The Nation Newspaper

Tag: investors

  • Why Cross River is investors’ haven –Adah

    Special Adviser (SA) to Governor Liyel Imoke of Cross River State on Investment Promotion, Mr. Gerald Adah has attributed the recent upsurge in investments in the state by multinational companies to the deliberate policies of the governor.

    Speaking at the signing of a Memorandum of Understanding (MoU) between the Federal Government and General Electric, on Thursday in Abuja, the SA unveiled plans to establish a manufacturing and assembly facilities in Calabar. Adah said the enthronement of a peaceful environment, provision of first-class infrastructure and the setting up of a one-stop shop for business has made the state one of the most attractive to investors.

    According to him, “one major focus of the present administration in Cross River State is the development of a service economy with emphasis on growing the private sector. This propelled the establishment of an Investment Promotion Bureau with an embedded state level One-Stop Shop with the primary focus on increasing the level of FDI as well as facilitating business entry for incoming investors.

    “The present administration has also invested heavily on improving the security and environment of the state. This has earned the Cross River State the pedigree of the most friendly and welcoming state of the federation with the lowest crime rate. Cross River State indegiens are also very hospitable and friendly.”

    He revealed that “in the very recent past, Cross River State has witnessed significant investment inflow in the region of over $1.5 billion dollars with the coming in of major investors such as Wilmar International, engaged in Palm Plantations and Processing, Brentex Petroleum Ltd, Pipes Mills, Project Masters Nig Ltd., in the oil and gas sector, OCICL in Cement production to mention but a few.

    “Late last year, the state was involved in major engagements with very key investors such as General Electric (GE) who has just announced itsintention to establish a manufacturing plant and training facilty in Calabar, Lion Steel West Africa Ltd and Oriental Energy are both working towards the establishment of Pipe Mills Plants in Cross River State.”

    He revealed that for this year alone, the state is expecting investment inflows in the region of about $800 million.

  • Why investors shun Nigeria’s capital market

    Why investors shun Nigeria’s capital market

    At the first public engagement with the media last Thursday, the management of the Nigeria Stock Exchange led by Oscar Onyema gave insights on how the stock faired last year, reports Bukola Afolabi

     

     

    FRESH facts have emerged as to why the nation’s stock market failed to achieve optimum growth potential in the outgoing year.

    Early last year the managers of the Nigeria stock Exchange had projected that at the end of the year 2012, a record 20 companies would be listed at the Exchange.

    An upbeat Oscar Onyema, Chief Executive Officer of the NSE in a manner somewhat reassuring had told a packed audience at the time that the prospective companies would be substantial in terms of equity and value.

    But one year down the line, the blessed assurance has turned to forlorn hope.

    The NSE boss said that much at a news conference last Thursday where he lamented the parlous state of the market. According to him, the market for IPOs and new equity listings was flat – no IPOs and there were two new listings on the main board while a total of four companies were delisted, including FinBank Plc, following its acquisition by FCMB Plc, and Ablast Products Plc, Udeofson Garment Factory Plc and Hallmark Paper Products Plc, as a result of noncompliance with the Exchanges’ post-listing standards.

    Three banks were also delisted and relisted in compliance with the holding company structure mandate by the Central Bank of Nigeria (CBN), following the repeal of the Universal Banking Guidelines, in a move to restore regulatory and corporate governance soundness in the Nigerian Financial system.

    He said 20 companies indicated there interest at the end of year 2011 that they are coming to the stock market to be listed only 2 companies show up.

    According to Onyema besides unfavorable effects of the global financial crisis which lingered throughout the year, the country suffered fiscal challenges, double-digit inflation (12.3% in November), high lending rates (MPR of 12% in November), and a decline in GDP contributions from key sectors such as oil and gas (13.42% in Q3, down from 15.80% in Q1), to record GDP growth of 6.48% in the third quarter.

    The implementation of the nation’s policy on fuel subsidy last January also stalled economic activities at the beginning of the first quarter, the result of which was felt in the capital market through the first half of 2012.

