The Nation Newspaper

Tag: Stock Exchange

  • Stock Exchange plans additional public disclosure for companies under restructuring

    The Nigerian Stock Exchange (NSE) plans to a mandatory public-disclosure briefing of all stakeholders by quoted companies that are undergoing restructuring.

    While the forum will be designed along the concept of the existing ‘Fact Behind the Figure’ forum at the Exchange, it will be mandatory and be regarded as part of regulatory compliance process unlike the ‘Fact Behind the Figure’ that is voluntary.

    Under the ‘Fact Behind the Figure’, the management of a company is allowed to x-ray the underlying reasons for the performance of the company within a specified period and outline the outlook based on the ongoing strategies. The audience usually includes dealing member firms, management of the Exchange, financial journalists and analysts and other stakeholders.

    A draft on the new initiative obtained by The Nation indicated that the additional public disclosure requirement for companies undergoing restructuring, which will be tagged ‘Fact Behind the Restructuring (FBR)’, will be mandatory and be treated as a requirement for all quoted companies irrespective of the board on which a company is listed.

    According to the draft, the new initiative is aimed at enhancing transparency and providing adequate information about listed companies to investors to promote investor protection and deepening of the market.

    “These companies have been out of operation for periods of differing lengths due to financial and managerial challenges and as such the market does not have current information on them. The FBR is expected to educate the investing public on the various activities the companies have embarked upon to resuscitate their businesses and bring them back to life as well as into compliance with their post listing obligations,” the draft indicated.

    The Nation’s check indicated that not less than 23 companies have indicated that they were undergoing corporate restructuring to the NSE.  These included Afrik Pharmaceuticals Plc, Union Dicon Salt Plc, Anino International Plc, African Paints (Nigeria) Plc, Rokana Industries  Plc, Navitus Energy Plc, Thomas Wyatt Nigeria Plc, Nigerian German Chemical Plc, Golden Guinea Breweries, FTN Cocoa Processors Plc, Aluminium Manufacturing Company of  Nigeria Plc, MTI Plc, Beco Petroleum Product Plc, Unic Insurance Plc, Adswitch Plc, Jos International Breweries Plc, G Cappa Plc, Goldlink Insurance Plc, UTC Nigeria Plc, IPWA Plc, West Africa Glass Industries Plc, Mtech Plc and Investment and Allied Insurance Plc.

    It should be recalled that AIICO Insurance Plc had recently completed its group corporate restructuring and consolidation. The corporate restructuring included the consolidation of other subsidiaries such as AIICO General Insurance Company Limited and AIICO Asset Management Company Limited.

    The consolidation led to cancellation of 1.87 billion ordinary shares of AIICO Insurance Plc, reducing the issued and fully paid ordinary shares of the company to some 6.93 billion ordinary shares.

    UTC Nigeria Plc had also recently taken a massive sweep in its ongoing restructuring exercise with the replacement of its entire six-man board of directors with a new board of directors.

    A new board of directors was constituted to reflect the change in the ownership interests and key points of restructuring, which had saved the ailing food company from being delisted from the NSE.

    In a response to an earlier media enquiry by The Nation, the management of the Exchange had said some incentives and waivers might be provided for companies with clear restructuring roadmaps and desired commitments to their restructuring processes.

    According to the Exchange, there would be consideration for companies making efforts to comply with the post-listing rules and best practices.

    “The Exchange will give due consideration to well-reasoned and supported requests from companies considering restructuring on a case by case basis,” NSE stated.

    Although the NSE did not outline the applicable waivers and incentives, sources in the know said the waivers may include the reduction and restructuring of outstanding annual listing fees and penalties for the heavily indebted companies and exemption from further penalties within a given timeframe.

  • ‘Stock Exchange has opportunities for growth’

    ‘Stock Exchange has opportunities for growth’

    The Chief Executive Officer of Seplat Petroleum, Austin Avuru, has advised companies to pursue good corporate governance and institutional framework as a means to accessing funds for growth and development at the Stock Exchange.

    He spoke at the tenth edition of the US-Africa Business Summit which held in Addis Ababa, Ethiopia.

    Avuru, who was a panelist at a session on ‘ Financing Africa’s Private Sector Growth’ noted, “that there are funds actually sitting and waiting for investable opportunities, for example from the Pension funds and Insurance companies” and that African businesses should take advantage of these opportunities to develop their businesses and grow the country’s economy.

