The Nation Newspaper

Category: Investors

  • NSE lifts Eterna to medium-price stock

    Authorities at the Nigerian Stock Exchange (NSE) have reclassified Eterna Plc from low-priced stock to a medium-price, providing additional liquidity that will enhance price discovery for the downstream oil and gas company.

    As a medium-priced stock, stockbrokers could move the share price of Eterna with a minimum volume of 50,000 shares as against 100,000 minimum shares required for low-priced stocks.

    The NSE had recently classified quoted companies into three categories-high-priced, medium-priced and low-priced stocks, based on their market price.

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

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

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

    Stocks under high-priced group shall have price change with minimum of 10,000 units; stocks under medium-priced group shall have price movement with a minimum of 50,000 units while stocks under low-priced group shall have price change with minimum volume of 100,000 units.

    According to the Exchange, Eterna gained above the N5 mark on January 8, 2018 and traded above N5 up till close of business on June 29, 2018, which indicated that Eterna has traded above N5 in at least four out of the last six months and therefore, would be reclassified from low-priced stock to mid-price stock with effect from Monday this week.

     

  • SEC: only fit, proper persons ’ll be allowed in capital market

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has restated its determination to ensure that only fit and proper persons and associations are allowed to operate in the nation’s capital market.

    Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk said SEC is open to suggestions and actions that would make the capital market vibrant, but the Commission would only be willing to collaborate with associations and persons that are fit and proper to operate in the market.

    Speaking when members of the Association of Stockbroking Houses of Nigeria (ASHON) met with SEC management in Abuja, Uduk said the Commission is dedicated to further develop and deepen the capital market.

    According to her, SEC is willing to collaborate with the association to lift the market and re-position it among leading capital markets that meet international standards and best practices.

    SEC noted that a well-functioning capital market was essential to Nigeria’s economic development, and to realise its full potential, the country must have a world class capital market that is strong, sustainable, effective, and plays a central role in economic development.

    Uduk commended members of the group on their efforts so far in deepening the market, especially for their support towards the financial literacy campaign of the SEC and assured them of the readiness of the SEC to continue to work with them.

    “It is good that we work together to take our capital market to the height we want it to attain. We are ready to engage with you to give us clarity on several issues relating to the market. We are open to discussions that will benefit the market, the market is the most important in all our engagements,” Uduk said.

    In his remarks, ASHON Chairman, Chief Patrick Ezeagu pledged the group’s commitment to the capital market growth, adding that whatever is done to make the market work is of concern to the association.

    “We have always worked with SEC and will continue to do so and accord you all the co-operation you require to succeed,” Ezeagu said.

    He said stockbroking houses will continue to collaborate in every way possible to bridge the gap in financial literacy.

    Meanwhile, in a move to further enlighten investors and the general public on the process and benefits of e-dividend, will today hold a town hall meeting with stakeholders and the general public in Port Harcourt.

    The meeting will provide the Commission the opportunity to highlight investment opportunities available in Nigerian capital market and how retail investors can benefit therein.

    The meeting will also provide the Commission opportunity to educate and enlighten the public on electronic dividend and interact with the general investing public.

     

     

     

    The Commission had earlier this year announced that the e-dividend registration would continue seamlessly in spite of the expiration of free registration deadline which and also enjoined investors yet to enroll, to continue with the registration at a cost of N150 only.

    According to the Commission, investors should continue to approach their banks or registrars to seamlessly mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 would not be demanded from them at the point of registration.

     

  • Confab on capital market development coming

    Major stakeholders in the  capital market will brainstorm next week on capital market developments.

    The Senate and House of Representatives’ Committees on Capital Market and Institutions, Securities and Exchange Commission (SEC) and other Regulatory Agencies will host the Second biennial Stakeholders’ Forum on the Capital Market next week.

    Vice President Yemi Osinbajo will join federal legislators, capital market experts and others at the stakeholders’ forum scheduled to hold in Abuja.

    Top private sector personalities, including leading industrialist, Alhaji Aliko Dangote; Chairman of Heirs Holdings, Mr.Tony Elumelu; Chairman Coronation Capital, Mr. Aigboje Aig-Imohkuede and Managing Director of Access Bank, Mr. Herbert Wigwe are expected to make this year’s event.