    There was more excitement in the second half of the year with steady growth across most sectors, and the inclusion of selected Nigerian government bonds in the JP Morgan Government Bond Index Emerging Markets (GBI-EM). Consequently, international institutional investors flocked to the Nigerian bond market, while local institutional investors’ appetite for equities was reawakened.

    Notwithstanding certain prevalent, national and market-specific challenges, the NSE’s major index closed the year with its strongest performance since 2008, while other indices topped their performance pre-global financial meltdown.

    The NSE All Share Index gained 35.45% in 2012, as the Bloomberg showed, soared to 44.63% while the NSE Lotus Islamic Index, comprising Shariah-compliant equities, saw a 44.21% jump.

    Besides, the Bloomberg NSE Consumer Goods Index grew 42.29%, and the Bloomberg NSE Banking Index added 23.84% to its 2011 value.

    A few indices mimicked the negative trends affecting their respective economic sectors, including the Bloomberg NSE Insurance Index which shed 17.45%, and the Bloomberg NSE Oil/Gas Index which plunged 30.53%.

    Onyema has said entrance of local companies into the capital market was expected to improve the Exchange.

    The NSE boss, said the capital market which was dominated in the past by forging companies has witnessed increased in the presence of local companies being listed on the stock Exchange.

    “It is time that the rise of the Nigeria Stock Exchange was at the back of foreign companies and investor but we are happy to know that local companies are beginning to show interest into the market which has been responsible for the improvement of the Exchange. We are working hard to bring in new good local companies and we believe the rise in the market will encourage more local companies to come on board. Hopefully we will see companies coming into the market,” he said.

    The NSE boss also recalled that in March 2012, offered issuers greater flexibility to raise capital from the market, just as the Exchange amended its listing rules to include quantitative measurements for profit, market capitalization, price and public float, among others.

    To increase the level of market compliance, the NSE launched the Broker TraX tool at the start of the year. The tool provides transparency of broker and brokerage firm compliance with the rules of the market.

    The exchange also introduced the XCompliance Report, a transparency initiative designed to help maintain market integrity, by providing compliance related updates on all listed companies.

    This was followed by the release of the Market Quality Report (X-Qual) in November 2012, which offers brokers and analytical investors insight into how to derive best execution of orders in the market, and the quality of execution that can be expected.

    To enhance the investor experience, the NSE launched its new Web site in January 2012 with a real-time feed to a ticker, and rolled out X-Net, a virtual private network (VPN), to enhance brokers connectivity (20x faster than the previous offering) to the Exchange’s trading systems.

    The Exchange also commenced development and testing of its new trading platform, X-Gen, which will go live in 2013.

    NSE boss said that they are seeking Federal Government support to hit $1trillion capitalization mark in 2016.

    According to him, it is not impossible for the NSE, which currently has a market capitalization of N10tn, to reach $1tn (N150tn) mark by 2016, however, the support of the FG is needed in many ways to achieve this.

    He said “When we gave the target of 1trn market capitalization in five years. It was an aspiration target, we were aware that a lot of things had to align to be able to achieve this, for instance, we depended on the regulation of the power sector and the quick passage of the petroleum industry Bill.

    “And so, we need the support of the government to ensure that the 16 companies that would come out of the power privatization process would be listed on the NSE. The same goes for the telecoms companies we need government assist in getting them to list their companies also.”

    The NSE helmsman is also optimistic that this year would see gains by global investors hoping to emerge in the frontier markets.

    Despite an anticipated dip from 5.0% to 4.8% by the OECD, economies in Africa are forecasted to maintain a positive growth trajectory, underpinned by factors such as strong performance of oil-exporting countries, continued fiscal spending on infrastructures projects, and expanding economic ties with Asian economies, Onyema stressed.

    In a related development, the African Development Bank has issued the following GDP projections for key African economies: Ghana 7.7%. Angola 7.1%. Nigeria 6.6%. Kenya 5.5% and South Africa 3.6%.

    The outlook for the Nigerian economy also remains promising with a projected growth of 7.67% by the National Bureau of Statistics (NBS).

