The Nation Newspaper

Tag: NSE

  • Seven firms get deadline to restructure capital

    The Nigerian Stock Exchange (NSE) has directed the boards of Great Nigerian Insurance (GNI) Plc, Chellarams Plc and Nigerian Ropes Plc to restructure their companies’issued share capital to dilute the existing concentrated shareholdings of the core investors and allow more investments from the general investing public.

    The addition of the three new companies increased the number of companies that have been given deadlines to restructure their outstanding shares to seven. The four other companies included Dangote Cement, Union Bank of Nigeria (UBN), Wema Bank and Capital Hotel Plc.

    In the latest report on public shareholding status in quoted companies obtained by The Nation, the NSE indicated that three other companies were in violation of the listing requirement, which compels companies quoted on the main board of the NSE to ensure that a minimum of 20 per cent of its issued shares is in the hand of the general investing public.

    The management of the NSE stated that it has notified the GNI, Chellarams and Nigerian Ropes Plc of the deficiency in its current shareholding structure. Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market in their securities. The free float requirement for companies on the main board is 20 per cent while companies on the second board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

    Free float, otherwise known as public float, 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, which is five per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    The report indicated that GNI currently has 16 per cent of its issued shares in the hands of the general investing public while Chellarams and Nigerian Ropes has 5.20 per cent and 13.96 per cent respectively. Capital Hotel currently has 2.23 per cent of its issued shares in the hands of the general investing public, implying that the core investors will need to sell down about 17.77 per cent to the general investing public or undertake a dilution through new capital issue.

    According to the report, the management of the NSE has given GNI a deadline of July 8, 2016 while Chellarams and Nigerian Ropes will have to complete their share restructurings by December 31, this year and January 7, 2015.

    Also, Capital Hotel has a deadline of April 20, 2016 to complete the share restructuring.

    The deadlines are in deference to application by the managements of the companies for some period to comply with the free float. However, the companies are required to provide quarterly disclosure reports to the NSE on the efforts being made to fully comply by the deadline.

    By the expiration of the deadline, the companies are mandatorily required to have completed partial divestments or dilution of the ‘non-public’ shareholdings to free 20 per cent equity stake for public holding, unless the management of the NSE grants fresh waivers and extensions for the companies. In the extreme instance, a company with deficient public float may opt to delist its shares.

    As earlier reported by The Nation, the report indicated that three other companies – Dangote Cement Plc, Union Bank of Nigeria (UBN) Plc and Wema Bank Plc, are still below the 20 per cent minimum float.

    The report indicated that Wema Bank is slightly under the 20 per cent free float with a free float of 19.64 per cent.  Wema Bank is expected to adjust its shareholding structure to free 20 per cent of its equities for unrelated shareholders by July 31.

    Dangote Cement has up till October while Union Bank of Nigeria has up till June 2017 to comply with the free float. The updated free float record of the NSE indicated that Dancem has a free float of 7.19 per cent, 12.81 percentage points below the minimum requirement of 20 per cent. Union Bank has a free float of 14.94 per cent, 5.06 per cent below the minimum standard.

    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.

  • NSE delays implementation of biometrics, direct cash settlement

    The Nigerian Stock Exchange (NSE) has deferred the implementation of its new policies on biometric identification and direct payment of cash to investors.

    The NSE on Monday commenced the implementation of three other bodies of rules and regulations that were approved alongside the rules on biometric and direct cash settlement. These rules included rules and regulations governing dealing members (amendments and additions, part II), rules and regulations governing dealing members (amendments and additions, part III) and rules governing compliance officers of dealing member firms.

    The biometric policy and direct cash settlement are part of the rules and regulations governing dealing members (amendments and additions, part III).

    Head, legal and regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, indicated that the implementation of the rules and regulations governing dealing members (amendments and additions, part III) would be taking off on July 21 with the exception of the biometric identification, direct cash settlement and two other provisions on post trade allocation and annual fit and proper evaluation.

    According to her, the policies on biometric identification, direct cash settlement and two other provisions on post trade allocation and annual fit and proper evaluation would take off on “a   later date to be communicated by the Exchange”.

