The Nation Newspaper

Tag: NSE

  • Foreign investors selling more than investing, says NSE

    Foreign investors selling more than investing, says NSE

    • Divestments outpace investments in Q1

    Nearly two-thirds of  oreign portfolio transactions in the first quarter were on the sell side, as foreign investors continued to be cautious ofNigerian equities.

    In its latest foreign portfolio investment (FPI) report, the Nigerian Stock Exchange (NSE) at the weekend indicated that there appeared to be a reversal in foreign investors’ sentiments in the past few months compared with the corresponding period of last year.

    While foreign investors  dominate, by value, the  stock market, most transactions in the past few months have been on the sell side. The first quarter report for the period ended March 31, last year underlined the sustained but modest downtrend at the Nigerian stock market so far this year. The benchmark index at the NSE, the All Share Index (ASI), opens today with a negative average year-to-date return of -6.71 per cent.

    According to the NSE, total foreign outflows stood at N229.03 billion in the first quarter, representing some 64.2 per cent of total foreign transactions during the period. Total foreign inflows stood at N127.41 billion. Altogether, foreign investors’ deals accounted for N356.50 billion during the three-month period, more than 65.11 per cent of total transactions of N547.51 billion. This indicated that indigenous investors accounted for N191.01 billion, 34.89 per cent of total transactions, during the period.

    The report used two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The NSE report is regarded as a credible gauge of foreign portfolio investments in the country as it coordinates data from nearly all active investment bankers and stockbrokers.

    “The rise in the foreign outflow is attributed to so many factors some of which are; uncertainty over the value of the naira, declining foreign reserve, drop in oil production over pipeline vandalism, insecurity, quantitative easing in USA, and the need for fund for political campaigns and the fear of post-election crises have mounted a divestment pressure on some investors,” Anetor Mustard of Interstate Securities Limited said.

    Monthly analysis showed that there was increase in the momentum of foreign transactions in March, this year, with increases in both sell and buy orders. However, the downtrend continued to dominate transactions. Total foreign outflow in March 2014 stood at N75.42 billion as against inflow of N55.13 billion, totalling N130.55 billion. Foreign investors accounted for 78.25 per cent of total transactions-foreign and domestic, of N166.84 billion in March 2014.

    The flow of investments in March, this year contrasted sharply with the situation in March, last year when there were more inflows than outflows. Total foreign inflows totaled 53 per cent of total foreign transactions in March 2013. Total foreign transactions stood at N80.14 billion in March 2013, consisting of inflow of N43.13 billion and outflow of N37.01 billion.

    The NSE report noted the “significant increase” in foreign transactions, driven by sales, since the beginning of this year as against decline in domestic participation.

    Month-on-month, the outflows in February are about 107 per cent higher compared to January 2014 and about 183 per cent compared to February 2013. While total transactions at the NSE increased from N181.97 billion in January 2014 to N198.70 billion in February 2014, foreign outflows accounted for the increased tempo of activities and the higher proportion of foreign participation to local participation.

    Foreign portfolio outflows stood at N103.53 billion in February 2014 as against foreign inflows of N32.75 billion. These indicated that foreign investors accounted for 68.59 per cent of total transactions during the period.  This contrasted sharply with the situation in similar earnings season of February 2013 when foreign investors had more inflows at N39.34 billion as against outflows of N36.63 billion.

    Total foreign outflow had stood at N50.14 billion in January 2014 as against inflow of N39.53 billion during the period, bringing total foreign transactions to N89.67 billion. In comparable period of January 2013, foreign inflow was higher at N40.96 billion against outflow of N20.50 billion.

    Recent reports have continued to highlight increased foreign participation, though negative. Foreign investors accounted for 49.28 per cent of total transaction value of N181.97 billion in January 2014 as against 36.89 per cent of total transactions of N166.60 billion in January 2013 and 48.91 per cent of total transactions of N142.24 billion in December 2013.

    Portfolio flow analysis in recent period had shown a consistent trading pattern in foreign transactions. While foreign investors flowed in more funds than they took out in the first half of 2013, they have since been taking more money out than they invested since the beginning of the second half of 2013.

    Month-on-month analysis showed that total foreign transactions closed December 2013 at N69.57 billion, consisting of inflow of N32.40 billion and outflow of N37.17 billion. Total foreign transactions rose to N88.89 billion in November, including inflow of N42.68 billion and outflow of N46.21 billion. These had closed October at N82.33 billion including inflow of N39.45 billion and outflow of N42.88 billion.

