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Tag: NSE

  • PCMN reverts to private status, delists from NSE

    Shareholders of Paints and Coatings Manufacturers Nigeria (PCMN) Plc are scheduled to meet and vote on sub-joined resolutions that will see the reversion of the company to a private limited liability company and the delisting of its shares from the Nigerian Stock Exchange (NSE).

    A Federal High Court has directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos where shareholders will deliberate and vote on the scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    The NSE has confirmed that the company had submitted application for scheme of arrangement between the company and holders of its fully paid up ordinary shares in furtherance of the delisting.

    The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent equity in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

    The block divestment involved transfer of a total of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.

     

  • ‘Why we passed Bill demutualising NSE’

    ‘Why we passed Bill demutualising NSE’

    The decision of the House of Representatives to demutualise the Nigerian Stock Exchange was based on the need to make it more attractive to investors by opening up the capital market in line with global best practices, the Speaker, Hon. Yakubu Dogara, has said.

    Dogara, in a statement by his Special Adviser on Media & Public Affairs, Mr. Turaki Hassan yesterday, said the action would make more multinational corporations to get their companies listed, thereby contributing to the development of the economy.

    By implication, the demutualisation of the NSE would bring the ordinary Nigerian closer to benefiting from the nation’s commonwealth, he added.

    Sequel to the adoption of the recommendations of a report by Hon. Yusuf Ayo Tajudeen – headed Committee on Capital Market and Institutions on a Bill for an Act to facilitate the development of Nigeria’s Capital Market by enabling the conversion and re-registration of the Nigerian Stock Exchange from a company limited by guarantee to a public company limited by shares; and for related matters, last week, the Green Chamber demutualised the Nigeria Securities Exchange.

    Dogara noted that the changes made by the House, when concurred to by the Senate is signed into law by the President, it will result in a flexible  governance  structure  in the capital market as well as stimulate the involvement of investors in governance, thereby making it easy to take decisive  action  in  response  to  changes  in  the  business environment where and when necessary.

    Increased access to resources for  capital  investment  raised  by  way  of  equity  offerings  or  private  investment will also be assured, he said.

    Recall that in June 2016, Dogara visited the stock exchange in Lagos where he sounded the closing gong and promised to use legislative tools to reposition the capital market for maximum performance.

    At the time, the Speaker said it was unacceptable for a large chunk of the nation’s resources or capital to be heavily concentrated in the hands of few chief executive officers.

    This, he added, would pose serious threat to the sustenance and survival of democracy as the inequality gap would further widen and the middle class eliminated thereby plunging more people into abject poverty.

    Conversely, deepening of Nigeria’s capital market will enhance wealth redistribution and deliberately allow it to trickle down to the ordinary people as against the practice where multinational corporations repatriate their profits 100 percent to their own countries without investing a dime back to the Nigerian economy, he said.

  • Why we demutualised NSE – Dogara

    Why we demutualised NSE – Dogara

    The Speaker of the House of Representatives, Yakubu Dogara, said on Monday the House demutualised the Nigerian Stock Exchange (NSE) to make it more attractive to investors.

    Dogara, in a statement issued by his Special Adviser on Media and Public Affairs, Mr. Turaki Hassan, said the action would enable more multinational corporations to get their companies listed in the NSE and consequently contribute to the development of the economy.

    “By implication, the demutualisation of the NSE will bring the ordinary Nigerian closer to benefiting from the nation’s commonwealth,” he stated.

    The House had last week demutualised the NSE following the adoption of a report submitted by Yusuf Ayo Tajudeen- led Committee on Capital Market and Institutions on a Bill for an Act to facilitate the development of Nigeria’s Capital Market.

    Dogara noted that the changes made by the House when concurred to by the Senate and signed into law by the President would ensure flexible governance structure in the capital market and stimulate the involvement of investors in governance.

     

  • NSE implements new kobo-based pricing rules

    NSE implements new kobo-based pricing rules

    The Nigerian Stock Exchange (NSE) will today begin the implementation of its amendments to the pricing methodology and par value rules, which remove the stopgap that has supported stocks at their nominal value and will allow shares of quoted companies to trade as low as one kobo.

    After a long-drawn stakeholders’ engagement and training including a week-long hands-on training for stockbrokers, financial journalists and other analysts, which was rounded off at the weekend, the Exchange will this morning open trading with the revised pricing rules.

    Under the new pricing rules, share prices shall be allowed to trade as low as a floor price of one kobo. The new rules effectively remove the current rule which places minimum allowable price to trade for any stock at its nominal value, irrespective of the market forces.

