The Nation Newspaper

Tag: equity

  • Equities look to Q3 earnings for renewed rally

    Equities look to Q3 earnings for renewed rally

    Investment managers and market pundits have predicted a renewed rally in the stock market in the weeks ahead on the back of third-quarter earnings reports by quoted companies.

    As companies round off their operations for the third quarter, market is already expectant of the nine-month operational results, which most analysts take as windows for preview of full-year earnings and returns.

    Early filers are expected to turn in their interim results for the nine-month period ended September 30, this year in October while all quoted companies are generally required to turn in their interim results for the third quarter on or before November 15. The regulatory filing calendar of the Nigerian Stock Exchange (NSE) stipulates November 15 as the mandatory due date for final submission of third quarter earnings reports, although the Exchange may in its discretion grant an extension till December 14.

    Post-listing rules of the NSE requires that audited annual accounts of companies should be submitted within three months after the year end while quarterly financial statements are expected to be made available 45 days after the end of the quarter.

    Investment analysts at Morgan Capital Group said increasing positioning for the third quarter earnings would trigger bullish rally as investors seek to evaluate the dividend potential of the stocks.

    According to analysts, with the sustained bearishness in recent weeks, investors have largely adopted a wait and see approach with low risk appetites for perceived as the apathy for the perceived volatile banking stocks persist.

    Analysts noted most investors have chosen the safety of regular dividend paying stocks notwithstanding that some of these regular dividend-paying stock are currently trading at high price-earnings multiples with low dividend yields at current prices.

    Analysts urged investors to remain focused on stocks with good fundamentals that have the capacity to retain value noting that even when their prices crash, they are the quickest off the mark in price appreciation when the market sentiment becomes bullish.

    Managing Director, GTI Securities, Mr Tunde Oyekunle, said third quarter earnings reports could provide impetus for a new round of rally as investors anticipate returns by the year-end.

    According to him, early results for the nine-month period would wet investors’ appetite and enhance the prospects of market’s recovery.

    The stock market opened this week with a 15-day negative return of -0.42 per cent, showing no letdown in the bearishness that had shaved off about N510 billion in equities’ values in August. The reversal in August had reduced average year-to-date capital gains at the Nigerian equities market from about N3.03 trillion by the end of July to N2.52 trillion by the end of August.

    Average returns at the market, as indicated by the All Share Index (ASI) of the Nigerian Stock Exchange (NSE), shrank to 29.10 per cent by the end of August as against 35.03 per cent recorded by the end of July. Average year-to-date return opened this week at 28.56 per cent after it lost 0.84 per cent last week.

    Nigerian equities had consolidated their bullish rally in July as market capitalisation added N581 billion to throttle back to N12 trillion. Aggregate year-to-date return improved from six-month value of N2.45 trillion to N3.03 trillion by the end of July. After the downtrend in June, the market was particularly spectacular in July with a month-on-month average return of 5.08 per cent.

    Aggregate market value of all equities closed July at N12.007 trillion as against its opening value of N11.426 trillion for the month. The ASI also rose from month’s opening index of 36,164.31 points to close at 37,914.33 points.

    The stock market had closed the first half with average return of about 28.8 per cent, equivalent to N2.45 trillion in capital gains. Aggregate market value of all equities on the NSE had closed the first half at N11.426 trillion as against its value-on-board of N8.974 trillion that started the year, representing an increase of 27.3 per cent. The ASI had risen from 2013’s opening index of 28,078.81 points to close the first half at 36,164.31 points.

    The first half performance was moderated by the downtrend in the latter half of June, which saw the month closing as the most bearish month with a loss of N649 billion. Equities had shown brighter performance in the first five months with whooping capital gains of N3.10 trillion. Aggregate market capitalisation of all equities had closed May at N12.075 trillion while the ASI had indicated a five-month average return of 34.6 per cent.

     

  • NSGF seeks sale of 49% equity in NNDC

    The Northern States’ Governors’ Forum (NSGF) yesterday advised the New Nigerian Development Company (NNDC) to sell 49 per cent of its equity to the public.

    Its Chairman and Niger State Governor Babangida Aliyu, on behalf of his colleagues, spoke at the opening of a three-day management retreat for the company’s workers in Kaduna.

    Aliyu noted that the poor performance of the NNDC necessitated the sale of some of its investments, such as the Arewa Hotels.

    He said: “You may, therefore, find it expedient to work out the investment portfolios of each state and issue certificate appropriately, while at the same time proposed a private placement of about 49 per cent for the consideration and approval of the governors.”

    The governors’ chairman noted that the company must refocus and improve on its performance to survive.

    “We should be concerned that after 56 years of operations, the NNDC is performing epileptically when similar companies in other parts of the country have grown into gigantic business conglomerates.

