The Nation Newspaper

Tag: NSE

  • NSE inducts new members in Imo

    The Owerri branch of the Nigerian Society of Engineers (NSE) at the weekend inducted new members.

    The inductees were urged to be part of policy and decision making organ of the government.

    Also at the ceremony, which held at the Umez Eronini Hall, Owerri, the Imo State capital, deserving engineers were conferred with the NSE Diamond Award.

    The Owerri branch Chairman, Emma Ossai, said Nigerian engineers are not inferior to their counterparts from other parts of the world, stating that the difference is in the attitude of the engineers.

  • NSE penalises 10 firms over defaults

    The Nigerian Stock Exchange (NSE) has imposed sanctions on 10 firms for failing to meet the deadlines for submission of their earnings reports for the year ended December 31, 2012.

    A report on penalties for default filing obtained on Monday by The Nation confirmed last week’s exclusive report by the newspaper that identified some 51 companies that are technically due for fines for failure to meet earnings report deadlines, even after the extension of such deadlines.

    The report indicated that Oando was directed to pay N600,000 while Dangote Flour Mills Plc was penalised N500,000. Others included Transnational Corporation of Nigeria (Transcorp), N300,000; Multiverse, N300,000; MRS Oil and Gas, N200,000; Wapic Insurance, N700,000; NCR Nigeria, N900,000; May & Baker Nigeria, N200,00 while Daar Communications, a perennial defaulter, was fined the highest sum of N3.4 million.

    The latest report might represented the first batch of sanctions, with more than 30 companies technically due for such sanctions, unless given waivers under special consideration by the NSE.

    The Nation had reported that some 30 per cent of quoted companies failed to meet the final extended deadlines for the submission of their audited reports and accounts. This implied that more than two-thirds, 70 per cent, of quoted companies submitted their earnings reports within the extended window for earnings reports.

    Investigation had shown that more companies might be sanctioned for failure to file their audited reports this year than the previous year. The NSE had reported that it 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 previous year was N1.77 million.

    The companies tagged for failure to submit their annual reports within extended deadlines included AIICO Insurance, Eterna, Union Homes Savings & Loans, Omatek Ventures, Vono Products, Resort Savings and Loans, DN Meyer and Beco Petroleum.

    There was also large concentration of defaulters in the troubled insurance subsector with not less than 25 insurance companies penciled down as defaulters. Besides AIICO, other defaulting insurance companies included African Alliance, Continental Reinsurance, Cornerstone Insurance, Custodian and Allied, Equity Assurance, Goldlink Insurance, Great Nigeria Insurance, Guinea Insurance, International Energy Insurance, Lasaco Assurance, Law Union and Rock Insurance, Linkage Assurance, Mutual Benefit Assurance, NEM Insurance, Niger Insurance, Oasis Insurance, Prestige Assurance, Regency Alliance Insurance, Sovereign Trust Insurance, STACO, Standard Alliance, Unic Insurance, Unity Kapital Assurance, Universal Insurance Company and Investment and Allied Assurance.

    Other defaulters included Nigeria Energy Sector Fund (NESF), Nigerian-German Chemical, Rak Unity Petroleum, PS Mandrides & Co, FTN Cocoa Processors, Big Treat, UTC Nigeria, Fortis Microfinance Bank, Royal Exchange Nigeria, Starcomms, MTI, IPWA, Nigerian Wire & Cable, Capital Hotel, Ikeja Hotel, Daar Communications and MTECH Communications.

    The NSE usually sanctioned earnings report defaulters in line with the provisions of Section 14 of Appendix 111 of the Listing Rules of NSE. Most of the companies now tagged were also fined in the previous year.

    Post-listing rules at the NSE require that quoted companies should submit their 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, the NSE provides that where a filing due date falls on a weekend or holiday, the filing will fall due on the next business day. March 31, 2013 fell on Sunday while April 1, 2013 was a public holiday in commemoration of Easter Monday, thus the due date for the deadline was Tuesday, April 2, 2013.

    However, the NSE had extended the regular deadline for all quoted companies by 30 days as a general concession in recognition of challenges being faced by companies, especially with regards to adoption of the International Financial Reporting Standards (IFRS).

  • NSE: Negative trend lingers, indices down by 0.7%

    Losses recorded by 31 companies on the Nigerian Stock Exchange on Thursday further dragged down market indicators at the close of trading.

    This was compounded by huge sell-offs, which continued to depress major market indices.

    For instance, Cap Plc lost the highest, falling by 10 per cent or N4.83 per share to close at N43.47 per share.

    Continental Reinsurance Plc lost 9.86 per cent or 14 kobo to close at N1.28 per share.

