The Securities and Exchange Commission on Monday said it would soon come out with fresh rules that would guide the conduct of Annual General Meetings.
The Director-General, SEC, Mr. Mounir Gwarzo, disclosed this in Abuja during the inauguration of a study team on ‘Voice and voting power: What role for the retail shareholders in the Nigerian capital market?’
The broad mandate of the study team is to develop additional policies for strengthening the corporate governance framework with a view to creating greater awareness on the rights and responsibilities of the shareholders.
It is also aimed at increasing the voice and voting power of retail shareholders for a robust capital market
The SEC DG said the commission would be coming up with the fresh guidelines in order to ensure that shareholders, particularly the retail investors, were given adequate representation in terms of participation during AGMs.
Findings revealed that in most of the AGMs, only members of shareholders’ unions were usually given opportunities to contribute during discussions, while those who do not belong to any union were usually ignored.
Gwarzo said apart from the review of the conduct of AGMs, the commission would also be carrying out a review of the Companies and Allied Matters Act.
He said, “This study is coming at a time when we are working towards restoring investors’ confidence in the capital market. This study is not only good but timely, because before the end of this week, SEC has set up a team that will review the Companies and Allied Matters Act.
“As at today, we have started working on rules that will guide the conduct of AGMs and so the timing is right and we need to move very fast, because I believe that some of your recommendations will be part of these laws that are being reviewed.”
The Minister of Finance, Mrs Kemi Adeosun, who gave the keynote address at the inauguration, urged the study group to work towards ensuring the return of minority shareholders and retail investors who fled the market following the declines of 2008.
MTN Group Limited shares fell after Nigeria suspended talks about a $3.9 billion fine on the South African mobile-phone company while the country’s House of Representatives completes an investigation into the nature of the penalty.
The stock declined as much as 2.9 percent, the most since May 12, and traded 1.5 percent lower at 126.50 rand monday in Johannesburg, valuing the company at 233 billion rand ($15 billion). The shares have plunged almost 35 percent since the fine, originally set at $5.2 billion, was levied in October.
“Any delays in finding a resolution for the MTN fine will play into trading and keep MTN’s share price suppressed,” Bloomberg quoted an analyst at Mergence Investment Managers, Peter Takaendesa to have said by phone from Cape Town on Monday.
“The big event to watch this week will be MTN’s annual general meeting, where the market might also get additional clarity.”
Nigeria’s decision to put talks on hold will frustrate Johannesburg-based MTN as it seeks to resolve a fine that was levied for missing a deadline to disconnect customers deemed unregistered in the country, which is battling an Islamist insurgency. The company’s stock decline has cost MTN the title of Africa’s biggest wireless company by market capitalisation, losing it to crosstown rival Vodacom Group Ltd.
“MTN cautions shareholders not to make any decisions based on media reports,” spokesman Chris Maroleng said in e-mailed comments. Investors will be informed of any update to the fine negotiations via the stock exchange news service, he said.
The Nigerian lawmakers “have set up a committee to investigate the MTN saga and they are still on it,” spokesman for Nigeria’s Ministry of Communications, Victor Oluwadamilare said by phone from Abuja, the capital. “Until they are through with it, nothing can be done.”
Executive Chairman Phuthuma Nhleko returned to the helm in November for a six-month term to resolve the crisis, yet he remains in charge having not fulfilled his mandate. He will address shareholders at the annual meeting in Johannesburg on Wednesday.
“The federal government, the Nigerian Communications Commission and the Ministry of Communications can do nothing about the MTN case until the committee concludes its thorough investigation,” Oluwadamilare said.
“There’s no point dealing with a particular organisation from different fronts. It would be counter-productive.” MTN’s last reported offer was to pay $1.5 billion in a combination of staggered cash payments, sovereign debt purchases and access to its network. The company is Nigeria’s biggest mobile-phone company, and in turn the country is the largest of MTN’s 22 markets across Africa and the Middle East.
