The Nation Newspaper

Category: Investors

  • Seplat’s director sells N640m shares in negotiated transaction

    A non-executive Director of Seplat Petroleum Development Company Plc has sold shares valued at about N640 million in a negotiated transaction consummated through the Nigerian Stock Exchange (NSE).

    A regulatory filing indicated that Mr. Macaulay Ofurhie, a non-executive director of Seplat, sold 900,000 ordinary shares of the oil and gas company at N711.10 per share.

    With the sale, Ofurhie now holds a direct interest in 4.0 million ordinary shares in Seplat, equivalent to a voting interest of 0.68 per cent based on the company’s issued share capital of 588.445 million shares.

    Ofurhie was one of the directors of Seplat, who last year received 11.43 million ordinary shares as bonus shares under the company’s Long-Term Incentive Plan (LTIP) and annual performance bonus. The board of directors of Seplat had in 2017 distributed ordinary shares of the oil and gas company worth N3.43 billion to its members as bonus shares.

    The Chairman, Chief Executive Officer (CEO), Eecutive Directors and non-Executive Directors of Seplat received 11.43 million shares as bonus shares.

    Those, who received the bonus shares included Mr Bryan Orjiako, Chairman; Austin Avuru, CEO; Stuart Connal, Chief Operations Officer and Roger Brown, Chief Financial Officer. The non-executive directors that were awarded shares included Michael Alexander, Michel Hochard, Macaulay Ofurhie, Basil Omiyi, Ifueko Omoigui-Okauru, Charles Okeahalam, Lord Mark Malloch Brown, Jean-Francois Henin and Alhaji Nasir Ado Bayero.

    The trio of Avuru, Connal and Brown were specifically awarded 247,610 shares as bonus shares in relation to the company’s performance in the business year ended December 31, 2015.

    “No consideration was paid for the grant of the awards and no consideration is due on the vesting of awards,” according to the filing on the award.

    All non-executive directors who had served on the board during the nine months prior to the date of the initial public offering (IPO) in 2014 had been allotted shares in the company at nominal value as part of their remuneration structure. Each of the non-executive directors received 95,238 shares with the exception of Lord Mark Malloch Brown, who received 31,746 shares in line with the time that he served.

  • NSE okays Custodian Investment

    Custodian Investment Plc has begun to trade under its new brand identity, completing the corporate change aimed at aligning the company’s brand essence with its diversified business structure.

    The Nigerian Stock Exchange (NSE) on June 25, 2018 adjusted its trading platform to change the Custodian and Allied Plc name to its new name of Custodian Investment Plc.  However, the company’s trading symbol remains the same-Custodian.

    Shareholders of the insurance-led financial services company had at their annual general meeting in April this year, approved a resolution to change the company’s name to Custodian Investment Plc.

    Meanwhile, Custodian Investment management has assured that the bankruptcy of Abraaj Holdings will not in any way affect Custodian Investment. Abraaj Holdings – a Dubai-based investment firm with operations in Africa, Asia, Latin America, Middle East and Turkey had filed for liquidation on June 12, 2018. Aureos Africa Fund, which is managed by Abraaj Investment Management Limited (AIML), holds minority shares of Custodian Investment Plc.

    A court order on June 18, 2018 appointed executives from PwC and Deloitte as joint provisional liquidators of Abraaj Holdings. In a statement by Abraaj Holdings, “the court-supervised restructuring of Abraaj Holdings would have “minimum impact” on the day-to-day operations of the management of the funds and their portfolio companies”.

    Reacting to the liquidation, Group Managing Director, Custodian Investment Plc, Mr. Wole Oshin, noted that Abraaj is just fund managers not shareholders of Custodian Investment.

    “They manage Aureos Africa fund, who have some shares in Custodian. Our stock market prices have remained steady, and the strength of our company will not be deterred regardless of this event,” Oshin said.

    He pointed out that the vision of Custodian Investment Plc remains the same, noting that the company is being managed by a board of thoroughbred professionals with varied experience.

    According to him, Custodian Investment management is focused on building capacity and shareholder value while ensuring the company’s financial strength and ranking as an eminent player in Nigeria’s other financial services sector of the economy is maintained.