    According to the Chairman of the House of Representatives’ Committee on Capital Market and Institutions, Honourable TeeJay Yusuf, the theme of this year’s conference is “Capital Market As A Catalyst for Economic Growth and Development”, while both Senate President, Senator Bukola Saraki and the Speaker of the House of Representatives, Honourable Yakubu Dogara are to be the Chief Hosts.

    The event is expected to yield productive recommendations on how to enhance the Nigerian Capital Market’s potentials towards enabling it to mobilise multi-billion dollar development funds from across the globe towards a fast-paced execution of infrastructural projects nationwide instead of relying on government’s limited annual budgets alone.

    Papers to be presented and vibrantly discussed by economic development experts and political office holders from various parties include: “Post Recession: Challenges, Implications and Opportunities for the Nigerian Capital Market”.

    There are other papers on the role of commodity exchange, development of the agricultural sector and capital market options for funding the development of major infrastructure projects.

    Others expected at the event include, Minister of Finance, Kemi Adeosun and Ministers of Agriculture, Economic Planning, Trade and Investment and Works, Power and Housing, as well as state Governors of Rivers, Kebbi, Kaduna, Sokoto, Bauchi, Lagos, Nasarawa.

    Also, heads of critical public institutions, including the Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS) and PENCOM are expected to participate actively in the cross-fertilisation of ideas that can lead to massive changes in funding arrangements for national infrastructural projects.

     

  • Prudential Zenith launches savings plan

    Prudential Zenith Life Insurance has launched a savings plan that allows customers to meet their long-term needs. The company recently launched a suite of new life insurance products, including My Savings Plan and My Family Protection Plan.

    The new products came on the heels of the recent launch of the company’s bancassurance business, which enables customers of Zenith Bank to buy life insurance products in more than 60 branches in Lagos State.

    According to the company, My Savings Plan is designed to help customers meet their long-term savings needs and My Family Protection Plan provides peace of mind to customers and their loved ones by paying a lump sum on the death of the policyholder.

    The new products are the latest development following the entry into Nigeria of Prudential Plc, one of the oldest and most capitalised life insurance companies in the world.

    Prudential Zenith stated that it aimed  to redefine the Nigerian insurance sector by providing a range of affordable life insurance products that are designed to meet the protection and savings needs of Nigerian consumers – and the new products are the first step in enabling Prudential Zenith to become a one stop shop for all Your insurance solutions.

    Prudential Plc, one of the oldest and most strongly capitalised life insurance companies in the world, last year acquired a majority stake in Zenith Life Assurance, to form, Prudential Zenith Life. Alongside its entry into Nigeria, Prudential also formed an exclusive Bancassurance partnership with Zenith Bank in Nigeria and Ghana.

     

  • New stockbrokers’ chief harps on trust, integrity

    The new President of Chartered Institute of Stockbrokers (CIS), Mr Adedapo Adekoje, has urged stockbrokers to ensure utmost trust and integrity in their operations to sustain investors’ confidence in the capital market.

    Speaking during a commemorative visit to the trading floor at the Nigerian Stock Exchange (NSE), Adekoje urged stockbrokers to ensure a high level of ethical standard because capital market thrives on investors’ trust.

    According to him, the institute expects stockbrokers to exhibit the highest level of ethical behavior and standards of professional conduct in their day-to-day dealings within themselves and the public at large.

    Ahead of his investiture on Thursday, July 26, at Muson Centre, Onikan, Lagos, Adekoje also called on stockbrokers to continue to support the institute.

    “Our institute is in the process of transition. The onus is on us to urgently re-position our institute and our profession for emerging challenges and opportunities. To achieve this , we must tap into the vast knowledge, expertise and experience of our members. I charge you to continue to support your institute with everything you have; and in turn I can assure you that you will derive a lot of benefits ultimately,” Adekoje said.

    He assured that with support of members, the new leadership will expand the scope of opportunities of stockbrokers in the next 12 months so that the profession can take its rightful place in the financial market and the Nigerian economy.

    NSE Head, Shared Services Division, Mr Bola Adeeko commended the institute for its outstanding performances since existence, describing it as a partner in progress with the Exchange.

    He advised the institute to join hands with the Exchange to actualise the demutualisation programme of the Exchange successfully.

    Doyen of the day, Mr Sam Ndata congratulated members of the new administration of the institute on their election and urged the principal officers to work with stockbrokers for enhanced development of the profession.