    He noted that unlike in the past when “the Nigerian banking sector did not lend up to $20m to any sector for over 20 years, the oil and gas sector in the country alone has accessed credit facilities to the tune of $5.7b within the past five years” while insisting that “indigenous entrepreneurs must work towards attaining international standards of operation as a way to attracting more fund injection be it through the banks or public offerings.”

    Sharing the experience of Seplat which is the first upstream company to be dual listed on the Nigeria and London Stock Exchanges, Avuru told the audience that while going public remains one of the most veritable ways of raising funds for a business entity, any company aiming at being listed on the stock exchange must be prepared to open itself up to public scrutiny.

  • Stock Exchange woos La Casera, Dana Group, others for listing

    The management of the Nigerian Stock Exchange (NSE) has started discussions with the management of many unlisted public limited liability companies to list their shares on the secondary market as part of efforts to deepen the market and allow wider participation by retail investors and institutions.

    The management of the NSE is wooing companies, such as Dana Group, Tower Aluminium Group, La Casera and the Nigeria Mortgage Refinance Company (NMRC) Plc, among others, to list their shares on the Exchange.

    All the companies have existing relationship with the Exchange where they have listed their debt instruments.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, who confirmed this, said the Exchange will continue to work with the companies which already have their debts instruments on its board to increase their participation with a view to getting their equities listed on any of its boards.

    “The NSE will continue its engagement with the companies and provide adequate thought leadership to drive its listing objectives,” Onyema said.

    The Dana Group is one of the largest unlisted conglomerates in Nigeria with at least 10 businesses in various sectors of the economy. Dana Group comprises of pioneering businesses with a manufacturing base. Ashmina Limited, a member of the Dana Group, manufactures intravenous fluids at a newly setup plant in Ibadanthe Oyo State capital, the very first unit in West Africa.

    Besides sterile pharmaceuticals, the plant also produces bottled table water Aquadana. Dana Air Limited provides air transportation. Dana Steel Mill had acquired a modern steel rolling mill in Katsina, Katsina State, strategically located in the Northwest. The mill produces reinforced and general-purpose steel from billets for construction and it has installed capacity of 207,000 mts per year.

    Dana Cars and Services Limited  was incorporated in 2013 and commenced operations in 2014 as the sole distributor in Nigeria for the Renault brand of vehicles, manufactured by Renault Corporation, France, one of the world’s fastest growing automobile companies. Another member of the group, Dana Plast Limited was incorporated in 1996 but it began commercial production in 2000. Dana Plast’s range of plastic finished products was reputed to be the very first in Nigeria’s history to be awarded with Nigeria Industrial Standards (NIS) certification by the Standards Organisation of Nigeria (SON).

  • Expert faults Stock Exchange on new trading platform

    Expert faults Stock Exchange on new trading platform

    A financial expert, Mr Okechukwu Unegbu, has faulted the online trading platform, `Smart Trade’, recently launched by the Nigerian Stock Exchange (NSE).

    Unegbu, a former President of Chartered Institute of Bankers of Nigeria (CIBN), spoke in an interview with the News Agency of Nigeria (NAN) in Lagos on Thursday.

    He said that the NSE should have embarked on sensitisation of investors before launching the application.

    According to him, the concept is good, but a tall order for Nigerian environment due to its peculiarity.

    Unegbu said that NSE should have embarked on nationwide sensitisation to enlighten investors before launching the online trading platform.

    “We are not in the U.S. and even, it is not everybody that can use online application to transact business,” he said.

    The expert urged the NSE to concentrate on manual trading, rather than the new platform, stressing that erratic power supply was still a major problem in Nigeria.

    He said that the exchange should also strengthen its investor education strategy to win more investors back to the market.

    According to him, the market is still battling from the loss of confidence due to the 2008 global financial meltdown.

    Unegbu advised market regulators to pursue policies that would enhance investor confidence in the market instead of concentrating on regulatory policies in the name of capitalisation and minimum operating standard.

    NAN reports that NSE, had on Nov. 18, launched the online trading platform aimed at increasing the number of retail investors to 25 million from its current five million.

    The platform was launched in conjunction with four stock broking firms of Investment One, CSL, GTI and Meristem Securities.

    The platform is to provide users with real-time market information to analyse the market trend.

  • Stock Exchange sanctions Union Diagnostic over misleading report

    Stock Exchange sanctions Union Diagnostic over misleading report

    The Nigerian Stock Exchange (NSE) has sanctioned Union Diagnostic & Clinical Services Plc over material misinformation of the investing public.