  • UPDC to list N4.36b bond on NSE

    UACN Property Development Company (UPDC) Plc has received regulatory approval to list its N4.355 billion bond on the Nigerian Stock Exchange (NSE)

    UPDC, a subsidiary of UAC of Nigeria (UACN) Plc, will be listing the N4.355 billion Series 1 Senior Guaranteed Fixed Rate Bond Due 2023 under its N20 billion Bond Issuance Programme. The listing by way of introduction will provide bondholders opportunity to trade on their investments and allow new investors to participate in the issue.

    UPDC has been leveraging on debts to fund its projects, after a slowdown in real estate market and stock market recession combined to shrink access to long-term capital.

    Attempt by the company to raise equity funds last year was only partially successful as it was only able to secure half of the funds it sought under the capital raising.

    Shareholders appeared to have shunned the shares that were provisionally allotted to them under the rights issue. UPDC had launched a rights issue of 1.719 billion ordinary shares of 50 kobo each to existing shareholders at N3 per share in a bid to raise N5.16 billion. The shares were provisionally allotted on the basis of one new share for every one share held as at close of business on January 19, 2017. The rights issue, which had opened on April 18, 2017, closed on May 26, 2017. However, the company only recorded subscription for 879.65 million ordinary shares valued at N2.64 billion.

    UPDC paid a total of N2.83 billion as interest expense during the year ended December 31, 2016, which contributed significantly to the company’s net loss of N1.55 billion during the period. It had planned to use N3.0 billion from the N5.2 billion rights issue to repay debts.

  • Stock Exchange approves delisting of Paints & Coatings Manufacturers Nigeria

    The Quotation Committee of the Nigerian Stock Exchange (NSE) has approved the voluntary delisting of Paints and Coatings Manufacturers Nigeria (PCMN) Plc, paving the way for its relapse to a private limited liability company.

    The delisting approval was sequel to compliance with delisting rules by PCMN, including approvals by its shareholders and the Federal High Court.

    The NSE had earlier suspended trading on PCMN shares with effect from May 30, 2018, in line with the effective date for determining shareholders, who will qualify to receive the scheme shares ahead of the implementation of the voluntary delisting of the company.

    PCMN shareholders had earlier this year approved sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the NSE.

    A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos where shareholders deliberated and voted to approve a scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

    The block divestment involved transfer of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.

    The NSE operates two delisting windows-voluntary and compulsory. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.

    Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.

  • Lotus Capital to list N1.49b fixed income fund

    Lotus Capital Halal Investments Limited has been given regulatory nod to list its N1.49 billion fixed income fund on the memorandum board of the Nigerian Stock Exchange (NSE).

    A total of 1.487 million units of Lotus Capital Fixed Income Fund of N1, 000 each will be listed by way of introduction on the memorandum board of the Exchange. The Quotation Committee of the NSE has approved the listing of the Lotus Capital Fixed Income Fund, a process that will pave way for the trading of the units on the Exchange.

    The Lotus Capital Fixed Income Fund had earlier been approved by Lotus Capital’s Shari’ah Advisory Board as well as the Securities and Exchange Commission (SEC).

    There are 46 mutual funds already listed on the memorandum quotation of the Exchange, including Lotus Capital Halal Investment Fund, another mutual fund under the management of Lotus Capital Halal Investments Limited.

    The Lotus Capital Fixed Income Fund is an open-ended collective investment scheme, which invests strictly in Shari’ah-compliant fixed income instruments and contracts such as sovereign and sub-sovereign sukuk, corporate sukuk, shari’ah-compliant fixed term investments, murabaha or cost-plus financing contracts and ijarah or lease contracts.

    Based on the Shari’ah, it implies that the Fund’s investments must be ethical and must not invest in interest bearing instruments such as treasury bills, conventional bonds or conventional bank deposits.

    Also, the Fund will also not invest in the stock market in order to avoid the associated volatility. The Fund intends to distribute 80 per cent of its returns to investors on a quarterly basis

    According to the fund manager, the Lotus Capital Fixed Income Fund seeks to attract investors interested in low risk, liquidity, capital preservation, shari’ah-compliant investment, competitive returns,     portfolio diversification and a regular income stream

    The Lotus Capital Fixed Income Fund projects a return on investment of 15 per cent for 2018. However, the Fund’s returns will be determined by the performance of the underlying assets and therefore, may deviate significantly from the forecast.