    “We must encourage and support the company to make private equity investments in Northern-based enterprises,” Aliyu said.

    According to him, such a step would attract capable individuals with a view to re-capitalising same and realising revenue from divestments.

    He said it would also enable NNDC “take strategic investment positions in public quoted companies whose operations are of economic relevance to the North”.

    Aliyu also urged the company to invest in “the untapped potential inherent in the northern region, particularly in agriculture, education, mining and infrastructure”.

    He advised the company to strengthen its human capital development programmes to enable it compete and negotiate favourably with international businesses and communities.

    The NSGF chairman urged the participants to use the training as an avenue to brainstorm and ensure that the company’s five-year strategic plan bears fruit.

    Also, Kaduna State Governor Mukhtar Yero stressed the need for collaboration with the state for economic development and capacity building.

    Yero was represented by his deputy, Amb. Nuhu Bajoga.

    The governor noted the challenges that had bedevilled the company, such as “pursuance of non-profitable projects, lack of viable plan to guide activities and other management oriented problems”.

    Yero was optimistic that the NNDC’s five-year strategic plan would aid its restructuring and enhance the economy of the region.

    The Group Managing Director of NNDC, Dr Ahmed Muhammed said the retreat would enable participants to assess long term business assumptions and conduct traditional SWOT analysis.

    He said the participants would also discuss issues on monitoring and evaluation of the plan.

    The Chairman, Board of Directors of the company, Prof. Halidu Abubakar, advised northern governors to ensure strict and regular monitoring of the implementation of the proposed strategic plan.

    Also, Mr Philips Folunsho, the Chairman of the Nigeria Economic Summit Group (NESG), said there was need for the company’s management to imbibe positive attitudinal changes to achieve its set goals.

    He advised the company to summon a collective northern economic summit to enable it adopt new strategies to achieve its goals and improve its investments.

  • Aganga inaugurates committee on Private Equity, Venture Capital

    Aganga inaugurates committee on Private Equity, Venture Capital

    The Federal Government has inaugurated a committee for the development of a Private Equity and Venture Capital framework for Nigeria.

    Inaugurating the 19-man committee in Abuja, the Minister of Trade and Investment, Mr Olusegun Aganga, said the ministry was committed to building a credible and vibrant equity and venture capital sector to boost investment, provide equity capital and business development support services for Micro, Small and Medium Enterprises.

    The terms of reference of the committee include to access the current regulatory environment and legal framework for Private Equity and Venture Capital in Nigeria; provide recommendations regarding changes necessary for catalysing development of the industry to compete with others in Africa in terms legal and regulatory framework and fund administration capacity , and provide recommendations on changes necessary to either funds geared towards start-ups and SMEs or take investments in SMEs more attractive to existing funds, among other things.

    Aganga said: ”We want to attract credible venture and equity capital investors into the country so that they can help to provide equity capital and business development support services to our small and growing businesses across the country.

    “Our immediate objective is to develop a strategy, including a targeted and comprehensive legal, taxation and regulatory framework for further development of the domestic and international private equity and venture capital sector in Nigeria in particular, as an effective vehicle for attracting investments into Small and Medium Enterprises in order to create jobs and generate wealth for our country.

    “Our long term vision is to a greater level of international investment into Nigerian businesses and entrepreneurs, infrastructure projects and the economy in general and to establish Nigeria as the leading centre for fund formation in Africa.

    “This initiative is a new way of developing a new fund administration and management sector that will strategically position i Nigeria as the leading destination for fund formation in sub-Sahara Africa in terms of venture and equity capital.We have the people, the experience and the knowledge in this committee to make that happen.”

    Also, the Director-General, Securities and Exchange Commission, Ms Arunma Oteh, said SEC would partner Trade and Investment Ministry to ensure the success of the programme.

    She said: “We are honoured to be associated with the Minister of Industry, Trade and Investment. This initiative is very much in line with President Goodluck Ebele Jonathan’s desire to create jobs and ensure that we have an economy that can compete with the comity of economies around the world.”

     

  • AMCON acquires second biggest equity in FTN Cocoa Processors

    AMCON acquires second biggest equity in FTN Cocoa Processors

    Asset Management Corporation of Nigeria (AMCON) has emerged the second largest shareholder of FTN Cocoa Processors Plc following indirect acquisition of equity stakes in the agro-allied company.

    The Nation gathered that the acquisition indicated that the corporation became the second largest shareholder of the company after it acquired provisionally bad loans related to the shares of the company.

    According to the latest shareholding analysis of the company, AMCON has 13.96 per cent equity stake, the second largest stake after 25 per cent equity stake held by the Managing Director and founder of the company, Mr Abiola Aderonmu. An executive director, Mr Akin Laoye, holds the third largest stake of 7.5 per cent.