    In September, total foreign inflow was N26.14 billion as against outflow of N27.88 billion, bringing total foreign transactions to N54.02 billion. Total transactions at the stock market during the month stood at N108.19 billion, out of which domestic investors contributed N54.17 billion or 50.07 per cent.

    In August, foreign inflow had stood at N31.12 billion as against outflow of N39.76 billion. Total foreign transactions thus stood at N70.88 billion, 52.26 per cent of the total turnover of N135.63 billion recorded for the month.

    Foreign investors had took out nearly a double of every penny they invested in the Nigerian stock market in July, unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the Nigerian stock market.

    The seventh month report for July 2013 had indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Foreign investors had accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June respectively.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June respectively.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio investors concluded deals worth about N2 trillion on publicly quoted Nigerian equities between 2012 and 2013. Value of foreign portfolio transactions on the NSE increased by 29 per cent in 2013 as domestic investors showed keener interests in listed equities.

    Value of foreign portfolio transactions increased from N808.4 billion in 2012 to N1.04 trillion in 2013. In both years, Nigeria retained net inflow from foreign investors. However, net inflow dropped considerably from N94.4 billion in 2012 to N20.48 billion in 2013, reflecting the speculative and edgy nature of foreign portfolios during the year.

    Foreign investors had accounted for about 61.4 per cent of total turnover on the NSE in 2012 while domestic investors accounted for 38.6 per cent. However, domestic investors stepped up their participation with 49.2 per cent in 2013 while foreign investors slowed down to 50.8 per cent. Foreign portfolios were the main drivers of transactions on the NSE between 2011 and 2012, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and 2012.

    Total foreign inflow increased from N451.40 billion in 2012 to N531.26 billion in 2013 just as foreign outflow correspondingly increased from N357 billion in 2012 to N510.78 billion in 2013.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.

  • NSE summons six stockbroking firms

    NSE summons six stockbroking firms

    The national council of the Nigerian Stock Exchange (NSE) would this week begin a disciplinary hearing on the fate of inactive, illiquid and delinquent stockbroking firms with the first batch of the affected operators expected to appear before the council on Thursday.

    The Disciplinary Committee of the National Council of the NSE has invited six stockbroking firms to appear before it on Thursday to explain why the Exchange should not take disciplinary action against them for failing to activate their dealing member licenses.

    The affected companies included Al-Pina Investment and Trust Company Limited, BBL Asset Management Limited, Integrated and Allied Securities Limited, MultiTrust Securities Limited, Standard Chartered Securities Limited and Trans Lux Services Limited.

    In a notice signed by head, legal department and council secretariat, Irene Robinson-Ayanwale, the NSE indicated that the six stockbrokers were part of a group of stockbrokers that it had earlier queried over their operating status.

    The disciplinary committee is expected to determine the propriety of the dealing licenses of the affected members at the hearing.

    The NSE had in December 2013 commenced a process to determine the propriety of dealing licence of 53 stockbroking firms, a development that may lead to withdrawal of operating licence of erring stockbroking firms.

    A query by the management of the NSE to the 53 stockbroking firms obtained by The Nation directed the stockbroking firms to show reasons why disciplinary actions should not be taken against them for failure to regularize their operating status and other sundry outstanding regulatory issues.

    The query was signed by head, broker dealer regulation, Nigerian Stock Exchange (NSE), Mr. Olufemi Shobanjo.

    A source in the know of disciplinary process of the NSE indicated that the Exchange may withdraw the operating licence of some of the stockbroking firms, which failed to provide tangible reasons to show liquidity, continuous operations and compliance with extant rules on dealing member firms.

    The Nation’s check showed that most of the queried firms had in September 2013 been suspended for failure to comply with extant operating rule that requires all stockbroking firms to establish compliance department and appoint accredited compliance officers. The suspension by the NSE implies that they will not be  allow to trade at the stock market or act in any issue relating to the capital market, especially as it relates to regulatory approval of the NSE.

    The latest query on regularization of operating status also referred to “all outstanding regulatory issues”, indicating a build-up of the case against the stockbroking firms.

    The queried dealing member firms included Mainstreet Bank Securities Limited, Standard Chartered Securities Limited and First Atlantic Securities Limited, three brokerage firms owned by banks.

