As prices of shares continue to dip at the stock with some hitting two-year low, the Association of Securities Dealing Houses of Nigeria (ASHON) has cautioned investors against panic sale of their securities, to avert losses.
The association insisted that the stock market would soon rebound.
The local bourse booked another decline for the third consecutive week as the Nigerian Stock Exchange (NSE) All-Share Index fell 2.27 per cent to close at 27,919.50, while market capitalisation ended at N13.922 trillion. The market had depreciated by 2.41 per cent the previous week.
However, while some nervous and short term investors may be contemplating selling to exit the market due to the persistent bearish run, the Chairman of ASHON, Chief Patrick Ezeagu, has advised against panic sale of shares, saying the negative trend would soon be reversed.
The ASHON boss noted that two investors may not necessarily have the same motive for sale or buy order, saying this is where the need for professional investment advice from stockbrokers become compelling.
He stated that a trend analysis of corporate earnings in recent time indicates that many companies across sectors have posted higher earnings with good returns but this has not significantly reflected in the upward movement of their share prices. Ezeagu explained that there was nothing unusual about this as the market generally reflects the trend in the economy, hence, investors buy into the future of these companies on the expectation of higher shareholder value.
He said: “Those who are selling off their shares right now are speculators and not real investors. Every stock market needs speculators for liquidity but they can change investment decision in one second. Our stock market is forward looking. Investors need not be nervous.
“They should consult professional stockbrokers for sound investment decision. There is no basis for panic sale of shares. Many companies have announced strong financial performance with prospects of increased future earnings. Why should a shareholder of such a company embark on panic sale of shares?
“Globally, stock market gauges the mood of the economy like a barometer. Our market is not a local one. Foreign investors have significant stakes because their analysis has always convinced them that our market has potential for strong Return on Investment (ROI).
“At the moment, core investors are awaiting a couple of things, including announcement of ministers of the Federal Republic and the Economic Team to show the clear direction of the government.
“These are issues that are beyond the council and management of the NSE but have dire consequences on investment decisions. The bearish trend has to do with the fact that the government is yet to settle down after the elections. However, astute and professionally guided investors should take position now that most stocks are trading lower than their net realisable asset value and expect handsome returns when the market shall eventually rally.
A mere study of most of the companies’ performance figures is most informative and points in the direction of a market that will definitely rally as soon as the economic team of government is in place.”
Meanwhile, an analysis of the market performance, it started the week on a negative note, which was sustained for four trading sessions, shedding 0.8 per cent, 0.5 per cent, 0.6 per cent and 0.6 per cent on Monday, Tuesday, Wednesday and Thursday respectively. However, the market went up by 0.8 per cent on Friday.
A look at the sectoral performance showed that five of them declined. The NSE Oil & Gas Index led with 5.7 per cent, trailed by the NSE Banking Index with 4.3 per cent. The NSE Insurance Index shed 3.8 per cent, while the NSE Industrial Goods Index went down by 0.01 per cent.
Market turnover
Meanwhile, investors traded 1.086 billion shares worth N13.390 billion in 15,774 deals, compared with 988.491 million shares valued at N13.839 billion that exchanged hands the previous week in 16,414 deals. But the Financial Services industry led the activity chart with 829.468 million shares valued at N8.493 billion traded in 8,596 deals, thus contributing 76.4 per cent and 63.4 per cent to the total equity turnover volume and value respectively.
The ICT Industry followed with 90.049 million shares worth N851.989 million in 658 deals. The third place was Conglomerates Industry with a turnover of 56.788 million shares worth N84.522 million in 731 deals. Trading in the top three equities namely: FBN Holdings Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc, accounted for 420.921 million shares worth N5.516 billion in 3,430 deals, contributing 38.7 per cent and 41.2 per cent to the total equity turnover volume and value respectively.
There was no ETP traded during the week compared with 1,115 units valued at N165, 837 were executed in three deals two weeks ago. A total of 5,666 units of Federal Government Bonds valued at N5.847 billion were traded last week in 17 deals compared with a total of 756 units valued at N730,454.35 transacted the previous week seven deals.
Top price gainers and losers
The price movement chart showed that 15 equities appreciated in price during the week, lower than 18 in the previous week, while 52 equities depreciated in price, higher than 39 equities in the previous week.
LASACO Assurance Plc led the price gainers with 13.7 per cent, trailed by Abbey Mortgage Bank Plc and Cornerstone Insurance Plc with 10 per cent apiece. A.G Leventis Nigeria Plc with 6.6 per cent, while Dangote Sugar Refinery Plc appreciated by 6.1 per cent. Vitafoam Nigeria Plc and Sterling Bank Plc went up by 4.5 per cent and 3.1 per cent respectively, just as Nestle Nigeria Plc, Dangote Flour Mills Plc and FCMB Group Plc 2.0 per cent, 2.0 per cent, 1.9 per cent in that order.