    With the acquisition, AMCON owns about 307.23 million ordinary shares of 50 kobo each of FTN Cocoa Processors, which places the bad loans management special purpose vehicle within the few shareholders that control the direction of the company.

    Some 0.41 per cent of the 5,676 shareholders of FTN Cocoa Processors control 70.53 per cent of the equities of the company. Besides AMCON, other strategic shareholders included Mr Aderonmu, who holds 551.9 million ordinary shares of 50 kobo each and Mr Laoye, who has 165 million ordinary shares of 50 kobo each.

    Altogether, the three main shareholders hold 1.02 billion ordinary shares of 50 kobo each, about 46.4 per cent of the total outstanding shares of 2.2 billion ordinary shares of 50 kobo each.

    AMCON is reported to be the second largest holder of quoted equities after the pension industry but the specific shareholdings and extent of control are not known.

    The corporation had invested some N3 trillion in the purchase of non-performing loans and recapitalisation of banks. Consequently, AMCON now has assets spread across the country including real estate properties and shares that were used as collaterals for loans. The corporation also has shares in nearly all banks in the country and several quoted companies.

    FTN Cocoa Processors, a pioneer-status agro allied company involved in processing of cocoa beans and palm kernel into cocoa cake, liquor, butter, powder, palm kernel oil and palm kernel cake, has struggled with lower sales and declining bottom-line.

    It posted a loss of N220.2 million in 2011 just as it sales dropped by 30 per cent from N1.2 billion to N836.9 million. This slightly impinged on its shareholders’ funds, which fell from N2.26 billion to N1.94 billion.

    Meanwhile, the company has started arrangements to explore the possibility of raising new funds to enhance its capital base.

    The board of directors of the company has sought and secured shareholders’ approval to raise new funds to meet the business operations of the company, kick-starting the pre-issuance process.

    According to the approval, directors of the company could raise new funds through equity issue or long-term debts including debenture, bond, rights issue, public offer and any combination of debts or equities.

    The board has also secured approval to enter into technical and management alliances with any foreign or Nigerian organisation with a view to enhancing its operations.

    The new funds might not be unconnected with the ongoing efforts to strengthen the operational base of the company.

    It had recently expanded its cocoa processing capacity from 10,000 metric tonnes per annum to 20,000 metric tonnes per annum. It also acquired a 50-metric tonnes per day vegetable oil refinery.

    Managing director, Asset Management Corporation of Nigeria (AMCON), Mr. Mustafa Chike-Obi, has said the corporation would not engage in any large disposal of its assets in the immediate future.

    According to him, AMCON would hold on to its assets to realise the intrinsic values of the assets in the foreseeable future.

    “We believe the assets will appreciate, it will be premature to sell now,” Chike-Obi said.

  • Osun, Hijrah and equity

    Osun, Hijrah and equity

    This piece is not for the Christian bigot or Muslim fanatic. Neither is it for the emotively misguided, warring for God who could war for Himself. It is rather for the open-minded; with absolutely no hang-up about religion, the bastion of immensely personal faith.

    Look at Nigeria’s green-white-green. Isn’t green rather dull for Nigerians known for their vigour, dynamism and corky pride, when the subject is national bragging rights?

    Why would anyone therefore pick such drab colour for Nigeria, when Britain the departing colonial master had draped itself in a blaze of red, blue and white?

    Why green? A surreptitious tinge of Islamic green, as parting gift to the Sokoto Caliphate and its green flag, for its lasting partnership in the British colonising mission in Nigeria?

    Look at the Nigerian currency: N1, 000, N500, N200 and N100 notes. All have Arabic inscriptions. Yet Nigeria’s lingua franca is English, not Arabic.

    None of Nigeria’s native national communities has Arabic as their mother tongue, though a lot of Muslim scholars and clerics in these communities use Arabic as the Islamic code: for teaching and scholarly discourse; a reality that led the religiously liberal Yoruba to tag Muslims Imale (literally, hard stuff, regarding Arabic), as distinct from Igbagbo (Christianity).

    That tag underscored the relative inaccessibility of Arabic in the local Yoruba community, since they could access Christianity by English (the colonising language) and Yoruba (their mother tongue, thanks to the works of Bishop Ajayi Crowther, who translated the Bible into Yoruba). Islam enjoyed no such twin-luxury of lingo accessibility, even if both religions are bastions of unquestionable faith, and Islam had cohabited with Yoruba traditional beliefs long before the advent of Christianity.

    There appears therefore ample evidence of Islamic symbolism in the panoply of Nigerian national symbols, even if Nigeria is constitutionally a secular state.

    But look at the other side of the religious coin. The government calendar and the routine work-free days are decidedly Christian. The colonial master worked from Monday to Saturday and worshipped on Sunday. So, Nigeria’s official rest day is Sunday, after the Western, Christian calendar.