    Under the biometric identification, individual and institutional investors would have to submit for biometric identification before they could buy or sell shares at the Nigerian stock market.

    A copy of amendments to rules governing operations and operators at the stock market showed that all stockbrokers will now be required to obtain the biometrics of all their clients in a new rule being proposed by the NSE.

    In what may have far-reaching implication at the market, NSE indicated biometric identifiers to be obtained “shall include finger prints and iris recognition and the information collected shall be applied towards confirming clients’ identities”.

    While individual investors will have to provide biometrics on every account, corporate entities will provide corporate information as well as biometrics of the authorised signatories to their share trading accounts.

    Besides, an investor will have to provide a minimum of three identifications to meet the new score-based criteria for opening of account, under one of the new rules.

    NSE is proposing a clients points system under which stockbrokers will have to ensure that an investor score a minimum of 10 points to be eligible to hold an account.

    In obtaining the data of its clients for identification purposes, every dealing member is expected to apply the “Clients Points System”, with the points awarded according to predetermined grade of the Exchange.

    According to the rules, international passport caries the highest grade of five points, national identity card carries four points, driver’s license obtains two points, utility bill accrues two points, voters card entitles to a point while employee’s photo identification card issued by recognised employer with employer’s tax identification from the Federal Inland Revenue Service obtains two points.

    Under the direct cash policy, net proceeds of stock market transactions would be sent directly to bank accounts of investors through the Central Securities and Clearing System (CSCS, the clearing and settlement gateway of the market.

    As against the current general practice whereby the payments for investors’ transactions go into the accounts of the brokers for onward disbursement to their clients, the general practice under the ‘direct cash settlement’ will be to send the net proceeds direct from the clearing and settlement system straight to the investors’ accounts while the existing practice of payment through brokers will become exceptional cases.

    The NSE has already advanced on the framework for the new direct cash payment system, with the rules setting out the framework currently undergoing review for final draft and approval by the Securities and Exchange Commission (SEC).

    According to the new rules, brokers are mandated to provide their clients’ bank account details to the CSCS, being the agent of the Exchange for the clearing and settlement of all securities traded on the Automated Trading System (ATS) of the NSE.

    Settlement of each trade carried out on the ATS shall then be done by direct payment into the client’s account as provided to the CSCS.

    Under the proposed framework, brokers are mandated within three working days of receiving instructions from a client that settlement should be done by direct payment into such client’s account to notify the CSCS of the client’s instructions and provide the client’s account details to the CSCS.

    Any broker-dealer that fails to notify and provide the account details within the three-day timeline will be liable to a fine of N250,000 in addition to any other penalty which the Exchange may impose, according to the new rules.

    However, a client that declines direct cash payment into its account provided to the CSCS shall notify the CSCS by completing a direct cash settlement notification form, specially made for that purpose.

    Also, settlement of transactions carried out on behalf of any client whose account details are not provided to the CSCS shall be done by payment into the account of the client’s broker-dealer firm.

    As part of the new rules, where a client provides its broker-dealer firm with a written mandate to purchase securities with proceeds from the sale of other securities any payment attributable to the sale shall be made into the account of the broker-dealer firm provided the client gives its consent in that regard.

    Every broker-dealer is also expected to take all reasonable steps to ensure that all details of direct settlement originate from the actual client through confirmation of the client’s details in relations to particulars contained in the ‘Know Your Client’ (KYC) provisions.

    “Any broker-dealer that trades in its client securities without receiving a mandate from its client or neglects to remit to its client the proceeds from trading in such client’s securities within three working days of receiving such, shall be liable for any penalties imposed under Article 148B for unauthorised sale of securities, in addition to any other penalty which the Exchange may impose,” the new rules stated.

  • Champion Breweries floats N11.7b rights issue

    Champion Breweries floats N11.7b rights issue

    Champion Breweries Plc will open application list for a N11.7 billion rights issue early August as the company moves to recapitalize its operations and optimize production capacity.

    Champion Breweries plans to issue 6.30 billion ordinary shares of 50 kobo each through a rights issue to existing shareholders on the basis of seven new ordinary shares for every one share they held as at May 7, 2014. The company has indicated it plans to sell the rights issue at N1.85 per share.