    Ndata also commended the previous administration for its achievements and promised that stockbrokers would continue to support the institute.

    He however advised the new administration to ensure regular dialogue with the stockbrokers as a strategic move to ensure their support for market development.

     

  • Exchange Traded Funds gain N1.34b in one year

    Exchange Traded Funds (ETFs) listed on the Nigerian Stock Exchange (NSE) recorded average gain of 20.2 per cent, equivalent to net capital gain of more than N1.3 billion in the past one year. Seven of the nine ETFs recorded double-digit gain over the 12-month period, with gains between 13 per cent and 72 per cent.

    A Market Intelligence Report by The Nation showed that the net asset value (NAV) of quoted ETFs rose from N5.78 billion on June 23, last year, to close at N7.12 billion last June 22, representing an increase of 23.17 per cent or N1.34 billion.

    While the increase in value could sometimes be due to increase in units due to supplementary issuance, unit-price analysis further confirmed that the increase in value was due largely to capital gain. Unit-price analysis of ETFs data supplied by the Securities and Exchange Commission (SEC) showed average gain of 20.22 per cent during the period, three percentage points below the value-based change.

    ETF is a security that tracks the performance of a specified security or other assets, including stocks, basket of assets, indices, commodity prices, foreign currency rates, and derivatives among others. There are many types of ETF. Index-based ETF, like index fund, tracks specified market index.

    ETFs are essentially index funds that are listed and traded on the Exchange like shares. Buying and selling ETFs is as simple as buying and selling of shares. Unlike shares and mutual funds however, the ETFs will trade continuously all day long and allow investors to lock in a price for the underlying stocks immediately, rather than being bought and sold based on end-of-day prices.

    ETFs were introduced at the NSE in December 2011 with cross listing of New Gold ETF with asset under management (AUM) of N287.5 million. The New Gold ETF is a gold-based derivative which allows Nigerian investors to invest directly in gold.

    Two ETFs being managed by Stanbic IBTC Asset Management Limited (SIAML) led the return table. The Stanbic IBTC ETF 30 Fund recorded the highest gain of 71.64 per cent while the SIAML ETF 40 followed with a gain of 57.32 per cent. Vetiva Fund Managers’s VETBank ETF placed third with a gain of 23.08 per cent. Lotus Capital’s Lotus Capital Halal ETF- an ethical variant of ETF based on Islamic principles, recorded a gain of 18.51 per cent. Vetiva Fund Managers’ Vetiva S & P Nigeria Sovereign Bond ETF followed with a gain of 18.18 per cent while two other funds being managed by Vetiva Fund Managers-VG 30 ETF and VCG ETF recorded a gain of 13.48 per cent and 13.47 per cent respectively.

    However, New Gold ETF, being managed by New Gold Managers (Proprietary) Limited, recorded a loss of 32.61 per cent while Vetiva Fund Managers’ VI ETF slipped by 1.10 per cent.

    Net asset value (NAV) simply refers to the remaining assets of a company or investment after deduction of all liabilities. Net asset value is calculated by deducting total liabilities from total assets at a given period. Unit price is the division of net asset value by the total number of units in the fund.

    Further analysis showed that VG 30 ETF remains the largest ETF with a net asset value of N2.72 billion. SIAML ETF 40, which rose by 89.4 per cent, displaced New Gold ETF to become the second largest ETF with N1.13 billion. Stanbic IBTC ETF 30 Fund occupied the third position with net asset value of N657.67 million.

    Lotus Capital Halal ETF was launched in 2014 and was the first Sharia compliant ETF in sub-Saharan Africa. It is an open ended fund that tracks the yield and performance of stocks under the NSE Lotus Islamic Index, which was initially developed by Lotus Capital in 2009 and publicly launched in conjunction with the NSE in 2012 to track the performance of Shari’ah-compliant stocks on the NSE.

    SIAML ETF 30 was listed in 2014 after successful completion of its initial public offering, which was oversubscribed. The Stanbic IBTC ETF 30 invests wholly in the same portfolio of securities that comprise the NSE 30 Index in proportion to their weightings in the underlying index. The VG 30 ETF-the first equity-based ETF to be listed on the NSE, also tracks the NSE 30 Index.

