Lafarge Africa Plc has revealed plans to raise N89.2bn by way of a rights issue of 7.4 billion shares.
The firm, in a statement on Tuesday signed by its Company Secretary, Adewunmi Alode, said the Securities and Exchange Commission had cleared it to open its announced N89.2bn rights issue.
Alode said the N89.2bn would be raised by issuing six new shares for every seven shares held by shareholders as of December 4, 2018, which is the qualification date.
He stated that the 7,434,367,256 ordinary shares of 50 kobo each at N12.00 per share would be payable in full on acceptance.
Alode added that the acceptance list opened on December 17, 2018 and would close on January 23, 2019.
According to the statement, the rights being offered are tradable on the floor of the Nigerian Stock Exchange for the duration of the offer.
The statement read in part, “Please read the prospectus/rights circular and where in doubt, consult your stockbroker, fund/portfolio managers, accountants, banker, solicitor or any other professional adviser for guidance before subscribing.
“The lead issuing house is Chapel Hill Denham, while the joint issuing house is Stanbic IBTC Capital.”
The nation’s stock market witnessed a rebound on Tuesday as the market capitalisation of listed equities increased by N74.93bn.
The market capitalisation rose to N11.255tn on Tuesday from N11.180tn on Monday, while the All Share Index gained 0.67 per cent to settle at 30,814.19 basis points.
Analysts at Afrinvest Securities Limited attributed the gain recorded to buying interests in bellwethers such as Dangote Cement Plc, Guaranty Trust Bank Plc and FBN Holdings Plc.
Investor sentiment advanced to 1.8x from 0.9x recorded on Monday as the year-to-date loss moderated to -19.4 per cent.
Activity level also improved as average volume and value traded appreciated by 47.1 per cent and 193.9 per cent to 316.199 million units and N5.090bn, respectively.
The top traded stocks by volume were Zenith Bank Plc (102.286 million units), AXA Mansard Insurance Plc (40.057 million units), Lafarge Africa Plc (25.905 million units), Access Bank Plc (22.208 million units) and GTB (15.970 million units), while Zenith Bank (N2.344bn), GTB (N553.8m), Unilever Nigeria Plc (N453.5m), Guinness Nigeria Plc (N384.5m) and Lafarge (N309.5m) were the top traded stocks by value.
Performance across sectors was largely bullish as three indices closed in the green.
The industrial goods index emerged the highest gainer with a 1.63 per cent gain on the back of major gains recorded by Dangote Cement and Cement Company of Northern Nigeria Plc.
The oil and gas index was the second highest gainer, advancing by 1.50 per cent as a result of price appreciation in major stocks such as 11 Plc and Forte Oil Plc.
It was followed by the banking index, which appreciated by 0.48 per cent following gains in GTB and Diamond Bank Plc.
On the flip side, the consumer goods index decreased by 0.91 per cent as a result of the profit-taking in Nigerian Breweries Plc and Unilever.
The insurance index dropped by 0.07 per cent on the back of losses in Continental Reinsurance Plc and Mutual Benefits Assurance Plc.
At the end of trading on Tuesday, 24 stocks emerged gainers against 11 losers.
The top five gainers were Neimeth International Pharmaceuticals Plc, Forte Oil, Cement Company of Northern Nigeria, Diamond Bank and UACN Property Development Company Plc, whose respective share prices gained 10 per cent, 9.91 per cent, 9.91 per cent, 9.62 per cent and 9.46 per cent.
The top five losers were Access Bank, Mutual Benefits, Nigerian Breweries, Lasaco Assurance Plc and Unilever, which saw their share prices depreciate by 5.52 per cent, 4.76 per cent, 3.40 per cent, 3.33 per cent and 2.76 per cent, respectively.
Analysts at Afrinvest said, “Although we maintain a bearish outlook for the equities market, we do not rule out the possibility of persistent buying interest particularly on fundamentally sound stocks in the near term.”
