AxaMansard Insurance Plc’s shares led the losers’ table at the close of trading on Monday, as the Nigerian Stock Exchange market capitalisation soared by N34bn.
The market also recorded additional 27 losers with 23 gainers, as 254.485 million shares worth N5.797bn exchanged hands in 4,600 deals.
Equities capitalisation rose to N12.933bn from N12.899tn, while the All-Share Index closed at 37,525.38 basis points from 37,425.15 basis points.
AxaMansard share price dropped by 4.61 per cent to close at N2.07 from N2.17. Also, Continental Reinsurance Plc, AG Leventis Plc, Africa Prudential Plc and Fidson Healthcare Plc shares slid by 4.32 per cent, 4.17 per cent, 4.15 per cent and 4.13 per cent, respectively.
The Nigerian equities market recorded a 0.27 per cent gain at the close of trading to settle the year-to-date return at 39.63 per cent.
The Cement Company of Northern Nigeria Plc was the best performing stock, advancing by 10.16 per cent to close at N10.84. C&ILeasing Plc, Dangote Flour Plc, Livestock Feeds Plc and Cadbury Nigeria Plc shares followed, gaining 10 per cent, 7.61 per cent, 7.53 per cent and five per cent, accordingly.
Sector performance as measured by the NSE sector indices showed that the NSE food/beverage and the NSE industrial indices closed in the green zone advancing, by 2.18 per cent and 0.59 per cent. However,the NSE insurance, NSE banking and the NSE oil/gas indices declined by 1.99 per cent, 0.20 per cent and 0.18 per cent, accordingly.
“The positive outing witnessed at the close of today’s trading activities may be attributed to continued bullish sentiments towards some heavily weighted stocks particularly in the consumer goods space,” analysts at Meristem Securities said in a post.
The construction of the fertilizer plant in Dangote Refinery and Petrochemical Complex will be completed in January and March 2018, Africa’s richest man and President of Dangote Group, Alhaji Aliko Dangote has said.
Speaking when the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu visited the refinery complex in Lagos, recently, Dangote stated that the first train of the fertiliser plant will commence operations in January next year, while the second line will be completed in March next year.
Dangote said his company was committed to playing its part in the efforts of the minister and the federal government to comprehensively address the energy crisis in the country. “As you are aware, we are currently building the world’s largest single line Refinery, Petrochemical Complex and the world’s second largest urea fertiliser plant.
The Refinery will have the capacity to refine 650,000 barrels of crude oil per day. The petrochemical plant will produce 780,000 metric tonnes of polypropylene yearly, 500,000 metric tonnes of polyethylene while the fertiliser project will produce 3.0 million metric tonnes per annum (mmtpa) of urea,” Dangote said..
Dangote added that his company is also building the largest sub-sea pipeline infrastructure in any country in the world, with a length of 1,100 kilometres, to handle three billion standard cubic feet of gas per day.
According to him, the company also plans to construct a 570 megawatt-capacity power plant in this complex. “As a matter of fact, gas from our gas pipeline will augment the natural domestic gas supply and we estimate an additional 12,000MW of power generation can be added to the grid with the additional gas from our system,” he said.
“We will be adding value to our economy as all these projects will be creating about 4,000 direct and 145,000 indirect jobs. We will also save over $7.5billion for Nigeria annually, through import substitution and generate an additional $5.5billion per annum through exports of the refined petroleum products, fertilizer and petrochemicals. We envisage that these projects, which would cost over $18billion, would be completed in 2019,” he explained. Dangote solicited the support of the federal government to enable his company to achieve these targets.
Dangote commended the minister for the effort he has put into ensuring availability of petroleum products in the country, as well as his present ongoing efforts at revamping our ailing refineries. “In addition, the minister has been championing a comprehensive overhaul of the energy sector in Nigeria, with a view to making us a self-reliant nation. I have no doubt that he will succeed in this quest, given his enviable profile,” Dangote added.
Leading food manufacturing company, Nestle Nigeria Plc has announced a profit after tax (PAT) of N16.5 billion for the six months ended June 30, 2017, showing a jump of 2,987 per cent compared with N536 million in the corresponding period of 2016.
However, the company got a boost from a significant reduction in finance cost made possible by the stable foreign exchange witnessed in that period.
Details of the results show that a revenue of N121.919 billion, up 51 per cent from N80.442 billion in 2016. Cost of sales rose from N47.712 billion to N73.576 billion, while gross profit grew by 47 per cent to N48.343 billion, compared with N32.731 billion.