    While the impact of government policy on fuel subsidy and other macro-economic shocks were felt last year, the CBN’s restrictive monetary policies, expectations for stable crude oil prices, and the FGN’s continued effort at fiscal conservatism should create an environment for single-digit inflation rates and MPR reduction by the CBN.

    Although existing challenges such as the security situation in the country are not expected to disappear, on-going governments initiatives to increase power generation, financial inclusion, and transformation of the agriculture sector are expected to carry over into the new year.

    The Nigerian Capital Market will continue to face challenges around liquidity and depth in 2013, however, there is a concerted effort to drive improvements in market participant experience.

    The CBN’s efforts to achieve single-digit inflation and a lower MPR should have a positive impact on the equities market. As investor confidence measures implemented by the NSE mature, we expect that a growth trend similar to that experienced in Q4 2012 will extend into 2013.

    On the fixed income side, we anticipate the relative attractiveness of FGN bonds will continue for local and global investors, as a result of record-high yields. With the upcoming inclusion of Nigerian FGN bonds in the Barclay’s Emerging Market Local Currency Bond Index, this should keep the nation’s bonds in the international spotlight.

    Furthermore, foreign issuers such as the International Finance Corporation (IFC) are expected to enter the Nigerian bond market this year.

    Other contributing factors to optimism about the capital market include early passage of the national budget, which creates an impression that fiscal policy is being prioritized.

    The pronouncement to begin investing proceeds of the Sovereign Wealth Fund (SWF) in March 2013.

    Besides, Onyema is persuaded that the elimination of VAT and stamp duties, which should take effect in 2013, freeing up funds for capital market investment just as continued product innovation by the Exchange, such as the commencement of secondary bond market trading, and the introduction of new indices and ETFs.

    Notwithstanding the hopeful promises, many analysts are of the view that a lot is required to turn the tide for the market.

     

  • Investors lament non-listing of IPOs, private placements

    Investors lament non-listing of IPOs, private placements

    • We are engaging them, says SEC

    Investors have criticised the lukewarm attitudes of several companies towards listing their shares on the Nigerian Stock Exchange (NSE) many years after luring them to buy into their initial public offerings (IPOs) and private placements with promises of listing on the secondary market.

    Retail investors who spoke with The Nation said the non-listing of the shares of the companies which had undertaken IPOs during the 2005-2008 stock market boom have locked down their funds without any verifiable means of accessing such funds.

    But the Securities and Exchange Commission (SEC) said it was engaging the issuing houses that fronted for such IPOs and placements to encourage them to quicken listing of the shares.

    Several private limited liability companies had converted to public limited liability companies and floated IPOs to raise funds from the capital market with assurances that they would list their shares after the conclusion of the offer.

    While some have listed, many companies that floated IPOs have backed down from listing their shares citing the steeply downtrend at the stock market.

    IPO is the first sale of shares by a company to the general investing public.

    Shareholders said the non-listing of the shares was a breach of agreement noting that this has not only denied them the opportunity of knowing the true current worth of their investments but they have also been unable to retrieve their funds.

    National President,Nigeria Shareholders Solidarity Association (NSSA),Chief Timothy Adesiyan, shareholders expect capital market regulators to have taken up the issue of listing with the companies since they also gave similar promise to the regulatory authorities when they were seeking approvals for their offers.

    He noted that several shareholders were lured into buying the IPOs due to the promise of public listing on the Nigerian Stock Exchange (NSE) and resultant opportunity to trade on their investments.

    According to him, it was unbecoming of the companies to raise funds from investors and refuse to subject themselves to public scrutiny by listing their shares.

    “They have never called any annual general meeting; they have not paid any dividend nor make kind of return whatsoever on our money, no iota of accountability, they just sat on our money. It’s highly unbecoming and we want the regulators to do something about this,” Adesiyan said.

    Citing example of a popular insurance company, Adesiyan said capital market regulators should be decisive by compelling the companies to list their shares if they refuse to heed appeals from the regulators and shareholders.

    He said the sense of deception that underlined the non-listing and other revelations of shady deals in the market have adversely affected investors’ confidence in the market.