Conversely, MCNichols Plc led the price losers with 18.1 per cent, trailed by Cement Company of Northern Nigeria Plc with 17.2 per cent. Courtville Business Solutions Plc went down by 16.6 per cent. Union Bank of Nigeria Plc shed 12.6 per cent, just as Nigerian Aviation Handling Company Plc depreciated by 11.6 per cent. Law Union & Rock Insurance Plc shed 11.3 per cent, while Flour Mills of Nigeria Plc with 11.1 per cent. Okomu Oil Palm Plc and Berger Paints Nigeria Plc dipped by 10 per cent each.
An investment fund set up by the German government has acquired 39.25 per cent in Royal Exchange General Insurance Company (REGIC) Limited, a subsidiary of Royal Exchange Plc, an insurance-based investment holding group quoted on the Nigerian Stock Exchange (NSE).
The investment fund- InsuResilience Investment Fund (IIF) was set up on behalf of German government by KfW and managed by Swiss-based Impact Investment Manager BlueOrchard Finance Limited.
In a regulatory filing yesterday at the NSE, Royal Exchange stated that the acquisition has been approved by the National Insurance Commission (Naicom), the primary regulator of REGIC.
In the statement signed by Company Secretary, Royal Exchange Plc, Sheila Ezeuko, the board of Royal Exchange stated that the proceeds of the acquisition would help REGIC to spur growth by increasing its risk capital and supporting its underwriting capacity in agriculture, thus extending its outreach to low income farmers.
With 10 decades of operations in Nigeria, REGIC is reputed as one of the largest non-life insurance companies in Nigeria. Through REGIC, IIF plans to reach out to more than one million Nigerian farmers by 2025.
Based in Luxembourg, IIF was set up by KfW, the German Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The overall objective of IIF is to contribute to adaptation to climate change by improving access to and the use of insurance in developing countries.
IIF seeks to reduce the vulnerability of low-income households and micro, small and medium enterprises (MSMEs) to extreme weather events. IIF is structured as a public-private partnership and it combines private debt and equity investments in two investible sub-funds as well as technical assistance and premium support. Deriving from its investment goals, IIF aims at achieving both financial return and social impact.
BlueOrchard was founded in 2001 by the United Nations as the first commercial manager of microfinance debt investments. It has since gradually expanded into many asset classes including credit, private equity and sustainable infrastructure. BlueOrchard currently has invested more than $4 billion across 70 emerging and frontier markets. BlueOrchard aims at fostering inclusive and sustainable growth while providing attractive returns to its investors.
Chairman, Royal Exchange Plc, Mr. Kenny Odogwu said REGIC has entered into strategic alliances with various stakeholders in the agricultural sector in order to drive insurance within the sector.
According to him, the group believes that agriculture and retail insurance are the future of insurance and as such, the group will continue to develop products and services to ensure that it remains relevant within that segment.
“REGIC is determined to take advantage of growth initiatives available in the industry, while leveraging on technology to expand its revenue base and stronger bottom-line,” Odogwu said.
Senior Vice President, Private Equity, BlueOrchard Finance Limited, Ernesto Costa said the history, team and commitment of REGIC to agriculture insurance make it a great addition to the firm’s portfolio.
Costa said REGIC was uniquely positioned to capture the opportunity presented by 30 million under-insured small scale farmers in Nigeria.
“We are thrilled to partner with and support REGIC with capital, technical assistance and our international network in the agriculture insurance space, with the objective to increase the resilience of small scale famers to climate change,” Costa said.
The investment will further strengthen REGIC’s capital base. It should be recalled that Naicom had recently introduced increased new minimum capital base for various insurance functions with a recapitalisation deadline of 13 months. Naicom raised the minimum paid-up share capital of a Life insurance company from N2 billion to N8 billion; Non-Life insurance from N3 billion to N10 billion and Composite insurance from N5 billion to N18 billion. Re-insurance companies were directed to raise their capital base from N10 billion to N20 billion.
The Nigerian equities market sustained its bearish run with the Nigerian Stock Exchange (NSE) All-Share Index (ASI) declining 0.49 per cent to close at 28,200.88, while market capitalisation shed N68.3 billion to close at N13.7 trillion.
With the continued bearish trading, the market has recorded a year-to-date decline of 10.28 per cent as at yesterday. A total of 32 stocks depreciated compared with 10 that appreciated.
Market operators attributed the negative performance to lack of policy direction by the federal government following non-appointment of ministers to drive the economy among other factors.
CAP Plc and Cement Company of Northern Nigeria Plc led the price losers with 10 per cent. Okomu Oil Palm Plc and Forte Oil Plc dipped by 9.9 per cent apiece.