    University Press Plc and Trans-nationwide Express Plc fell by 9.69 per cent and 9.59 per cent to close at N4.38 and N1.32 per share, respectively.

    NPF Microfinance Bank Plc and IPWA Plc shed 9.38 per cent and 7.41 per cent to close at 87 kobo and N1.00 per share in that order; while May & Baker Nigeria Plc and Cornerstone Insurance Company Plc lost 6.90 per cent and 5.66 per cent to close at N2.70 and 50 kobo per share, respectively.

    Consequently, the market capitalisation of the listed equities, which fell to N11.893 on Wednesday, further fell by 0.7 per cent or N85bn to N11.808tn.

    The NSE’s All-Share Index, which had closed lower at 37,554.73 points on Wednesday, also fell by 0.7 per cent to 37,286.50 points on Thursday.

    The NSE-30 Index slipped by 0.9 per cent from 1,072.90 basis points to 1,057 points.

    The NSE Banking Index, which fell by 3.87 per cent to 405.23 basis points on Wednesday after the stocks of 12 banks depreciated, dropped further on Thursday by 1.1 per cent to close at 400.73 points.

    Still, the banking sub-sector maintained its lead on the activity chart, accounting for 33.8 per cent of total turnover traded.

    In the sub-sector, investors exchanged 105.656 million shares worth N869.705m in 2,010 transactions.

    Turnover in the sub-sector was driven by activities in the shares of Diamond Bank Plc, Fidelity Bank Plc, United Bank of Africa Plc, Sterling Bank Plc, Skye Bank Plc and Access Bank Plc.

  • Investors Protection Fund finalises draft rules

    The Board of Trustees (BoT) of the Investors Protection Fund (IPF) of the Nigerian Stock Exchange (NSE) is finalising the draft rules for the IPF.

    It would be recalled that the board of IPF had prepared a new set of draft rules governing the operation and effective management of the fund on June 11. These rules were made available to stakeholders on June 14, this year.

    Head, Public Relations, Nigerian Stock Exchange (NSE), Mr Dante Martins, said the Exchange has received comments from stakeholders and has made necessary amendments to the rules.

    He said the final draft will soon be presented to the Securities and Exchange Commission (SEC) for its approval in line with the provisions of Section 201(b) of the Investment and Securities Act 2007.

    According to him, a lot of work is going into ensuring that the rules of the IPF are well-structured given the importance of investors’ protection in the Nigerian capital market.

    Part XIV of the Investment and Securities Act 2007 requires the Nigerian Stock Exchange to establish and maintain an investors protection fund to compensate investors with genuine claims of pecuniary loss against Dealing Member firms resulting from insolvency, bankruptcy or negligence of a Dealing Member firm of a securities exchange or capital trade points; and defalcation committed by a Dealing Member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received by the Dealing Member firm in its course of business as a capital market operator.

  • Wema Bank, Eterna, Aiico, 48 others risk N90m NSE’s fines

    The Nigerian Stock Exchange (NSE) has identified some 51 companies that are technically due for fines for failure to meet the deadlines for submission of their earnings reports, even after the extension of such deadlines.

    Up-to-date lists of companies in default of earnings filings obtained by The Nation indicated that some 30 per cent of quoted companies have failed to meet the final extended deadlines for the submission of their audited reports and accounts. This implies that more than two-thirds, 70 per cent, of quoted companies submitted their earnings reports within the extended window for earnings reports.

    It was showed that more companies might be sanctioned for failure to file their audited reports this year than the previous year. In its latest compliance status report, the NSE had reported that it slammed some N60.2 million as fines on 34 firms for failure to meet deadlines for 2011 audited reports. With a range of N3.8 million and N100, 000, average fine for the previous year was N1.77 million.

    The companies currently tagged for failure to submit their annual reports within extended deadlines included Wema Bank, the only banking stock with such tag; AIICO Insurance, Eterna, Union Homes Savings & Loans, Omatek Ventures, Vono Products, Resort Savings and Loans, DN Meyer and Beco Petroleum.

    There was also large concentration of defaulters in the troubled insurance subsector with not less than 25 insurance companies penciled down as defaulters. Besides AIICO, other defaulting insurance companies included African Alliance, Continental Reinsurance, Cornerstone Insurance, Custodian and Allied, Equity Assurance, Goldlink Insurance, Great Nigeria Insurance, Guinea Insurance, International Energy Insurance, Lasaco Assurance, Law Union and Rock Insurance, Linkage Assurance, Mutual Benefit Assurance, NEM Insurance, Niger Insurance, Oasis Insurance, Prestige Assurance, Regency Alliance Insurance, Sovereign Trust Insurance, STACO, Standard Alliance, Unic Insurance, Unity Kapital Assurance, Universal Insurance Company and Investment and Allied Assurance.