    However, a director of one of the companies that had delayed listing of their shares said they took the decision to suspend listing because of the fear that the recession at the stock market might seriously undervalue the shares.

    Citing other companies that had listed at IPO or above IPO prices, he noted that most of the listed IPOs have depreciated to their nominal values.

    Responding to concerns over the delayed listing of previous issues, Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, said the Commission had interacted with the affected companies to impress it on them the imperatives of listing their shares.

    According to her, the apex regulator has been engaging the issuing houses to the issues with a view to finding solutions to the problem.

    She however said the Commission would not compel the companies to list noting that the companies would have to be fully prepared in terms of corporate governance and compliance before listing their shares.

  • Dirt scares investors away, says Ajimobi

    Oyo State Governor Abiola Ajimobi at the weekend said an unplanned and dirty environment scares investors away.

    He said his administration was determined to make Oyo one of the cleanest states in the country.

    Ajimobi spoke at the Governor’s Office in Ibadan, the state capital, while inaugurating 39 mini refuse trucks meant for 13 local governments.

    He said the state had lost alot because of the impression that it was a filthy place.

    The governor said: “Today at the inauguration of these mini refuse trucks, we are fulfilling a major kernel of our promise to the people to institute an urban renewal programme that will reposition our state and our people as lovers of a clean environment and the aesthetics that go with it.”

    The governor said the procurement of the trucks was based on the requests of the 13 local governments.

    He said the remaining 20 local governments, which are agro-based, requested tractors and other farm implements.

    Ajimobi said the trucks would enhance a clean environment and urged the people to cultivate the habit of healthy living.

    He said: “Our administration will leave no stone unturned in making sure Oyo State wears a new toga of a clean and aesthetic state, as against the general belief that we are a filthy people, which we are not.

    “This is why I call on the people to cooperate with this administration in ensuring that the government’s efforts at ensuring a clean environment are fulfilled.”

    Giving reasons for the demolition of structures under the Molete Bridge and in Dugbe, Ajimobi said people must obey town planning rules.

    He said: “We do not have any interest in destroying the livelihood of our people, but it is also incumbent on us all to adhere to town planning rules and regulations by not erecting houses or stalls on set-backs and not selling at designated road paths.”

    Chairman, Association of Local Governments of Nigeria (ALGON), Oyo State branch, Yekeen Popoola said the trucks would address the delay in the evacuation of refuse and prevent epidemic outbreak.

    The council caretaker chairmen pledged to maintain the trucks.

    Eleven local governments in Ibadan, Ogo Oluwa council and Ogbomosho North council were the beneficiaries. Three trucks were given to each of the councils.

    Also at the weekend, non-indigenes, under the aegis of the Association of Non-Indigenous Residents of Oyo State (ANIRO), pledged their support for the state government.

    ANIRO President Dr Camillus Asumu spoke with reporters at the group’s secretariat in Ibadan on the association’s objectives.

    Asumu said the task of maintaining the peace and unity in the state cannot be left to Ajimobi alone.

    He said: “They have realise that not only soldiers die in wars, therefore, the task of security cannot be left to politicians alone. If we can sit and talk together as a united body, we can assist the government in securing peace and prosperity. This association was established for all non-indigenes to come together and play an active role in advancing the state.”

  • Nigeria is safe for investors, says Kuwait envoy

    Nigeria is safe for investors, says Kuwait envoy

    His Excellency Saad A.Al-Asousi is the Ambassador of the State of Kuwait to Nigeria. Al-Asousi has been in Nigeria since 2009 when his home government named him his country’s envoy to Nigeria.  He spoke with Assistant Editor Onyedi Ojiabor.  Excerpts:

     

    Your Excellency, how has it been since you came to Nigeria as Kuwait Ambassador to Nigeria?

    Kuwait has no Embassy in Nigeria before 2009. But relationship between Kuwait and Nigeria started more than 40 years ago.

    So why did you decide to open your embassy in Nigeria now?

