The Nation Newspaper

Tag: investors

  • Investors stake N26b on equities

    •Fola Adeola resigns from Eterna

    Investors showed keener interests in equities last week as the stock market rallied to a new highpoint amidst upsurge in demand for shares of mid-tier banks. The market recorded average weekly gain of 1.20 per cent last week, pushing the year-to-date return at the equities market to 33.02 per cent.

    The uptrend implied total weekly gain of N141 billion with intermittent profit-taking downsides mitigated by subsequent strong rallies.

    Investors staked a total of N25.68 billion on 2.12 billion shares in 31,806 deals, representing modest increase of 6.9 per cent on turnover value of N24.03 billion recorded on 2.29 billion shares in 29,048 deals in the previous week.

    Aggregate market value of all equities closed last week at N11.939 trillion as against its week’s opening value of N11.798 trillion. The All Share Index (ASI), the common value-based index that tracks all equities rallied to highest index point of 37,350.53 points as against its index-on-board of 36,907.81 points.

    All sectoral indices, except the insurance index, recorded substantial gains, underlining the widespread uptrend during the week. The NSE Consumer Goods Index, NSE Banking Index, NSE Oil and Gas Index, NSE-Lotus II, NSE Industrial Goods Index and NSE-ASeM Index increased by 2.51 per cent, 3.20 per cent, 1.45 per cent, 5.09 per cent, 1.76 per cent, and 0.31 per cent respectively. However, NSE Insurance Index declined by 2.83 per cent.

    The financial services sector remained the most active sector with 1.48 billion shares valued at N12.67 billion in 16,807 deals. The banking subsector was the main driver of the market with a turnover of 1.11 billion shares worth N10.44 billion in 11,839 deals.

    Turnover in the banking subsector was largely driven by activities in the shares of Skye Bank Plc, Zenith Bank Plc, Access Bank Plc, United Bank for Africa (UBA) Plc and Fidelity Bank Plc. Trading in the shares of the five banks accounted for 681.026 million shares, representing 32.13 per cent of total turnover volume traded during the week.

    On the over-the-counter (OTC) bond market, turnover stood at 226.05 million units valued at N263.63 billion in 1,352 deals, indicating a marked increase on turnover of 150.653 million units worth N173.49 billion recorded in 1,019 deals in the previous week.

    Meanwhile, Mr. Fola Adeola has resigned as the chairman of the board of directors of Eterna Plc.

    The company in a regulatory filing stated that it has accepted the resignation. It expressed confident that the exit of Adeola from the board will not adversely affect the company’s business. Eterna stated that it would soon make new appointments unto the board. Eterna had been embroiled in the fuel subsidy scam. The company has consistently denied allegations of fraudulent dealings by the government agencies.

     

     

  • Akwa Ibom targets Canadian Investors

    A team of Canadian investors are expected in Akwa Ibom to explore economic opportunities beneficial to the state.

    Governor Akpabio stated this on Monday in Uyo during his interraction with newsmen as regards his official trip to the Nigeria-Canada Economic Summit held in Toronto.

    Akpabio said: “I attended the Nigeria-Canada Economic Summit which was held in Toronto. I was happy with the high representation of Akwa Ibom people from the business, academia to the government circles. We had useful discussions with the would-be investors and also companies that are interested in doing business in Nigeria.

    “We also represented the people of the state in Canada and a lot of interest was shown, judging from the crowd that followed the Akwa Ibom delegation. I believe strongly that Canadian investors are coming to Nigeria. Outside investing in Federal Government concerns, Akwa Ibom would be the first port of call and we were able to sell the Ibaka Deep Seaport, the free trade zone with the possibility of establishing ammonia plant in the state”.

    The Governor, who described Canada as a major aviation hub in the world in the manufacture of hi-tech bombadier aircraft, noted that the state government delegation was able to sell the maintenance, repair and overhaul facility of Akwa Ibom International Airport.

    “I also went with the Nigerian delegation to take a tour of the bombardier facility. So I am hopeful that the effort with Canada would yield fruitful results,’’ he said.

    He said the Canadian investors has showed interest in the crude oil sector in the country, saying that Africa showcased Nigeria as the highest complaint on technical know-how due to the country’s law on local content which is beneficial to the citizens in the oil sector.