    A classification guideline for the implementation of the new pricing methodology indicated that about 67 per cent or 116 of quoted companies will come under the immediate pricing band of one kobo, 27 per cent will come under a band of 5.0 kobo while the remaining 6.0 per cent will come under a band of 10 kobo.

    Head, Market Surveillance and Investigation, Nigerian Stock Exchange (NSE), Mr. Abimbola Babalola, who confirmed the implementation of the new pricing rules, noted that the amended stratification of price movements, price limits and tick sizes was aimed at improving liquidity, narrowing spreads, and ensuring that all price-improving transactions have material impact.

    According to him, the new pricing rules will make the market to be more efficient for all participants.

    The new rules stipulate that “notwithstanding its par value, the price of every share listed on the Exchange shall be determined by the market, save that no share shall trade below a price floor of one Kobo per unit”.

    Par value is the nominal value of a share as stated in the Memorandum of Association of the company while price floor means the amount below which the price of one unit of a share shall not be permitted to trade, and the minimum amount which must be paid for a share in the event of a drop in the unit price of that share.

    The amendments to the pricing technology at the stock market will see a categorisation of quoted companies under three groups with different pricing rules.

    The tick size-the minimum price movement by which the price of a trading instrument can change-will also be lowered to as low as one kobo, although all quoted companies shall continue to trade within the current pricing band of 10 per cent maximum allowable change per day.

    Under the new groupings and pricing rules, stocks under the first category-Group A, shall consist of large-cap equities that are priced at N100 per share or above for at least four of the last six trading months, or new security listings that are priced at N100 or above at the time of listing on the Exchange.

    The second category-Group B, shall consist of medium-priced equities that are priced at N5 per share or above but less than N100 per share for at least four of the last six months, or new security listings that are priced at N5 per share or above but less than N100 per share at the time of listing on the Exchange.

    The third category-Group C, where majority of listed companies fall, shall consist of equities that are priced at one kobo per share or above but below N5 per share for at least four of the last six months, or new security listings that are priced at one kobo per share or above but below N5 per share at the time of listing on the Exchange.

    The new rules expectedly link price movements and minimum quantity of equities traded that will change the published price of an equity security. Stocks under Group A shall have price change with minimum of 10,000 units; stocks under Group B shall have price movement with a minimum of 50,000 units while stocks under Group C shall have price change with minimum volume of 100,000 units.

    The tick size-the minimum price movement that any equity shall trade, shall also be linked to the groups. Group A will have a tick size of 10 kobo, Group B, five kobo while Group C will have a tick size of one kobo. This implies that the share price of each stock shall be allowed to move up or down in multiples of its tick size.

    There are only nine stocks under the “high-priced stocks” category of Group A1. These include Dangote Cement Plc, Mobil Oil Nigeria Plc, Nestle Nigeria Plc, Nigerian Breweries Plc, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund (NESF), Total Nigeria Plc and Seplat Petroleum Development Company Plc.

  • NSE market indicators drop further by 1.16%

    NSE market indicators drop further by 1.16%

    The Nigerian Stock Exchange ( NSE ) market indicators on Tuesday dropped further by 1.16 per cent due to market volatility caused by profit taking.

    Market capitalisation shed N187 billion or 1.16 per cent to close at N15.902 trillion compared with N16.089 trillion on Monday.

    The All-Share Index lost 522.68 points or 1.16 per cent to close at 44,389.85 against 44,912.53 achieved on Monday.

    Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., attributed the development to profit taking embarked by some investors ahead of 2017 earnings season.

    Omordion said some investors were taking adavantage of 18 per cent growth posted by the market in the past three weeks.

    Mobil Oil recorded the highest loss, declining by N7 to close at N209 per share.

    Read also: NSE, CBi award corporate governance rating to 33 companies, 435 directors

    Dangote Cement trailed with a loss of N4 to close at N269, while Julius Berger was down by N1.60 to close N30.40 per share.

    Guaranty Trust Bank shed N1.51 to close at N52, while Zenith International Bank dropped by 75k to close at N32 per share.

    On the other hand, Seplat topped the gainers’ table, increasing by N9.99 to close at N685 per share.

    Unilever followed with a gain of N2.21 to close at N46.41, while Nigerian Breweries gained N2 to close at N145 per share.

    Presco appreciated by N1.31 to close at N70, while Nestle added N1.11 to close at N1,471.11 per share.

    A breakdown of the activity chart showed that Skye Bank was the toast of investors trading 150.37 million shares worth N226.77 million.

    FBN Holdings followed with an account of 104.17 million shares valued at N1.36 billion, while Wema Bank traded 64.09 million shares worth N87.36 million.

