Members of the Nigerian Stock Exchange (NSE), who are mostly stockbrokers, yesterday urged the Council of the NSE to embark on more consultations before the demutualisation of the exchange. The brokers made the call at the 55th annual general meeting (AGM) of the exchange in Lagos. They also said after the consultations, an extra-ordinary general meeting (EGM) should be convened where the council and management of the NSE will be authorised to commence the demutualisation process. The demutualisation is expected to positively transform the NSE.
Speaking at the AGM, the President of Council of NSE, Mr. Aigboje Aig- Imoukhuede, noted that the exchange weathered the impact of capital flight shocks experienced globally through effective fiscal discipline and tight budgetary controls.
He said: “Although 2015 was characterised by recessionary pressures including a slump in crude oil price, uncertainty in Nigerian economic policies and significant local currency exchange rate pressures, our management and staff successfully delivered on a number of ambitious operational and strategic initiatives. We recorded an operating surplus of N1.86 billion as a result of management diligence in managing the budget as well as strategic prioritisation and execution of key initiatives based on efficiency, scale and growth potential.”
According to him, total assets of the exchange grew by over 10 per cent , while net assets grew by 11 per cent.
“By the end of year, the exchange asset base exceeded N22.78 billion, with N19.29 billion in accumulated funds, providing us adequate financial flexibility to support strategy execution in key business areas for the road ahead,” he added.
Also speaking at the meeting, the Chief Executive Officer of the NSE, Mr. Oscar Onyema resilience during the year amidst prolonged economic uncertainty, diminishing commodity prices and volatile securities markets.
“Despite declines in our core income streams, alternative sources of income continued to play an important role in supporting the financial performance of our business. In 2015, revenue excluding transaction fees and listing income, grew by 15 per cent contributing 40 per cent to total revenue. The greatest drivers of this growth were revenues from our proactive investment strategy and income generated from our market services business,” he said.
Looking forward, Onyema said the goal of the NSE is to reinforce its business take advantage of fluctuations in market cycles.
“To this end, we will be intensifying our efforts to demutualise and to develop the necessary infrastructure and frameworks to launch derivative products in our market. We believe demutualisation will strengthen the exchange’s operational agility and aptitude,” he said.
Fidelity Bank Plc has distanced itself from the news making the rounds that it was promoting anti-labour practices in the bank.
The bank in a letter addressed to the President, Nigeria Labour Congress, which was in response to an earlier letter by the congress, stated that such information does not represent the true position of affairs in the bank.
“You may wish to note that Fidelity Bank had never in its history engaged in any sort of the practice you have referred to and at the extremely inconvenient period of the global recession in 2009, unlike some other banks in the country who engaged in mass sack of its workforce, we resorted to salary cut negotiated by staff and management, to preserve jobs rather than sack any staff of the bank.
“We equally find the assertion that we are obstructing unionisation in the bank untrue. Considering that the formation or joining of any union is voluntary, the bank therefore is not in a position to compel its staff to join the Union or refrain from doing so.
We are uncomfortable with the approach you have adopted in taking an affirmative position on these issues without as much as verifying the authenticity or otherwise of the information you had relied on. We have a high regard for the NLC and would like to assure you of our continued respect,” the letter jointly signed by Ifeanyi Monye and Tonie Obiefuna of its Human Resources department stated.
The future looks rosy for shareholders of Union Dicon Salt Plc as the company has become the core investor in the $100 million Alape Staple Crop Processing Zone (SCPZ) in Kogi State. Union Dicon Salt replaces Cargill, a United States based agro-industrial giant.
Already the chief executives of Union Dicon Salt have held a meeting with the Minister of Agriculture and Rural Development, Chief Audu Ogbeh in Abuja. According to statement from Union Dicon Salt, the Federal Ministry of Agriculture and Rural Development had approved the take-over.
Speaking after a meeting with Union Dicon Salt officials, Ogbeh said: “I am glad to see that a Nigerian company is taking over this very important project, and is championing the indigenous development of agribusiness. We are not going to engage in policy somersault. We are carrying on with the great idea of SCPZ and we are adding even greater ideas. We are carrying on as we now produce what we call the green alternative: that alternative being agriculture, since oil and gas are unstable sources of income.”