    Akpabio hinted that the delegation moved to Houston in the United States of America for oil retreat. He said there is hope that prospective investors would explore the opportunity by investing in the rich oil deposits in the country and in the sta

  • Shareholders, core investors to recapitalise quoted firms

    Against the background of the investors’apathy and dormancy at the primary segment of the capital market, shareholders and core investors in several quoted companies have opted to provide additional equity funds to their companies, putting rights issue as nearly the main equity-based means of raising funds.

    The primary segment of the capital market is the new issue market where companies can raise new equity funds through public offer or other combinations.

    However, while the secondary market, where quoted shares are traded, has recovered significantly, the primary market has been dormant since the recession in 2008. There has been no initial public offering or public offer in the market since then.

    The Nation’s check indicated that companies with substantial major investors’ holdings are falling back on the existing shareholders to bridge equity financing gaps and reduce dependence on short-term loans.

    Not less than four companies have initiated plans to float rights issue in the past three weeks. Shareholders of Diamond Bank and Sterling Bank had earlier this month approved plans by the banks to raise new funds through rights issue. Shareholders of Berger Paints on Monday mandated their board to float a rights issue of one new share for every three shares held. Resort Savings and Loans also secured the approval of the Nigerian Stock Exchange (NSE) to float a rights issue.

    Transnational Corporation of Nigeria (Transcorp) has opened application list for its rights issue, which is expected to raise about N13 billion. Transcorp is issuing about 12.91 billion ordinary shares of 50 kobo each at N1 per share. The right issue is expected to close on May 31, 2013.

    Both Transcorp and Berger Paints have indicated they intend to use the net proceeds of their rights issue to finance expansion and modernisation of their businesses. Berger Paints would use the net proceeds of the rights issue, which will be underwritten up to 30 per cent, to further modernise its factory. Transcorp will use the funds to finance its new power business and expand its hotel and agro-allied businesses.

    Both Sterling Bank and Diamond Bank are to raise equity funds to bolster their balance sheets and support tier Two capital as they seek to energise small and medium business financing.

    Rights issue gives the first right of refusal to existing shareholders and thus preserve shareholding structure. As such, rights issue is usually initiated with the prior consent of the majority shareholders, who must have indicated prior interests to pick up their rights.

    However, new investors can also buy into a rights-issuing company through rights trading on the secondary market.

    Market analysts said the growing list of rights issues early this year underscores the preparedness of core investors to refinance their companies.

    According to analysts, rights issue implies significant financial commitment by the core investors.

    They said they expected more companies to file for rights issue given the high gearing ratios of several quoted companies, which interest burden could stifle returns to shareholders in the period ahead.

    Managing Director, GTI Securities, Mr Tunde Oyekunle, said the recourse to rights issue was a sign of confidence of shareholders in the prospects of their company, especially the core investor, which would provide the larger chunk of the required capital.

    He added that the generally weak state of the primary market has left core investors with little option then to pick up the gauntlet.

    Economist and securities advisor, Sterling Capital Markets, Mr. Sewa Wusu, said the market scenario and timing did not favour public offer, particularly given the recent experiences and loss of value by most investors.

    “We are seeing more of rights issues because the core shareholders are ready to inject more funds to their company and still maintain their current holdings. The rights issue avenue will also give the existing shareholders the right to purchases new shares at a discount to the market price,” Wusu said.

     

  • Investors approve N6b dividend for Dangote Sugar

    Investors approve N6b dividend for Dangote Sugar

    Shareholders of Dangote Sugar Refinery on Monday approved payment of N6 billion as cash dividend for the immediate past year, representing a dividend per share of 50 kobo.

    At the Annual General Meeting (AGM) in Lagos, shareholders praised the performance of the company.

    National Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs Bisi Bakare, said the prudent method employed by the management of the company led to 25 per cent increase dividend payout from N3.6 billion to N6 billion.

    According to her, 2012 performance was unique because 60 per cent of the company’s refinery got burnt and the company still made good profit to increase dividend from 30 kobo to 50 kobo.

    National Coordinator, Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, said the 50 kobo dividend was quite impressive, considering the challenges the company faced during the period under review.

    “We are satisfied because it has not been easy for Nigerian companies. Dangote has done what the government could not do in terms of job creation. If the government can tackle security issues, companies will perform better,” Okezie said.

    In his address, chairman, Dangote Sugar Refinery (DSR) Plc, Alhaji Aliko Dangote, said that the company would have paid higher dividend but it needs to retain funds for the expansion of its refinery.

    According to him, the company’s target was to achieve local production of 1.5 million metric tonnes of raw sugar per annum by year 2018 harvest season.

    He assured that the outlook for the company was promising noting that this year would see better performance.