“This suggests that MTN might still be stuck in limbo, and that is not a good thing for them,” managing director at Johannesburg-based Africa Analyst, Dobek Pater, said.
“Suggestions were that the negotiations were going on in a positive Dobek Pater, path for MTN, especially when the company received that first reduction. Now, with the investigation the process is back to the unknown.”
The Lagos State Government on Thursday disclosed that it had remitted a sum of N64 billion into the retirement saving accounts (RSAs) of civil servants as contributory pension scheme since the inception of the scheme.
The Commissioner for Establishments, Training and Pensions, Dr. Akintola Oke disclosed this at a news conference he addressed at Alausa, Lagos.
At the conference, the commissioner said there had been regular deductions of 7.5 per cent from the salaries of staff and corresponding 7.5 per cent by the state government into the retirement savings accounts maintained by them with their appointed Pension Fund Administrators (PFAs).
According to him, as at March, 2016, the deduction has cumulatively risen to N64 billion approximately since the inception of the scheme in 2007. Also, since the commencement of the retirement benefit bond certificate presentation in 2010 to over 10,000 retirees/deceased/ withdrawn staff, the state Government has paid accrued pension rights of about N48.08 billion.
He said the state government had reduced drastically the backlog of terminal entitlements of retirees, noting that between August 2015 and April 2016, the government had, through the Lagos State Pension Commission (LASPEC) paid the sum of N13.701 billion into the Retirement Savings Account (RSA) of 3,069 retirees.
He said 1,294 retired from the Local Government, 745 from the State Universal Basic Education Board (SUBEB), 731 Teachers Establishment Pension Office (TEPO) and 299 from the mainstream service. Oke disclosed that the state governor, Mr. Akinwunmi Ambode had directed that outstanding pension payment of three years arrears on the 142 per cent pension increase as approved by the administration of Asiwaju Bola Tinubu be paid with immediate effect.
He said the sum of N2.03 billion was paid as pensions between May 2015 and April 2016, adding that in November 2015, Civil Service Pensions Office facilitated and completed the payment of severance, pensions and gratuity to 73 disengaged staff of the defunct Eko Today which amounted to N37.17 billion.
Oke further revealed that Ambode had approved the release of the sum of N1.5 billion intervention fund for the payment of outstanding gratuities and pension arrears to Local Government retirees, including the balance of 142 per cent pension arrears amounting to N1.77 billion, saying that the payments would be effected as soon as the verification exercise was conducted.
On the issue of pension fraudsters, the commissioner said the government had begun sensitization programmes in all ramifications on the activities of these fraudsters, stressing that apart from drawing the attention of the state government to this unsavoury report, LASPEC had gone further to sensitize the public with the printing of posters and handbills.
Transnational Corporation of Nigeria Plc (Transcorp) has instituted a N1 billion suit before a Federal High Court, Lagos, against the Attorney General of the Federation and six others over alleged unlawful revocation of a land/property located at Block 1, Flats 1-6, Rumens Road, Ikoyi, Lagos.
Other defendants in suit are Minister of Lands, Housing and Urban Development, Mrs. Bello Morenike, Lt. CDR Okon Godwin Inyang, Joseph Etim Bassey, Akinyeke .P. Akinyeke and one J E Benten respectively.
Transcorp had in a suit marked as FHC/L/CS/794/2015 filed by its counsel, Dr. Joseph Nwobike SAN is seeking among other reliefs an order of perpetual injunction restraining the Federal Government from implementing the Revocation Order dated May 27, 2015 issued by the Minister of Lands, Housing and Urban Development.
In the suit, which is before Justice Jude Kanyioh Dagat, Transcorp is also seeking for an order of perpetual injunction restraining the 3rd – 7th defendants from interfering with or disturbing the title, possession or occupation of the property.
The plaintiff (Transcorp) in its amended statement of claim signed by Dr. Nwobike stated that sometimes in 2005, the Federal Government, through the Implementation Committee of Federal Government Landed Property offered the property located at Block 1, Flats 1-6, Rumens Road, Ikoyi to it for lease for a term of 99 years at plaintiff’s bid price of N375 million.