Chuka Mordi and Bex Nwawudu of Union Dicon Salt Plc, who met with the minister, thanked him for his support in taking over the Alape project valued at $100 million. With this, Union Dicon will be cultivating Cassava on 30,000 hectares of land in Alape, Kogi State. Speaking on the development, Mordi said:
“It is a remarkable opportunity to develop the agribusiness space in Nigeria from a fully indigenous perspective. Union Dicon is listed in the Nigerian Stock Exchange, and it is a wholly Nigerian company. We are grateful for the support given by the Minister, and the Agriculture Ministry, after careful consideration of our proposal. Their detailed understanding and focus on new capital investment, import substitution and job creation really impressed us and allows Union Dicon Plc to move forward confidently in a willing and positive partnership.” Speaking in the same vein, Nwawudu said:
“The outcome of the meeting would accelerate the progress on the Kogi State project in the next few months. We are ready to move very quickly to site.” We thank the minister for ensuring policy continuity as a priority and the need to ensure local content.”
Union Dicon Salt Plc operates in the Nigerian Consumer Goods, and Agro Industrial Sector, and is building the largest industrial starch processing facility in Nigeria. Meanwhile, trading at the stock market remained bullish, lifting the Nigerian Stock Exchange (NSE) All-Share Index to an 8-month high.
At the close of trade the NSE ASI appreciated 2.4 to close at 30,127.82 points, bringing the year-to- date gain to 5.2 per cent. Similarly, market capitalisation added N242.2 billion to close at N10.3 trillion.
The Nigerian Stock Exchange All-Share Index recorded the highest gain in eight months after the NSE market capitalisation appreciated by N242bn on Wednesday. The market last recorded this performance in October last year.
The NSE ASI rose to 30,127.82 basis points from 29,422.71 basis points recorded on Tuesday, as market capitalisation also soared to N10.347tn from N10.105tn.
A total of 31 stocks appreciated in value, while 16 surged. An aggregate of 541.869 million shares valued at N7.93bn exchanged hands in 5,727 delas.
GlaxoSmithkline Consumer Nigeria Plc, Transnational Corporation of Nigeria Plc, Neimeth International Pharmaceuticals Plc, Champion Breweries Plc and Sterling Bank Plc emerged as the top five gainers.
The shares of GSK soared by N1.68 (10.16 per cent) to close at N18.21 from N16.53, as those of Transcorp rose to N1.77 from N1.61, gaining N0.16 (9.94 per cent).
Neimeth share price recorded a gain of N0.10 (9.90 per cent) to close at N1.11 from N1.01, as Champion Breweries shares closed at N4.44 from N4.04, appreciating by N0.40 (9.90 per cent).
The shares of Sterling Bank gained N0.12 (7.95 per cent) to close at N1.63 from N1.51.
Other gainers were FCMB Group Plc, Guaranty Trust Bank Plc, Dangote Cement Plc, Airline Services and Logistics Plc, Honeywell Flour Mill Plc, AG Leventis Nigeria Plc, Axa Mansard Insurance Plc, Zenith Bank Plc, Unity Bank Plc, Guinness Nigeria Plc, Fidelity Bank Plc, Fidson Healthcare Plc, Custodian and Allied Plc, Nestle Nigeria Plc, Stanbic IBTC Holdings Plc, Flour Mills Nigeria Plc and Access Bank Plc.
7UP Bottling Company Plc, Nascon Allied Industries Plc, Nigerian Breweries Plc, Skye bank Plc, United Bank for Africa Plc, Nigerian Aviation Handling Company Plc, FBN Holdings Plc, Total Nigeria Plc and Africa Prudential Registrars Plc also made the gainers’ table.
On the other hand, Trans-national Express Plc, Cement Company of Northern Nigeria Plc, Lafarge Africa Plc, DN Meyer Nigeria Plc and Conoil Plc were the top five losers at the close of trading.
Trans-national Express shares plunged by N0.13 (nine per cent) to close at N1.30 from N1.43, as thpose of CCNN recorded a N0.55 (6.88 per cent) drop in their share price to close at N7.45 from N8.
WAPCO share price also depreciated by N4.39 (5.64 per cent) to close at N73.51 from N77.90, followed by DN Meyer, which recorded a loss of N0.04 (4.08 per cent) in its share price and closed at N0.94 from N0.98.
In the same vein, Conoil shares plunged by N0.89 (4.07 per cent) to close at N20.96 from N21.85.