Flour Mills of Nigeria (FMN)Plc went down by 9.8 per cent despite the company’s declaration of 120 kobo dividend for the year ended March 31, 2019.
FMN ended the year with a revenue of N527.4 billion compared with N542.7 billion in 2018. Given the challenging operating environment in Apapa, where the company is located, selling and distribution expenses rose 32 per cent from N6.180 billion to N8.166 billion, while administrative expenses remained at N19.424 billion, compared with N19.423 billion in 2018.
Although the company reduced its financing cost by 30 per cent from N32.7 billion to N22.9 billion, it posted profit before tax of N10.2 billion as against N16.5 billion in 2018.
Commenting on the result, Group Managing Director, FMN Plc, Paul Gbededo, said: “We have made substantial progress this year, even in the face of an adverse and challenging business environment. Our growth and efficiency initiatives across our various functions and businesses have started to show anticipated gains as we continue to focus on organic sales growth and position the business for continuous profitability.”
Cadbury Nigeria Plc and Conoil Plc were also among the price losers, shedding 9.6 per cent and 9.5 per cent in that order. On the positive side, Redstar Express Plc led the price gainers with 9.8 per cent, trailed by LASACO Assurance Plc with 9.6 per cent. NEM Insurance Plc chalked up 4.0 per cent, just as Nestle Nigeria Plc appreciated by 1.7 per cent.
Meanwhile, activity level was mixed as volume traded rose 23.7 per cent to 216.7 million shares while value traded declined 16.1 per cent to N1.8 billion. The most traded stocks by volume were FBN Holdings Plc (46.8 million shares), Courtville Business Solutions Plc (46.7 million shares) and United Bank for Africa Plc (24.1 million shares) while by value, Stanbic Holdings Plc (N389.3 million), FBN Holdings Plc (N266.2 million) and Dangote Cement Plc (N223.7 million) were the most traded stocks.
The stock market extended its losing streak to the second week of July as investors’ sentiments remained weak. The market which opened the month of July with a loss the previous week, declined further last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) depreciated by 2.41 per cent to close at 28,566.79, while market capitalisation rose to closed at N13.922 trillion, due to the listing of Airtel Africa Plc.
However, the listing of Airtel Africa Plc at the start of the week, demand for stocks was low as most investors adopted wait-and-see attitude. Market operators said while some investors are waiting for the ministers President Muhammadu Buhari will appoint to run the economy, others are waiting for the financial results of listed companies for the half year ended June 30, 2019. Year-to-date, the market has declined by 9.1 per cent.
A look at the market performance showed that it started on a positive note on Monday gaining 0.70 per cent and 0.10 per cent on Tuesday following buying interest in the newly listed Airtel Africa Plc lifted the market. However, the market reversed gains on Wednesday and Thursday, shedding 0.20 per cent and 1.9 per cent respectively. Also, the market closed 0.51 per cent lower on Friday.
In terms of sectoral performance, only one of the five sectors tracked appreciated. The NSE Consumer Goods Index led the price losers, shedding 5.0 per cent. The NSE Industrial Goods Index followed with 4.3 per cent fall, while the NSE Oil & Gas Index went down by 3.1 per cent. The NSE Insurance Index lost 2.4 per cent. The only gainer was the NSE Banking Index that appreciated 0.8 per cent.
The major event in the market last week was the listing of Airtel Africa Plc. A total of 3,758,151,504 ordinary shares of Airtel Africa Plc were listed at N363 per ordinary share on the main board of the exchange.
Commenting on the listing, Chief Executive Officer, NSE, Mr. Oscar Onyema commended Airtel Africa Plc for taking the bold step to list on the exchange.
“Listing on the exchange reaffirms Airtel Africa’s long-term commitment to expanding opportunities and providing everyday services to Africans and Nigerians in particular. It also indicates the firm’s belief that our platform, which has a total market capitalization of N25.20 trillion across various asset classes, remains a veritable avenue for raising capital and enabling sustainable national growth. This listing serves to deepen the telecoms and technology sector for investors and provides an opportunity for a wider group of Nigerians to be part of the African telecoms growth story,” he said.
According to him, the listing is a promising development in Africa with Airtel Africa being the second company to have its ordinary shares listed on both the LSE and NSE.
“This gives credence to the successful partnership between the two exchanges. I encourage similar situated companies to explore the different opportunities for raising capital on the Exchange’s platform,” Onyema.
In his comments, the Chief Executive Officer of Airtel Africa, Raghunath Mandava, said:“Airtel Africa is delighted to be listed on the main board of the exchange. This is an exciting time for Airtel Africa in the 14 countries it operates in and an important milestone in our development as a leading provider of telecommunications and mobile money services in Africa.”