  • MTN Nigeria may sell 30% equity to retail investors

    Nigeria’s largest telecommunication company, MTN Nigeria, may sell some 30 per cent of its ordinary shares to Nigerian retail investors under its much-awaited initial public offering (IPO).

    Sources in the know of the arrangements for the IPO indicated that MTN Nigeria could sell as much as 30 per cent of its share capital to the investing public to ensure substantial number of the company’s shares is freely available in the hands of minority retail investors.

    MTN Nigeria plans to raise between $400 million and $500 million through an IPO scheduled for the second half of this year. The company had in 2016 appointed the advisory team and set out a roadmap towards listing on the Nigerian Stock Exchange (NSE) in 2017.

    Its board had announced the appointment of Stanbic IBTC Capital Limited and its affiliates, Standard Bank of South Africa Limited and Standard Advisory London Limited and Citigroup Global Markets Limited, as the joint transaction advisors and joint global co-ordinators for the proposed listing of MTN Nigeria on the NSE. The telco, however, missed the 2017 target.

    Sources said MTN Nigeria plans to have a free float of some 30 per cent, significantly above the minimum listing requirement at the NSE. Free float, otherwise known as public float, which refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors, who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake. This is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares exclude shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    MTN Group holds 75.8 per cent majority equity in MTN Nigeria. Public Investment Corporation Ltd holds 1.7 per cent. MTN NIC BV controls 2.8 per cent equity while Nigerian high networth investors hold about 19 per cent equity through many special purpose vehicles.

    Sources said MTN Nigeria will use the IPO to dilute the current shareholdings and free up shares for retail minority shareholders. MTN Nigeria is expected to be listed on the premium board of the NSE.

    Extant rules require companies on the premium board to have free float of 20 per cent or above N40 billion on the date the Exchange receives the company’s application to list. Companies on the main board is required to have 20 per cent of market capitalisation while companies on the third tier board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

    A draft of a review of the free float rules undergoing rule-making process requires companies seeking to list on the premium board to have a free float of 20 per cent of the company’s issued share capital made available to the public and held by not less than 300 shareholders; or alternatively valued at N40 billion or more, or any value prescribed by the Exchange from time to time, on the date the Exchange receives the company’s application to list and shall maintain same as long as it remains listed on the Exchange.

    Stock markets maintain minimum public float to prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation. Besides, it provides the general investing public with opportunity to reasonably partake in the wealth creation by private enterprises.

    Market sources said they expected MTN Nigeria to proceed as scheduled later this year despite the recent downtrend at the stock market, noting that MTN Nigeria is a good offer that will always attract investors. Many investors were reported to have placed funds on standby in their investment accounts with stockbroking firms.

    With more than 55 million subscribers, MTN Nigeria is the largest subsidiary in the MTN Group. Since inception in 2001, MTN Nigeria has led the growth in the voice market to become the biggest mobile operator in Nigeria and West Africa.

    Many analysts believe that the MTN Nigeria’s IPO will be the pioneer to launch the electronic IPO in the Nigerian capital market. Already, stakeholders in the Nigerian capital market have commenced preparatory process towards the full automation of IPO and other public primary offers in the Nigerian market.

    The full automation of primary issuance will involve automation of the process, approval, documentation, subscription and allotment of all issues, especially IPOs and public offers. With this, investors will be able to subscribe and make payment for IPOs and public offers online with such orders being matched and allotted electronically and directly to the investment accounts of the investors at the Central Securities and Clearing System (CSCS).

    The full automation will enable the primary market to operate within a designated transaction cycle, possibly within the T+3 four-day trading cycle currently being operated at the secondary market.

    Investors will also be able to monitor and change their orders within a designated period while subscribers with personal access to the internet and online stockbroking trading portals can make direct subscriptions from anywhere.