Other laggards at the market were Continental Reinsurance Plc, Livestock Feeds Plc, Tiger Branded Consumer Goods Plc, Diamond Bank Plc, Portland Paints and Products Plc, Dangote Sugar Refinery Plc, Oando Plc, Wema Bank Plc, Vitafoam Nigeria Plc, Seplat Petroleum Development Company Limited and Mobil Oil Nigeria Plc.
The stock market rebounded on Tuesday after Monday’s loss as investors showed renewed positive sentiment.
The Nigerian Stock Exchange market capitalisation appreciated by N224bn, with 37 stocks making the gainers’ chart.
The market had started the week with a loss of N163bn on Monday, which was the first day of foreign exchange trading under the new forex framework.
The NSE market capitalisation rose to N10.105tn from N9.881tn, just as the All-Share Index appreciated to 29,422.71 basis points from 28,769.90 basis points.
A total of 533,317 million shares valued at N6.789bn exchanged hands in 5,736 deals.
Glaxo Smithkline Consumer Nigeria Plc, Champion Breweries Plc, Access bank Plc, Nigerian Aviation Handling Company Plc and Dangote Sugar Refinery Plc emerged the top five gainers.
GSK shares soared by N1.53 (10.20 per cent) to close at N16.53 from N15, while those of Champion Breweries closed at N4.04 from N3.70, appreciating by N0.34 (9.19 per cent).
The share price of Access Bank rose to N6.10 from N5.80, gaining N0.30 (5.17 per cent), while that of NAHCO appreciated by N0.20 (4.98 per cent) to close at N4.22 from N4.02.
Other gainers were AG Leventis Nigeria Plc, UAC Property Development Company Plc, United Bank for Africa Plc, Tiger Branded Consumer Goods Plc, Custodian and Allied Plc, AxaMansard Insurance Plc, Fidelity Bank Plc, Zenith Bank Plc, Transnational Corporation of Nigeria Plc, NPF Microfinance Bank Plc, Guinness Nigeria Plc, Lafarge Africa Plc and United Capital Plc.
An aggregate of 10 stocks plunged in their values led by Trans-national Express Plc, NEN Insurance Company Nigeria Plc, Unity Bank Plc, Caverton Offshore Support GRP Plc and Honeywell Flour Mill Plc, which were the top five losers.
Other losers were DN Meyer Nigeria Plc, Vitafoam Nigeria Plc, FCMB Group Plc, Diamond Bank Plc and Cadbury Nigeria Plc.
The share price of Trans-national Express depreciated by N0.14 (8.92 per cent) to close at N1.43 from N1.57, while that of NEM Insurance dropped to N0.99 from N1.04, losing N0.05 (4.81 per cent).
The Senate on Monday took a swipe at the Central Bank of Nigeria and beneficiaries of the N120bn released to the aviation sector out of the N500bn intervention fund for the power and the Small and Medium-scale Enterprises sectors in 2011.
The Senate Committee on Aviation and Anti-Corruption, at a public hearing, frowned on the way the N120bn allocated to the aviation sector as a bailout was allegedly mismanaged and diverted.
But the Minister of Transportation, Mr. Rotimi Amaechi, told the committee that his ministry and agencies under it, based on available records, were not aware of the fund.
Amaechi’s submission, however, forced the Chairman of the committee, Senator Hope Uzodinma, to demand from the Governor of the Central Bank of Nigeria, Godwin Emefiele, who was represented by a Director of the bank, Mudashiru Olaitan, for an explanation on how the money was used in view of the financial related problems still bedevilling the sector.
The CBN representative said out of the N120bn intervention fund injected into the sector, only N39.5bn had been recovered, while the balance of N81.2bn was still outstanding.
He admitted that some of the 10 airlines that benefitted from the fund were now moribund or had folded up, which according to him, was against the reasons behind the release of the fund.
Olaitan named Air Nigeria and Chanchangi Airlines as the already folded up carriers, while Arik, Dana, AeroContractors, Kabo, Overland, First Nation and Odenegene were still in operation on the strength of the intervention.
On why two out of the 10 airlines folded up in spite of the intervention fund, Olaitan said the responsibility of monitoring the utilisation of the fund by the beneficiaries was that of the Bank of Industry, being the facilitator of the loans to them.