Also speaking, the Chief Executive Officer and Managing Director of Airtel Nigeria, Segun Ogunsanya, said: “Nigeria is a great place for business and Airtel Africa remains committed to building a leadership position here. Investors have been interested to hear our story, and importantly they have been interested enough to invest in our business and are now ready to share the future with us.”
Market turnover
Meanwhile, investors traded 988.491 million shares worth N13.839 billion in 16,414 deals last week by investors at the stock market compared with a total of 1.025 billion shares valued at N9.911 billion that exchanged hands last week in 19,375 deals. The Financial Services industry led the activity chart with 769.350 million shares valued at N7.238 billion traded in 8,530 deals, thus contributing 77.83 per cent and 52.30 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 55.223 million shares worth N92.483 million in 719 deals. The third place was ICT Industry with a turnover of 42.080 million shares worth N4.144 billion in 839 deals. Trading in the top three equities namely, Zenith Bank Plc, FBN Holdings Plc and Wapic Insurance Plc accounted for 348.839 million shares worth N3.520 billion in 2,703 deals, contributing 35.29 per cent and 25.44 per cent to the total equity turnover volume and value respectively.
Also, a total of 1,115 units valued at N165,837 were traded last week in three deals compared with a total of 12,375 units valued at N6.223 million that was transacted the previous week in eight deals.
Equally, a total of 756 units of Federal Government Bonds valued at N730,454.35 were traded last week in seven deals compared with a total of 1.007 million units valued at N1.024 billion transacted the previous week in 14 deals.
Price gainers and losers
On the price movement chart, 18 equities appreciated in price during the week, lower than 21 in the previous week, while 39 equities depreciated in price, lower 44 equities in the previous week.
Sovereign Trust Insurance Plc led the price gainers with 9.5 per cent, trailed by Union Bank of Nigeria Plc, while Cadbury Nigeria Plc chalked up 8.6 per cent. Flour Mills of Nigeria Plc, just as Cutix Plc appreciated by 7.1 per cent. Learn Africa Plc and NEM Insurance Plc garnered 6.1 per cent and 5.5 per cent in that order. Redstar Express Plc, Unity Bank Plc and NPF Microfinance Bank Plc rose by 5.1 per cent, 4.8 per cent and 4.6 per cent in that order.
Conversely, Forte Oil Plc led the price losers with 23 per cent trailed by Glaxosmithkline Consumer Nigeria Plc with a loss of 18.6 per cent. Nigerian Aviation Handling Company Plc shed 16.8 per cent, just as Conoil Plc went down by 15.9 per cent. The petroleum products marketing firm went down despite reporting a jump of 54 per cent in profit after tax (PAT) for the first quarter ended March ,31, 2019.
The company grew its revenue by 13.8 per cent from N31.3 billion, N35.6 billion. Cost of sale rose from N28.3 billion to N32.7 billion, making gross profit to decline marginally from N3.1 billion to N3 billion. However, distribution expenses fell from N650 million to N449 million, just as administrative expensive reduced from N1.669 billion to N1.556 billion. Finance cost fell from N525.9 million to N506.52 million. As a result, profit before tax increased from N310.73 million in 2018 to N478.2 million, while PAT rose from N211.29 million to N325 million in 2019.
PZ Cussons Nigeria Plc shed 10.1 per cent while AXA Mansard Insurance Plc declined by 10 per cent. Other to price gainers included: Linkage Assurance Plc (9.8 per cent); Nestle Nigeria Plc (8.9 per cent); UACN Property Development Company Plc (8.5 per cent) Sugar Refinery Plc (7.8 per cent).
A day after the cross border secondary listing on the Nigerian Stock Exchange (NSE), the shares of Airtel Africa Plc suffered a decline wednesday, indicating weak demand for the stock.
The shares were listed at N363 per ordinary share on the main board of the exchange on Tuesday and they rose to N399.30. However, the share price fell 9.9 per cent yesterday to close at N359.40 per share. Market analysts said the stock may continue to suffer some level of volatility before stabilising.
The Chief Executive Officer of Airtel Africa, Raghunath Mandava, had expressed delight at the listing of the telco on the main board of the exchange.
“This is an exciting time for Airtel Africa in the 14 countries it operates in and an important milestone in our development as a leading provider of telecommunications and mobile money services in Africa,” he said.
Similarly, the Chief Executive Officer and Managing Director of Airtel Nigeria, Segun Ogunsanya, said: “Nigeria is a great place for business and Airtel Africa remains committed to building a leadership position here. Investors have been interested to hear our story, and importantly they have been interested enough to invest in our business and are now ready to share the future with us.”
The price decline by Airtel Africa Plc, Forte Oil Plc, Dangote Cement Plc among 14 other losers led to a depreciation of 0.21 per cent in the NSE All-Share Index to close at 29,256.60, while market capitalisation shed N123.9 billion.