    Other queried firms included AAA Securities Limited, Alliance Capital Management Company Limited, Al-pina Investment & Trust Company Limited, BBL Asset Management Limited, BFCL Asset & Securities Limited, BIC Securities Limited, CEB Securities Limited, Colvia Securities Limited, Consolidated Investment Limited, Dakal Services Limited, Decanon Investment Limited, Empire Securities Limited, Enabell Capital & Investment Limited, Epic Investment Trust Limited, Equator Stockbrokers Limited, First Equity Securities Limited, First Express Limited, Folu Securities Limited, Genesis Securities & Investment Limited, Ideal Securities Limited, Indemnity Finance Limited, Integrated & Allied Securities Limited, KFF Worldwide Solutions Limited, Kingdom Securities Limited, Lion Stockbrokers Limited, LMB Stockbrokers Limited, Maninvest Asset Management Plc, Mayfield Investment Limited, Metropolitan Trust Nigeria Limited, Midland Capital Markets Limited, Midlands Investment & Trust Limited and ML Securities Limited.

    Others included Monument Securities & Finance Limited, MultiTrust Securities Limited, Omas Investment & Trust Company Limited, Peninsula Asset Management & Investment Company Limited, Platinum Capital Limited, Professional Stockbrokers Limited, Prudential Securities Limited, Regency Financing Limited, RIV Trust Securities Limited, Riverside Trust Limited, Securities Trading & Investment Company Limited, Sikon Securities and Investment Trust Limited, Trans Lux Services Limited, Transglobe Investment & Finance Company Limited, Tropics Securities Limited, Truebond Capital & Asset Management Limited, WT Securities Limited and Zuma Securities Limited.

     

  • Caverton gets listing date, to add N32b to NSE

    Caverton gets listing date, to add N32b to NSE

    Caverton Offshore Support Group, a leading provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, will list its entire issued share capital on the Nigerian Stock Exchange (NSE) on May 20.

    Coming on the heels of the listing of SEPLAT Petroleum Development Company, the first upstream company to be quoted on the NSE, the listing of Caverton will further integrate the oil and gas sector into the Nigerian stock market.

    Having met all NSE and other regulatory requirements, Caverton Offshore Support Group has been given approval to list by introduction on the main board of the exchange. The company’s 3.35 billion shares will be listed for trading at N9.50 per share.

    Caverton Offshore Support Group (Caverton) is the holding company of Caverton Helicopters and Caverton Marine Limited, two Nigerian companies that have within a short period grown dramatically to become industry leaders in the oil and gas aviation and marine sub-sectors, two highly technical and capital intensive areas previously dominated by foreign firms.

    Chairman, Caverton Offshore Support Group, Mr Aderemi Makanjuola, said the listing will usher the company into its next phase of growth.

    “We are extremely pleased as Caverton enters its next phase of growth as a listed company. Leveraging on our expertise and execution capabilities, we plan to embark immediately on fleet expansion and the development of new service areas in the offshore marine and aviation sectors,” Makanjuola said.

    He said the company is keen on exploring entry into new markets while it will create a balanced and diversified portfolio.

    “We are pleased to have strong technical partners on board with us. This is in line with our strategy for sustainable growth and we are confident that the company will continue to achieve its growth aspirations while fostering indigenous participation in the Nigerian oil and gas industry,” Makanjuola said.

    According to him, the listing represents a major milestone for the company in its steady march towards becoming the leading provider of oil and gas logistics services in sub-Saharan Africa.

    “Our past and present speak eloquently for us. But we are not content on resting on our oars. Rather, we are keen on further diversification operationally and geographically. Apart from operating in Cameroon, we have been invited to bid in Ghana and invited to come for discussion in DRC. We are keen on building a world-class company that outlives us and becomes a byword for cutting-edge services and the best of corporate governance not only in Nigeria but in Africa,” Makanjuola said.

    He noted that as a wholly-owned Nigerian company, Caverton has demonstrated that when given the opportunity, Nigerians can compete favourably with the best of foreign nationals adding that the company is desirous of opening the doors of opportunity to many other Nigerians.

    “Becoming a publicly quoted company allows us to do more in this regard and permits us to add more value to the country and its economy,” Makanjuola said.

    Caveton’s rising business profile has been powered by strategic partnerships, highly skilled management and staff, investment in cutting-edge technology and facilities, and strong financial performance. In the 2012 financial year, the company’s turnover rose 47.6 per cent to N16.132 billion, from N10.928 billion in 2011. Profit after tax and exceptional items jumped to N1.035 billion from N60.373 million in the previous year, an increase of 1,625 per cent.