    Other defaulters included Nigeria Energy Sector Fund (NESF), Nigerian-German Chemical, Rak Unity Petroleum, PS Mandrides & Co, FTN Cocoa Processors, Big Treat, UTC Nigeria, Fortis Microfinance Bank, Conoil, Royal Exchange Nigeria, Starcomms, MTI, IPWA, Nigerian Wire & Cable, Capital Hotel, Ikeja Hotel, Daar Communications and MTECH Communications.

    The NSE usually sanctioned earnings report defaulters in line with the provisions of Section 14 of Appendix 111 of the Listing Rules of NSE. Most of the firms tagged were also fined in the previous year.

    The lists also indicated that nearly three-quarters of quoted companies failed to meet the deadlines for their first quarter earnings reports for the year. However, NSE had not applied sanctions on defaulters for interim reports, although it maintains a deficiency tag on each stock that defaults to alert investors on the corporate governance and compliance status of the company.

    Post-listing rules at the NSE require that quoted companies should submit their 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, the NSE provides that where a filing due date falls on a weekend or holiday, the filing will fall due on the next business day. March 31 fell on Sunday while April 1 was a public holiday in commemoration of Easter Monday, thus the due date for the deadline was Tuesday, April 2, 2013.

    However, the NSE had extended the regular deadline for all quoted companies by 30 days as a general concession in recognition of challenges being faced by companies, especially with regards to adoption of the International Financial Reporting Standards (IFRS).

    The extension had came a day after The Nation exclusively reported that banks’ results might fell below earnings report due date of April 2, due to issues around IFRS and Central Bank of Nigeria’s (CBN’s) approval.

    According to the NSE, the extension was an intervention to ensure listed companies present their audited and interim reports accurately as well as provide assurance to businesses and advisors affected by the early adoption of IFRS and levels of regulatory approvals which now includes Financial Reporting Council (FRC).

    The NSE had indicated that it would not apply the tag of Below Listings Standard (BLS) on the names of the companies nor impose fines on them during the extended period.

    “While we believe that the timely disclosure of financial information is critical to stakeholders in the capital market as well as investors, the challenges which the entities are facing are germane. It is in view of the extenuating circumstances that the Exchange is granting all listed companies an extended filing date of 30 days from the due date of the required periodic financial submissions,” General Manager, Legal and Regulation Division, Nigerian Stock Exchange (NSE), Ms. Tinu Awe, had said.

    NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. Under the corporate governance and rules compliance assessment report known as X-Compliance Report, NSE identified four different kinds of tags or symbols to alert investors about the status of each quoted company. These included below listings standard (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, 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.

  • ‘Why telcos can’t list on NSE’

    ‘Why telcos can’t list on NSE’

    Former President of the Association of Telecoms Companies of Nigeria (ATCON), Engr Titi Omo-Ettu, has said the non-institutionalisation of corporate governance in the country is one of the reasons why the telecom companies operating in Nigeria have refused to list on the Nigeria Stock Exchange (NSE).

    He said the telcos may begin to look in that direction when corporate governance is put in place. According to him, this problem may have informed the stakeholders’ forum on corporate governance organised by the Nigerian Communications Commission (NCC) in Lagos.

    He argued that when the issue of corporate governance is embraced, serious companise will look in the direction of listing on then NSE.

    Speaking on Board Leadership & Governance at the stakeholders’ corporate governance forum, MTN board chairman, Dr Pascal Dozie, said it was the absence of corporate governance that led to the demise o some banks in the country, arguing that where there is a strong board, the company is unlikely to die the way the banks went unders.

    According to him, accepting a board appointment is not a tea party because precious time will be spent on running the company. He therefore advised people who are not ready to serve not to take up the board appointment of any company.

  • New earnings reports will drive equities, say experts

    Second quarter earnings reports would enliven equities and trigger a new level of bullish rally at the stock market, analysts have said.

    Against the downtrend that has pervaded the market in recent weeks, market pundits said the release of interim reports for the second quarter and first half of the year would spur the performance of the market.

    Analysts at Sterling Capital Markets and FSDH Merchant Bank said they expected the new earnings reports to moderate the bearishness and create new impetus for continuing market recovery.

    Post-listing rules at the Nigerian Stock Exchange (NSE) require that quoted companies should submit their reports, not later than three months after the expiration of the period. However, the NSE provides that where a filing due date falls on a weekend or holiday, the filing will fall due on the next business day.