    Over 40 years ago, Ahmadu Bello flew to Kuwait and Saudi Arabia and he asked them to support him to build the first school in Kaduna. Kuwait decided to donate to start the building of the school in Kaduna in 1965. We have been here since then. We have good relationship between Kuwait and Nigeria. Our brothers in Nigeria support us in different international organisations all over the world. We are member of more than 36 organisations all over the world. The government of Kuwait and the Nigerian government are cooperation in different ways to promote the relation between the two brotherly countries. I was appointed Ambassador of Kuwait to Nigeria in 2009. Since I was appointed I started working very hard to promote the relation with Nigeria . Since I came to this country I started to establish good relationship with the government and people of Nigeria , the media and universities. I have visited many universities. We are working to sign agreements between Kuwait and Nigeria . We have signed the first two agreements in the field of international investment between both countries. We are in the process of signing five more agreements between Kuwait and Nigeria . The second point is that we have requested our brothers in Nigeria to give us a piece of land to build our embassy here in Nigeria . We are in the process of building our chancery in Abuja . We are working to concretise our relationship with Nigeria . We are also working in different fields including economic field, which is the most important thing to us. We have held the first investment conference in Kuwait which we called “Invest in Nigeria .” We invited many people in Kuwait , we followed up with sensitization of the people. We used the media to sensitize the people of Kuwait about investment in Nigeria .

    What was the out come of the investment conference?

    Because of the situation in Nigeria after October 2010, most people were a little bit worried about security issue in Nigeria . But this doesn’t mean anything. Any time some people express anxiety, I use the media to tell them they can come to Nigeria to invest. I tell them their investment is safe, the country is safe, and that hundreds of companies are investing in Nigeria from South Africa, Europe, from America. I tell them that their money is safe, they are safe, and that they can come and invest and do their business. From this point, I want to invite all our brothers from both countries to find the chance to invest and there are a lot of chances in both countries. So the relation between Kuwait and Nigeria is strong and we are working very hard to further promote the relation. I think that we can make the relation much more stronger within few months because the Nigerian Ambassador to Kuwait and my humble-self are working very hard to promote this brotherly relation between both countries. This is the most important thing I can say now, I promise that within few months, we get our brother Ambassador of Nigeria in Kuwait to invite the officials from both countries to exchange visits to promote our relation and to show people all over the world that Kuwait is here to reach our goals and to do something good, and to concretise our relation between both governments.

    You have been in Nigeria for about three years. By the time you conclude your stay, what would you want to be remembered for as the first Kuwait Ambassador to Nigeria?

    I think the most important thing as the first Ambassador of Kuwait appointed to this country, relationship between both countries started in my time. Two, in my time the first agreement was signed between both countries. There was no agreement of any sort before 2009 between Kuwait and Nigeria . So in my duty as the Kuwait Ambassador to Nigeria we signed two agreements and we are planning to sign five more agreements. Most importantly I am working for our brothers from both sides to come and invest in Nigeria and in Kuwait . I was in a meeting and most of our brothers in the Foreign Affairs they know very well that we are working to show all over the world that there is a fruitful relationship between Kuwait and Nigeria.

    You talked about the security challenge facing Nigeria . Is there any way your country can assist Nigeria in the effort to address the challenge?

    I don’t think that Kuwait will have the power to do anything. We as a nation, we are a very small country. Kuwait is not in a position to support in the field of addressing security challenge. But we hope and pray not to see more security issues in Nigeria . We believe this thing can be solved. But it is not in our power to help our brother nation in this field. If we can and we have the power we will do it because we don’t want to see any of our brothers have any security issue. This is because when you have these issues, it will create difficulties with everything you can think of because they are one chain.

    You spoke about some political re-engineering taking place in your country when you visited Senator Bukar Abba Ibrahim in Abuja . Can you let us into some of these especially constitution amendment in your country?