The plaintiff averred that it accepted the offer as contained in the letter of offer for lease of Federal Government Landed Property dated October 24, 2005 and completed the acceptance form and returned same to the Implementation Committee.
According to Transcorp, upon the receipt of its acceptance form, the Implementation Committee on behalf of the Federal Government issued it with a confirmation of offer letter dated November 28, 2005 wherein the committee confirmed the offer of the property to the plaintiff at its bid price of N375 million.
The 36 state governors have decided to turn to the World Bank as one of the ways of surviving the current economic downturn in the country, which has made it difficult for many of them to pay workers’ salaries.
They are putting machinery in place to access a $3.25bn portfolio currently lying idle in the bank.
The Chairman, Nigeria Governors’ Forum, Alhaji Abdulaziz Yari; and Kaduna State Governor, Nasir el-Rufai, briefed State House correspondents about the decision to approach the World Bank at the end of a meeting of the forum held inside the Presidential Villa, Abuja on Thursday.
The meeting, which started at about 8.45pm on Wednesday, ended in the early hours of Thursday.
Yari, who is the governor of Zamfara State, said he and his colleagues decided to invite the Country Director of the World Bank, Rachid Benmessaoud, who briefed them on the $3.25bn fund available in the bank, which largely belongs to the state governments but had not been accessed.
He said because of the cumbersome procedure for accessing the fund, most of the governors did not know that such existed in the bank.
Yari explained that it was el-Rufai’s initiative that officials of the bank should come and make the presentation so that the governors could be properly educated.
He added that the states had been defaulting in the payment of their own part of the World Bank fund because of the economic downturn afflicting the country.
He, however, said the bank officials had agreed to revisit the issue.
The governor said, “They came to educate the governors so that they would know that this money is there. This could help us in the kind of difficult situation we are in so that we can move forward in terms of infrastructure development and other matters in our respective states.
“We had a presentation from the World Bank officials and we agreed on the terms. The governors made their own contributions, especially the issue of counterpart funding, which the bank accepted they are going to look into.”
Yari added, “Also, they agreed that they would give us the details of how much each state could access. As of now, they are ready to facilitate a kind of workshop for the state governors, the commissioners of Finance and other officials for us to know how best to move and access these funds for the betterment of our respective states.
“We discussed the issue of counterpart funding. It is more difficult for us to fulfil our own part, because we are struggling to see how we can pay salaries. That is the most difficult aspect of it and they promised that they would look into it; and immediately that is done, the states will move fast to ensure we access it.”
El-Rufai admitted that all the state governments were broke, adding that this was the reason why they must work hard to access the money.
He expressed the belief that the idle money was capable of turning around the fortunes of the states.
El-Rufai explained, “The World Bank portfolio for the states for this year is $4.25bn and out of that, $3.25bn is lying there undisbursed, which means the states are not meeting their conditions or not moving fast enough to draw this $3.25bn.
“You know $3.25bn can do a lot to improve the lives and livelihood of our citizens in the states, and the World Bank has expressed its flexibility to look into the challenges we are facing as well as the procedure to ease accessing this money. The World Bank wants us to withdraw the money as quickly as possible so that our citizens will get the benefits from health to education, agriculture and the revival of livestock and water supply.
“These are the areas for which most of these funds are dedicated and we all need the money, because we are all broke. So, we are going to work very hard to try to get the money in trust.”
Shareholders of NASCON Allied Industries Plc on Thursday approved a dividend of N1.46 billion for the year ended December 31, 2015, which translates to 55 kobo per share. In his address to shareholders at the annual general meeting (AGM) in Lagos, outgoing Chairman of NASCON, Alhaji Aliko Dangote, said the dividend was an improvement on the 50 kobo or N1.32 paid the previous year.