Marketing and distribution expenses trended upwards, standing at N16.863 billion, from N12.731 billion in 2016. Administrative expenses declined marginally to N4.780 billion, from N4.9177 billion.
Nestle Nigeria recorded a finance income of N5.145 billion in 2016, showing an increase of 529 per cent from N817 million in 2016, while finance cost fell by 50 per cent from N14.891 billion to N7.385billion in 2017.
As a result, net finance cost dipped by 84 per cent from N14.074 billion in 2016 to N2.239 billion in 2017. A further analysis of the net finance cost show that net foreign exchange loss improved from N13.1 billion to N5.175 billion, while finance cost expenses improved from N14.891 billion to N7.385 billion. Hence, net finance cost stood at N2.239 billion in 2017, as against N14.074 billion in 2016.
Consequently, Nestle Nigeria ended the H1 of 2017 with a profit before tax of N24.459 billion, up by 2,629 per cent from N896 million in 2016, while Pat grew faster by 2,987 per cent to N16.547 billion, from N535 million in 2016.
Speaking on the results, Managing Director/Chief Executive Officer of Nestle Nigeria, Mr. Mauricio Alarcon said: “We are particularly pleased with the growth which is an affirmation of the loyalty and trust of our consumers in our brands. The result is also due to the hard work of our people, and our distribution network.”
“The Board and the management remain confident that our strategic roadmap will continue to leverage on the potential of the business and the company will further increase investments behind brand and route-to-market activities while proactively managing input cost pressures.”
Meanwhile, the Nigerian stock market remained bullish, opening the new week with a gain of 0.27 per cent to close at 37,525.38. Similarly, market capitalisation closed higher at N12.93 trillion.
Guaranty Trust Bank Plc (GTBank) is celebrating the 10th anniversary of its listing on the London Stock Exchange (LSE) as the first Nigerian bank to be listed on the London bourse.
The bank is the first to dual list on an international exchange and the first Nigerian company to raise international capital using listed Global Depositary Receipts.
To mark the pioneering feat, the Managing Director/ Chief Executive Officer of GTBank, Mr. Segun Agbaje, led the market open ceremony at the LSE last Friday, accompanied by senior representatives of the bank and other institutional partners.
The LSE is a diversified international exchange that offers international business, and investors, unrivalled access to Europe’s capital markets.
A statement from the bank at the weekend explained that since its listing on the LSE, GTBank has embarked on a decade of unparalleled growth, leading the financial industry in profitability and products and service delivery.
Commenting on the anniversary, Agbaje, said: “To be listed on the London Stock Exchange, one of the most illustrious exchanges in the world, was a pioneering feat which remains fresh in our minds.
“We are deeply grateful to all our investors and partners for the integral role they played and their confidence in our ability to pull of that giant leap. Ten years on, we remain committed to maximising shareholders’ value and delivering superior and sustainable return, guided by our founding values of hard work, discipline and integrity.”
GTBank offers a wide range of financial services and products throughout Nigeria, with strong footprints in West and East Africa, as well as the United Kingdom.
GTBank had been recognised as the Best Bank in Nigeria by Euromoney (2016), the African Bank of the Year by the African Banker Magazine (2016) the Best Bank in Africa for Corporate Governance (2015) and the Most Innovative Bank in Africa by African Investor (2016).
Union Bank of Nigeria Plc reported a marginal increase in profit for the half year ended June 30, 2017. According to the results, the financial institution ended the H1 with profit before tax of N9.5 billion, showing a minimal growth of seven per cent compared with N8.9 billion in 2016. Profit after tax also rose slightly by five per cent from N8.8 billion to N9.2 billion. The results also showed that the bank recorded gross earnings of N73.7 billion, showing a growth of 23 per cent from N60 billion in the corresponding period of 2016. Interest income was boosted by naira devaluation-fueled foreign currency loan book to hit N58.3 billion, up from N44.3 billion.