  • Transcorp appoints new ED

    THE Transnational  Corporation of Nigeria (Transcorp) Plc board has appointed Mr. Christopher Ezeafulukwe as an Executive Director. The appointment takes effect from July 1, 2018.

    Ezeafulukwe, who before his appointment was the Group General Counsel and Head, Business Development, will drive the development of new commercial interests as well as the optimisation of Transcorp’s existing investments in the power and oil and gas sectors.

    Transnational Corporation of Nigeria (Transcorp) Plc Chairman, Mr. Tony Elumelu, described Ezeafulukwe as an “invaluable member of the Transcorp team” whose “insights, drive and commitment to business execution are exemplary”.

    “His appointment will deepen and open new doors of commercial opportunities for Transcorp and all our stakeholders as we pursue our goal of providing power in every home, school, hospital and business enterprise in Nigeria,” Elumelu said.

    Group President, Transnational Corporation of Nigeria (Transcorp) Plc, Mr. Adim Jibunoh, noted that Ezeafulukwe brings exceptional value to the group.

    “We are certain that he will deliver on the high expectations of the board and management,” Jibunoh said.

    Ezeafulukwe brings to this role over 19 years’ experience in business development, legal advisory and company secretariat roles among others in a career spanning several industries. He holds an LL.B degree from the University of Lagos, a B.L-second class upper division, from the Nigerian Law School, an LL.M from the University of Lagos and another LL.M in Energy, Environmental & Natural Resources Law from the University of Houston, Texas.

    He is a member of the Nigerian Bar Association (NBA), Institute of Chartered Secretaries & Administrators of Nigeria (ICSAN), Association of International Petroleum Negotiators (AIPN) and until recently a member of the Executive Council of Association of Power Generation Companies of Nigeria.

  • Stakeholders allay fears over stock market downtrend

    Major operators in the capital market have allayed fears over the recent decline in share prices at the Nigerian Stock Exchange (NSE), assuring that the fundamentals of the market remain strong.

    The Chartered Institute of Stockbrokers (CIS) and Association of Stockbroking Houses of Nigeria (ASHON) assured investors of safety of their investments, noting that the depression was a temporary dip in the price cycle.

    They said the performance of quoted companies on the Exchange has been satisfactory and the current downswing was due to the general lull in the economy and other exogenous factors prompting both domestic and foreign investors to convert their shares to cash.

    They pointed out that the market remained undervalued; hence, investors have greater chances of higher returns when the situation becomes more stable.

    Chartered Institute of Stockbrokers (CIS) President, Mr. Adedapo Adekoje, attributed the bearish trend to panic sales by foreign portfolio investors, who are taking advantage of emerging higher returns on mutual funds in the United States (US) and Europe, leading to massive sale of their shares on the NSE.

    “Information about mutual funds in America and Europe that are giving five per cent return on investment (ROI) is attractive to foreign portfolio investors and they are offloading shares to take advantage of the investment opportunity. They are more comfortable with the new returns on mutual funds. The good news is that we are having good valuations. Investors should buy on long term basis and not short term,” Adekoje said.

    He urged the government to initiate policies that would enable the Pension Fund Administrations (PFAs) to increase their investments in the market.

    President, Association of Stockbroking Houses of Nigeria (ASHON), Mr. Patrick Ezeagu, said nothing was wrong with the Exchange in terms of governance structure, technology and compliance with the rules and regulations by stockbrokers.

    He noted that the quoted companies are also not doing badly when viewed against the general lull in the economy.

    “The Federal Government should intensify efforts in addressing security problems in Nigeria and keep on reassuring of a safe investment environment. Our market is full of opportunities but we need to sustain the momentum of assuring both indigenous and foreign investors that the market is safe,” Ezeagu said.

    According to him, the Exchange is a barometer that gauges the mood of the economy. Therefore, there is need to address investors’ fears in order to enable them take advantage of good returns associated with the market.

    “The current bearish trend is temporary as the market would bounce back soon,” Ezeagu said.

    Average year-to-date return for Nigerian equities opened this week at -3.73 per cent, technically implying that all gains so far recorded this year had been eroded and investors now carry average loss of 3.73 per cent. Compared to net capital gain of N1.34 trillion at the beginning of May 2018, the market opened this week with net capital loss of N273 billion.