In all, 17 stocks lost value led by Fort Oil Plc with 10 per cent, trailed by Airtel that shed 9.9 per cent, while Conoil Plc went down by 9.9 as well.
On the positive side, 15 stocks appreciated led by NPF Microfinance Bank Plc with 9.7 per cent, trailed by Union Bank of Nigeria Plc with 9.4 per cent. Union Bank of Nigeria Plc on Monday denied report of acquisition talks with Access Bank Plc.
In notification to the NSE, the Company Secretary of Union Bank of Nigeria, Mr. Somuyiwa Sonubi said: “Our attention has been drawn to a blog post on pageone.ng site, posting that Access Bank Plc is in talks to acquire Union Bank of Nigeria Plc. As the post itself states, the unfounded report is based on mere rumours and speculations. The NSE, other regulators and members of the public are advised to disregard the publication in its entirety.”
Airtel Africa Plc has listed 3,758,151,504 ordinary shares on the main board of the Nigerian Stock Exchange.
The NSE said the shares were listed at an offer price of N363 per ordinary share.
It added that the listing of the company’s shares added N1.36tn to the total market capitalisation of the Exchange, further deepening the market.
“It will also increase the visibility of Airtel Africa to investors on the continent and across the globe,” the NSE said in a statement.
The Chief Executive Officer, Airtel Africa, Mr Raghunath Mandava, said the company was delighted to be listed on the main board of the Exchange.
He said, “This is an exciting time for Airtel Africa in the 14 countries it operates in and an important milestone in our development as a leading provider of telecommunications and mobile money services in Africa.”
The Chief Executive Officer/Managing Director, Airtel Nigeria, Mr Segun Ogunsanya, said the company remained committed to building a leadership position in the country, describing Nigeria as a great place for business.
He noted that investors had been interested to hear the company’s story to invest in the business and share the future with them.
The Chief Executive Officer, NSE, Mr Oscar Onyema, commended Airtel Africa for taking the bold step to list on the Exchange.
He said, “Listing on the Exchange reaffirms Airtel Africa’s long-term commitment to expanding opportunities and providing everyday services to Africans and Nigerians in particular.
“It also indicates the firm’s belief that our platform, which has a total market capitalisation of N25.20tn across various asset classes, remains a veritable avenue for raising capital and enabling sustainable national growth.
“This listing serves to deepen the telecoms and technology sector for investors and provides an opportunity for a wider group of Nigerians to be part of the African telecoms growth story.”
The listing lifted the market capitalisation of equities listed on the NSE from N12.909tn on Monday to N14.288tn on Tuesday.
The All Share Index increased slightly by 0.10 per cent to 29,318.02 basis points from 29,287.87bps on Monday.
However, performance across sectors was negative as all sectors closed on a negative note.
Analysts at Afrinvest Securities Limited said, “Our bearish outlook on the market remains unchanged as we believe Tuesday’s bullish run is only temporary.”
Fidson Healthcare Plc has successfully raised N2.345 billion equity capital from existing shareholders to boost its operations. However, the amount was about 78.18 per cent of the N3 billion the company targeted to raise. Fidson Healthcare Plc made a Rights Issue of 750 million shares of 50 kobo at N4.00 on the basis of one new share for every per share to raise N3 billion.
But at the end of the issue in April, a total of 586.360 million shares were accepted by shareholders at N4 per share, amounting to N2.345 billion, which is about 78.18 per cent.
The additional shares were listed by the Nigerian Stock Exchange (NSE) last week and has increase the total issued and fully paid up shares of Fidson Healthcare Plc from 1.5 billion to 2.086 billion shares.
Shareholders of Fidson Healthcare had in 2017 approved a plan by the company to raise N6 billion in new capital to boost its working capital and support its expansion plan.
The shareholders had also increased the authorised share capital of the company from N1.2 billion to N1.5 billion by the creation of additional 600 million shares of 50 kobo each.
According to the company, the new capital would be used to boost working capital that had been negatively impacted by the depreciation of Naira.
The company had also explained that its new factory that came on stream at the tail end of 2016 needed additional capital to realise the full potential and utilise the new factory to full capacity.
Meanwhile, trading resumed at the stock market yesterday on positive note to halt the losing streak recorded last week. Specifically, the NSE All-Share Index appreciated by 0.06 per cent to close at 29, 292.66 as 17 stocks gained, while 14 lost.
Flour Mills of Nigeria Plc led the price gainers with 10 per cent, trailed by Unity Bank Plc with 9.6 per cent. Redstar Express Plc garnered 9.0 per cent, while Wema Bank Plc and WAPIC Insurance Plc appreciated by 8.2 per cent and 7.5 per cent respectively.