    Regulatory filing obtained at the weekend indicated that the rights issue will open on August 4 and close on September 10.

    The rights issue’s price represents a substantial discount to the company’s current market price of N10.17 on the NSE. The discount is in line with the traditional view of rights issue as a form of return to existing shareholders.

    The huge discount provides opportunity for existing shareholders who want to fully or partially renounce their rights to trade such renounced shares on the NSE.

    The management of Champion Breweries had earlier indicated that the company would soon overcome its challenge of capital inadequacies with the planned recapitalisation exercise.

    The recapitalization, according to the management, would enable the company to maintain and sustain the production of premium quality beer and non-alcoholic beverages that meet international brewing standards through the deployment of cutting-edge technology and application of human capital.

    The Raysun Nigeria Limited, a wholly owned subsidiary of Heineken International BV, recently became the new core investor in Champion Breweries following the sale of 513 million ordinary shares of 50 kobo each by Consolidated Breweries Plc, the previous core investor in Champion Breweries.

    The shares were crossed to  Raysun on the floor of  the NSE. As a result, Raysun now owns a 57 per cent equity stake in the total issued share capital of Champion Breweries.

    Chairman, Consolidated Breweries Plc, Prof. Oyinade Odutola-Olurin, said the sale of its equity stake in Champion Breweries was meant to provide the company with better financing opportunity.

    According to her, Champion Breweries has recorded losses over the years and has relied on financing from Consolidated Breweries in the form of inter-company debt. The associated interest burden of the intercompany debts on Champion Breweries has negatively impacted its profitability.

    She pointed out that it was is in the best interest of both parties for the company to be owned by Raysun, where Champion Breweries’ financing and restructuring needs can be more adequately met.

     

     

  • Capital market regulators issue guidelines on online trading

    Capital market regulators issue guidelines on online trading

    Securities regulators have designed guidelines for the growing number of retail online stockbroking portals that allow investors to execute their own orders on the Nigerian Stock Exchange (NSE).

    A reliable source said the regulators have raised a team to review the retail online stockbroking portals and develop a robust regulatory framework that could aid the growth of the segment and protect the investors and the market from abuses.

    The regulatory framework is expected to provide clear rules and guidelines for stockbroking firms and users of the online trading portals.

    There are no specific rules and guidelines for the online trading portals, which have emerged with the launching of the NSE’s new multi-faceted trading engine in 2013.

    At least four stockbroking firms have launched online retail stockbroking portals. These included Meristem Securities Limited, Lead Capital Plc, Morgan Capital Group and Capital Bancorp Plc.

    The regulatory framework, according to sources, would seek to protect the market and investors from the main risk of identity theft while allowing enough flexibility that could stimulate the growth of the online trading.

    NSE’s new trading engine, X-GEN, became fully operational in 2013. A dynamic platform that has numerous opportunities and capabilities, it is able to process some 100 million orders per day with 5,000 trades per second. It has a highly flexible and configurable market structure that can be enhanced to support the auctioning process and trading of several asset classes including Treasury Bills, a wide range of Fixed Income securities (including FGN Bonds), Equities, Exchange Traded Funds, Commodities and Derivatives.

    Based on NASDAQ OMX’s proven X-Stream technology, the X-Gen allows investors, through their stockbrokers, to have real-time access to market prices and their portfolios and provide them with ability to execute market orders in near real-time on a wide range of devices including smart phones and laptops from any location.

    Capital Bancorp is billed to formally launch its online stockbroking portal, Bancorp e-Trade, tomorrow. Bancorp e-Trade enables retail investors with as low as N1,000 to open stockbroking accounts and trade on these accounts.

    Managing Director, Capital Bancorp Plc, Mr. Higo Aigboje, said the portal will provide investors with round-the-clock access to their portfolio and cash statements while investors can also place their orders within and outside the trading hours of the NSE.

    According to him, Bancorp e-Trade is designed as a convenient and transparent means to ensure investors are in control of their investments at any time.

    To be eligible to trade on the portal, one needs only access to internet, a functioning e-mail address, any active bank account, a fair understanding of the workings of the stock market and a stockbroking account with Capital Bancorp.