But Mr. John Nnorom, who served as Finance Director of the defunct Air Nigeria, alleged that the diversion of the fund to other ventures led to the collapse of the airline.
He said, “The N34.5bn drawn from the fund by the airline was diverted to other personal business by the owner, Jimoh Ibrahim.
“The very moment the N34.5bn intervention fund was paid into the airline’s account through the United Bank for Africa, it disappeared into one of the private accounts of the owner without any amount from the fund injected into the airline, paving the way for its eventual collapse.”
Efforts by the committee to get further clarification on the alleged diversion were unsuccessful due to the absence of the Managing Director of the BoI and other relevant stakeholders.
The committee directed that the CBN governor and heads of other relevant agencies, including the management of the airlines to appear in person before it on Tuesday (today).
The Vice Chairman of the committee, Senator Bala Ibn Na’Allah, said one of the airlines diverted its share of the fund to Ghana.
He said, “As soon as the management of the airline got access to the money, it transferred a huge sum of money to a company in Ghana, apparently to acquire a business in Ghana with the money that is meant to develop aviation in Nigeria.
“Then, there were other transfers that were non-aviation related and they are in huge amounts. What we are saying is that they have collected this money to enhance the growth and development of aviation.
“Wherein lies the wisdom of making these huge transfers to non-aviation related areas, including transfers across the borders of Nigeria?”
He also said that one of the airlines collected N6bn loan for a repair that cost $4,000 from the Federal Government.
“An aircraft was grounded because of an equipment that cost just $4,000, which is the Emergency Locator Transmission, even after collecting N6bn loan,” Na’Allah stated.
The Securities and Exchange Commission has lifted the suspension it placed on Falcon Securities Limited and its sponsored individuals three years ago. SEC said in a statement on its website that the suspension was lifted because the firm has resolved all issues that led to its suspension and has complied with the Commission’s directives.
SEC had in June, 2013, suspended of Falcon Securities Limited and its sponsored individuals from all capital market activities as an enforcement action for failing to respond to issues regarding the filing of its quarterly reports with the Commission.
The company was suspended for failing to attach the company’s schedule of investments marked to market and failure to report its investments in quoted securities at market value.
Also, the company was found guilty of reporting a false and misleading financial status of its 2012 annual reports, as well as complete erosion of the company’s shareholders’ funds as shown in its returns for the period ended December 31, 2012.
In line with its resolve to protect investors and rid the market of infractions, SEC recently suspended the Managing Director of BGL Plc, Mr. Albert Okumagba, his deputy, Chibundu Edozie from capital market activities for 20 years for infractions.
The Director General of SEC, Mounir Gwarzo recently visited the Inspector General of Police, Solomon Arase, and called for the collaboration to ensure that infractions are reduced, or completely eliminated from the capital market.
Gwarzo solicited the support of the IGP to enhance the ongoing co-operation between the police and the commission towards ensuring that laid down rules and procedures are adhered to in the capital market, and also ensure that perpetrators of fraudulent acts are brought to book appropriately.
He appreciated the police on the work they have been doing since the collaboration started and sought for more in areas of specialised discipline such as forensic investigation to enhance the operations of the capital market.
Arase assured the commission that the Nigerian Police under his leadership would do all that it could to assist the commission in ensuring that incidents of infractions within the capital market are brought to the barest minimum.
Lafarge Africa Plc has concluded its Series I and II N60bn bond issuance, comprising N26,386,000,000 three-year bond at 14.25 per cent, which is due in 2019, and a N33,614,000,000 five-year bond 14.75 per cent due in 2021.
The firm stated that the proceeds of the bond issuance would be used to part refinance the debt of its wholly-owned subsidiary, United Cement Company of Nigeria Limited.
“The dual-series issuance, the first of its kind and largest ever bond issuance by a corporate in Nigeria’s debt capital markets, was concluded following a book build, with the order book oversubscribed. This transaction is Lafarge Africa’s second bond issuance in the Nigerian capital markets, having previously issued a N11.8bn three-year fixed rate bond in 2011,” the company said in a statement.
It stated that a signing ceremony in respect of the Series I and Series II bonds was held on Wednesday last week following the Securities and Exchange Commission’s approval, adding that the bonds would be listed on the FMDQ OTC.
According to the firm, Chapel Hill Denham acted as the lead financial adviser, lead issuing house and lead book runner on the transaction, while Citibank Nigeria acted as the joint lead financial adviser and book runner, with Standard Chartered and Stanbic IBTC as joint issuing houses and book runners.