Conversely, Forte Oil Plc led the price losers with 10 per cent, trailed by Glaxosmithkline Consumer Nigeria Plc with 8.0 per cent. Sovereign Trust Insurance Plc shed 4.7 per cent, while FCMB Group Plc went down by 1.9 per cent.
Activity level was mixed as volume traded declined 27.5 per cent to 216.3 million shares while value traded advanced 24.1 per cent to N2.3 billion. WAPIC Insurance Plc (84.9 million shares), FBN Holdings Plc (16.2 million shares)and Zenith Bank Plc (14.7 million shares) were the most traded stocks by volume while MTN Nigeria Plc (N1.1 billion), Zenith Bank Plc (N282.3 million ) and Guaranty Trust Bank Plc (N275.9 million) led by value.
The stock market is experiencing a bearish trend that has sent jitters down the spines of a lot of short term investors. Year-to-date the Nigerian Stock Exchange (NSE) All-Share Index declined by 6.8 per cent as at last Monday. Most stocks have depreciated by over 50 per cent, making their prices to be very attractive for long term investors to take advantage of.
Although the bearish nature of the equities market is giving many investors concerns, the management of the Nigerian Stock Exchange (NSE) may have little to worry about.
The NSE is aware that stock markets globally fluctuate and is confidence that the Nigerian market will rebound at certain point. However, the major reason why the NSE may worry less over the current rout is the fact that its market capitalisation has received a major boost from the listing of two telecommunications companies within the last two months.
The first to list was MTN Nigeria Communications Plc, which got listed on May 16, 2019 followed by Airtel Africa Plc, which was admitted yesterday. Before the listing of MTNN, the equities market capitalisation of the NSE stood at N10.626 trillion, while the NSE All-Share Index was at 28,286.08.
However, when MTNN had its 20.35 billion shares listed on the local bourse at N90 per share and rose to N99 per share on May 16, the market capitalisation jumped to N12.458 trillion. MTNN added N1.832 trillion to the capitalisation. And following the appreciation of shares of MTNN to N129.45 translating to N2.634 trillion, the market capitalisation further rose to N12.909 trillion as at Monday.
When the shares of Airtel Africa Plc were listed at 3.758 billion shares at N363 per share on Tuesday, it added N1.364 trillion to market capitalisation of the NSE to close at N14.273 trillion. But for the listing of MTNN and Airtel Africa Plc, the market capitalisation of the NSE would have depreciated to N8.9 trillion. However, the stock exchange has the two telcos to thank for the high level of market capitalisation still being maintained despite the rout in the market.
NSE’s excitement Speaking on the listing of the Airtel Africa Plc, Oscar Onyema said it was a promising development in Africa with Airtel Africa being the second company to have its ordinary shares listed on both the LSE and NSE.
According to him, this gives credence to the successful partnership between the two exchanges, and encouraging similarly situated companies to explore the different opportunities for raising capital on the exchange’s platform.
Onyema said: “Airtel Africa’s listing on the NSE will not only showcase the company as an established player in the African telecommunication industry, but will enable the firm to actualise its strategic vision “To enrich the lives of customers.”
This listing is a result of many months of hard work by all parties to the transaction and will add N1.36 trillion to the market capitalisation of the exchange, further deepening the Nigerian capital market. “It will also increase the visibility of Airtel Africa whilst differentiating its brand as a major player in the Telecommunication sector.”
The NSE boss said the exchange would continue to support the telecom industry and the real sector by promoting efficient capital formation and allocation, enabling industries to raise long-term funds for growth & expansion of their business to reduce unemployment and sustain Nigeria’s economic growth and development.
Speaking earlier on the listing of MTNN Onyema said: “We are delighted to welcome MTN Nigeria to the exchange. This listing is a promising development in the country’s telecommunications sector and we encourage other players in the sector to explore the different opportunities in the capital markets for raising long term capital.
“As a listing platform of choice, today’s listing will add to our bouquet of diverse investment offerings to the public. Having MTN Nigeria listed in our market is a testament of the exchange’s commitment to building a dynamic and inclusive market and creating channels for sustainable investment.
“This listing will promote liquidity for MTN Nigeria, enhance its value and increase transparency, as our platform remains one of the best avenues for raising capital and enabling sustainable growth for national development.”
President, NSE, Abimbola Ogunbanjo, also expressed excitement saying: “We are particularly pleased that MTN Nigeria has joined the prestigious club of companies listed on our Premium Board with this landmark transaction, which will differentiate it as a professionally run telecommunications company with high standards, having met the NSE’s listing criteria.
“A Premium Board listing is a sign of commitment to strong corporate governance, excellence, professionalism, efficiency in service delivery and providing increased returns to shareholders. It is our expectation that the MTNN, which is the NSE’s 2nd largest, will encourage other telecommunication companies to list their shares on the exchange, thereby opening the sector up to cheaper, long term capital that will boost innovation and development.”