    The Vetiva S & P Nigeria Sovereign Bond ETF was the first bond ETF to be listed on the Exchange. It gives investors access to Nigerian Federal Government bonds in retail lots; thus providing an opportunity for every Nigerian to invest in Federal Government bonds.

    The history of ETFs dates back to 1990, when the Toronto Index Participation Fund (TIP 35) was launched in Canada. Since then, ETFs have gained widespread acceptance in most developed markets with demand from global retail and institutional investors leading to a variety of offerings by ETF sponsors. ETFs have become a huge success story, as Global ETF AUM have grown from $1.4 trillion in December 2010 to about $3 trillion as at April, 2016 representing over 102 per cent cumulative growth over the last five years. Experts have predicted the continued growth of the ETF industry estimating that global AUM will reach at least $ 7 trillion by 2021.

  • Govts, firms risk expulsion for funds diversion

    Governments and companies that divert or misapply funds raised from the capital market will henceforth be expelled from the capital market, in addition to monetary sanctions and “naming and shaming” exposure of such diversion to the general public.

    Authorities at Securities and Exchange Commission (SEC) said they have decided to strengthen the deterrence measures against misapplication and diversion of funds after they discovered many instances of misapplication of funds.

    Under the new rules undergoing rule-formulation process, SEC will be able to suspend any erring government or company from accessing the capital market for such period as the Commission may determined. SEC will also be empowered to undertake “naming and shaming” by publishing the erring government or company on the Commission’s website.

    The suspension and “naming and shaming” provisions are part of a new robust deterrence measures that include additional monetary sanctions on companies and governments that divert or misapply funds raised from the capital market.

    Under the proposed amendments, any company or government that diverts or misapplies funds raised from the capital market will pay additional penalty equivalent to two per cent above the subsisting monetary policy rate (MPR). The MPR is at 14 per cent, implying a proposed penalty of 16 per cent at the current rate.

    SEC noted that it had received reports on instances of misapplication of issue proceeds, referring to the practice by some issuers to use funds raised for a specific purpose for another purpose without recourse to the Commission for a variation of the use of the net proceeds.

    “To curtail such diversion and misapplication of issue proceeds, it became necessary to propose a stiffer penalty,” SEC stated.

     

  • University Press doubles profit to N354.63m

    University Press Plc witnessed, improved performance in the immediate past year with 115 per cent growth in pre-tax profit.

    Key extracts of the 12-month audited report for the period ended March 31, 2018 showed remarkable improvements in the top-line and bottom-line of the publishing company. Turnover rose to N1.80 billion in 2018 as against N1.61 billion in 2017. Profit before tax doubled by 115 per cent from N164.94 million in 2017 to N354.63 million in 2018. Profit after tax also jumped from N118.42 million to N207.41 million. Earnings per share increased from 27.45 kobo to 48.08 kobo.

    The latest audited report further strengthened the positive outlook for the Ibadan, Oyo State-based University Press. The company had distributed N43.1 million to shareholders as cash dividend for the 2017 business year, representing a dividend per share of 10 kobo.

    The audited report for the year ended March 31, 2017 had shown significant improvements as turnover rose from N1.47 billion in 2016 to N1.61 billion in 2017. Profit before tax more than doubled to N164.94 million in 2017 as against N70.21 million in 2016. After taxes, net profit jumped from N73.28 million to N118.42 million. Basic earnings per share thus improved from 16.99 kobo in 2016 to 27.45 kobo in 2017.

     

  • Don urges investors to imbibe sustainable development

    Financiers and investors in Nigeria need to imbibe the principles of sustainable finance and investment and ensure that their financing and investment decisions take into consideration possible negative social and environmental impacts.

    Director, Sustainable Business Initiative, University of Edinburg Business School, Professor Kenneth Amaeshi, said investors and financiers should play primary roles as drivers for adoption of sustainable development by supporting projects, which positively impact not only the economy, but the nation’s social and governance structures.

    Amaeshi, who was the guest speaker at the Finance and Investment Dialogue on Prospects for Sustainable Finance and Investment in Nigeria, organised by GTI Capital Limited in collaboration with Business AM newspaper, said the adoption of principles of sustainability will lead to progressive government and increased profitability for Nigerian companies.

    He noted that projects by companies have both economic and social costs, but most companies pay more attention to economic cost instead of working towards eliminating or reducing social costs.