C &I Leasing Plc has applied to reduce its issued and paid-up share capital from N808.505 million, which is 1,617,010,000 ordinary shares of 50 kobo each to N202,126, 250 share being 404,252,500 ordinary shares of 50 kobo each.
In notification to the Nigerian Stock Exchange (NSE), C & I Leasing Plc yesterday said the reduction would be achieved through the consolidation of every four ordinary shares currently held into one new share in the company. The share capital so reduced, it said, would be added to the company’s share premium account.
“The purpose of the reconstruction is to allow the company to have enough unissued shares to accommodate future plans to raise capital through the equity capital market. The additional capital will be used to finance the company’s expansion plan, extinguish some liabilities and enhance the company’s capital mix,” the company said.
According to the company, the qualification date for the share consolidation shall be Wednesday 12th December 2018 while the shares of the company will be placed on suspension from Thursday 13th December 2018 to Thursday 27th December 2018 to allow for the consolidation exercise. The shares of C & I Leasing Plc closed at N1.94 per share yesterday.
The company recorded improvement in its nine months results, growing profit after tax by 35 per cent. The unaudited results released yesterday showed gross earnings of N19.9 billion, up 15.6 per cent from N17.2 billion, while lease rental income rose to N13.9 billion, up by 17.5 per cent from N11.8 billion in 2017.
Personnel outsourcing income increased by 10.4 per cent to N5.0 billion, from N4.5 billion, bringing net operating income to N5.7 billion, up 8.6 per cent from N5.2 billion.
C & I Leasing Plc ended the period with profit before tax (PBT) of N1.3 billion, up 11.4 per cent from N1.2 billion. PAT jumped by 25 per cent to N1.2 billion, compared with N950 million in 2017.
Speaking on the results, the Managing Director/CEO of C & I Leasing Plc, Mr. Andrew Otike-Odibi said: “The Company recorded an increase of about 15.6% in revenue from N17.2 billion in the corresponding period of 2017 to N19.9 billion in 2018 and a stronger improvement in our profit after tax (up by 25 per cent from N0.95 billion in 2017 to N1.2 billion in 2018) while the group has continued to deliver a healthy performance despite the challenging operating environment. This result was achieved on the back of increased efficiency from all the business units as well as improvement in capacity utilisation of both marine and non-marine assets.”
The Debt Management Office has listed a second Federal Government N100bn Ijarah Sukuk on the Nigerian Stock Exchange and the FMDQ OTC Plc.
The Director-General, DMO, Patience Oniha, while speaking at the investor presentation in Lagos, said the government was happy and proud of the success stories of the first Sukuk and decided to issue a second one.
She said a lot of encouragement was received from construction companies because they got their money as and when due, which made the projects go as planned.
She noted that the proceeds of the first Sukuk issuance, which was invested in road construction, brought reprive to road users, improved travel times between major commercial cities, linked borrowing and government expenditure to specific critical projects, helped increase the flow of cargo and passenger traffic across major cities, improved infrastructure delivery across the country, among others.
Oniha noted that the retail investors’ participation in the first Sukuk was about five per cent, adding that she hoped more retail investors would partake in the second one.
According to her, stockbrokers will be involved in the process to get a lot of retail investors to participate.
She said, “This second Ijarah Sukuk is due in 2025 and has a rental rate of 15.743 per cent. We listed the Sukuk on the NSE and the FMDQ on Thursday, which was the date it opened, and it will close on December 17, 2018.
“The allotment date is December 21, 2018. The proceeds from the Sukuk will be invested in road infrastructure development, just like the last one. Though the proceeds will not see the roads to completion, it will go a long way in improving the state of our roads.”
Oniha stated that the first Sukuk ensured the execution of road projects across all regions of the country, adding that it also led to a multiplier effect that created jobs around the country.
“The first Sukuk increased retail participation in the capital market as over N15.6bn of it has been traded since listing.” she said.
She added, “We are aware of the fear people have about the 2019 elections, but we want to assure you that no matter the government in power, debts will always be serviced and people will receive their money at maturity.