    Diamond Bank sold 44.39 million shares valued at N144.80 million, while Transcorp exchanged 43.39 million shares worth N94.28 million.

    In all, the volume of shares traded closed lower with an exchange of 737.86 million shares valued at N7.67 billion traded in 8,927 deals.

    This was against the 4.44 billion shares worth N15.93 billion shares exchanged in 8,572 deals on Monday.

    NAN

  • NSE, CBi award corporate governance rating to 33 companies, 435 directors

    NSE, CBi award corporate governance rating to 33 companies, 435 directors

    The Nigerian Stock Exchange (NSE) and Convention on Business Integrity (CBi) have awarded high corporate governance rating to 33 companies and 435 directors under the Corporate Governance Rating System (CGRS) initiative.

    At a media briefing yesterday in Lagos, Chairman, Steering Board of the Corporate Governance Rating System (CGRS), Ms Tinuade Awe said 25 companies successfully passed the rating test, having scored the required pass mark of 70 per cent while 87 other companies are at various stages of completion of the process.

    These 25 successful companies joined eight companies that retained their rating from the CGRS pilot in 2014, bringing the total number of companies rated now to 33. Also, 435 directors passed their certification test. The CGRS was introduced into the capital market in 2012 and was launched in 2014 with a number of volunteer companies including those listed on the Exchange premium board.

    Awe, who is also Executive Director, Regulation at the NSE, the aim of the CGRS rating is to improve the level of corporate governance of listed companies noting that the rating is a developmental index that will help to boost the company’s image and better cooperation when it needs to transact with foreign partner.

    She explained that the self assessment is in three stages which is corporate compliance with its component indicator covering five categories, business ethics and anti corruption, internal and external audit and control, shareholder and stakeholder rights, board structure and responsibilities, transparency and disclosure.

    The companies that have attained the rating during the first roll out phase are Africa Prudential Plc, Continental Reinsurance Plc, Cornerstone Reinsurance Plc, custodian and Allied Plc, Dangote Sugar Refinery Plc, eTranzact International Plc, Flour Mills of Nigeria Plc, Forte Oil Plc, GlaxoSmithKline Consumer Nigeria plc, Guaranty Trust bank Plc, Guiness Nigeria plc, Honeywell Flour Mills, Lafarge Africa plc, NEM insurance plc, Nestlé Nigeria plc, Nigerian Breweries Plc, Pz Cussons plc, Red Star Express Plc, Stanbic IBTC Holdings Plc, Transcorp Hotels Plc, Unilever Nigeria Plc, United Capital Plc, WAPIC insurance plc and Wema Bank. Others that started during the pilot stage in 2014 included Access Bank, Dangote Cement, Diamond Bank, FBN holdings, AXA mansard Insurance, Nigerian Aviation Handling Company, United Bank for Africa and Zenith Bank.

    Chief Executive Officer, Convention on Business Integrity (CBi), Mr Soji Apampa, said the success rate and increased participation in the CGRS initiative is a testament to the rising acclaim that corporate governance is receiving in corporate Nigeria.

    “It is important to celebrate companies and directors who are leading the renewed charge while encouraging others to participate. We continue to celebrate companies where we notice that corporate governance is evolving nicely,” Apampa.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, noted that as the Exchange make surefooted steps to globalise its market, the CGRS rating will bolster the confidence to invest in the Nigerian market especially from international investors.

    “Increasingly, our listed companies are meeting their compliance and requirements and we will continue to protect investors in our market through a robust regulatory regime,” Onyema said.

  • Equities maintain price rally on NSE, Index hits 43,041.54

    Equities maintain price rally on NSE, Index hits 43,041.54

    Trading on the Nigerian Stock Exchange ( NSE ) on Thursday maintained a bullish run with the All-Share Index hitting all-time high of 43,041.54, while market capitalisation crossed over to N15.317 trillion.

    The index rose by 1,225.43 points or 2.93 per cent to close higher at 43,041.54 against 41,816.11 recorded on Wednesday.

    Similarly, the market capitalisation which opened at N14.880 trillion inched N437 billion or 2.94 per cent to close at N15.317 trillion following price growth in anticipation of 2017 audited results.

    Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., attributed the market rally to investors’ anticipation of improved 2017 audited results that would start hitting the market very soon.

    Omordion said investors were positioning in stocks with good fundamentals ahead of earnings release.

    Seplat led the gainers’ table with a gain of N15.01 to close at N675.01 per share.

    Nigerian Breweries came second with N6.68 to close at N152.68, while Guinness appreciated by N5.01 to close at N105.21 per share.

