, DMO warns

The workshop will be declared open by the Director-General of the Securities and Exchange Commission (SEC), Mr Lamido Yuguda, who will be the special guest of honour, while the Chief Executive Officer of the NGX Exchange, Mr Temi Popoola, the guest of  honour, will give more details how the exchange is  positioning itself as the  Africa’s investment window.

The apex regulatory institutions in the Nigerian Capital market expected to grace the event include SEC Nigerian Exchange Ltd., NGX, FMDQ Exchange Ltd., as well as other market operators.

Managing Director, FMDQ Exchange, Mr Bola Onadele, will bring perspectives on how the potential in the debt capital market can be unlocked to grow the economy.

Other dignitaries expected at the event are: Chairman of Association of Stockbroking Houses of Nigeria (ASHON), Mr Sam Onukwue and President of Chartered Institutes of Stockbroker (CIS), Mr Oluwole Adeosun.

Also expected at the  workshop are the  Deputy Managing Director, United Bank for Africa ( UBA),  Mr Muyiwa Akinyemi and the TGI Group, amongst others.

The Guest Speaker, Oniha, will also throw more light on the high-yielding opportunities in the Nigerian debt space, and how the country and corporates could tap into the opportunities that abound in the local market for infrastructure development funds.

Equally,  she is expected to further unveil opportunities for retail investors in debt investing, as well as the commitment of government in ensuring sound policies, and environment towards enhancing a vibrant local debt market.

Beyond the general market outlook, there is a different market for every investor, reports Deputy Group Business Editor Taofik Salako

The overall market position usually plays a trick on many investors. A blend of several movements and dynamics, when the overall market position is up, there is the euphoria of a generally rising market and when it is down, there is a discouraging feeling of decline. This is illustrative of the general sense of the benchmark indices. But there are always differing returns based on several segmentations and portfolio composition.

Benchmark indices at the Nigerian equities market indicated net loss of about N2.8 trillion in October 2022. This implied average loss of 10.58 per cent during the month. The decline in October shaved the average year-to-date return from 14.77 per cent by September 2022 to 2.6 per cent in October 2022. Nigerian equities, which had closed the third quarter ended September 2022 with net capital gain of about N3.3 trillion for the nine-month period, was left with net gain of about N580 billion by the end of the 10th month.

The All Share Index (ASI)- the common value-based index that tracks all share prices at the Nigerian Exchange (NGX)  declined by 10.58 per cent to close October at 43,839.08 points as against 49,024.16 points recorded at the beginning of the month. Also, aggregate market capitalisation of all quoted equities dropped from its month’s opening value of N26.451 trillion to close October 2022 at N23.878 trillion, a face value loss of N2.57 trillion but a real adjusted loss of N2.797 trillion. The difference between the ASI and aggregate market value was due mainly to the listing by introduction of Geregu Power Plc, which led to primary increase in number and value of outstanding shares at the Exchange.

The ASI had opened 2022 at 42,716.44 points as against 40,270.72 points recorded as opening index for 2021. Aggregate market value of all quoted equities had also opened this year at N22.297 trillion.

Pricing trend analysis shows that investors’ returns differ and the extent of gains or losses depends on the stocks that make up an investor’s portfolio. Despite the negative pricing trend in recent months, which had significantly eroded year-to-date investors, several investors have huge positive returns that still make them comfortable even after adjusting for inflation and cost of capital. Although the rate of decline was slower, several investors, on the other hand, have also lost more than the average market return and must be ruing 2022 as the worst year so far.

Out of the 155 quoted companies tracked at the NGX, there were 46 stocks on the upside, more than 39 unchanged stocks but lower than 70 stocks on the losers’ list. As against the average 10-month return of 2.6 per cent, top 10 gainers made returns of between 64.7 per cent and 2,210 per cent. With even inflation rate at 21.09 per cent and the Monetary Policy Rate at 15.50 per cent, investors with the least return within this group still had more than 28 per cent fully adjusted real return, a mouthwatering return not realisable in any other class of regulated assets.

Conversely, the top 10 losers for the period lost between 31.5 per cent and 54.9 per cent. This implied that the real negative return at the top bracket might be as high as 90 per cent, such dismal situation that makes people to gloat over zero or low-yielding savings account.