    He outlined that his firm has simplified the account opening process for new investors as they only need to fill account opening form and upload scanned passport photo, scanned utility bill that is not later than three months, scanned specimen signature, scanned mode of identification and their bank details.

    The features of Bancorp e-Trade, which sits on the infoware e-business suite platform, included display of balance in any currency of choice, online mandate, ability to specify expiry dates on orders, display of portfolio balance and portfolio analysis, statement of account, ability to view and download contract note in different formats, ability to view certificates and verification status, live streaming of stock market prices, live portfolio valuation, amendments or cancellation to undone transactions, graphs and charts and online real-time client information.

  • NSE DG, others hail Dangote for cement quality

    NSE DG, others hail Dangote for cement quality

    •’42.5 is the way to go’

    Stakeholders in the stock exchange, led by the management of the Nigeria Stock Exchange (NSE), have said the investment of the Dangote Group in the cement industry is a revolution that will transform the economy into more productivity.

    The group, led by NSE Director-General Oscar Onyema, with major investors, leading players in the exchange and top stock brokers, visited the Ibese, Ogun State plant of Dangote Cement Plc.

    They were surprised at the huge technologies being used at the production plant.

    Onyeman was delighted at the near completion of work on the two additional lines of three million metric tonnes per annum (MMTPA), which will push up the total production at the Ibese plant to 12 MMTPA and the latest technology in the equipment deployed.

    The NSE director-general said Nigeria needs more investors like Dangote.

    After seeing the quality control mechanism and the robotic laboratory with the end product of the quality checks and assurances of 42.5 grade of cement, Onyema said: “If this is the case, the 42.5 grade is the way to go.

    “What we have seen here is amazing: the high technologies here. I know for sure that this saves time and cost, couple with the technical capabilities, quality control and the quality of the end product. I can speak on behalf of my colleagues that what we have seen is fantastic and Dangote Cement is incomparable…”

  • Capital Bancorp launches online stockbroking portal for investors

    Capital Bancorp Plc has concluded arrangements to formally launch its online stockbroking portal that provides on-line, real time access to investors to personally execute their orders on the Nigerian Stock Exchange (NSE).

    The portal, known as Bancorp e-Trade, enables retail investors with as low as N1,000 to open stockbroking accounts and trade on these accounts.

    Managing director, Capital Bancorp Plc, Mr. Higo Aigboje, said the portal will provide investors with round-the-clock access to their portfolio and cash statements while investors can also place their orders within and outside the trading hours of the NSE.

    According to him, Bancorp e-Trade is designed as a convenient and transparent means to ensure investors are in control of their investments at any time.

    He added that the new portal would lead to significant reduction in cost of investment with the removal of such costs as travelling and opportunity costs.

    Higo pointed out that with the user-friendly nature of the portal, investors would be able to optimize their investments by avoiding errors and lack of clarity of orders or signature forgery and theft of shares.

    According to him, Bancorp e-Trade is carefully crafted to provide access to stockbroking services for the busy executives and upwardly mobile young adults and would assist in the realization of the financial inclusion agenda of the government.

    To be eligible to trade on the portal, one needs only access to internet, a functioning e-mail address, any active bank account, a fair understanding of the workings of the stock market and a stockbroking account with Capital Bancorp.

    He outlined that his firm has simplified the account opening process for new investors as they only need to fill account opening form and upload scanned passport photo, scanned utility bill that is not later than three months, scanned specimen signature, scanned mode of identification and their bank details.

    The features of Bancorp e-Trade, which sits on the infoware e-business suite platform, included display of balance in any currency of choice, online mandate, ability to specify expiry dates on orders, display of portfolio balance and portfolio analysis, statement of account, ability to view and download contract note in different formats, ability to view certificates and verification status, live streaming of stock market prices, live portfolio valuation, amendments or cancellation to undone transactions, graphs and charts and online real-time client information.

    Higo assured that the portal has several levels of security that ensures optimal protection for clients including login credentials, password that is encrypted at the backend and real-time alerts that notify the investor of any change or trade.

    “With access to internet, clients can trade in shares and bonds through their computers and mobile devices from the comfort of their homes from any part of the world. With a minimum of N1,000, clients can trade in shares,” Aigboje said.