    A reliable regulatory source indicated that Union Diagnostic was directed to pay monetary fines for “filling misleading and incomplete information” as well as for engaging other corporate activities in surreptitious ways without informing the Exchange.

    According to the rules of the Exchange, quoted companies are expected to inform the Exchange of their board meetings and also seek regulatory clearance before publication of certain materials. The source indicated that Union Diagnostic held a board meeting and also made unauthorized publication, without prior approval from the Exchange.

    Union Diagnostic is the only company to be so penalized so far in 2015, according to the records of the Exchange.

    A source said the fines might not be unconnected with the half-year report and the controversial interim dividend that the company declared.

    The management of Union Diagnostic had in August 2015 initially announced an interim dividend but turned round to withdraw the interim dividend after dealers had traded on the basis of the dividend recommendation.

    Union Diagnostic, an indigenous medical diagnostics company, was the first public liability diagnostic firm in Nigeria as well as the first in its field to be quoted on the NSE.

    The withdrawn dividend recommendation was part of the highlights of the first half report of the company. Union Diagnostic had reported that turnover rose to N623.43 million in first half of 2015 as against N517.73 million in 2014. Gross profit was reported to have risen from N255.35 million to N329.47 million. Profit before tax stood at N113.16 million in 2015 as against N47.49 million in 2014 while profit after tax increased from N41.94 million in first half 2014 to N105.99 million in first half 2015.

    Third quarter report of the medical diagnostics company for the period ended September 30, 2015 released on Monday meanwhile indicated considerable growths in incomes and profit. Turnover rose to N936.76 million in third quarter 2015 as against N773.66 million in comparable period of 2014. Profit before tax doubled from N71.33 million to N155.26 million. Profit after tax also rose by about 125 per cent from N64.9 million to N145.7 million. With this, earnings per share improved from 1.8 kobo to 4.0 kobo.

  • Stock Exchange appoints financial advisers for demutualisation

    The Nigerian Stock Exchange (NSE) yesterday announced the appointment of a consortium of Rand Merchant Bank (RMB) and Chapel Hill Denham (CHD) as financial advisers on the proposed demutualisation of the Exchange.

    Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema,  said the appointment affirms the Exchange’s commitment to achieving its demutualisation in a methodical and transparent fashion.

    “This step is pivotal to a professional and successful conversion of the Exchange from a member-owned mutual organization to shareholder-owned public limited liability company that aligns with global best practices,” Onyema said.

    He reiterated the commitment of the Exchange to ensuring that the interests of all members are protected in the demutualisation exercise.

    He outlined that the management of the Exchange has implemented a number of initiatives to strengthen and improve governance adding that the demutualisation process will contribute to the sustenance and enhancement of governance at the Exchange.

    Onyema said the NSE employed a very rigorous and extensive selection process, commencing with a request for proposal (RFP) process on March 11, 2014, which invited qualified financial consortia to submit expressions of interest (EOI).  As part of the EOI, potential financial advisors (FAs) were required to express their interests as a consortium of one international and one Nigerian investment bank, where at least one party of the consortium had participated in the demutualization of a securities exchange as lead adviser.

    According to him, the qualifying consortia were sent the RFP and 13 proposals were received by deadline date. These proposals were reviewed extensively and scored based on technical and financial considerations by NSE. After a round of presentations, only three consortia progressed to the final stage which was aimed at picking the most competent consortium and extracting the best value for NSE.

    Chief executive officer, Rand Merchant Bank Nigeria and Regional Head for West Africa, Mr. Michael Larbie, said the bank was delighted to be assisting the NSE with the demutualisation.