According to him, for the 2015 financial year, turnover grew by 43 per cent to N16.2 billion, while profit after tax rose by 11 per cent to N2.1 billion. “The overall financial stability continued to remain strong with N2.5 billion of cash and its equivalents as reserves. We achieved this by becoming more customer focused, managing our costs and improving our efficiencies,” he said.
Dangote resigned as the chairman of the company while Mrs. Yemisi Ayeni. In her address, Ayeni said it as an honour to succeed Danote, saying that his passionate and dedicated leadership has re-positioned NASCON as not just undisputed market leader I salt refining and distribution but also a producer of other food-related products.
Ayeni said going forward, the company would continue to invest appropriately in existing and new products lines to achieve its strategy of growing revenues within the context of improved profit margins and enhanced shareholder returns.
“We will ensure we conclude ongoing plant upgrades that will enhance the efficiency of the production lines and guarantee consistently high product standards,” Ayeni said. Also speaking at the meeting, the Managing Director of the company, Mr. Paul Farrer, said that the tomato paste business line was affected by the foreign exchange policy restrictions and operations were suspended in October 2015 to arrest additional impact on account of overhead.
He, however, disclosed that the company was in discussions with Dansa Foods, one of its sister companies that had established a state-of-the-art tomato concentrate plant in Kano. “They intend to produce tomato concentrate from locally grown tomatoes and maybe able to provide us with raw material requirements,” Farrer stated.
In all, Farrer raised optimism about the future of the company,”our product lines remain a huge value driver for us as we play in categories that are life-necessities for average Nigerian and for which significant supply gaps continue to exist in the market.
Despite the macroeconomic headwinds hitting the country in the past two years, the United Bank for Africa increased its shareholders’ equity by an annual growth rate of 22 per cent between 2011 and 2015, a report by the Financial Derivatives Company indicated.
The pan-African lender also recorded a compound annual growth rate of 19.3 per cent in its net interest income within the period.
The report further stated, “In spite of all these adverse conditions, UBA has shown its resilience as reflected in the ability to maintain profitability and ensure a high asset quality. Its PAT increased by 24.5 per cent in full year 2015 and remained flat in Q1 1916.
“The bank also maintained its non-performing loan ratio at 1.7 per cent, an industry benchmark. UBA’s superior risk management framework helped ensure subdued impairment effects from oil and gas exposures. Its share price has declined by about 20 per cent due to investor concern and pervading economic uncertainty.”
It added, “Given UBA’s revenue potential, recent performance, extensive network and branch system, large customer base, robust risk management framework and exceptional management, it is a company with an immense upside. Accordingly, we place a BUY rating on the stock.”
According to the FDC report, UBA’s growth through the years can be seen in key financial metrics between 2011 and 2015.
During that period, total assets and shareholders (attributable to owners) have grown by a CAGR of 9.4 per cent and 21.9 per cent, respectively.
Net interest income has also grown by a CAGR of 19.3 per cent while net income grew by a CAGR of five per cent between 2012 and 2015, after recording a loss in 2011.
In its analysis of the lender, the FDC said, “We derived our valuation for United Bank for Africa Plc using the dividend discount model method. Our fair value estimate for UBA Plc is N5.31, which is a 56.2 per cent upside on its current share price of N3.40 as of 09 May, 2016.
“The discount rate used in the DDM is the cost of equity (20.7 per cent), which is computed via the capital asset pricing model. The terminal P/BV, which is factored into calculating for exit multiple, was derived using the formula (Return on Equity (ROE) – Net Income Growth)/ (Cost of Equity – Net Income Growth).
“The intuition behind using this formula is considering how much of UBA’s ROE is being allocated to grow dividends and how much does it cost. Based on this intrinsic valuation, UBA is an undervalued stock with a potential for significant appreciation.
“In forecasting UBA’s assets and earnings, we took into account the low oil price environment, possible devaluation and the overall macroeconomic condition. These issues, alongside Nigeria’s monetary policy uncertainty, are major investor concerns.”