    Even though its operations predated the passage of the Local Content Act by many years, Caverton has been seen as the poster-child of indigenous capacity and ownership since 2010 when one of its subsidiaries, Caverton Helicopters, edged out long-established foreign operators to win a $648 million, multi-year contract from Shell Petroleum Development Company for the supply and operation of seven helicopters. Won after a rigorous competitive bidding process, it is on record as the biggest contract ever awarded by the oil multi-national to an indigenous company.

     

     

     

    The Shell contract opened the floodgate for Caverton, with more contracts pouring in from other oil majors such as Chevron, ExxonMobil, Total and Addax Petroleum. In 2013, the company commenced its first international operation after it won the contract to provide passenger transfer and pipeline surveillance services to the Cameroon Oil Transport Company (COTCO), a subsidiary of ExxonMobil.

    Caverton’s operations have also been significantly buoyed by the opportunities provided by government’s local content policy. Signed into law by President Goodluck Jonathan on 22 April 2010, the Nigerian Oil and Gas Industry Development Act stipulates that oil and gas companies must give the right of first refusal to competent indigenous companies in their award of contracts. On account of its massive investment in facilities and personnel, verified by the oil majors through audits conducted on the company and Caverton’s strict adherence to standards and safety, the company has been well positioned to benefit from this policy.

    For example, Caverton’s turnover leapt from N7 billion in 2010 to about N17 billion in 2012, an increase of 142 per cent within two years. Another indicator of the dramatic growth is that its staff strength rose from 160 personnel in 2009 to 650 in 2013, an increase of 306 per cent. About 90 per cent of the Caverton’s staff are Nigerians in pursuance of the company’s own commitment to the local content policy. Also, the company has a record of employing and training Nigerian sea-fearers, engineers and pilots, thereby deepening national capacity to operate effectively in the highly technical sector.

     

  • Dana Group seeks N4.5b from NSE

    Dana Group seeks N4.5b from NSE

    Dana Group of Companies Plc plans to raise about N4.5 billion from the capital market through a medium-term debt issue.

    Dana Group plans to float a six-year bond to raise N4.5 billion. It will carry a fixed-rate coupon and will be due for redemption in 2020.

    The corporate bond is expected to be listed on the Nigerian Stock Exchange (NSE). The NSE has given its approval to the corporate bond.

    Sources said the net proceeds of the bond issue would be used to strengthen the operations of Dana Group, a conglomerate of several businesses across various sectors of the Nigerian economy.

    From its maiden business of pharmaceuticals manufacturing in the mid 80s, the group has diversified into not less than eight other businesses including bulk importation of industrial chemicals, affordable pharmaceuticals and surgicals, commodities, polyethylenes,  automobiles, electronics and white goods.

    It inaugurated a plastics plant for household products in 2000 and followed this by setting up a pharmaceutical formulation plant and a table water bottling plant in 2003. The group also ventured into the manufacturing of food products with an instant milk plant under the banner of danaco milk  and an instant noodle plant under the banner of Dana Sun Yum Noodles in 2007, and a rice milling plant too, using state-of-the-art food processing equipment from the world leaders in their fields. Dana Group also acquired steel rolling mill in Katsina to produce debars and wire rods, which was a high point in 2006. The group has also diversified into the food sector, automobile sector and aviation sector.

    Global corporate new bond issuance reached $3.2 trillion last year, the second highest annual total since 2009’s $3.3 trillion, according to Standard & Poor’s (S & P).

    In a report on credit trend, Standard & Poor’s stated that investor appetite for corporate debt was very healthy for most of the year, dipping only during certain periods due to the uncertainty related to the timing of the Fed’s tapering.

    According to the report, with a relatively low and stable cost of capital, many companies pursued capital-intensive projects, made strategic acquisitions, and pre-financed or refinanced obligations.

    “Both investment-grade and speculative-grade bond issuance were strong in 2013. Of the $3.2 trillion in new corporate debt issued globally, investment-grade corporate issuance comprised nearly $1.8 trillion or 55.1 per cent of the total, while speculative-grade debt reached a record-high of $507 billion or 15.7 per cent of the total,” the report stated.

    S & P noted that the sharp rise in the issuance of speculative-grade debt is telling as investors appeared to have become more comfortable with riskier assets in 2013 as they searched for ways to improve overall yield.