    “Sustainability is about how companies make their money, the challenge is to find ways of reducing negative impacts while increasing positive impacts,” Amaeshi said.

    He noted that financiers and investors had contributed to creating many of the societal problems by providing funds to companies, which engage in environmental degradation and health hazards among others.

    While urging investors and finance companies to use their funds to drive adoption of principles of sustainability, he pointed out that they stand to make more returns on their investments as the society, the economy and governance improve.

    According to him, while it may appear that there is no direct link between sustainability and profitability, there is an indirect relationship as the resultant improvement in reputation, greater resource management, employee productivity, customer loyalty and community goodwill will bring increased and sustainable profits.

    “By reducing social costs, you become more efficient and increase the goodwill of the company, which will turn to profit in due course,” Amaeshi said.

    He urged companies on voluntary compliance, noting that the nation’s financial services regulators are already working on a common programme to enforce principles of sustainability, which may come into effect by 2020.

    GTI Capital Limited Group Managing Director, Mr. Abubakar Lawal, said the dialogue series was borne out of the company’s desire to make meaningful impact on Nigeria and Africa as a whole.

    According to him, GTI is committed to a vision to impact Nigeria and influence Africa through positive contributions to national development.

    He emphasised the need for citizen-led participatory process that will lead to adoption of sustainable financing and investment, which will in turn benefit the general citizenry while helping the government to harness greater productivity and national wealth.

    The Business AM Managing Director, Mr Phillips Isakpain, in his remarks,  emphasised the need for futuristic thinking as a driving point for agenda setting.

    “Our discussion about Nigeria should be futuristic. A lot of the things that we do tend to remain current or in the past, but Nigeria deserves to begin to talk about the future. Our children should be paramount in our discussions on how to move forward as a nation,” Isakpa said.

  • Flour Mills grows net profit by 54% to N13.6b

    •Firm declares N4.1b dividend

    Flour Mills of Nigeria Plc grew its net profit by 54 per cent to N13.6 billion in the immediate past year, riding on the back of strong sales and improved cost management.

    Key extracts of the audited report and accounts of the company for the year ended March 31, 2018 showed that profit after tax rose from N8.84 billion in 2017 to N13.62 billion in 2018. Profit before tax had risen from N10.47 billion to N16.54 billion. Group turnover increased from N524.46 billion in 2017 to N542.67 billion in 2018. Earnings per share thus improved from N3.03 in 2017 to N4.83 in 2018.

    The board of directors of the company has recommended payment of a dividend per share of N1 to shareholders as cash dividend for the 2018 business year, the same amount distributed for the 2017 business year.

    Flour Mills during the last quarter of the business year raised N40 billion in new equity funds through a rights issue. It floated a rights issue of 1.476 billion ordinary shares of 50 kobo each at N27 per share.

    The success of the new capital raising had placed the flour mill group in a better position to strengthen its balance sheet and support business growth.

    Its Chairman, Mr. John Coumantaros, had said the rights issue would be used primarily to pay down some of the company’s outstanding short-term debt in order to reduce its finance costs, which have increased significantly in recent times.

    He said the company would maintain and expand its market leadership across all its five core businesses and value chains.

    He outlined that Flour Mills would improve route, extend its distribution footprint and launch new innovative consumer products like Gari, Margarine, spread, soya and vegetable oil, among others.

    He added that the company will continue to focus on supply chain security through import substitution and value chain diversification.

    “We will also continue to improve in our processing facilities and manufacturing excellence, which will lead to productivity and efficiency gains,” Coumantaros said.

    Group Managing Director, Flour Mills of Nigeria Plc, Mr. Paul Gbedebo, explained that the rights issue is part of the group’s strategy to grow and build long-term value for all stakeholders.

    “The proceeds from the rights issue will be used to strengthen the company’s capital base by deleveraging our balance sheet, supporting our working capital needs and positioning the company to exploit value-accretive opportunities, while giving greater operational and financial flexibility to ensure business growth and continuity,” Gbedebo said.

    He noted that Flour Mills has a long and rich history in Nigeria and continues to evolve and become the leading food and agro-allied group in Africa.

    According to him, Flour Mills’ commitment to sustainability as a corporate strategy is shown in different levels of its operations and activities, while the company’s customer-centric culture remains focused on both product and process innovation aimed at building value for all stakeholders.