UBA had on Tuesday announced the appointment of five new executive directors to its board, subject to the approval of the Central Bank of Nigeria.
The lender, in a statement, listed the directors as Mr. Ayo Liadi, Mr. Oliver Alawuba, Mr. Ibrahim Puri, Mr. Uche Ike and Mr. Chuks Nweke.
“All (the new EDs) bring considerable experience to the board and, as a sign of the depth of internal talent and the group’s commitment to fostering promotion of its own human capital; all have been promoted from within the bank,” the statement said.
Commenting on the appointment, the Group Chairman, Mr. Tony Elumelu, was quoted as saying, “These appointments will greatly assist in the plans we have to transform the UBA Group into a truly customer led bank and the foremost financial institution in Africa”.
“These are exciting times for UBA. And with this leadership, I have no doubt that the bank will continue on its strong growth trajectory.”
The lender in March appointed Mr. Kennedy Uzoka as its incoming Group CEO. Uzoka will assume this role on August 1, on the retirement of Phillips Oduoza.
MTN Nigeria said on Wednesday that it had started receiving payments for the interconnect debts owed it by other telecommunications companies, including Globacom, Etisalat and Airtel.
Out of the N13.6bn, our correspondent gathered that the other operators had paid over N5bn as of Wednesday.
Although MTN’s Public Relations and Protocol Manager, Mr. Funso Aina, declined to state the exact figures paid by each of the three firms, sources at the regulatory unit of the company told The PUNCH that Glo had paid N2bn.
“We cannot at the moment state how much has been paid by Etisalat, Airtel and others, but we are sure of the N2bn payment from Globacom, which was paid in two weeks ago,” the source said.
However, Aina said, “The truth is that the issue of the huge interconnect debt has always raised concerns in the industry, and this is why we escalated the matter to the Nigerian Communications Commission, and as a responsible regulator, the NCC has decisively intervened.
“We are now receiving some long-overdue payments. We, however, cannot comment on specific operators for reasons of professional courtesy and contractual obligations.”
Reacting to the development, MTN Nigeria’s General Manager, Regulatory Affairs, Oyeronke Oyetunde, said the issue of the rising interconnectivity debt profile was something that the industry needed to discuss urgently, adding, “Otherwise, it may pose questions around the sustainability of the industry.”
During a visit by the Minister of Communications, Adebayo Shittu, to MTN in February, the company revealed that the amount being owed it represented more than 40 per cent of the N30bn interconnect debt across telecoms companies.
MTN has about 60 million subscribers and as such, receives more termination on its network, and has incurred more unsettled interconnect rates from other players.
The minister had promised to intervene in the matter upon receiving MTN’s complaints.
“I have met with the NCC and the government is currently looking into how the issue will be resolved very soon,” Shittu had said.
Analysts say that the interconnect debts are capable of threatening the stability of Africa’s largest telecoms market if the government does not effectively manage the consequences of not settling them.
A larger portion of the debt could be traced to the collapse of the Code Division Multiple Access operators, which owed bigger players such as MTN, Globacom, Airtel and Etisalat. Already, the NCC has declared 14 licensed telecoms operators inactive.
According to the NCC statistics, from less than N10bn in the last five years, the interconnectivity debt profile has increased to N30bn, as telecoms firms grapple with rising capital and operational expenditure.
The persistent bearish trend that has depressed the share prices of most stocks is discouraging new companies from listing on the Nigerian Stock Exchange (NSE), THISDAY checks have revealed. While the Nigerian Stock Exchange (NSE) has made several efforts to increase the number of new listings, many of the companies are reluctant to list their shares.
Market sources said two major reasons companies are reluctant to list despite the many benefits derivable are the poor persistent slide in prices and the possible erosion of value as experienced by two companies that were listed two years ago.