    To put  this in perspective, speculative-grade bond issuance was $419 billion in 2012. Previous to the recession, in 2006 and 2007, speculative-grade bond issuance only reached $208 billion and $213 billion, respectively, before dropping as low as $56 billion in 2008. Even entities at the lowest end of the ratings spectrum were able to sell their bonds on the capital markets, which is partly the reason why defaults were less frequent in 2013.

    Globally, only 2.16 per cent of speculative-grade companies defaulted in the 12 months through the end of November, last year, down from 2.5 per cent in 2012. Standard & Poor’s Ratings Services did not rate $942 billion of the $3.2 trillion in new bonds that were issued last year.

  • Caverton to list 3.35b shares on NSE

    Caverton to list 3.35b shares on NSE

    The Nigerian Stock Exchange (NSE) has given approval to Caverton Offshore Support Group Plc to list its entire share capital on the main board of the Exchange.

    The quotation committee of the NSE gave the approval after reviewing the prospective listing documents submitted by Caverton.

    Caverton would be listing 3.35 billion ordinary shares of 50 kobo each by way of introduction. The listing by way of introduction will enable existing shareholders of Caverton to trade on their shares while new investors can buy into the company.

    Market sources also hinted that Caverton will also float an initial public offering (IPO) to raise funds from the general investing public.

    Coming on the heels of the historic listing of SEPLAT Production and Development Company as the first upstream company on the NSE, the listing of Caverton will provide further inroad into the upstream oil and gas industry.

    Incorporated in June 2008, Caverton Offshore Support Group was formed in response to the Local Content Policy of the Federal Government, which is aimed at increasing indigenous participation in the oil and gas sector.

    The group, made up of Caverton Marine Limited, Caverton Helicopters Limited and other subsidiaries, is an indigenous conglomerate and one of the leading providers of marine, aviation and logistics support services to the oil and gas sector.

    Caverton Helicopters and Caverton Marine have provided services to clients working within the oil and gas industry for 15 years and have a global workforce of more than 600 employees.

    Caverton Helicopters, which started operations with an intra-city helicopter shuttle services in Lagos in 2004, has grown steadily to become a dominant player in the oil and gas and aviation sub-sector within and outside the country.

    On its part, Caverton Marine Limited, which was incorporated in 1999, has, among others, provides premium marine services to the Nigerian Ports Authority, Oando Plc, Total Fina Elf, African Petroleum, Shell Trading and Shipping Company and Shell Petroleum Development Company.

  • NSE slams N100,000 weekly fines on 80 companies

    NSE slams N100,000 weekly fines on 80 companies

    The Nigerian Stock Exchange (NSE) has imposed a weekly fine of not less than N100, 000 each on all the companies that failed to submit their 2013 audited annual reports and accounts by the expiration of the extended deadline of April 30, 2014.

    The NSE, in a response to exclusive media enquiry by The Nation, stated that it has no intention to grant further extension of the April 30, 2014 deadline. The NSE stated that barely half of companies with December 31, 2013 year-end met the deadline and that defaulters will be sanctioned in line with Appendix 111 of the NSE Greenbook, which contains listing requirements.

    Section 14 of the Appendix 111 states that “any late submission of accounts shall attract a fine of N100, 000 per week from the due date until the date of submission” while “a listed company who contravenes any of the provisions of the Listing Rules and General Undertaking and fails to pay the penalty imposed on it for such contravention on or before the due date shall be liable to a further fine of N300,000 in addition to N25,000 per day for the period the violation continues”.

    Besides, the sanctioned companies are expected to state in their subsequent annual report details of contraventions and the sanctions imposed for such contraventions.

    According to the NSE, there were 136 companies with December year-end but only 71 companies had submitted by the close of working hours.

    “The Exchange has granted a one month extension to all listed companies irrespective of their year-end to submit their audited accounts and reports. There is no present intention to grant any further extensions,” the NSE stated.

    The Nation’s check indicated that the NSE has now tagged 80 companies with its “Below Listing Standard” (BLS), which confirms their failure to submit their audited annual reports within the deadline and also confirms the imposition of sanctions. The 80 companies included 65 companies with December year-end and some 15 companies with year-end within the previous year.