    He pointed out that Bancorp e-Trade is a tested platform as it has continuously been operational since it was launched in July 2013 adding that the number of clients who registered on it had grown by 56 per cent while the value and commission recorded growth of 322.9 per cent within the first half of this year.

  • Nigerian, global equities retreat on cautious sentiments

    Nigerian and global investors were overtly cautious last week as investors continued the countdown to the second quarter and half-year earnings, which are expected to provide further indications on the corporate outlooks for the year.

    Across the advanced and emerging markets of Europe, America, Africa and Asia, equities bowed to bearish sentiments. The benchmark index for the Nigerian stock market, the All Share Index (ASI), indicated average loss of 0.46 per cent at the Nigerian Stock Exchange (NSE). The largest African market, the Johannesburg Stock Exchange (JSE) of South Africa, as represented by the JSE All Share Index (JSE ASI), recorded average return of -1.8 per cent.

    In Europe, the German XETRA DAX declined by 3.8 per cent. The France CAC 40 lost 3.7 per cent while United Kingdom’s FTSE dropped by 3.0 per cent. In the Asian region, the Japan Nikkei and Hong Kong Hang Seng  slipped by 3.7 per cent and 1.8 per cent respectively.

    Besides concerns over earnings, market analysts have linked the widespread bearish sentiments to concerns over the fundamentals of the banking sectors.

    In Nigeria, all common value indices and gauges of activities indicated a slowdown in the market momentum. The ASI closed weekend at 42,832.82 points as against its week’s opening index of 43,031.81 points. This depressed the average year-to-date return to 3.64 per cent.

    Aggregate market value of all quoted equities on the NSE dropped by N66 billion from the week’s value-on-board of N14.209 trillion to close the week at N14.143 trillion. The negative market situation at the NSE last week was driven largely by losses by Dangote Cement, which pulled the sectoral index to the highest loss during the week.

    Most sectoral indices showed broad underlying rally but the decline in the influential industrial goods sector coloured the overall market performance. The NSE Industrial Goods Index dropped by 0.69 per cent while the NSE Insurance Index declined by 0.55 per cent.

    Meanwhile, the NSE 30 Index, which tracks Nigeria’s 30 most capitalised quoted companies, inched up with a gain of 0.03 per cent while the NSE Banking Index indicated average week-on-week return of 0.17 per cent. The NSE Consumer Goods Index rallied a gain of 0.73 per cent while the NSE Oil and Gas Index rode on the back of impressive run by Forte Oil to close with the highest week-on-week return of 4.99 per cent.

    Analysis of the price movements showed that 40 equities appreciated while 37 depreciated. A total of 123 stocks closed flat. In the previous week, 35 stocks had depreciated as against 43 stocks that appreciated while 122 stocks were flat.

    Total turnover stood at 1.83 billion shares worth N19.39 billion in 26,521 deals, lower than a total of 2.27 billion shares valued at N28.62 billion traded in 26,730 deals in previous week. The financial services sector remained the dominant sector accounting for nearly three-quarters of the market turnover.

    Financial services stocks recorded a turnover of 1.31 billion shares valued at N9.53 billion in 12,356 deals; representing 72 per cent of the aggregate turnover volume. The conglomerates sector staged a distant second with a turnover of 241.57 million shares worth N1.46 billion in 2,788 deals. The oil and gas sector placed third with 118.22 million shares worth N2.77 billion in 4,684 deals.

    The trio of FBN Holdings Plc, Transnational Corporation of Nigeria (Transcorp) Plc and Fidelity Bank Plc were the most active with a turnover of 662.81 million shares worth N6.01 billion in 5,125 deals, representing 36 per cent of aggregate turnover.

    Also traded during the week were a total of 836,683 units of Exchange Traded Products (ETPs) valued at N18.094 million executed in 21 deals compared with a total of 223,359 units valued at N4.452 million transacted in 19 deals in the previous week. Also, 10,600 units of FGN bonds valued at N13.64 million were traded in two deals compared with a total of 730 units of FGN bonds valued at N863, 405 traded in a deal two weeks ago.