Companies with the highest returns included Multiverse, 2,210 per cent; Meyer Paints, 393.48 per cent; Academy Press, 170 per cent; Guinness Nigeria, 112.56 per cent; Seplat Energy, 84.62 per cent; Jaiz Bank, 69.64 per cent; E-Tranzact International, 69.31 per cent; SCOA Nigeria, 68.27 per cent; RT Briscoe Nigeria, 65 per cent and Fidelity Bank Plc, which recorded net return of 64.71 per cent for the 10-month period.  It should be noted that Multiverse’s return was partly due to its massive share reconstruction and not entirely due to ordinary pricing trend like other stocks.

On the negative side, highest-losing stocks included Royal Exchange, with a loss of -54.90 per cent, Livestock Feeds, -52.56 per cent; Caverton Group, -43.60 per cent; Geo Spectrum Energy Services, -40.81 per cent; University Press, -39.12 per cent; Honeywell Flour Mills, -37.35 per cent; Coronation Insurance, -35.71 per cent; Berger Paints, -33.33 per cent; Guaranty Trust Holding Company, -32.31 per cent and UPDC Real Estate Investment Trust, which dropped by 31.46 per cent.

The secret to success in stock investing, most analysts will say, lies in diversification. Diversification simply means investing in stocks across any sectors and growth cycles such that losses in some stocks or sector are counterbalanced by gains in other stocks and sector. Beyond sectoral categorisation which is based on the business operation, shares are also categorised by the intrinsic fundamentals and technical values. So, there are value stocks- mature stocks with steady pattern; growth stocks-relatively volatile but with potential; blue chips- well-established market leaders and least volatile and penny stocks- low-priced stocks susceptible to high volatility but less liquidity among others. The composition of the gainers and losers also lent credence to this, from natural resources to financial services, banking, industrial goods, oil and gas, agriculture, financial services, consumer goods to real estate as well as diversity in growth cycles, from penny stocks to blue chips.

Managing Director, Futureview Asset Management, Ughochi Nnodi offered investment tips for building an efficient portfolio that can generate competitive returns despite prevailing inflationary environment.

She explained that investors could optimise the tough operating environment by investing in assets that hedge against inflation.

According to her, there are resilient sectors that outperform inflation and generate alpha returns.

“There are resilient stocks that thrive during inflation because of their underlying assets. Investors should build their portfolios with stocks of companies in the healthcare, energy, commodities, consumer staples, financials and real estate among others as a risk and reward trade off. We should not lose sight of mutual funds which is a collection of investment in different asset classes,” Nnodi said.

According  to her, it is settled in portfolio management that during high inflation rate, mutual funds provide an opportunity for diversification and better returns with advantages suh as sharing of investment expenses, economies of scale and operational efficiencies, ease of investing  in specialised market sectors and investment tracking, simple portfolio management, access to professional money managers and  low trading costs.

Mutual funds, otherwise known as collective investment schemes (CIS), are joint investment vehicles through which investors can pool funds and invest in chosen basket of securities with a view to optimising returns and reduce risks. A mutual fund is usually categorised by the class of assets that forms the primary focus of its investments. Thus, there are equity funds, money market funds, bond funds, real estate funds, ethical funds and balanced funds among others.

Frontline businessman and former president of Nigerian Stock Exchange (NSE), Dr Goodie Ibru, said despite the volatility, investment in the equities market remains the most profitable of investment options.

He urged Nigerians to embrace the stock market, noting that average return on equities portfolio in Nigeria and Africa is 30 per cent and 35 per cent respectively per annum.

“In today’s realities, the best investment is in equity. The average return in Nigeria and Africa is 30 per cent and 35 per cent per annum which is very attractive. A good equity market will encourage government to partner with the private sector to undertake infrastructure projects under a public private policy programme,” Ibru said.

Ibru, a shrewd investor, said a good understanding of the economy will lead an investor to good investments noting that with Nigeria’s huge housing deficit, hospitality and real estate sectors present good investment opportunities.

Analysts meanwhile agreed that investors must keep unflinching eyes on the fundamental performance of the companies.

Analysts at Arthur Stevens Asset Management advised investors to “go for stocks with good fundamentals” in the midst of uncertainties.