    The sanctioned companies included West Africa Glass Industries Plc, FTN Cocoa Processors Plc, Cappa & D’alberto Plc, Big Treat Plc, Dangote Flour Mills Plc, National Salt Company Nigeria Plc, UTC Nigeria Plc, African Alliance Insurance Plc, Aiico Insurance Plc, Consolidated Hallmark Insurance Plc, Continental Reinsurance Plc, Cornerstone Insurance Plc, Equity Assurance Plc, Goldlink Insurance Plc, Great Nigeria Insurance Plc, Guinea Insurance Plc, Intercontinental Wapic Insurance Plc, International Energy Insurance, Lasaco Assurance Plc, Law Union And Rock Insurance Plc, Linkage Assurance Plc, Mutual Benefit Assurance Plc, Nem Insurance Company, Niger Insurance Company, Oasis Insurance Plc, Prestige Assurance Company Plc, Regency Alliance Insurance Plc, Sovereign Trust Insurance Plc, Staco Insurance Plc, Standard Alliance Insurance Plc, Unic Insurance Plc, Unity Kapital Assurance Plc, Universal Insurance Company Plc, Fortis Microfinance Bank Plc, Abbey Building Society Plc, Royal Exchange Plc, Ekocorp and Evans Medical Plc.

    Others were Omatek Ventures Plc, NCR (Nigeria) Plc, E-Tranzact International Plc, Starcomms Plc, MTI Plc, African Paints (Nigeria) Plc, IPWA Plc, Austin Laz & Company Plc, Nigerian Wire & Cable Plc, Afroil Plc, Oando Plc, Beco Petroleum Product Plc, Conoil Plc, R.T Briscoe Plc, Ikeja Hotel Plc, Daar Communications Plc, Studio Press(Nigeria) Plc, Smart Products Nigeria Plc, Rokana Industries Plc, Capital Oil Plc, Union Ventures & Petroleum Plc, Adswitch Plc, Multi-Trex Integrated Foods Plc, C & I Leasing Plc, Tourist Company of Nigeria Plc, Aso Savings & Loans Plc, Costain (W.A) Plc, G Cappa Plc, Union Homes Savings & Loans Plc, Nigerian German Chemical Plc, Thomas Wyatt Nigeria Plc, Premier Breweries Plc, Rak Unity Petroleum Plc, Golden Guinea Breweries Plc, Premier Breweries Plc, Lennards (Nigeria) Plc, DN Tyre & Rubber Plc, P.S Mandrides & Company Plc, John Holt Plc, Deap Capital Mgt & Trust Plc and Juli Plc.

    Some market pundits said the NSE should conduct operational review of companies that have persistently been fallen short of corporate governance standards with a view to determining the real reasons behind their persistent failures.

    A report on sanctions and fines for similar defaults in 2013 obtained yesterday showed that the Exchange slammed about N105.9 million on 48 companies that delayed their results. The fines ranged between N200, 000 and N6.8 million.

    The NSE had slammed some N60.2 million as fines on 34 companies for failure to meet deadlines for 2011 audited reports. With a range of N3.8 million and N100, 000, average fine for the year was N1.77 million.

    Post-listing rules at the NSE require quoted companies to submit their earnings reports, not later than three months after the expiration of the period. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31.

    NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year is March 31.

    However, on the heels of exclusive report by The Nation that less than one-third of the companies submitted their annual reports by March 31, 2014, the NSE had extended the March 31 deadline for a period of one month, giving companies that operate the Gregorian calendar year as their business year up till April 30, 2014 to submit their audited earnings reports for the year ended December 31, 2013.

    The tagging of the defaulting companies with “BLS” serves as caveat and red alert to investors that the tagged companies are operating below expected corporate governance standards as set out by the listing rules at the NSE.

    NSE uses four different kinds of tags or symbols to alert investors about the status of each quoted company. These include “BLS”, the first degree alert level indicating a company that has not complied with post listing rules such as late submission of financial statements, unauthorised publication, and management failures among others.

    Also, financial services companies such as bank and insurance companies awaiting regulatory approval will carry the appropriate symbol of awaiting regulatory approval (ARA). Companies that are undergoing a capital reconstruction exercise including supplementary issue, share buyback, split, share reconstruction among others will be tagged with capital reconstruction exercise (CRE) while companies that have indicated that they will be delisting or companies that are being delisted at the instance of the regulator would be flagged with delisting in process (DIP) symbol.