    Economist and investment advisor, Sterling Capital Markets Limited, Sewa Wusu said the market could witness a rebound this quarter on the strength of earnings reports for the second quartear.

    According to him, half-year interim results of companies would be major catalysts for the market this quarter as investors seek to optimize their returns through bargain hunting.

    He also noted the lessening tension in the global economic outlook with recent improvement in the United States of America (USA)’s economy and positive signs that it may not drastically cut the stimulus that had supported liquidity.

    He however cautioned that Nigeria’s weakening macroeconomic indices may moderate performance of the market pointing out that declines in crude oil production and foreign reserves might tighten government’s revenue and hamper its role as provider of liquidity to the financial system.

    Analysts at FSDH said the unaudited results of quoted companies should drive equities performance noting that there are buy opportunities in the banking sub-sector of the equities market due to the fact that the sector is undervalued.

    In the first half, the Nigerian stock market recorded a six-month average return of about 28.8 per cent in the first half of this year, leaving investors with approximately N2.45 trillion in capital gains during the period.

    Notwithstanding the downtrend that characterized June, significant successive bullish rallies in previous months still left Nigerian equities as one of the best-performing market during the period.

    In value terms, the increase of N2.45 trillion in the first half has already surpassed total gains of N2.44 trillion recorded for the entire 2012. However, the real benchmark return of 28.80 per cent is 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 Nigerian Stock Exchange (NSE) closed the first half at N11.426 trillion as against its value-on-board of N8.974 trillion that started the year, representing an increase of 27.3 per cent. The All Share Index (ASI), which doubles as benchmark index for all equities on the NSE and country index for Nigeria, rose from 2013’s opening index of 28,078.81 points to close the first half at 36,164.31 points.

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

    NSE Industrial Goods Index showed a six-month average return of 49.12 per cent. Ethical investors fared better as NSE-Lotus Islamic Index indicated a return of 42.31 per cent. NSE 30 Index, which tracks 30 most capitalised stocks, posted a first half return of 27.38 per cent. NSE Consumer Goods Index showed a return of 21.40 per cent. NSE Banking Index showed average return of 18.46 per cent while NSE Insurance Index indicated a return of 16.90 per cent. The NSE Oil and Gas Index showed that downstream investors recorded modest return of 12.18 per cent.

  • NSE picks Sterling Bank, others for market’s top index

    •Reviews seven indices

    The Nigerian Stock Exchange (NSE) is undertaking a review of stock market indices to reflect the capitalisation and liquidity of key determining stocks for the market and some key sectors.

    The biannual review includes two broad indices and five sectoral indices. The broad indices are the NSE 30 Index, which tracks the 30 most capitalised stocks on the NSE and the NSE 50 Index, an extended index that tracks 50 most capitalised stocks. The sectoral indices include the NSE Banking Index, the NSE Consumer Goods Index, the NSE Oil & Gas Index, NSE Industrial Index and the NSE Insurance Index.

    The revised indices will become effective on July 1, this year.

    Preliminary report by the NSE on the review of the indices indicated that Sterling Bank Plc, Oando Plc, CAP Plc, Presco Plc and Okomu Oil Palm Plc would be making debut on the NSE 30 Index, underlining the growing profile of the stocks. They will likely replace the five of Total Nigeria, Dangote Flour Mills, Mobil Oil Nigeria, Ashaka Cement and GlaxoSmithKline Consumer Nigeria.

    Besides, the report indicated that Sterling Bank would also make the NSE Banking Index, an influential index that tracks the largest sector of the market. Two other banks- Unity Bank and Wema Bank, are expected to also make the banking index. They will replace the trio of Skye Bank, Fidelity Bank and Diamond Bank.

    The NSE 50 Index will see entry of five stocks including Livestock Feeds, AIICO Insurance, Wapic Insurance, Eterna and Northern Nigeria Flour Mills in replacement of stocks such as Custodian and Allied Insurance, Nigerian Aviation Handling Company, Continental Reinsurance and Cement Company of Northern Nigeria.

    The stocks that make indices are usually picked from the most liquid sectors based on their market capitalisation. The liquidity is based on the number of times the stock is traded during the preceding two quarters. To be included, the stock must be traded for at least 70 percent of the number of times the market opened for business.

    The NSE 30 Index, NSE 50 Index and NSE Industrial Index are modified market capitalisation index with the numbers of included stocks fixed at 30, 50 and 10 respectively. The numbers of included stocks in the NSE Consumer Goods Index, Banking Index, Insurance Index and Oil and Gas Index are 15, 10, 15 and seven.