    Femi Abbas, a Friday columnist with The Nation, has claimed Seventh Day Adventists, a Christian sect, successfully persuaded Gen. Yakubu Gowon to, from half-day, make Saturday a full work-free day, since the Adventists worship on that day. But not even the strong Islamic lobby could persuade the British colonialists and independent Nigerian governments to make Friday, the Muslim rest day, work-free, though Muslims are allowed ample time for Friday Jumat prayers.

    Before aligning the school calendar with the international September-July cycle, the January to December calendar was decidedly Christian. Schools took short breaks in the first term in April (which dovetailed with Easter), second term in August and the end-of-year longer holiday in December (which also dovetailed into the Christian Yuletide, a season in Christendom starting from December 24 – Christmas Eve – to January 6, well beyond the Christian New Year’s Day of January 1).

    Indeed, ever so adaptive Yoruba Christians have promptly tagged Christmas, Odun Kekere (small festival) and New Year’s Day, Odun-Nla (big festival). Besides, the harmless Yuletide wish of “a merry Christmas and happy New Year” holds in its goodwill cheer an imposed Christian calendar.

    Indeed, Yuletide appears some unseen parallel to Saudi Arabia, which theocratic court declares as many as 10 days to celebrate the two Islamic feasts of eid-al-fitr (after Ramadan) and eid-al-adha (which Yoruba adherents simply tag Ileya – literally, “time to go home and feast”).

    The Nigerian case is even more interesting when compared with Egypt, a secular state with a Muslim majority and a sizeable Coptic Christian minority. Egypt, each year, celebrates the Coptic Christmas (January 7), Orthodox Easter (April 25, this year). For the Muslim festivals of eid-al-fatr, it sets aside three days of public holiday, and four days for Qurban (eid-al-adha). It also observes a public holiday for Al-Hijrah, the Islamic New Year, but only recognises what, in most of the Arab world is called the international New Year’s Day, January 1, though on that day, offices remain open.

    From the foregoing therefore, it would appear Nigeria is under the twin-domination of Muslim and Christian symbolisms, which is just as well: since a majority of Nigerians claim to be Christian or Muslim.

    It is also clear that though officially January 1 is not in Nigeria a Christian holiday, its root is Christian. It is the first day in the Gregorian calendar, decreed into being by Pope Gregory XIII on 24 February 1582. Besides, January 1 cannot be totally separated from the international celebration of the Yuletide, the Christmas season.

    That moves the discourse to the hoopla State of Osun Governor, Rauf Aregbesola, caused with his declaration of November 15 as Hijrah (Islamic New Year’s Day) this year.

    Was the governor right by law? No doubt. Was it politic? Not convinced: that the Yoruba are famously tolerant of rival faiths does not eliminate residual Christian-Muslim tensions, which the Hijrah declaration appeared to have goaded in many a Christian psyche.

    Was the declaration legitimate? If legitimacy is interpreted as quiescence in Osun, it would appear so: for while Osun Muslims appear happy and proud of their latest concession from the state, hardly any Christian groups have growled over the holiday.

    So, why the media hue and cry? Perhaps because a governor just accused of putative Islamisation should be very circumspect on religious matters. That is good faith.

    But much of the media flak veered beyond good faith into impish intolerance and sweeping but false claims. The most blatant of these claims that no Arab and Muslim country has Hijra as public holiday is false.

    According to www.schoolholidaysguide.com, Egypt, Malaysia (marked as Awal Muharram), Indonesia, Kuwait and United Arab Emirates (UAE) have Hijrah as public holidays, though all of these countries, except Egypt, also observe January 1 as public holiday. Saudi Arabia runs an official Islamic calendar but does not declare Hijrah a public holiday. Neither does it declare January 1. Hijrah is no public holiday in Pakistan. But Pakistan also only observes January 1 as “banker’s holiday”, according to information on this website.

    Thinking Aregbesola’s Hijrah move is impolitic, therefore, is within the explosive realm of political gains and losses. If that Machiavellian motive indeed drove the declaration, then it is well and truly condemnable.

    But if it was driven by meeting deeply felt but much repressed Muslim aspirations, there is nothing sinister about it, so long as no non-Muslim is forced to join in the Hijrah celebrations.

    The notorious fact is that the Nigerian Christian and Muslim majority, having carved the country in their twin-images, bawl and scream anytime they sense a tilt on the domination scale. That is no ode to tolerance.

    So, let all in the State of Osun beware. As citizens, Osun Muslims have a right to Hijrah. But adherents of other faiths, like African traditional believers, have rights too.

    So, when this most repressed group come to the fore to claim their own religious rights, let no one turn emergency jihadists or crusaders!