    He outlined that the company would use competitive prices to increase its sales volumes and profitability.

    He however noted that the new policy by the Federal Government on new sugar master plan, which is expected to take off by the year 2020 stipulates a 60 per cent tariff payment on raw sugar import as against current five per cent rate.

    He nonetheless assured shareholders that the board and management would continue to do everything within their powers to consolidate on the performance and sustain its leadership position in the industry.

     

  • ‘Africa’s stock markets should unite to attract investors’

    ‘Africa’s stock markets should unite to attract investors’

    Africa’s 24 stock markets should cooperate if they are to seize high levels of investor interest, Nicky Newton-King, Chief Executive Officer, Johannesburg Stock Exchange (JSE), has said.

    The leader of Africa’s biggest securities exchange, told AFP that global investors have their eye in Africa and the continent’s stock market leaders should seize the opportunity.

    “The appetite for Africa is very, very high. I think everybody is trying to find their way, to participate meaningfully in that. All of us who are privileged enough to run exchanges, need to figure out that these waves of investor appetite aren’t yours by right. Once they come, you have to be able to ride them properly. We should not be taking this as business as usual, this is a business opportunity,” she said.

    Newton-King said allowing South Africans to more easily place orders into Nigerian stock markets, or by allowing Kenyans to invest in joint-listed South African stock in KES shillings, would attract more foreign investors.

    She added that there are benefits from cross-listing, as the JSE learned when its leading shares moved to London. “When Anglo-American cross-listed in London, the amount of trades in Anglo-American increased.

    “South Africa’s percentage of trade in Anglo-American decreased, but the decreased percentage was worth more. In those cases you have to think quite bravely,” she said.

    She explained that the International Monetary Fund’s (IMF’s) forecast that the aggregate economy of sub-Saharan Africa will grow at 5.7 per cent this year, presents an opportunity for the continent, adding that the one way to channel the investor interest through African markets would be to make it easier to invest across borders and to improve liquidity in small markets so that assets can be bought and sold quickly.

  • Kwankwaso meets prospective investors in Kuwait

    Kano State Governor Rabi’u Musa Kwankwaso yesterday in Kuwait met with prospective investors in his state.

    Top on the list was the Chief Executive Officer of Kuwait Finance House (KFH), Sheikh Mohammad Sulaiman Al-Omar.

    There were others directors of the financial institution the governor wants to partner the state government to improve the new micro-finance banks in the state and other business areas.

    Kwankwaso said his administration recently established 37 micro-finance banks, besides seven others.

    The governor said this would enable the less privileged the state, which is the most populous in Nigeria, to have access to soft loans to improve their small businesses.

    He said: “We are the first state in Nigeria to benefit from the Central Bank of Nigeria’s (CBN’s) gesture of being granted licences for the establishment of 37 micro-finance banks at once. This shows our serious commitment to the matter.”

    The governor explained that the banks, which were established in January, would create over 740 direct jobs, besides various prospects that would follow as they introduce more products and services.

    He said because of poverty, which has been compounded by inaccessibility to credit facilities, several Kano residents, especially rural dwellers, have been suffering.

    Kwankwaso said his administration has begun various poverty eradication programmes, including the establishment of 21 institutions that will train unemployed youths and women to acquire various skills. Al-Omar told Kwankwaso that the institution was a pioneer of Shari’a-complaint banking.

    He added that it also provides a wide range of services and products covering banking, real estate trade finance, investment portfolios and financial markets.

  • Govt to pay PHCN workers’ benefits with investors’ $2.237b

    Govt to pay PHCN workers’ benefits with investors’ $2.237b

    The Federal Government plans to pay severance benefits of workers of the sold successor companies unbundled from Power Holding Company of Nigeria (PHCN) with the $2.237billion proceeds from investors who bought the assets.

    Although payment of the severance package is expected to start immediately the government concludes discussion on the issue with the electricity workers, the eventual handover process will still await the final payment by the successor firms for the assets they bought, a top official of Ministry of Power, said.

    The government and the workers are still discussing. The result of the biometric exercise carried out on the PHCN staff last year to determine genuine staff members that deserve benefits is being collated. After the collation and settlement of other outstanding issues with the labour group, the payment of the workers’ benefits will commence, but the exact number of PHCN staff that will benefit from the severance package is unknown, The Nation learnt.