    As such, the sectoral indices comprise the top 15n most capitalised and liquid companies in the insurance and consumer goods sectors, top 10 most capitalised and liquid companies in the banking and industrial goods sector and the top seven most capitalised and liquid companies in the oil and gas sector.

    The Index Committee of the NSE stated that the Exchange was not oblivious of the fact that the number of the stocks that will be included in some of the indices may be inappropriate for optimal portfolio diversification, assuring that the numbers would be reviewed as sector conditions change.

  • Why market downtrend may persist, by experts

    The downtrend at the stock market in recent days may subsist in the immediate period as equities undergo price corrections in view of their earnings and prospective yields.

    Market pundits said the price corrections could last for the next few weeks as investors seek to lock in profit from substantial capital gains in recent months while buying investors re-evaluate the price-earnings potential of equities to determine the appropriate entry prices.

    The Nigerian stock market opened this week with a loss of N1.14 trillion in the previous eight trading days. Aggregate market capitalisation of all equities on the Nigerian Stock Exchange (NSE), which had stood at N12.855 trillion June 11, 2013, opened this week at N11.715 trillion.

    The All Share Index (ASI), the main value-based index that tracks prices of all equities on the NSE, has tracked the downtrend for the past two weeks, recording its first successive weekly decline so far this year. The ASI opened this week at 36,464.39 points as against 40,012.66 points recorded prior to the downtrend on June 11, 2013.

    Investment managers and analysts told The Nation that several equities appeared to have been overvalued by the sustained bullish rally in the previous months, setting the market for a round of price corrections.

    Managing director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said the price corrections may last for the next few months based on the fact that some of the stocks that had driven the market rally seemed to be overpriced.

    According to him, a valuation of most of the real sector companies that have enjoyed significant price appreciation, based on earnings yield and price earnings multiple shows that there is a gradual disconnect between their earnings and market prices.

    “This could be an early indication some bubble in their market prices, hence the expectation of price corrections over the coming months,” Chukwu said.

    Managing director, GTI Securities, Mr. Tunde Oyekunle, said what the market is undergoing now is a minor price correction due to profit-taking transactions by investors who had garnered substantial gains in recent period.

    He however expressed concerns that the minor correction could lead to further significant correction if the global economic outlook worsened citing the strong linkage between Nigerian market and foreign investors.

    According to him, the current market situation calls for cautions on the part of buying investors while it will make for better investment management for existing investors to take some profit to balance their portfolios with some liquidity.

    Economist and investment advisor, Sterling Capital Markets, Mr. Sewa Wusu, said while the outlook for the stock market remains positive over the long term, the market could be under selling pressures from profit-taking investors.

    “The outlook for the stock market looks positive in the long-term horizon. In the near term however, there is the likelihood of the infiltration of selling pressure given the recent bullish run we have witnessed in recent time. Most funds managers may take profit on recent gains to optimize return on their portfolios,” Wusu said.

    He advised investors to evaluate the market on the prospects for good long-term returns rather than concerns on short-term fluctuations, pointing out that the capital market is a market for long term.

    The downturn at the stock market came on the heels of global downshift in world’s equities’ market amidst worries about the outlooks for advanced economies. The International Monetary Fund (IMF) cut its outlook for USA’s economic growth in 2014 from 3.0 per cent published in April to 2.7 per cent, citing what it described as “excessively rapid and ill-designed” fiscal cuts. The IMF warned that fiscal reductions in the areas of education, science and infrastructure could reduce potential growth.

    Nigerian equity market has a strong linkage with the international financial markets. NSE’s update showed that foreign investors accounted for 64.48 per cent of total transaction value in April, a substantial increase on 52.78 per cent they recorded in March when they displaced domestic investors as the most influential investment block.

  • Orji joins NSE Board

    AN eminent investment banker and economist, Professor Herbert Onye Orji, has joined the 14-member National Council of the Nigerian Stock Exchange (NSE).

    Prof Orji is the Chairman of the Audit and Risk Management Committee of NSE. He was at various times, the Chief Executive Officer (CEO) of Summa Guaranty and Trust Co Plc; Senior Advisor-Emerging Markets Group, Inc, United States for IFC’s three countries Discount Houses Projects; CEO of Progress Bank of Nigeria Plc; Chief Representative and General Manager of United Bank for Africa Plc, UK; Vice President of American Express Bank, New York and Senior Systems Programmer with Riggs National Bank, Wash. DC.(now PNB).

    An award-winning author of five books on banking, finance, capital markets, risk management and Applied Economics, Prof Orji has also published over 80 articles and reports in professional and academic journals in Africa, United States and the United Kingdom.