  • Cross River lists N8b bond on Stock Exchange

    THE Cross River State Government at the weekend listed the state’s recent bond issue on the Nigerian Stock Exchange (NSE), paving the way for investors in the bond to trade on their investments.
    Cross River’s N8 Billion 17% Series 1 Fixed Rate Development Bonds due 2022 was admitted to trade at the NSE at the weekend. The bond issue was a tranche under the state’s N40 Billion debt Issuance programme.
    The listing of the Cross River’s bond brought the number of sub-national bonds on the NSE to 23. The Cross River’s bond is within the highest coupon rate in the market, at par with the Kwara Government Bond 2022, which also carried a coupon of 17 per cent.
    The Nation had in May named Cross River State as one of the six state governments and four companies that had initiated plans to raise about N350 billion through bond issues as governments increasingly turn to the capital market to bridge shortfall in national allocations.
    The state governments planned to raise between N5 billion and N40 billion in medium term revenue bonds.
    The states included Zamfara State, Cross Rivers State, Plateau State, Benue State, Kogi State and Oyo State. Zamfara State and Plateau planned to raise N30 billion each through medium-term fixed rate debt issues. Cross Rivers State was eyeing N40 billion while Benue State had filed application for N11 billion debt issue. Both Oyo State and Kogi State planned to raise N5 billion each.
    Total debts by the Federal Government and State Governments were then over N12 trillion. Official records by the Debt Management Office (DMO), the national agency that oversees debt issues by governments and state governments, had shown that total public debts by the Federal and State Governments closed the first quarter at about N12.1 trillion.
    According to the report for the period ended March 31, 2015, external debts by the Federal and State Governments stood at N1.86 trillion. Domestic borrowings by the Federal Government totaled N8.51 trillion while domestic debts by state governments stood at N1.69 trillion.
    SEC had earlier approved about N45 billion for four states including Bauchi, N15 billion; Kaduna, N8.5 billion; Ebonyi, N9.34 billion and Gombe State, N10 billion.
    Reacting to controversy over the approval of the Gombe State bond, SEC had said bond applications by sub-national governments usually follow due process in line with the rules and regulations of the Commission and extant laws guiding such issuance.
    According to the Commission, SEC is unique among other capital market regulators around the world in carrying out pre-offer and post-offer inspections to ensure that funds raised from the capital market are not misappropriated but applied for the purposes stated in the issuance prospectus.
    The Commission noted that its inspectorate department usually carries out on-site verification inspection of the projects completed from the proceeds of any previous issuance before granting approval for subsequent issue.

  • Fidelity Bank lists N30 billion bond on Stock Exchange

    Investors in the N30 billion bond floated in May by Fidelity Bank Plc now have opportunity to trade on their investments as the Nigerian Stock Exchange (NSE) admitted the bond to its daily official list.

    Fidelity Bank had earlier in May this year issued N30 billion, 16.48 percent fixed rate domestic-currency-denominated bonds. The bond is a seven-year fixed rate subordinated unsecured debt instrument due in 2022. The bonds, which are callable with a call protection period of five years and issued at par, qualify as securities because Pension Fund Assets could be invested under the Pensions Reforms Act 2014. The implication of this is that the bonds also qualify as securities in which Trustees can invest under the Trustees Investments Act, Cap T22, LFN, 2004. The bond issuance was fully underwritten and the basis of allotment was approved by the Securities and Exchange Commission (SEC) in June 2015.

    The listing marked the completion of the issuance process. Parties to the issue said all investors have been credited through their Central Securities Clearing System (CSCS )’ accounts and trading has now commenced in earnest in the secondary market.

    Managing Director, Fidelity Bank Plc, Mr Nnamdi Okonkwo, said by the listing, the bank’s quest to raise fresh capital to expand its support to the Small and Medium Enterprise (SME) segment of the country’s monolithic economy is headed in the right direction.

    He said the bank has already earmarked 80 per cent of the proceeds of the bond for SME financing in recognition of the importance of SMEs as the engine room of the economy.

    “We are a very strong SME bank. So, we have raised this bond to channel it to our SME banking and to improve our retail infrastructure,” Okonkwo said.

    He explained that the growth trajectory the bank witnessed in the SME sector last year is a pointer to the potentials of the sector, adding  that if Nigeria properly provide the right infrastructure to that segment, it should be the new frontier to help the nation face the difficult environment that it is now operating in.

    According to him, with the conclusion of the issuance of the bonds and its subsequent listing, Fidelity Bank will reach out more in the SME banking space. The remaining 20 per cent of the net proceeds will be used in financing retail lending and retail infrastructure, to the tune of 15 per cent and 5 per cent respectively.

    He pointed out that Fidelity Bank Plc is a fully integrated commercial bank focused on building and maintaining a well-respected brand that caters for the needs of its growing corporate, commercial and consumer banking clientele.

    According to him, Fidelity Bank has continued to maintain its leadership position in SME banking as the bank has won numerous prestigious awards over the years latest of which was the Lagos Chamber of Commerce & Industry SME Bank of the year 2015.

  • Stock Exchange sanctions 21 firms over delayed results

    The Nigerian Stock Exchange (NSE) has imposed monetary sanctions on 21 quoted companies over their failure to meet the extended deadline for the submission of their audited reports and accounts for their business year.