    Dangote Cement also gained N5 to close at N252, while Okomu Oil Palm added N4.46 to close at N72.15 per share.

    Read also: NSE market capitalisation rises by N29bn

    Conversely, Flour Mills recorded the highest price loss, declining by 40k to close at N33 per share.

    Dangote Sugar Refinery trailed with a loss of 30k to close at N21.50, while Berger Paint dipped 25k to close at N9.10 per share.

    Cadbury lost 20k to close at N16.80, while UPl declined by 13k to close at N2.63 per share.

    Also, the volume of shares traded appreciated by 43.63 per cent with an exchange of 1.62 billion shares worth N17.38 billion transacted in 8,968 deals.

    This was in contrast with 1.09 billion shares valued at N13.29 billion traded in 8,025 deals on Wednesday.

    Transcorp was investors delight, accounting for 208.78 million shares worth N439.19 million.

    Diamond Bank trailed an account of 149.70 million shares valued at N368. 33 million, while Zenith International Bank traded 129.43 million shares worth N4.40 billion.

    FBN Holding traded 93.16 million shares valued at N1.06 billion, while Access Bank sold 89.46 million shares worth N1.08 billion.

    NAN

  • NSE begins direct flow of information to stock market

    NSE begins direct flow of information to stock market

    The Nigerian Stock Exchange ( NSE ) has launched the auto-flow mechanism in its trading engine. This allows companies to send their corporate earnings’ reports and other information directly to the trading engine on a real time basis.

    The auto-flow function, an existing function of the issuers’ portal had been partially disabled in order to allow a first level, non-substantive review of filings by the NSE before they are circulated to the market and the general public. Since inception in 2013, the Exchange has seldom permitted information to auto-flow to the market.

    With the launch of the full auto-flow mechanism, all corporate information shall flow from the companies to the stock market, a move that will reduce possibility of interference and distortion of the price discovery mechanism.

    A circular obtained by The Nation at the weekend indicated that the full auto-flow mechanism began on the first trading session in 2018.

    The auto-flow mechanism is one of the functionalities of the X-Issuer platform of the Exchange. It allows information filed by companies and other issuers through the issuers’ portal to flow directly to the market on a real time basis without any human intervention.

    According to the Exchange, the time is ripe for all information submitted via the issuers’ portal to auto-flow directly to the market without any intervention of the Exchange.

    The NSE had noted that operationalising the complete auto-flow function on the issuers’ portal will eliminate the current practice of reviewing financials before the financials flow to the market and the Exchange’s website, thus ensuring a real time flow of information directly from the issuer to the market.

    In order to ensure a seamless transition from  previous system to a complete auto-flow system, the Exchange had adopted a four-phase approach that included regulatory and statutory disclosures training, assessment of issuers’ compliance with disclosure requirements, pilot test of auto flow and full launch of complete auto flow.

    Under the phase one, which was held between November and December 2016, the Exchange had organised trainings for company secretaries, compliance officers, chief finance officers and other issuers’ representatives charged with the responsibility of making disclosures to the Exchange.

    In the second phase, the Exchange conducted a comprehensive review of issuers’ filings using interim returns for the last quarter of 2016 and the December 2016 audited accounts of listed companies with December year ends. Deficiencies identified at this phase were highlighted and communicated to companies for correction in subsequent filings.

    Under the third phase, the Exchange conducted a pilot test of the auto-flow mechanism using September 2017 interim returns and September audited accounts of companies with September year ends. Any report with regulatory and statutory deficiencies was withdrawn and corrected immediately. There was no sanction imposed for any report with deficiencies at this stage.

    Under the current final phase, the Exchange has commenced full operationalisation of the auto-flow mechanism in X-Issuer using December 2017 audited accounts.

    The circular indicated that with the full launch of auto-flow, the Exchange will apply regulatory sanctions on companies whose filings flow to the market with any form of deficiency.

     

  • NSE plans new derivatives to stem price fluctuations

    NSE plans new derivatives to stem price fluctuations

    The Nigerian Stock Exchange (NSE) plans to introduce the Exchange Traded Derivatives (ETDs) into the stock market as part of efforts to widen investment instruments and to address some underlying causes of volatile price fluctuations.

    The NSE at the weekend released draft rules and guidelines that will serve as the main regulatory framework for the planned ETDs.

    The General Counsel and Head of Regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, said the proposed introduction of the ETDs is in line with the strategic objective of the Exchange to increase the number of asset classes traded on its platform.

    According to her, the introduction of the ETDs is also in recognition of the need and appetite for these risk management and investment products in order to facilitate hedging of investment risks and diversification of asset portfolios.