“We expect bearish sentiments to remain predominant next week in the absence of any positive triggers to turn the tide for Nigerian equities. Nonetheless, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” analysts at Cordros Securities stated in a recent advisory.

Operational reports of stocks underline the fundamental value including the future dividend-payment capability. For instance, Nigeria’s premier and largest non-interest bank, Jaiz Bank Plc had sustained double-digit growths across key performance indicators in the third quarter with total assets of the leading alternative finance institution rising to N325.06 billion.

Key extracts of the interim report and accounts of Jaiz Bank for the nine-month period ended September 30, 2022 showed that the bank’s total income rose by 23 per cent from N13.03 billion in third quarter 2021 to N16.03 billion in third quarter 2022. With the inflationary trend, total expenses increased from N9.76 billion to N12.12 billion. Profit before tax thus rose by 19.6 per cent from N3.27 billion in third quarter 2021 to N3.91 billion in third quarter 2022. After taxes, net profit grew by 14.4 per cent to N3.33 billion in third quarter 2022 as against N2.91 billion in comparable period of 2021.

The balance sheet of the non-interest bank also emerged stronger with appreciable growths in customers’ deposits. Total assets rose by 16.4 per cent to N325.06 billion by September 2022 as against N279.28 billion recorded at the end of the year ended December 31, 2021. Customers’ deposits rose from N111.56 billion in December 2021 to N118.11 billion in September 2022.

Also, interim report and accounts of Fidelity Bank for the six-month period ended June 30 2022 had shown that gross earnings rose by 37.9 per cent from N112.30 billion in first half 2021 to N154.84 billion in first half 2022. Profit before tax grew by 21.6 per cent to N25.08 billion in first half 2022 as against N20.6 billion in first half 2021. After taxes; net profit rose by 20.7 per cent from N19.31 billion to N23.31 billion. Earnings per share thus stood at 80 kobo in first half 2022 as against 67 kobo in first half 2021. The board of the bank then declared an interim dividend of 10 kobo per share to all shareholders.

So, for investors, the market is a big tree with different degrees of shades for all under it.

Total market value of all quoted equities at the Nigerian Exchange (NGX) depreciated by N440 billion yesterday as a flurry of sell orders on large-cap stocks overshadowed the overall market position.

The All Share Index (ASI)- the value-based common index that tracks all share prices at the NGX declined by 807.83 absolute points or 1.82 per cent to close at 43,461.60 points. Aggregate market value of all quoted equities dropped by N440 billion to close at N23.672 trillion.

The downtrend was mainly due to losses recorded by large-capitalised stocks such as Dangote Cement, Guinness Nigeria, MTN Nigeria Communications (MTNN) and Stanbic IBTC Holdings.

There were 19 losers  to 12 gainers. Unity Bank  recorded the highest price gain of 10 per cent to close at 44 kobo per share. Thomas Wyatt Nigeria followed with a gain 8.57 per cent to close at 38 kobo. Jaiz Bank rose 6.38 per cent to close at N1.00 per share. Fidson Healthcare went up by 5.76 per cent to close at N8.99 while Geregu Power appreciated by 5.09 per cent to close at N121.80 per share.

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On the negative hand, Guinness Nigeria led the losers’ chart by 9.95 per cent to close at N74.65 per share. Custodian Investment followed with a decline of 9.32 per cent each to close at N5.35. Dangote Cement lost 8.33 per cent to close at N220.00 per share. Courteville Business Solutions lost 8.00 per cent to close at 46 kobo while NEM Insurance shed 7.50 per cent to close at N3.70 per share.

However, the total volume traded rose by 142 per cent to 249.912 million shares valued at N2.502 billion and exchanged in 3,283 deals. Transactions in the shares of Access Holdings topped the activity chart with 128.732 million shares valued at N1.035 billion. FBN Holdings (FBNH) followed with 19.492 million shares worth N192.824 million. Transnational Corporation of Nigeria (Transcorp) traded 17.352 million shares valued at N18.240 million. Fidelity Bank traded 14.900 million shares valued at N59.862 million while Guaranty Trust Holding Company (GTCO) recorded a turnover of 14.591 million shares worth N255.819 million.

 ”We expect mixed sentiments to continue during week, as pre-election risks amplify” GTI Securities stated.