    Benchmark indices at the Exchange indicated steep declines in share prices over the past 11 trading sessions as panic selling exacerbated mild profit-taking transactions that had moderated the market since last March. The equities market had started last month with a year-to-date return of 7.91 per cent, a slight decline but considerable return compared with 8.53 per cent recorded at the end of the first quarter.

    The All Share Index (ASI)-the common value-based index that tracks share prices at the Exchange opened this week at 36,816.29 points while the aggregate market value of all quoted equities stood at N13.336 trillion, their lowest values this year.

    The market had witnessed its worst decline last week, losing N908 billion in four trading sessions. The week-on-week average decline of 6.38 per cent last week eroded positive return and left the market with average negative return of -3.73 per cent.

  • Gwarzo goes to industrial court

    Suspended Securities and Exchange Commission (SEC) Director-General, Mr Mounir Gwarzo has headed for the National Industrial Court (NIC) to challenge his suspension by the Minister of Finance, Mrs Kemi Adeosun.

    In the case filed by his lawyers: Messrs A.U Mustapha, SAN & Co, Gwarzo stated that Mrs Adeosun, lacked the power to suspend him, arguing that only the President can suspend him with the approval of the Senate.

    Gwarzo is also contending that the Administrative Panel of Inquiry (API) set up by Mrs Adeosun was not properly constituted to be fair, impartial and unbiased in view of the fact that the Minister had already adjudged Gwarzo guilty of “proven cases of financial misconduct, unlawful carting away of sensitive documents”.

    He is seeking an order of the court reinstating him as SEC DG and payment of all his entitlements, emoluments, allowances and other perquisites for the period he was under the purported suspension.

    Gwarzo is also seeking an order of court setting aside the panel constituted by the Minister and the entire proceedings of the so called API as same negates the principle of natural justice. Joined as defendants in the case were SEC, Mrs Adeosun and the Attorney-General of the Federation

     

  • SEC cautions patrons of Ponzi schemes

    •Seeks incentives for quoted companies

    Securities and Exchange Commission (SEC) has warned the investing public against dealing with unregistered schemes and illegal operators and promoters of ponzi schemes.

    In a circular, the Commission advised the public to exercise utmost caution and conduct adequate due diligence on the status of operators and investment schemes to ensure they are duly registered before entering into any transaction with such operator. The list of registered operators and investment schemes are on the website of the Commission.

    According to the Commission, Section 38(1) of the Investments and Securities Act, 2007 requires any person who intends to operate as a professional in the capital market or carry on securities business to be registered by the Commission before engaging in such activities.

    “It is therefore illegal to carry on any kind of capital market business without registration or to patronize such person. In view of the above, the general public is hereby warned that any person dealing with any such persons in any capital market or investment related business is doing so at his or her own risk,” SEC stated.

    The Commission noted that while it is under a duty to protect investors, such duty does not include recovering funds for investors who against reason and public notices invest in products promoted by unregistered and unregulated entities.

    SEC reiterated its commitment to work with law enforcement agencies to bring promoters of such illegal schemes to book.

    Meanwhile, the Commission has advocated for some fiscal incentives for quoted companies on the Nigeria Stock Exchange (NSE) in order to reduce their costs and encourage more companies to list shares on the stock market.

    SEC Acting Director-General, Ms. Mary Uduk, noted that apart from reduction of costs, fiscal incentives will translate to huge investment benefits to shareholders and further position quoted companies to contribute more to national development through improved capacities and job creation.

    She added that creating some form of fiscal incentives for listed entities will add further mileage to ongoing efforts to improve corporate governance in the country.

    “Our case for fiscal incentives for listed companies on the NSE is actually based on experience. What we are saying is that Nigerian companies doing the same business these foreign companies are doing if they are listed should be encouraged in terms of public procurement or whatever government is doing.

    We don’t want to keep taking from them because they incur a lot of cost and you cannot reduce the cost more than a limited amount of percentage. The best is to begin to give them some incentives and with that you have more companies coming to the market, you have more jobs and then people will have dividends of investing,” Uduk said.