  • NEM, Unic, others pay N60m to NSE

    NEM, Unic, others pay N60m to NSE

    At least 21 listed firms have paid N60 million penalties to the Nigerian Stock Exchange (NSE) for submitting their 2012 financial accounts late. This was revealed in the X-Compliant Report dated April 25 released on the NSE website. The report showed that the companies filed their financial statements to the exchange after the regulatory due date lapsed. It further showed that Universal Insurance Plc paid N4.2 million as fine  while Guinea Insurance Plc paid N3.8 million fine. Equity Assurance Plc paid N3.2 million each while Great Nigerian Insurance Plc was equally fined N3.8 million. NEM Insurance Plc, on the other hand, got N3.5 million fine, Prestige Assurance paid N2.9 million, Law Union and Rock Insurance Plc N2.7 million fine, Regency Alliance Insurance Plc N2.5 million, Cornerstone Insurance Plc paid N2.8 million, Unity Kapital Insurance Plc N2.1 million, among others.

  • UBA Capital, NSE, LSE, JSE, TSX explore dual listings for oil, mining firms

    UBA Capital, NSE, LSE, JSE, TSX explore dual listings for oil, mining firms

    Major African and global stock exchanges have initiated discussions on the prospects and opportunities for Nigerian oil and gas and mining companies to list their shares on the Nigerian Stock Exchange (NSE) and other international stock exchanges.

    At an interactive session organized by UBA Capital, officials of three major international stock exchanges: Johannesburg Stock Exchange (JSE), London Stock Exchange (LSE), and Toronto Stock Exchange (TSX) and top management of the NSE held discussions with select companies in the oil and gas sector and mining industry on the opportunities in dual listing.

    Senior Manager, primary markets, London Stock Exchange (LSE), Darko Hajdukovic, said LSE could help African companies seeking listing to de-risk the process and enhance their valuation noting that London offers a very cost effective option among major stock exchanges.

    According to him, LSE has a long experience of listing companies from Africa with its main market currently having 42 listed African companies with total market capitalization of $239 billion.

    Business development manager, Johannesburg Stock Exchange (JSE), Tamsin Freemantle, outlined that dual listing offers companies larger and complimentary pools of capital, increased visibility, increased liquidity through two pools of liquidity on the home and secondary exchanges and access to capital from emerging market focused funds.

    She noted that 86 companies listed on the JSE have dual listings while JSE has been able to achieve average market liquidity of between 40 per cent and 50 per cent since 2010.

    In the same vein, head, business development, Europe and Africa, Toronto Stock Exchange (TSX), Graham Dallas, said TSX offers Nigerian oil and gas companies the best opportunities to have access to the largest community of listed peers.

    According to him, TSX is the number one exchange in the world by the number of listed oil and gas companies as well as listed mining companies while it also hosts the highest number of oil and gas analysts among world stock exchanges.

    He pointed out that in 2013, oil and gas companies raised $5.2 billion on the TSX with $789 million raised for oil and gas companies covering projects in Africa.

    According to him, TSX has competitive advantages in dual listing because of its superior access to capital especially for small companies, tailored listing rules for oil and gas companies, availability of TSX staff with specialized knowledge in oil and gas matters and rules to facilitate fast capital raising, strong energy trading liquidity, vibrant retail and institutional investor base and a strong equity culture among Canadians with 50 per cent of the Canadian population owning stocks.

    In her remarks, general manager, listings, sales and retention, Nigerian Stock Exchange (NSE), Taba Peterside, urged the oil and gas companies to take advantage of the increasing visibility and interest in the Nigerian economy to list their shares.

    She noted that 48 per cent of the funds raised by the Seplat dual listing were raised from local shareholders underpinning the importance of local investors when listing a Nigerian company on any exchange.

    Partners from the international law firms Jones Day and Freshfields Bruckhaus Deringer LLP however, stressed the need for appropriate corporate governance structures to be put in place well before a company approaches the international markets.

    Group chief executive officer, UBA Capital, Oluwatoyin Sanni, said UBA Capital would support capital raising aspirations of African issuers while simultaneously creating attractive and accessible investment opportunities for investors.

    According to her, UBA Capital will continue to partner with credible regional and international institutions as it pursues its strategic intent to build Africa’s leading integrated financial services group.

    Managing director, investment banking, UBA Capital, Wale Shonibare,  noted that UBA Capital Plc is well-positioned to support fast-growing mining companies and their oil and gas counterparts to raise the much needed equity capital from local and international sources.