    Regarding the situation in the last three weeks in Kuwait , it is a very long story. According to Kuwait constitution, the parliament of Kuwait was dissolved by the Emir of Kuwait because there was no cooperation between the government and the parliament. So, the Emir of Kuwait took a decision to dissolve the parliament. The period between the dissolved parliament and calling for a new election it is about one and half month. This period, according to the Kuwait Constitution, the Emir, the Ruler has the right to issue decree. We faced difficulty with the three elections in Kuwait , because there is a group that came to the parliament to take up some issues. During election, each Kuwaiti has four candidates. But we have taken a decision to ensure one man one vote. Each voter has the right to vote for one candidate instead of four candidates. Democracies all over the world have the some system of one man one vote. One man one vote is nothing new with Kuwait . We are not creating something new. What we are doing is according to the wish of the majority in parliament and democracies all over the world. And according to the constitution of Kuwait the new parliament which we will have can approve or reject what the Ruler mentioned. The parliament can vote and say one man one vote, we don’t accept it, we need one man four votes or three or two votes for one man. This is left to the new parliament to decide.

    Essentially, under the new rule, each voter chooses only one candidate instead of four. There are 397 candidates for the 50-seat parliament according to the election affairs electorate. For us in Kuwait , we have decided to invest in Kuwaiti citizen. The most important thing that the Kuwaiti Government decided to invest in is to give a very good education to the citizens. It is very important to invest in your citizens, give them good education, housing, good health system. The Kuwaiti Government takes care of the citizens from birth until he goes back to the grave. The government gives you free education, free health care, housing; the government supports you or if you want to buy a house the government gives you a loan without interest to buy a house. If you want to marry, the government gives you loan without interest to marry. The government gives you opportunity to work any where and if you are not working with the government and you are working with the private sector, the government supports the private sector to pay you a good salary. The government supports the private sector to give you good salary to Kuwaiti citizens working in that sector. We are Kuwaiti, we feel we are proud, from our government we are proud that we are doing all these things because we feel we are honoured to be Kuwaitis. And I feel that all our brothers in Nigeria are honoured to be Nigerians because they are working for Nigeria . For me as a Kuwaiti whenever I meet any media person I’m proud that I am Kuwaiti.

    You also spoke about your country’s relationship with the African Union (AU). In what ways is Kuwait assisting the growth of AU?

    The State of Kuwait got the power from the last African-Arab Summit that took place in Libya because, according to the arrangement, the summit should hold in one African country and another summit in Arab world. The last summit was in Libya and they decided that the next summit will take place in Kuwait . The summit will take place next year in Kuwait . We believe that most of our brothers in Africa will explore the opportunities of the summit. The summit has a laudable agenda. We will use the summit to continue to promote the relationship between Africa and the Arab world. Kuwait is currently supporting more than 40 African countries through the Kuwaiti Fund. Through the Fund we build schools, we build houses and hospitals. Through the Fund we build roads and other things. While at the summit in Libya we requested that we want to be observer in the African Union. Immediately we were accepted and we are now a member of the African Union as observer. The Head of State of Kuwait was invited to the last summit in July. He attended and gave his speech in the AU. He told them that Kuwait will donate to build the new African Union building. We are supporting and we have good relation with our brother African countries. We are assisting in agriculture, and building hospitals through the Kuwaiti Fund. The Kuwaiti Fund started working in Africa since early 1960s. We support and build schools, hospitals and equip them. With the Fund we are cementing our relation. With the Fund we have good relation with African countries and I believe that this relation will continue after and grow even stronger after the African-Arab Summit in Kuwait because the relationship will have legal framework to work together.

    As the Dean of Arab Ambassadors in Nigeria, what are your functions?s

    I have acted as Dean just for one week. So I’m one week old as Dean. I took over from my brother Ambassador of Saudi Arabia who is going to leave us within two weeks. As the Dean of Arab Ambassadors, my time is going to be very tight. It is my duty to discuss with our brothers in Africa . At the Ministry of Foreign Affairs, I will speak on behalf of Arab Ambassadors. African Ambassadors have their own Dean, Asian Ambassadors have their own Dean. All the Deans hold meetings; if there are issues of difficulty, the Ministry of Foreign Affairs would want to discuss with us. The Dean also tries to help any new ambassador if he needs any thing.

    Again, you have been in Nigeria for about three years meeting and interacting with Nigerians. What is your assessment of Nigeria and Nigerians?