    A report obtained earlier this week indicated that the NSE imposed fines ranging from between N100, 000 to N6 million on 20 companies. Some 22 others that have defaulted are under assessment to determine the accrued sanctions. The sanctioned companies are expected to disclose the sanctions in their next annual report.

    The latest report is in line with The Nation’s report in May this year that the NSE might sanction 45 companies after they failed to meet the 30-day extended deadline for the submission of their audited annual reports.

    The breakdown of the sanctions showed that Daar Communications Plc received the highest fine of N6 million while Nigerian Ropes got the lowest fine of N100, 000. Universal Insurance received the second highest fine of N5.3 million while Resort Savings and Loans placed third with a fine of N4.3 million. African Alliance will N4.2 million. Aso Savings and Loans was fined N3.7 million while Mutual Benefits Assurance, which was fined for double defaults, would pay a total of N3.6 million.

    Others companies included Nigerian Enamelware, N1.6 million; E-Tranzact, N2.7 million; C and I Leasing, N1.3 million; the trio of Fortis Microfinance Bank, Lasaco Assurance and Japaul Oil and Maritimes Services were fined N400, 000 each; the trio of Regency Assurance, Staco Insurance and Niger Insurance were fined N700,000 each; Linkage Assurance and Studio Press were slammed with N900,000 each while NEM Insurance and Equity Assurance would pay N300,000 and N500,000 respectively.

    Following a report by The Nation that more than two-thirds of quoted companies have not submitted their audited reports at the expiration of the initial regular deadline of March 31,  the NSE had extended the March 31 deadline by a period of one month. With this companies that operate the Gregorian calendar year as their business year had up till April 30 to submit their full-year audited reports and accounts.

    Checks had then indicated that some 40 companies have not submitted their earnings reports and now are liable for sanctions by the Exchange. The NSE usually applies both the “naming and shaming” and monetary sanctions on earnings defaulters.

    A report on sanctions and fines for similar defaults in 2013 showed that the NSE slammed about N105.9 million on 48 companies that delayed their results. The fines ranged from 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 NSE has also confirmed that 89 per cent of quoted companies have filed their audited accounts for the year ended 31 December last year as at August 3 this year.

    Head, Legal and Regulation Division,Nigerian Stock Exchange (NSE), Tinuade Awe, said that late filing has the potential to adversely affect the market and their shareholders.

  • ‘Why we ‘re taking Osun Osogbo Festival to Stock Exchange’

    ‘Why we ‘re taking Osun Osogbo Festival to Stock Exchange’

    Osun State is seeking the listing of Osun Osogbo Festival Festival on the floors of the Nigerian Stock Exchange (NSE) to reduce capital flight by Nigerians seeking cultural exploration in South and North American countries, such as Brazil and Mexico, the government has said.

    Other reasons for the listing, the government said, are to generate revenue, make Nigerians in the country and those in diaspora to invest in the festival and make Osun a tourist destination for Africans and  non-Africans wishing to study and know how deities in Yorubaland are worshipped.

    A Consultant to the organisers of the festival, Ayo Olumokun, told The Nation that billions of naira is being spent abroad yearly, by Nigerians on what he described as  Cultural Tourism, adding that the need to bring back the money informed the plans by the government to list the Festival in the NSE.

    He said: “When the ownership and management of the festival is extended to people across the world, the festival would become bigger and there is going to be inflow of capital to Osun and Nigeria in particular in a way. When this happens, the festival sponsors, such as Nigerian Breweries, Nigerian Distilleries Limited and others, would definitely increase their commitment to the project.”

    He said there are 75 hectares of land in Osogbo, the Osun State capital that boast of artefacts that are well-positioned for viewing by tourists.

    “This is a multi-billion naira asset when put in investment scale. It is a prime asset and it is one of the reasons behind the proposed listing of the festival in the capital market. The asset belongs to Osun Osogbo and it would bring more money into the coffers of the government if it well managed,” he added.

    According to him, the patronage of the festival, by companies, is reducing the nation’s bad economy.

    ‘’As a consultant, I can tell you authoritatively that brands sponsorship of the programme reduced this year, compared to the previous years. But the situation would improve when the festival is listed on the equities market soon,” he added.

    Olumokun said the listing  involves various stages, noting that the process started two years ago.

    He said talks on the public listing of the festival are on-going, adding it may likely take place next year.

    A brand specialist with the Nigerian Breweries, Ekanem Kufre, said the Osun Osogbo Festival is a big project, adding that companies in search of a strong and enduring brand image would like to identify with it.

    He said the festival is about tradition and people, arguing that no brand could grow without the people or consumers.