“The management of the NSE has brought innovations to the market capable of attracting new listings. But many of them are afraid of value erosion after listing given the current bearish trend. The situation is worsened by the rate at which the shares of Seplat Petroleum Development Company Plc and Caverton Offshore Services Group Plc that were listed two years ago fell,” a senior market operator said.
The stockbroker, who confirmed that his firm has companies that are willing to list, noted that the major obstacle is fear of losing the value of their investments after listing.
Seplat and Caverton were listed on the NSE on April 14 and May 20, 2014 respectively. Seplat was listed at N576 per share while Caverton listed at N9.50. Two years after, value of the shares has fallen significantly. Specifically, Seplat has declined by 39 per cent, having depreciated from the listing price of N576 to N350 as at Monday.
Caverton has suffered a value erosion of 83 per cent as the shares fell from the listing price of N9.50 to close at N1.65 on Monday. Apart from the general bearish trend in the market, the two companies recorded lower profits both for the 2015 full year and first quarter of 2016 due to challenges the oil and gas sector is passing through.
As a survival strategy, Caverton is planning diversifying its operations outside the oil and gas industry and focus on cost reduction. Chief Executive Officer of Caverton, Mr. Bode Makanjuola said: “The slide in oil prices with the resultant reduction of activities by international and local oil and gas companies continue to impact the service sector of the industry. Part of our strategy to weather the current challenging business environment is to continue to focus on cost efficiency without compromising on our safety standards.
The implementation of our strategy to increase service offerings is ongoing as we have commenced construction of the MRO and overhaul facility in Ikeja, Lagos. We will also continue to explore other innovative solutions in support of deep and shallow water operations in both marine and aviation business.”
Vitafoam Nigeria Plc, Diamond Bank Plc and Transnational Corporation of Nigeria Plc, led the stock market into a loss of N56bn at the close of trading on the floor of the Nigerian Stock Exchange on Tuesday.
Data from the NSE showed a drop in market capitalisation to N9.172tn from N9.228tn, while the NSE All-Share Index slipped to 26,655.48 basis points from 26,818.77 basis points. The other losers in the top-five category were Forte Oil Plc and FCMB Group Plc.
A total of 396.030 million shares worth N2.657bn exchanged hands in 5,513 deals.
Following three consecutive banner sessions, Nigerian equities were said to have come under sell pressure as investors took profit across most key sectors.
On the global front, Asian markets traded in positive territory amidst a rally in a number of energy stocks driven by rising oil prices. European markets however traded mixed with bearish bias, pressured by declines in auto stocks while United States markets opened lower.
The oil and gas sector (-335bps) recorded the biggest decline, no thanks to a sell down in Forte (-875bps) and Total Nigeria Plc (-286bps).
The financial services (-135bps) and industrial goods (-3bps) sectors also closed lower on the back of decline in the shares of Zenith Bank Plc (-393bps), FBN Holdings Plc (-429bps), Guaranty Trust Bank Plc (-89bps) and Dangote Cement Plc (-6bps).
However, the consumer goods sector (+51bps) maintained an upward trend, posting the only positive close, as investors maintained their appeal for Nigerian Breweries Plc (+164bps) and Nestle Nigeria Plc (+42bps).
United Bank for Africa Plc topped the volume chart, trading 65 million units while Zenith Bank topped the value chart, trading 33 million units worth N511m.
The NSE ASI and NSE 30 lost 63bps and 79bps, putting year-to-date returns at -6.94 per and -8.35 per cent respectively.
Market breadth turned negative with 15 gainers and 35 losers.
Conoil Plc, Neimeth International Pharmaceutical Plc and Union Dicon Salt Plc led the gainers chart, advancing 9.47 per cent, five per cent and five per cent, respectively; while Vitafoam, Diamond Bank and Transcorp led the losers chart, declining 9.59 per cent, 9.45 per cent and 9.38 per cent, respectively.
On what would shape the next trading session, analysts at Vetiva Capital Management Limited said, “Noting the room for more profit taking across a handful of large cap stocks, we see likelihood of further decline across stocks in the session ahead.”