  • Shareholders seek probe of firms to be delisted

    Shareholders seek probe of firms to be delisted

    Shareholders have called for extensive probe of companies  earmarked for delisting by the Nigerian Stock Exchange (NSE), arguing that capital market regulators should unravel the management of the companies’ resources.

    Shareholders, who spoke to The Nation, said capital market regulators should probe the utilisation of the funds earlier raised by those companies and the previous projections made by the companies. Many shareholders were against the delisting of the companies, noting that delisting would worsen shareholders’ fate.

    The NSE recently said it has decided to delist 21 companies that have failed continuously to meet the corporate governance standards at the stock market. In a notice of delisting obtained by The Nation, the NSE said it decided on the delisting to protect investors from trading on securities with serious corporate governance failures.

    The affected companies included Investment and Allied Insurance Plc, Goldlink Insurance, Pinnacle Point Group, Adswitch, Afroil, Rokana Industry, IPWA, West African Glass Industry, Nigeria Wire and Cable, Starcomms, Daar Communication, Mtech, Big Treat, G.Cappa, FTN Cocoa Processing and UTC Nigeria.

    Others included Stockvis, Nigeria Sewing Machine, Jos International Breweries, Capital Oil and Golden Guinea. However, Adswitch had earlier filed for voluntary delisting while Pinnacle Point Group is in the process of being wound up.

    According to the Exchange, while the five of Stockvis, Nigeria Sewing Machine, Jos International Breweries, Capital Oil and Golden Guinea were being delisted because they failed to regularise their listing status, other companies were being delisted because they have failed to submit requisite financial and operational statements.

    Chairman, Ibadan Zone Shareholders Association (IBZA), Chief Sola Abodunrin, said the companies could discourage investors from future participation in new issues as most of them only came to the market to raise funds without returns to shareholders.

    According to him, the companies did not follow through with their purposes of the fund raising and mismanaged investors’ funds.

    Abodunrin, a member of the board of trustees of the Investors Protection Fund (IPF) of the NSE, said delisting would be worse for the investors in the companies as they won’t be able to retrieve their investments.

    He said the companies would not adhere to any iota of corporate governance after delisting and shareholders would not have any hope of holding the companies to account.

    National coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, also said the NSE and Securities and Exchange Commission (SEC) should go beyond the delisting to determine the extent of management’s culpability in the companies’ misfortunes.

    Another shareholders’ leader, Alhaji Gbadebo Olatokunbo, called for a thorough investigation of the management of the companies.

    According to him, the regulators should be able to extricate failures that were due to environmental constraints from those due to managerial failures.

    The NSE had stated that the delisting was necessary to protect investing public from trading in the securities of entities with no current information regarding their financial status.

    The NSE stated that the delisting of the companies would take effect in September, in line with three-month notice required for such action.

    All the companies slated for delisting had been dormant and mostly at their nominal values. Companies such as Big Treat, Starcomms, Capital Oil and Afroil have been subjects of regulatory investigations.

    Since listing on the NSE, Starcomms has struggled with mounting debts and operational losses, leaving shareholders with losses on two fronts as negative bottom-line impacts on share price.

  • Nigerian stocks record N802b gain in first half

    Nigerian stocks record N802b gain in first half

    Nigerian investors recorded capital gains of N802 billion in the first half of this year, indicating a modest average return of 2.79 per cent over the six-month period.

    Riding on the back of sustained gains in May and June, the stock market erased the losses in the previous four months and left the investors with some N802 billion in capital gains.

    A six-month analysis of the first half showed that the market benefited from increasing positioning and portfolio rebalancing as investors sought to strengthen their portfolios across sectors.

    The main value-based indices at the Nigerian Stock Exchange (NSE) showed modest performance. Aggregate market value of all quoted equities closed the first half at a high of N14.028 trillion as against its 2014 opening value of N13.226 trillion.

    The All Share Index (ASI), the benchmark index that tracks prices of all quoted equities and serves as Nigeria’s country index, rose from the year’s opening index of 41,329.19 points to close first half at 42,482.48 points, representing average return of 2.79 per cent.

    Nigerian equities in June built on strong gain made in May to add additional capital gains of N333 billion. Aggregate market value of all quoted equities closed June at N14.028 trillion as against the opening value for the month at N13.695 trillion. This represented additional gain of N333 billion. The ASI rose from index on board for the month of 41,474.40 points to close June at 42,482.48 points, indicating month-on-month average return of 2.43 per cent.