“The main objective of the second Sukuk is to sustain the rehabilitation and construction works on the 25 key economic roads in the six geopolitical zones with three roads now added for more reach.”
Oniha, however, noted that the DMO and the Federal Government were working to reduce the debt profile of the country as the ratio of debt service to revenue was higher than what it used to be.
According to her, if revenues are higher in the country, borrowing will reduce.
The DMO boss also noted that the tax to Gross Domestic Product ratio was low at six per cent, which she said were signs that citizens were not paying enough taxes.
She said, “This has to change. We cannot continue that way. Taxes will be introduced on select goods such as heavily-consumed goods.
“The Federal Inland Revenue Service is doing a lot to generate more taxes for the government and we will give them maximum support.”
The Deputy Managing Director, FBNQuest Merchant Bank Limited, Taiwo Okeowo, said operators were working to ensure Sukuk issuances become one of the major forms of fund raising for infrastructure by the government.
The Securities and Exchange Commission (SEC) yesterday said the country’s infrastructure deficit would hit $878 billion by 2040, and therefore called for active utilisation of green bond for infrastructural gap.
SEC acting Director-General, Mary Uduk, stated this at the 2018 annual workshop organised by the Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos.
She said Nigeria should tap into green bond opportunities, adding that the commission would continue to promote an active enabling and regulative environment for its issuance.
“The future holds opportunities for renewable energy, energy efficiency, infrastructure, food, agriculture, and the task ahead is to ensure funds are channeled to green projects with multiple socio-merits,” Uduk said.
Uduk said there must be more domestic participation in green bonds investment for Nigeria to claw its way out of deficit in infrastructure, power and energy, transportation as well as eliminating environmental degradation.
The DG SEC, who was represented by Head, Registration and Market Infrastructure Department, SEC, Mr. Emomotimi Agama, said it was necessary for Nigeria to stand at the forefront of innovations and initiatives.
She noted that the second tranche of green bonds which had been issued presented an opportunity for the country to solve its infrastructural deficit.
“The biggest opportunity, to my mind, which green bond issuances will present, is the potential to solve Nigeria’s infrastructural deficits, improve agriculture and alleviatepoverty as well as protecting the environment-a multi-faceted strategy,” she said.
Also speaking, the Managing Director of FMDQ OTC Securities Exchange, Mr. Bola Onadele, said $155 billion had been realised from the green bonds issuance, thereby gaining attention of investors.
Onadele, who was represented by the Senior Vice President, Economic Development Division at the Exchange, Emmanuel Etaderhi, said the country’s resources was not growing in tandem with the rising population.
He stated that the reason for Nigeria’s woeful performance in the power and energy sector was due to its inability to tap into energy utilisation from the sun like other European countries.
According to him, the challenges affecting green bonds include low level of local participation in green bond verifiers, lack of investible projects, cost of verification and lack of understanding on the part of key investors.
“Green bond investors enjoy waivers relating to tax, and in the next 15 years, we will require $7 trillion in investments connecting sustainable finance to capital markets,” he said.
The Director-General, the Debt Management Office (DMO), Ms. Patience Oniha said the federal government has raised sum of N10.5 billion through Federal Government of Nigeria Savings Bond (FNSB) since the creation of the bonds March, 2017.
The FNSB programme introduced in March 2017 to boost domestic investors’ participation in the bond market.
Speaking in Lagos, Oniha said: “From the 18 months of the creation of the FGN savings Bonds, we have been able to raise N10.5 billion and attracted 13,200 retail investors into the market.”
However, she said the amount raised and the number of investors were very minimal when compared with the amount government spent on enlightenment campaign.
According to her, a lot needs to be done to strengthen financial inclusion of the federal government, stressing that the target of the government through the FNSB has not been not actually been met.
She said that DMO was presently studying the possibility of using phones as used in Kenya by investors to participate directly in the government securities.