    From the day I entered Nigeria , the people welcomed me. They told me some times I’m going to face some difficulty but frankly speaking, since I came to this country, I have not faced any difficulty. Life is going on smoothly. We don’t face much difficulty’. Nigeria is a very important country in the region. Nigeria is very strong and the country has a lot of chances for investment. From this country I call people to come and visit and see. Don’t listen, visit and see. You are listening about Nigeria , it is different, you are reading in the media, it is different. Visit the country and see the people. Come and see how the people will stay with you. I just say these things. The first day I met the Minister of Foreign Affairs, he told me ‘Mr Ambassador, this is my telephone number and my door is open’. You can’t find this all over the world that a Minister of Foreign Affairs will tell you, ‘Mr. Ambassador, if you need any thing, my door is open, this is my telephone number, any time you want to meet me, just give me a call’. For an Ambassador to find an official to be very close to you and you can contact him at any time, I believe that it is difficult to find that any where. I have been in Nigeria for three years now, when ever we meet any official they welcome you and tell you our door is open for any diplomat. They want to create a relationship, they want to promote this country, they want to do something for this country because they feel they are Nigerians.

     

     

     

     

  • Investors stake N200b on equities, bonds

    Investors staked N199.85 billion on quoted equities and bonds last week but the cautious optimism that later prevailed over the capital market could not totally erase the negative impact of bearishness that opened the week.

    While investors reduced stakes on equities, they stepped up investments in government bonds, a shift that reflected the largely negative pricing trend that opened the stock market.

    Total turnover on the Nigerian Stock Exchange (NSE) last week stood at 1.29 billion shares worth N9.41 billion in 19,825 deals as against turnover of 1.19 billion shares valued at N11.49 billion traded in 22,277 deals in previous week.

    At the over-the-counter (OTC) bond market, where Federal Government’s bonds are traded, turnover rose to 180.63 million units valued at N190.44 billion in 1,082 compared with 179.41 million units worth N187.51 billion exchanged in 1,196 deals two weeks ago.

    Although the overall pricing trend improved considerably by the middle of the week, the week-on-week market return still closed on the negative, particularly reflecting the major decline on Tuesday.

    The All Share Index (ASI), the benchmark common index that measures changes in prices of all quoted companies, closed the week with a drop of 1.19 per cent to close at 26,400.94 points. It had opened at 26,718.30 points.

    Aggregate market value of all quoted equities indicated net loss of N101.13 billion with closing value of N8.413 trillion. All main sectoral indices followed the overall downtrend. The NSE 30 Index, NSE Consumer Goods Index, NSE Banking Index, NSE Oil and Gas Index and NSE Lotus II Index dropped by 1.18 per cent, 1.48 per cent, 1.24 per cent, 2.65 per cent, and 1.47 per cent respectively. The NSE Insurance Index meanwhile appreciated by 0.29 per cent.

    Price movement analysis showed that 23 stocks appreciated while 43 stocks depreciated. The financial services sector accounted for 876.900 million shares valued at N5.328 billion in 11,454 deals. The oil and gas sector occupied the second position on the activity chart with a turnover of 135.055 million shares valued at N186.919 million in 1,161 deals. The consumer goods sector ranked third with 92.782 million shares valued at N3.119 billion through 3,850 deals.

    Altogether, the top three sectors accounted for 1.105 billion shares valued at N8.634 billion traded in 16,465 deals, thus accounting for 85.42 per cent, 91.71 per cent and 83.05 per cent of the volume, value and number of deals respectively. On stock-by-stock basis, Beco Petroleum Product Plc emerged the most active stock with a turnover of 105.093 million.

    Cadbury Nigeria Plc led the advancers with a weekly gain of N1.39 to close at N25.89 per share. NCR (Nigeria) followed with a gain of N1.31 to close at N14.40. Ashaka Cement added N89 kobo to close at N18.89 while UACN Property Development Company rose by 58 kobo to close at N11.98 per share.

     

  • Investors to pay N350m in land swap deal

    Investors to pay N350m in land swap deal

    The commitment of the Federal Government to rapid infrastructural development and delivery of affordable housing in the Federal Capital Territory has received a boost with the pre-qualification of 13 companies in the novelty land swap initiative.