    The preferred bidders for five generation and 10 distribution companies, according to the Bureau of Public Enterprises (BPE), have paid 25 per cent value of the bids they made, which totalled $559,445,573.96. The process of selling the remaining generation company – Afam Generation Company and (Genco) and Kaduna Electricity Distribution Company (Disco) – is on-going. The bids initially submitted by the investors didn’t meet the required criteria and were quashed.

    It was gathered that after the government and the workers have reached a consensus, the government will start the first payment with N50 billion and will continue the payment with the 75 per cent final proceeds expected from payments of the preferred bidders.

    The Federal Government has agreed to earmark N384 billion as severance package for the PHCN workers, while the labour union is demanding N700 billion. But an official confirmed that the power assets will not be handed over to the preferred bidders until they complete payment.

    However, the non-conclusion of issues in the power industry has grossly affected electricity supply. Power supply in most areas across the country has dropped by over 70 per cent from what it used to be last year.

    The Minister of Power, Prof. Chinedu Nebo, promised that power generation would rise to 4000 megawatts (MW) by weekend, which is much less than the 4,425MW generated last year.

    The 15 assets sold and the preferred bidders include Vigeo Consortium, Benin Distribution Company ($32.25million); Transcorp/Woodrock Consortium, Ughelli Power Plc ($75 million); CMEC/EUAFRIC Energy JV, Sapele Power Plc ($50,249,965); Kann Consortium, Abuja Distribution Company ($41 million); Aura Energy, Jos DistributionCompany ($20,464,968.15); Mainstream Energy Limited, Kainji Power Plc ($59,467,500); and Sahelian Power SPV, Kano Distribution Company ($34.25million).

    Other are Amperion Power Company Limited, Geregu Power Plc ($33 million); Integrated Energy Distribution & Marketing Company, Ibadan and Yola Distribution Companies ($42.25 million and $14.75 million ); NEDC/KEPCO, Ikeja Distribution Company ($32.75 million); and West Power & Gas, Eko Distribution Company ($33.75 million); 4Power Consortium, Port-Harcourt Distribution Company ($31million); Interstate Electrics Limited for Enugu Distribution Company ($31.5 million); and Northsouth Power Company, Shiroro Power Plc ($27,913,633.50).

     

  • ‘Africa’s stock markets should unite to attract investors’

    Africa’s 24 stock markets should work together if they are to attract high investors’ interest, Nicky Newton-King, Chief Executive Officer, Johannesburg Stock Exchange (JSE), has said.

    The leader of Africa’s biggest securities exchange told AFP that global investors have eye in Africa and the continent’s stock market leaders should seize the opportunity.

    “The appetite for Africa is very, very high. I think everybody is trying to find their way, to participate meaningfully in that. All of us who are privileged enough to run exchanges, need to figure out that these waves of investor appetite aren’t yours by right. Once they come, you have to be able to ride them properly. We should not be taking this as business as usual, this is a business opportunity,” she said.

    Newton-King said allowing South Africans to more easily place orders into Nigerian stock markets, or by allowing Kenyans to invest in joint-listed South African stock in KES shillings, would attract more foreign investors.

    She added that there are benefits from cross-listing, as the JSE learned when its leading shares moved to London. “When Anglo-American cross-listed in London, the amount of trades in Anglo-American increased. South Africa’s percentage of trade in Anglo-American decreased, but the decreased percentage was worth more. In those cases you have to think quite bravely,” she said.

    The International Monetary Fund (IMF) forecasts the aggregate economy of sub-Saharan Africa will grow at 5.7 per cent this year, also presents a giant opportunity for the continent.

    Newton-King said one way to channel the investor interest through African markets would be to make it easier to invest across borders and to improve liquidity in small markets so that assets can be bought and sold quickly.

     

  • Sterling Capital woos investors to money market funds

    Investors seeking stable and steady incomes should take advantage of the ongoing Initial Public Offering (IPO) of ARM Money Market Funds, Sterling Capital Markets has advised.

    Asset and Resource Management Company Limited (ARM) is offering 1.0 billion units of N1 each at N1 in the IPO for its ARM Money Market Fund. Minimum subscription is 50,000 units amounting to N50,000 and subsequent multiples must be 1,000 units. The ARM Money Market Fund is an open-ended mutual fund authorised and registered in Nigeria as a unit trust scheme.

    Head, Investment Advisory and Research, Sterling Capital Markets Limited, Mr Sewa Wusu, said the expertise and experience of ARM as the fund manager would ensure the realisation of the collective investment scheme’s objective of steady stream of income to investors.