“From the 18 months of the creation of the FGN savings Bonds, we have been able to raise N10.5 billion and attracted 13,200 retail investors into the market. As you know the DMO borrows on behalf of the government. One of our objectives is to be able to issue our securities in a timely manner and at a very minimal cost,” Oniha said.
Speaking on the use of technology in government securities, she said: “The issue around what technology can do in terms of raising capital is extremely important to us. We, traditionally for a long term have been serving only a segment of the market, the institutional investors and foreign investors. There is no buy side from the retail investors because they need to be knowledgeable and familiar to invest in the sovereign bond.”
Meanwhile, Managing Director, Access Bank Plc, Mr. Albert Wigwe , has said that greater number of people could be reached with technology.
He said: “There is a flow of huge technology changes. Today with technology, you can reach out to greater number of people and financial institutions are deploying technology to enhance service delivery.
“The traditional way to make money is vanishing, so we need to look at other ways to make money and cut cost.
“We have 65 per cent of Nigerians who are youths and they are important segment of the society. So, at Access Bank we are using technology to reach the youths and change how people transact business.
“Today usage of cards are no longer on the increase because of increase in technology through phones.”
The Federal Government of Nigeria Savings Bonds (FGNSB) are becoming attractive to retail investors going by the interest rates offered on the security in November. The interest rates of 13.4 per cent and 12.4 per cent for the 3-year FGNSB and 2-year FGNSB respectively are the highest since October 2017.
Analysts have said the rates are attractive to retail investors compared with the alternative returns from savings accounts offered by Nigerian banks. “The current interest rates on the FGNSB are also higher than the current inflation rate of 11. 26 per cent (October2018 figure), which means that the real interest rates on the FGNSB are positive. Consequently, retail investors should position for the December 2018 FGNSB auction, which should be open for subscription on Monday, 03 December 2018,” analysts at FSDH Research said.
According to the firm, given the current interest rate movements in the country, FSDH Research expects the interest rates on the December FGNSB auction to inch up marginally from the levels recorded in November 2018.
The Debt Management Office (DMO) introduced the FGNSB in March 2017 to provide an avenue for low-income earners to earn consistently good returns over time. The security has some benefits, which include the provision of an investment opportunity, offering attractive returns with low investment risk.
The FGNSB is an initiative of the federal government to encourage a culture of national saving among low-income earners. The FGNSB also helps to diversify the funding sources of the government.
As at June 2018, the FGNSB contributed N8.52bn to the total domestic debt of N12.15trn. The FGNSB currently offers tenors of two years and three years. The interest rate on the three-year tenor is higher than the two-year tenor. The average interest rate on the two-year tenor between March 2017 and November 2018 was11.79 per cent. The average interest rate on the three-year tenor between April 2017(when it was introduced) and November 2018 was 12.73 per cent. The FGN pays the interest on the Bonds on a quarterly basis.
As a result, the FGNSB is a more attractive investment option than a savings account as it is exempt from all forms of tax and offers a higher interest rate than a savings account. “An additional benefit of the FGNSB is its relative liquidity as investors can trade the Bonds on The Nigerian Stock Exchange (NSE) if they wish to sell before maturity. Our findings show that the volume of FGNSB available for trading at the NSE is small.
“Therefore, stockbrokers and the DMO need to do more sensitisation programs than are currently being done to create an active secondary market for investors to trade their bonds. Also, an investment in the FGNSB may be used as collateral to borrow money in any financial institution in Nigeria,” FSDH Research stated.
The Securities and Exchange Commission has revealed plans to drive capital market participation through financial inclusion.
The Acting Director-General, SEC, Ms. Mary Uduk, revealed this at 2018 PEARL Awards Night in Lagos, Sunday.
Uduk restated the comission’s desire to pursue initiatives that would aid financial inclusion of Nigerians, saying it was capable of growing the nation’s economy.
She said, “The gains of having a more inclusive financial system are enormous, as it helps broaden the markets and make policies more effective. A financially inclusive society will provide increased access to finance, especially for women, help support sustainable growth and will create million more jobs.