The Chairman, Lafarge Africa, Bolaji Balogun, was quoted as saying that the bond was the largest ever by a corporate organisation in the country’s capital market, making the firm a prime issuer.
Lafarge Africa’s Group Managing Director, Michel Puchercos, was also quoted as saying that the proceeds would deliver savings in financing costs to Unicem and Lafarge Africa.
“Unicem is currently undergoing a 2.5 million-metric-tonne per annum capacity expansion, which will be completed by the end of 2016,” he stated.
The Chartered Institute of Stockbrokers has lauded the Central Bank of Nigeria for the re-introduction and re-modelling of the floating single foreign exchange policy, saying it is a positive and bold step.
The move, it noted in a statement on Monday, attested to the dynamism of the apex bank in policy evolution for the greater benefit of the economy.
“The operating dynamics of the new framework as stipulated by the CBN is in accordance with the tenets of democratic capitalism of which the highlights are, market-driven systems, free participation within individual limitations and the ‘invisible hand’,” it explained.
The introduction of a forward market to hedge volatility in the foreign exchange market, and the licensing of foreign exchange primary dealers, according to the body, are well commended innovations which will deepen the market.
Barring systemic malfunction, the CIS it was convinced that the implementation of the new framework would boost dollar supply; and with clarity, define the exact exchange rate, ease the challenges of businesses across the board and return the economy to the path of growth.
The currency peg of the past 16 months resulted in a dearth of dollar currency and prompted large scale capital flight with the attendant growth challenges in the economy, it said.
The CIS added, “Foreign inflows into the capital market dropped by 32 per cent in 2015, as reported by the Nigerian Stock Exchange, just as the benchmark equity index fell by 17 per cent this year.
“The new foreign exchange policy will bolster investor confidence, trigger inflow of foreign portfolio investments and boost the velocity of the stock market.”
The CIS reiterated its supports for the continual restriction of the 41 excluded items from the interbank foreign exchange market, saying the the exclusion of the items supported the infant industry argument.
“CIS believes that an admixture strategy of the floating foreign exchange policy, an intensive export promotion drive, support for the infant industry argument and pump priming will give fillip to the economy. Going forward, we are optimistic on the growth prospects of the economy in 2017,” the statement added.
Meanwhile, the Chartered Institute of Stockbroker’s President and Chairman of the Council, Mr. Oluwaseyi Abe, said that the coast was already clear for the investors to shore up their holdings as market had begun to rebound.
According to him, there is nothing unusual about the current state of the market as the market essentially mirrors the economy and moves in phases.
Corroborating him, the Institute’s First Vice-President, Mr. Dapo Adekoje, assured investors that uncertainty which characterised the investment climate would soon disappear completely.
Deposit Money Banks have asked customers to submit bids ahead of the start of new interbank foreign exchange trading on Monday.
The Central Bank of Nigeria had on Wednesday announced plans to begin market-driven trading of the naira to alleviate chronic foreign exchange shortages.
Banks asking customers to submit bids is a signal that the new forex trading platform will be driven by market forces and not dominated by internal bank trading.
After a meeting with the CBN officials and banks’ chief executive officers late on Friday, banks asked their clients to send them pending Letters of Credit for them to resubmit and to quote a rate at which they want to buy dollars, Reuters reported quoting its source said.
Customers had so far submitted bids between N210 and N290 to the dollar, the source said.
“I got a memo from my bank yesterday asking us to contact all our customers with pending LCs to resubmit their LCs and say at what rate they would want to buy the dollars,” the source said.
“Liquidity will likely return to the market because central bank will now sell its dollars at higher rates.”
The CBN has pegged the naira rate at 197 to the dollar for the past 16 months after a slump in oil revenues hammered public finances and its foreign reserves.
But the naira trades at around 355 on the parallel market.
A Reuters poll found that analysts expect that when the naira floats freely on Monday it will trade at 275 to 300 per dollar.
There is a $4bn backlog of demand in the market which could take three to four weeks to clear, the central bank has said.
Banks will set the first exchange rate of the naira versus the dollar when the local currency is allowed to float freely after the CBN abandoned its dollar peg, bankers have said.
The average rate at which the market clears the demand will become the new exchange rate, according to the banking source.