    In May, equities had broken away from a year-long bearish streak with a gain of N1.02 trillion. While the market had closed April with a four-month average loss of -6.88 per cent, the average gain of 7.77 per cent recorded in May turned the average year-to-date return positive at 0.35 per cent. Though modest, the five-month average gain of 0.35 per cent represents a significant breakeven for the equities market. It also underlined the overtly bullish overall market situation during the month.

    Aggregate market value of all quoted equities closed May at N13.695 trillion as against its opening value of N12.672 trillion, indicating a whooping gain of N1.02 trillion. The ASI also rallied by 7.77 per cent to close May at a high of 41,474.40 points compared with its index-on-board of 38,485.48 points. The market had seen strong rally last week with the ASI recording a week-on-week gain of 4.12 per cent.

    Quoted equities had wriggled all through the first four months with negative month-on-month return. The stock market recorded a negative return of -0.68 per cent in April, building on the bearish trend that had characterized the stock market in the first quarter. In January, February and March, the market consistently recorded losses of 1.8 per cent, 2.5 per cent and 2.0 per cent respectively.

    The negative return in April further depressed the overall market performance, increasing the four-month average loss to 6.88 per cent. This implied that an average investor had lost 6.88 per cent of its portfolio over the four-month period.

    Aggregate market value of all quoted equities closed April at N12.672 trillion as against its opening value of N13.226 trillion for the year. The ASI closed April at 38,485.48 points as against its opening index of 38,748.01 points for the month.

    The performance of the stock market in the first four months of the year underlined the cautious investors’ appetite. This was in sharp contrast to the corresponding period of 2013 when the market returned about 17.7 per cent in the first three months. In terms of activities, the average daily volume of transactions of 380 million units for the first quarter of 2014 was also lower than 512 million units in the corresponding period of 2013.

    The ASI closed the first quarter of 2014 with a drop of 6.25 per cent to close at 38,748 points while market capitalization dropped by 5.89 per cent to close at N12.45 Trillion. Total market volume for the quarter also fell by 26 per cent at 22.83 billion while total market value rose marginally by 6.3 per cent to close at N269.4 billion.

    However, the performance of the stock market in the first half of 2014 was significantly below the market position in the comparable period of 2013. In the first half of 2013, the Nigerian stock market recorded a six-month average return of about 28.8 per cent, leaving investors with approximately N2.45 trillion in capital gains during the period.

    In value terms, the increase of N2.45 trillion in the first half had surpassed total gains of N2.44 trillion recorded for the entire 2012. However, the real benchmark return of 28.80 per cent was some 6.65 percentage points below the average full-year return of 35.45 per cent recorded in 2012.

    Aggregate market value of all equities on the NSE closed the first half of 2013 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 rose from 2013’s opening index of 28,078.81 points to close the first half at 36,164.31 points.

    The market had subsequently built on this momentum to close 2013 with a capital gain of more than N4.25 trillion. The 2013 business year set the stock market on a new high with average full-year return of 47.19 per cent, its best performance since 2007.

    Aggregate market capitalization of all quoted equities on the NSE closed 2013 at N13.226 trillion as against its opening value of N8.974 trillion for the year. This represented a whooping increase of N4.252 trillion. The ASI recorded full-year return of 47.19 per cent rising from its opening index for the year of 28,078.81 points to close the year at 41,329.19 points.

    The performance in 2013 significantly surpassed the much applauded return in 2012 when equities posted average return of 35.45 per cent, equivalent to capital gains of N2.44 trillion. The stock market had closed the first half of 2013 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 while the ASI had closed the first half at 36,164.31 points.

    Major investment firms and analysts had said Nigerian capital market would be characterised by restrained bargain-hunting amidst evident lull in investors’ appetite in the second quarter of 2014 as the market oscillates between external pressures and domestic regulatory transition.

    Leading market pundits and analysts said they expected the market to be somehow tepid in the remaining months of the first half, although there could be some modest resurgence.