    Pursuant to the requirement of the land swap framework and preparatory to commencement of discussion with the technical committee, the successful 13 companies are expected to within 30 days of receipt of their letters, open a Project Account with a reputable bank with the sum of N350 million commitment funds.

    The land swap policy is a development initiative recently introduced by the Senator Bala Mohammed-led FCT administration under which the administration would give land to investors in exchange for infrastructural development.

    The document indicated that 13 companies that have received the nod of the government in the project are: Dangote Group (promoted by billionaire Aliko Dangote), Gilmor Engineering Nigeria Ltd, (already involved in infrastructure development in Guzape district), China Railway Construction Company Limited (CRCC) (backed by the Chinese), First Aries Crude Oil Limited, System Properties Development Consortium Limited and Adkan Services Limite

    Others are Edimo Group, Ridley Group, Afri-International Projects & Consulting Limited; Hongye Group; Rosehill Group; Nimec Investment Company Limited and Balmus International Limited.

    A letter dated September 28, 2012 and signed by Faruk Sani, Coordinator of Abuja Infrastructure Investment Centre (AIIC) also directed the pre-qualified companies to “give specific and express instructions to the bank to monitor, inspect and take records of the account at any time without any recourse to the Project Account holders.”

    The letter indicated that a technical committee has been constituted to closely work with representatives of the firms to produce the following: survey plan, topography and contour maps; detailed site land use and layout; engineering design; demographic reports for resettlement and compensation and any other technical task critical to commencement of work.

    The letter also directed the firms to forward to the AIIC the list of their representatives for technical discussion after opening a project account with N350 million and mandating the banks to give specific and express instructions for the AIIC to monitor, inspect and take records of the account at any time without any recourse to the account holders.

    The Technical Committee of AIIC will only begin work at the expiration of the 30 days grace at the end of October hi.

    Investors, both foreign and local, had indicated interest in the land swap scheme initiative of the Federal Capital Territory Administration (FCTA) to accelerate delivery of affordable housing in the FCT.

  • Nestle Nigeria leads equities as investors gain N138b

    Nestle Nigeria leads equities as investors gain N138b

    Nestle Nigeria set a new market-wide all-time high of N615 value per share last week as investors pocketed about N138 billion in new capital gains.

    Nestle Nigeria led a compact but impactful pack of fast moving consumer goods companies that provided impetus for further market recovery. Other major gainers during the week included Guinness Nigeria, Cadbury Nigeria, Flour Mills of Nigeria, Nigerian Breweries and GlaxoSmithKline Consumer Nigeria (GSK).

    Nestle Nigeria’s share price improved by N35, representing an increase of 6.03 per cent. Guinness Nigeria followed with a gain of N17.20 to close at N277.20. Cadbury Nigeria added N3.62 to close at N27.56. Flour Mills of Nigeria gained N3.32 to close at N64.99 while Nigerian Breweries and GSK added N2.85 and N2 to close at N139.85 and N38 respectively.

    Gains by 48 stocks added N138 billion to aggregate market capitalisation of quoted equities, which rose from opening value of N8.282 trillion to close at N8.420 trillion. The All Share Index also reflected the gain with closing index of 26,442.67 points as against its opening index of 26,011.64 points.

    Total turnover stood at 4.76 billion shares worth N40.472 billion in 20,364 deals, a marked improvement from a total of 1.70 billion shares valued at N14.54 billion exchanged in 24,202 deals in previous week. The consumer goods sector accounted for 3.261 billion shares valued at N32.447 billion in 3,902 deals.

    The financial services sector followed with 905.262 million shares valued at N6.236 million in 11,327 deals.

    Turnover was largely driven by the transfer of majority equity holdings in Dangote Flour Mills Plc. The flour mills accounted for 3.178 billion shares, representing 66.78 per cent total turnover for the week.

    On the secondary over-the-counter bond market, investors staked N198.96 billion on 185.76 million units through 991. This represented a slowdown from the previous activity level, when investors staked N247.31 billion on 229.84 million units in 984 deals.