Head, Listing Regulation of the NSE, Godstime Iwenekhai had disclosed that after the book building by Airtel Africa Plc , about 130 shareholders subscribed to issue, which is below the 300 shareholders requirement of the exchange. Iwenekhai, however, explained that the firm had a free float of 25 per cent across the London Stock Exchange and the NSE, above the exchange requirement of 10 per cent for cross boarder listing.
According to him, the rules of the NSE’s cross boarder listing was developed in such a way that it could grant exemption or waivers to attract cross boarder listing to the exchange and deepen the market. “The exchange cross boarder listing requirements rule also grants the exchange the powers to give exemption or waivers in every part of the rule because the rule is developed in such a way to attract cross boarder listing to the exchange.
“We have the requirements that we feel we can deploy to attract such big and foreign companies to Nigeria, the rule as approved by the SEC gives the exchange the power to grant such requirement,” he said. Iwenekhai noted that the waiver was granted considering the fact Airtel has also listed on the LSE and must have complied with the stringent listing requirements in the foreign exchanges.
Airtel’s road to listing Before the listing on the NSE, Airtel made an initial public offering (IPO) through a book building process to determine the eventual price and volume of shares to be sold to investors. A book building is a process of price discovery, through which the issuer ascertains the demand for the securities being issued and assesses the price at which such securities may be issued before ultimately determines the quantum of securities to be issued. The company ended up with a price of N363 per share. The shares are being offered to high networth and institutional investors.
The directors of Airtel Africa Plc said offering the shares in Nigeria and listing on the NSE would encourage operational discipline through the establishment of an independent capital structure and governance framework following the successful turnaround of the group’s operations.
“It will also facilitate measurement of the Group’s continued positive performance against holistic, publicly disclosed metrics as it enters a strong free cash flow phase; introduce an optimal capital structure and enable improved leverage for greater flexibility in pursuing growth opportunities going forward; and provide access to the capital markets and diversification of the Group’s capital base to support the Group’s continued growth. The company intends to use the net proceeds from the offer principally on the reduction of debt, in particular to achieve a targeted leverage ratio of 2.5x based on underlying earnings before interest, tax, depreciation and amortisation for the year ended 31 March 2019.
Market share and Performance Airtel Africa has been offering mobile services in Africa since 2010 and has leveraged this experience to roll out relevant products and services across its footprint. The Group offers a range of country specific entertainment, lifestyle and general content through its VAS products. The group aims to continue positioning its non-voice businesses, in particular through its investments in value-added digital services and continued expansion of mobile money services, as an opportunity for long-term sustainable growth in response to the rapidly changing telecommunications environment in the markets in which the Group operates.
As at 31 December 2018, Airtel Africa was the second largest mobile operator in Africa by number of active subscribers, according to Ovum. The group’s footprint is well-diversified, serving an aggregate of 98.9 million subscribers and 14.2 million mobile money customers across its footprint as at 31 March 2019. Nigeria represents Airtel Group’s largest single country subscriber base, comprising 37.6 per cent of total subscribers as at 31 March 2019.
In terms of financial performance, as the year ended 31 March 2019, revenue in Nigeria was $1.106 billion (representing 35.9 per cent of the Group’s revenue in the year) and underlying earnings before interest, tax, depreciation and amortization (EBITDA) was $550 million. In the year ended 31 March 2019, revenue in East Africa was US$1,102 million (representing 35.8 per cent of the Group’s revenue in the year) and underlying EBITDA was $442 million. Revenue in rest of Africa was $888 million (representing 28.9 per cent of the Group’s revenue in the year) and underlying EBITDA was $339 million
A further analysis of the performance showed that revenue from $2.884 billion in 2018 to $2.910 billion in 2019. This increase was primarily due to mobile data revenue growth and Airtel Money revenue growth. Profit after tax rose from $142 million to $441 million.
Airtel Africa operates in three main business lines, mobile voice, mobile data and Airtel Money. The mobile voice business line comprises pre- and post-paid wireless voice services, international roaming, fixed-line telephone services and interconnect revenue paid to the Group by other telecommunications providers. The mobile voice business line is the largest component of the group’s revenue, representing 62.2 per cent and 66.4 per cent in the years ended 31 March 2019 and 31 March 2018, respectively.
The Mobile data business line comprises data communications services, including 2G, 3G and, increasingly, 4G data services, and other VAS for mobile subscribers. The mobile data business line accounted for 22.2 per cent and 18.9 per cent of the group’s revenue in the years ended 31 March 2019 and 31 March 2018, respectively.