    Investment experts at BGL Plc, GTI Capital, FSDH Securities, Financial Derivatives Company (FDC) and CBO Capital said they did not expect an overtly bullish market in the second quarter, although there were several bargain stocks that could enliven the market.

    Group Deputy Managing Director, BGL Plc, Mr. Chibundu Edozie, said the capital market would remain cautious and undecided, although it may not witness a major decline.

    According to him, the outlook for the market is unclear as the market has so far failed to respond to a number of impressive corporate financial announcements of listed companies.

    “The cautious mode of the market is likely to be sustained through the first half of the year until the new CBN Governor resumes in June and monetary policy direction becomes clearer especially in relation to exchange rates. We however do not foresee a further precipitous decline given that the market currently presents significant bargain opportunities to investors,” Edozie had said.

    On stock by stock basis, Forte Oil, which recorded the highest return in 2013, continued to lead the stock market with a five-month return of 118.80 per cent by end of May. Other top gainers during the period included Transnationwide Express, 88.03 per cent; Custodian and Allied, 56.25 per cent; Berger paints, 25 per cent; IHS, 40.74 per cent; NPF Microfinance Bank, 40 per cent; Cadbury Nigeria, 27.62 per cent; Union Dicon Salt, 35.02 per cent and Seven-Up Bottling Company, which recorded a five-month return of 20.17 per cent.

  • Stockbrokers screen 16 firms, others for NSE’s council

    Stockbrokers screen 16 firms, others for NSE’s council

    Stockbrokers under the auspices of the Chartered Institute of Stockbrokers (CIS) and the Association of Stockbroking Houses of Nigeria (ASHON) have drawn a preliminary list of firms and individuals eligible for election into the council of the Nigerian Stock Exchange (NSE).

    The NSE has scheduled its crucial annual general meeting for July. At the meeting, members of the Exchange are expected to undertake massive overhaul of the council. Besides the election of new council members, president of the NSE, Alhaji Aliko Dangote, has indicated he intends to step down and not seek re-election, paving the way for the first vice president, Mr. Aig Aig-Imokhuede, to take over  as president of the council.

    The council of the NSE is the apex governing body of the self regulatory organisation and it I responsible for providing oversight for the Exchange’s business and financial affairs, strategy, structures and policies; monitoring the exercise of any delegated authority; and dealing with challenges and issues relating to corporate governance, corporate social responsibility and corporate ethics.

    Sources told The Nation that stockbrokers had formed an election committee, which screened eligible stockbroking firms and stockbrokers that could be elected into the council.

    The election committee is chaired by leading stockbroker and investment banker, Mr Chike Nwanze, vice chairman and chief executive of Icon Stockbrokers while Mr Akin Akeredolu Ale, a director in Abuja-based stockbroking firm-DSU Brokerage Services Limited and general secretary of the Association of Stockbroking Houses of Nigeria (ASHON), is the secretary of the election committee.

    A source said the committee has screened and submitted names of 16 stockbroking firms and stockbrokers for further regulatory screening. The stockbroking firms and their representatives included Meristem Securities Limited and Mr. Oluwole Abegunde, Cashville Investment  & Securities Limited and  Ejeize Ifeyinwa Rita, Signet Investment & Securities Limited and Mr. Aina Oladipo, ICMG Securities Limited and Osime Michael, Trust Yields Securities Limited and Alhaji Rasheed Yussuff and BGL Securities Limited and Mr. Chibundu Edozie.

    Others included Stanwall Securities Limited and Mr. Ofonagoro Onyedikachi, Sigma Securities Limited and Dunama Balami, Greenwich Trust Limited and Mr. Kayode Falowo, Interstate Securities Limited and Mr. Akintunde Odunsi, Fortress Securities Limited and Mr. Yomi Adeyemi, Gem Assets Management Limited and Osagie Ediale, Rencap Securities Limited and Dan Ugwuoke, Vetiva Securities Limited Mr.  Chukuka  Eseka, Finmal Financial Services Limited and Umaru Kwaranga and Nigerian Stock brokers Limited, which is being represented by Mr. Bosun Adekoya.

    Sources said the preliminary list would still be subjected to further scrutiny by both the NSE and the Securities and Exchange Commission (SEC).