    She noted that in the cash markets, investors are typically exposed to asset price risk and in the absence of short selling and the supportive securities lending options, investors are highly susceptible to significant diminution in portfolio values once there is a reversal of a bull trend.

    “Thus, investors engage in aggressive efforts to lock-in unrealised profits, thereby resulting in a self-reinforcing market downturn, which negatively impacts investor confidence, and trading volumes. Derivative instruments enable investors to hedge their portfolios against adverse price movements which can result in unexpected losses,” Awe said.

    She pointed out that the absence of derivative products contributes to persistent problems of inability of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices and lacklustre activity in the underlying cash market, particularly in times of stressed economic and market conditions.

    She added that the absence of derivative products also leads to lack of confident market participants as well as volatility in Exchange revenues.

    “Derivative instruments are financial contracts that are critically dependent on a regulatory framework which supports their enforceability. However, The Exchange does not currently have the requisite framework for the creation, listing, and trading of derivatives products. Accordingly, the draft derivatives rules seek to create a regulatory framework for the aforementioned purposes. The framework will also regulate the activities of the trading members and other market participants in the Exchange Traded Derivatives market,” Awe said.

    She said the Exchange is involving relevant stakeholders in the rule-making for the ETDs in order to provide an avenue for the exchange of ideas and opinions regarding a new area within the exchange space in Nigeria.

    Meanwhile, the draft derivatives rules are subject to the approval of the National Council of the Exchange and the Securities and Exchange Commission (SEC).

  • NSE adds Sterling Bank, Skye Bank, others to most influential stocks’ groups

    THE Nigerian Stock Exchange (NSE) is expected to move  Sterling Bank Plc, Diamond Bank and three other stocks to the top index of 30 most capitalised stocks  in the forthcoming review of the stock market’s indices.

    The NSE is expected to review the six group indices that track performance of some groups of stocks at the stock market by the end of this month. These included the NSE 30 Index, which tracks the 30 most capitalised stocks; the NSE 50 Index, which tracks the top 50 stocks; the NSE Banking Index, which tracks banking subsector; the NSE Consumer Goods Index, which serves as benchmark index for the consumer goods stocks; the NSE Oil and Gas Index, which tracks the oil and gas sector; the NSE Industrial Index, which underscores the building materials and other industrial goods stocks; the NSE Insurance Index, that tracks insurance stocks , NSE Pension Index-which tracks stocks specially screened in line with pension investment and the NSE Lotus Islamic Index, which tracks select stocks adjudged to meet the stringent Islamic standards of ethical stocks.

    At the completion of the first stage of its year-end review, the NSE indicated that it will change five stocks within the NSE 30 Index. The five of Dangote Flour Mills Plc, Diamond Bank Plc, NASCON Allied Industries Plc, Cadbury Nigeria Plc and Sterling Bank Plc will replace 7Up Bottling Company, Oando, UACN, Julius Berger Nigeria Plc and Forte Oil Plc.

    Under the NSE Pension Index, the review will see the replacement of four companies-7Up Bottling Co Plc, Oando Plc, Conoil Plc and united Capital Plc with Honeywell Flour Mills Plc, International Breweries Plc, Continental Reinsurance Plc and Cement Co of Northern Nigeria Plc.

    Lafarge Africa and Nigerian Aviation Handling Company will be added to the ethical NSE Lotus Islamic Index, while 7Up Bottling Company Plc and GlaxoSmithKline Consumer Nigeria Plc will be removed from the ethical stocks’ list.

    In the influential NSE Banking Index, Skye Bank Plc and Unity Bank Plc will replace Wema Bank Plc and Sterling Bank Plc.

    The NSE Consumer Goods Index will include Northern Nigeria Flour Mills Plc, DN Tyre & Rubber Plc and Nigeria Enamelware Plc while 7Up Bottling Company Plc, Vitafoam Nigeria Plc and Champion Breweries Plc will be removed.

    Under the populous NSE Insurance Index, four companies-Equity Assurance Plc, Mutual Benefits Assurance Plc, Sovereign Trust Insurance Plc and Consolidated Hallmark Insurance Plc will be replaced with new entrants including Regency Alliance Insurance Plc, STACO Insurance Plc, Universal Insurance Plc and Standard Alliance Insurance Plc.

    The rebalanced NSE Industrial Index will have Grief Nigeria Plc and Austin Laz & Company Plc in exchange for Portland Paints & Products Nigeria Plc and DN Meyer Plc while the NSE Oil and Gas Index will have Japaul Oil & Maritime Services Plc and Eterna Plc as replacement for Oando Plc and MRS Oil Nigeria Plc.