     

  • NSE promotes corporate ethics

    NSE promotes corporate ethics

    The Nigerian Stock Exchange (NSE) in partnership with key publicly quoted companies will be holding the 1st NSE Corporate Challenge. The one-day event which is scheduled to take place in Lagos on Saturday, May 17, 2014 will be a highly competitive and fun-filled five kilometre walk, run or jog competition to promote and support teamwork, company pride and corporate wellness. The competition is open to the broker dealer community and companies listed on the NSE.

    Head, corporate services, Nigerian Stock Exchange (NSE), Mr Bola Adeeko, in a statement, stated that the idea behind the corporate challenge is for responsible organisations and their employees to take part in the initiative as a way of enhancing employee-employer relations and boost goodwill by bringing all together for fun, fitness and fellowship.

    According to him, the inaugural NSE Corporate Challenge is a professionally organised and volunteer-driven initiative involving over 350 companies listed on the Exchange and support organisations from the capital market community.

    He said the NSE would be working in close partnership with public and private sector organisations such as the Lagos Island Central Business District, First Bank of Nigeria, Unilever, Unity Bank, Nestle Nigeria, Malta Guinness and First City Monument Bank among others.

    “The Corporate Challenge is a corporate social responsibility (CSR) initiative of the Exchange, aimed at promoting the health and wellbeing of our operating community which will also present a platform for teamwork and networking. The initiative will enhance the concept of volunteerism within participating companies,” Adeeko said.

    Though the challenge will be primarily open to teams of employees from companies listed on the Nigerian Stock Exchange, non-commercial organizations such as Federal, State and Local Governments, quasi-governmental organizations, educational institutions and non-governmental organisations (NGOs) will be invited to compete as well.

     

  • NSE may sanction 50 companies over delayed results

    NSE may sanction 50 companies over delayed results

    •Slams N106m fines on 48 companies

    A head of today’s deadline for extended timeline for quoted companies to submit their audited reports and accounts for the year ended December 31, 2013, there are indications that the Nigerian Stock Exchange (NSE) may sanction not less than 50 companies over their failure to submit their period within the extended period.

    The Nation’s investigation at the NSE showed that several companies have not submitted their audited reports while  others were making last-minute efforts to scale the deadline and avoid the poor corporate governance tag and sanction of the NSE.

    Post-listing rules at the NSE require quoted companies to submit their earnings reports, not later than three months after the expiration of the period. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31.

    NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year was Monday, March 31.

    However, on the heels of exclusive report by The Nation that less than one-third of the companies submitted their annual reports by March 31, 2014, the NSE had extended the March 31 deadline for a period of one month, giving companies that operate the Gregorian calendar year as their business year up till April 30, 2014 to submit their audited earnings reports for the year ended December 31, 2013.

    The NSE had in an emailed response to media enquiry by The Nation attributed the extension to several requests for extension by companies. During the extended period, the companies will not be liable for any sanction.

    A source at the Exchange yesterday ruled out possibility of another general extension, implying that the NSE would start applying relevant sanctions and tags as from May 2, 2014.

    A headcount by The Nation indicated that not less than 50 companies might miss today’s deadline as several companies have not made required announcement for scheduled board meeting to consider their audited reports.

    A report on sanctions and fines for similar defaults in 2013 obtained showed that the Exchange slammed about N105.9 million on 48 companies that delayed their results. The fines ranged between N200, 000 and N6.8 million.

    The NSE had slammed some N60.2 million as fines on 34 companies for failure to meet deadlines for 2011 audited reports. With a range of N3.8 million and N100, 000, average fine for the year was N1.77 million.

    The source at the NSE said the sanctions were not intended to generate incomes for the Exchange but to serve mainly as deterrents against corporate failures.

    Meanwhile, market pundits said they expected the momentum of submission to be high today, since companies will want to avoid the double-sanction of monetary fines and “naming and shaming” of the NSE.

    Companies that have submitted their 2013 results included Unilever Nigeria, FCMB Group, Nigeria Aviation Handling Company (Nahco), Julius Berger Nigeria, Livestock Feeds, United Bank for Africa (UBA), First Aluminium Nigeria, Cement Company of Northern Nigeria, Sterling Bank, Dangote Cement, GlaxoSmithKline Consumer Nigeria, Berger Paints, Lafarge Cement Wapco Nigeria, Cadbury Nigeria, Zenith Bank, Transnational Corporation of Nigeria (Transcorp), Guaranty Trust Bank, Nestle Nigeria, Forte Oil and Africa Prudential Registrars among others.