    He said the mutual fund would distribute incomes to investors quarterly with option for investors to cash in their incomes or re-invest their dividends, which make it a good investment outlet for short to medium term investors as well as long-term investors.

    According to him, as an open-ended fund, the units of the fund can be bought and sold easily, thereby providing immediate liquidity to investors.

    “Safety of investor funds is assured through adherence to the strict provisions of the trust deed and an experienced investment committee. The fund manager has impressive track records having successfully managed several funds and delivered on their forecasts,” Wusu said.

    Sewa said the fund would seek to achieve a liquid and highly profitable portfolio through active security selection consistent with the fund manager’s daily assessment of market liquidity and credit risks.

    He noted that the fund would maintain a weighted average portfolio maturity of 90 days and would only invest in high-grade instruments that have a term to maturity of not greater than 366 days at the time of issuance.

    He outlined that the high quality of the short-term money market instruments and sovereign guarantee of government securities would make investments in the mutual funds almost risk free pointing out that the fund has a risk rating of ‘Prelim Aa(f)’ by Agusto & Co, which shall be subjected to annual review throughout the life of the fund.

    “The fund provides good opportunity to investors seeking to optimise their returns at minimal risk. It’s a relatively cheap opportunity for investors to build wealth at a considerably lower risk and potential returns,” Wusu said.

    He said the fund would invest 40 per cent of its funds in short-term government securities and 60 per cent in money market instruments including bankers acceptances, certificate of deposits, commercial papers, fixed deposit placements with eligible financial institutions, collaterised reverse repurchase agreements (reverse repos), treasury bills and other approved short-term debt instrument issued or guaranteed by the CBN or Federal Government.

    He noted that Sterling Capital Markets, as the issuing house, has employed multi-channel online systems that allow investors to access information and subscription to the fund, in addition to wide distribution of the prospectuses and application documents.

    Besides, the money market fund, ARM manages the ARM Aggressive Growth Fund and the ARM Discovery Fund, which have continued to perform above market average.

    Established in 1994,ARM started operations as a traditional asset management but has over the years, metamorphosed into a diversified financial services institution with two distinct business segments – asset management and specialised funds – within which various products and bespoke asset management services are offered to its diverse clientele.

     

  • New template for aviation investors coming

    New template for aviation investors coming

    The Federal Government is set to introduce a new arrangement for potential investors in the provision of aviation infrastructure as part of plans to consolidate its master plan in the sector, investigations have revealed.

    Part of the new arrangement is setting a timeline as well as funding options and credit guarantee for the investors in airports nationwide, a source hinted last week.

    Under the new arrangement, any concession or lease rentals as well as other retail offerings that will be offered for private sector involvement must meet the conditions spelt out by the government under the watch of the Federal Airports Authority of Nigeria (FAAN).

    The new terms of engagement, according to investigations, is coming on the heels of the incidence of legal tussle between FAAN and some concessionaires that have sealed deals in the past that have gone awry.

    The concessionaire agreements signed between FAAN and some firms have become subject of litigation and controversy following disagreement between the authority and the firms to review the details of the deal in line with contemporary business practices.

    The Managing Director of FAAN, Mr George Uriesi, told The Nation: “Well, we are doing this right and doing the right things. We are not doing anything for myself, or the minister. We are doing what is right for the business. Any concession agreement that we strike is done the way. It is done elsewhere in the world.

    “And so, the criteria are clear, the business expectations are clear, unlike in the past . We are not doing anything with anybody unless we have evidence from the banks that they are funding the project and the money is there. This will be from the day you sign the agreement and the day you start construction is perked on a timeline, which is six months.”

    If any investor does not start within that period, which was stipulated in the agreement, the deal is no longer tenable. The new arrangement is that from the day you start construction, we will follow up to ensure the timeline is observed fully.

    The new arrangement is such that under normal circumstances, if there is default, by the concessionsire, penalty kicks in . There is no question of saying the thing has been concessioned to somebody in 1998 or so when you have not done anything.

    The new rule is that you do not need to sign any agreement with FAAN, unless you have the money. From now on, six months after signing any agreement , you have not started any construction , the agreement will be cancelled.

    I am convinced the message is getting clearer now that nobody is going to come into FAAN and do any business just because they know somebody in FAAN, we have gone beyond that level.

    You must have a business proposal on paper that meets our criteria, and now have very stringent criteria , in accordance with the global airport standard. If the business proposal is sound and could earn money for FAAN, we will sign you on . This is about giving opportunity to every investor. It is not going to be business as usual.”