“The Commission will continue to highlight and promote developments and trends in the Nigerian capital market and drive financial inclusion aimed at reducing adult exclusion from financial services.
“Innovations in financial technology has made possible the potential of using digital tools to make financial services available to a wider range of consumers and enterprises, promoting financial inclusion and the affordability of financial services.”
Uduk commended the efforts of management of the PEARL awards and said more consideration should be given to companies with good corporate governance practice in the award nomination process.
She added that emphasis should be placed on companies with technological innovation in the capital market, in the advent of the convergence of finance and technology.
Uduk disclosed that SEC was implementing various initiatives aimed at making the capital market deeper, vibrant and more effective.
She said one of the initiatives was the forbearance window for shareholders with multiple subscriptions that had been extended by another year from the December 31, 2018 deadline previously communicated.
She noted that another initiative was the two-pronged approach to addressing the intractable challenges associated with transmission of shares related to the estate of deceased investors that had been developed.
“The first step will involve engagement with and enlightenment of the probate registry with a view to providing solutions to the cumbersome process of transmitting shares,” Uduk said.
She added that rules would be developed around the time frame for transmission shares and the fee structure.
Continental Reinsurance Plc says its board of directors has received an offer from CRe African Invetsments to acquire all its outstanding and issued shares.
The Company Secretary, Continental Reinsurance, Abimbola Falana, in a statement on Monday, said the company was making the offer in order to initiate a much-needed restructuring exercise with a view to consolidating its operations and repositioning it for enhanced competitiveness in the global insurance market.
The statement said the acquisition was intended to be executed through a Scheme of Arrangement, under Section 539 of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2004 and other applicable rules and regulations.
It said the company was offering N2.04 per share for the 10,372,744,314 ordinary shares of 50 kobo each or one ordinary share of $1 each in its capital investments for every 176 ordinary share of 50 kobo each.
The statement added that the proposed scheme consideration represented a 46.76 per cent premium to the last traded share price of the company on October 5, 2018, being the last business day prior to the date the proposal was received.
The statement read in part, “The company has received the Securities and Exchange Commission’s ‘No objection to the scheme’. The scheme is also subject to the approval of the shareholders at a court-ordered meeting as well as the sanction of the Federal High Court.
“Further details will be communicated to the market upon relevant approvals from shareholders and regulators. Shareholders are advised to exercise caution when dealing in Continental Reinsurance’s shares until a further announcement is made.”
The Nigerian Stock Exchange and the World Federation of Exchanges are set to sign a Memorandum of Understanding today in a bid to deepen the capital market.
The Chief Executive Officer, NSE, Mr Oscar Onyema, revealed this while giving a speech at the 22nd annual conference of the African Securities Exchanges Association in Lagos on Monday.
He said the strategic relationships of ASEA resulted in grants worth approximately $1.2m from the Financial Sector Deepening Africa and the Korea-Africa Economic Cooperation fund via the African Development Bank.
He stated that the grants received to date were targeted at the African Exchanges Linkage Project, ASEA secondment program, information portal and annual conferences.
He described the programmes as critical levers to the success for ASEA, saying they aimed to continue to broaden and deepen the relationships in order to create increasing value for members and the African financial market.
Onyema noted that this was the main reason the MoU would be signed with the WFE.
He said, “I will like to thank the WFE and we look forward to working with the Federation on many initiatives.
“To ensure we deliver value for members and partners, we created a five year strategy running from 2019 – 2023, which will provide a structured approach to delivering on our initiatives.”
Onyema stated that the strategy was designed to position ASEA as the authoritative source of information on African exchanges.
He added that the theme of the two-day conference, ‘Champions on the rise: Africa’s ascension to a more sustainable future’ could not be more timely as Africa had been confirmed to be positioned for economic acceleration, akin to the Asian boom with several African businesses translating opportunities into enduring business value.
Onyema said ASEA aimed to do more to support African exchanges and businesses to integrate digital technology, especially data analytics into their business models.