On an aggregated basis, the Mobile business lines before inter-product elimination and including infrastructure tower sharing income accounted for 94.8 per cent of the group’s consolidated revenue and 92.7 per cent of the group’s underlying EBITDA in the year ended 31 March 2019 and 95.4 per cent of the group’s consolidated revenue and 95.2 per cent underlying EBITDA in the year ended 31 March 2018.
On the other hand, Mobile money services, offered under the Airtel Money brand, are an increasingly important part of the Group’s service offerings. The Airtel Money business line comprises a mobile commerce service that is accessible 24 hours a day, seven days a week through customers’ mobile devices. The Airtel Money business line before inter-product elimination accounted for 7.6 per cent of the Group’s consolidated revenue and 7.3 per cent of the group’s EBITDA in the year ended 31 March 2019 and 5.2 per cent consolidated revenue and 4.1 per cent EBITDA in the year ended 31 March 2018.
Tripple Gee & Company Plc has reported a growth of 17.7 per cent in profit after tax (PAT) for the year ended March 31, 2019 and has recommended a dividend of N24.75 million for shareholders.
According to the audited results, Tripple Gee, which produces security documents, financial instruments and stationery, posted a revenue of N784.795 million in 2019, up by 5.7 per cent from N742.56 million recorded in 2018. Cost of sale went up from N545 million in 2018 to N581 million in 2019. Distribution and administrative expenses stood at N170 million, compared with N146 million in 2018. PAT improved to N27.613 million as against N23.45 million in 2018.
Based on the performance, the board of directors has recommended a dividend of N24.75 million, which translates to five kobo per share, up from three kobo per share in 2018.
Tripple Gee is a manufacturer of financial instruments, secure and commercial documents, labels and flexible packaging materials. Its range of products and services are instrumental across industry sectors from the banking industry, government regulatory bodies and oil and gas to pharmaceuticals and fast moving consumer goods manufacturers.
According to the company, with over 37 years in the print business and a solid track record working with financial institutions, big organisations and governments to research, evolve and improve the security and quality of transactional and commercial instruments and other substrate based prints, it has continuously delivered significant return on investment to its shareholders, customers and the community in which it operates.
Tripple Gee mission is to locally manufacture and sell quality paper and paper related products of the highest global standards nationally and regionally.
“This we aim to achieve by building a motivated, professional and competent work force while delivering good return on investment to our shareholders and demonstrating corporate social and economic responsibility,” the firm emphasised.
Continued Sell-Offs Drag Benchmark Index… NSE ASI down 0.3%
Meanwhile, the bearish trading at the stock market extended to the fourth day yesterday as the Nigerian Stock Exchange (NSE) All-Share Index dipped by 0.26 per cent to close at 29,300.09, while market capitalisation shed N33.1 billion to close at N12.9 trillion.
Trading level was mixed as volume traded dipped 24.1 per cent to 108.4 million shares while value rose 5.0 per cent to N2.0 billion. The top traded stocks by volume were Lafarge Africa Plc (50.0 million shares), Access Bank Plc (23.3 million shares) and United Bank for Africa Plc (20.2 million shares).
The Nigerian Aviation Handling Company Plc (NAHCO) said it has embarked on a business transformation project expected to result to a “quantum leap” in its revenue in the next five years.
The company said digitalisation would play a vital role in achieving the target. The Group Managing Director, Nacho Aviance, Mrs. Olatokunbo Fagbemi, said this during a media briefing in Lagos at the weekend. According to her, the transformation agenda became necessary after a review of NAHCO’s business process by KPMG, last December.
She also assured shareholders of the company which is listed on the Nigerian Stock Exchange of returns on their investments She explained: “Three key thing came out from the review process with KPMG – one was we are going to take a quantum leap and then in the next five years we are going to double our revenue by five times, which will be roughly four times what we have in 2018.”
Fagbemi, said as part of the transformation process, the one of the decisions that was taken was that the company should operate a group structure.
This, she stressed was expected to drive efficiency in the company’s operations and enhance its revenue. “We also have our plan to build our people and also on culture transformation. There is a perception both within and without that this is a government entity and that can affect the way things are done. So, one of the things we are doing is complete transformation of our culture and building our culture on safety, quality and security – the key pillars of aviation – because everything about aviation is safety.
“For us digital transformation is about how we use the digital platforms and system, to enhance the business and how we will be more efficient. That is part of our five-year transformation plan.”
In addition, Fagbemi said the company is also working towards diversifying its operations so as it achieve its targets of higher revenue. “One of the things we are looking at is that our business, if you take mainland cargo option for example, we are a logistics company and one of the first things that happen when I came is that since logistics is not just about the air, it is also about land and sea, our focus now is how do we diversify our business to begin to look at the other mode of transportation. Aviation is just a part of the transport system,” she added.
Fagbemi, however, bemoaned the poor state of infrastructure in the sector, which according to her was a burden on the company, in terms of high transaction cost.