Net interest income rose 19 per cent to N26.3 billion, from N22.2 billion, while non-interest revenue fell marginally by two per cent from N15.7 billion to N15.4 billion. Customer deposits rose 15 per cent due to growing confidence in the bank to hit N759 billion as at June 30, up from N658 billion as December 31, 2016. Impairment charge fell by 39 per cent from N8.8 billion to N5.4 billion. In his comments on the results, Chief Executive Officer of Union Bank of Nigeria, Mr. Emeka Emuwa said: “As our centenary celebrations continue and with the launch of ourN50 billion rights issue in the second half of the year, 2017 will remain a very busy year for the bank. With our clear focus on enhancing the operational efficiency of the franchise, gross earnings grew by 23 per cent in the first half of the year to N73.7 billion, from N60.1 billion in H1 2016. In a challenged economy, the group delivered PBT of N9.5 billion, a six growth over the corresponding period in 2016.” According to him, in the second half of the year, their focus will centre on the rights issue launch, adding “we will remain nimble to take advantage of emerging opportunities and while improving on service delivery to our customers.”
Also speaking on the results, Chief Financial Officer of the bank, Oyinkan Adewale, said: “Improved foreign exchange availability enabled us to bring our foreign currency loan book down to 44 per cent of total loans, from 50 per cent at the end of 2016. 18 per cent customer deposit growth in the Nigerian bank allowed us to bring Loans to Deposit Ratio down to 65 per cent from 82 per cent at the end of 2016. Sustaining low cost deposit generation momentum, we were able to improve our low-cost deposit base to 69per cent of total deposits, from 65 per cent at the end of 2016.”
The Central Bank of Nigeria (CBN) will this week conduct its bi-weekly treasury bills auction with total offer of N229.1 billion to offset maturing bills of the same amount. In addition, the central bank is expected to float open market operations (OMO) auctions to keep financial system liquidity tight. Afrinvest West Africa Limited stated in a report at the weekend that despite repeated OMO auctions, money market rates eased last week against the backdrop of an OMO repayment and improved system liquidity. The CBN conducted OMO auctions on all trading sessions but for Monday.
Despite this, system liquidity during the week remained in the positive region save for Wednesday which had a negative balance of N53 billion. Money market rates – Open Buy Back (OBB) and overnight (OVN) – were at first elevated at the start of the week (relative to preceding Friday’s close of 14 per cent and 14.9 per cent respectively). But both rates closed at five per cent and 5.8 per cent respectively. Despite the MPC’s decision to retain rates at current levels, performance of the secondary treasury bills market was bearish last week as average yield rose on four of five sessions.
On the other hand, foreign exchange rate at the official market remained pegged within a range of N305.70/$1 – N305.75/$1 during the week, closing at N305.70/$1. At the parallel market, rate appreciated from last week’s close of N366.00/$1 to touch a 2017 high of N364/$1 on Wednesday before closing the week at N365/$1. Meanwhile, at the NAFEX segment, a total of $983 million traded during the week with market rate appreciating slightly from N366.45/$1 at the start of the week to close at N366.08/$1 on Friday. “In the week ahead, we expect the central bank to continue its current administration of the forex market by way of weekly SMIS sales and operation of multiple FX windows. Hence, we expect rates to hover around current levels,” the report added.
Activities in the domestic bonds market remained soft as the market recorded a bearish performance last week with average yield across benchmark bonds rising on four of five trading days.
Stakeholders have expressed support for the proposed demutualisation of the Nigerian Stock Exchange (NSE), describing it as a crucial step towards boosting liquidity and growth of the economy.
The National Assembly is currently promoting a bill to demutualise the NSE from a company limited by guarantee to a company limited by shares.
Demutualisation refers to the transition from a mutual association of exchange members to a limited liability company which is accountable to shareholders.
The concept typically separates ownership and voting rights from the right of access to trading on an exchange.
At a joint public hearing organised by the Senate and House of Representatives Committees on the Capital Market on a bill for an Act to facilitate the development of Nigeria’s capital market by enabling the conversion and re-registration of the NSE from a company limited by guarantee to a public company limited by shares and for related matters, 2017, stakeholders agreed that the move was long overdue in order to stimulate liquidity in the system among other things.
Leading deliberations on the legislation, the sponsor, Senator Foster Ogola, who is the acting Chairman, Senate Committee on Capital Market, said the NSE plays a critical role in the country’s financial market, arguing that the conversion and re-registration into a public company limited by shares is essential to developing and strengthening the market as well as enhancing the formation of capital for the expansion of the economy.
He said: “It is anticipated that the demutualisation of the NSE will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeria’s economic development.”
He said the planned demutualisation was in line with the 2015-2025 Capital Market Master Plan taunted to promote efficiency in the creation and harnessing of capital, as well as creating liquidity in the market, adopting and strengthening corporate governance best practices.
The Chief Executive Officer of NSE, Mr. Oscar Onyema, said the board had voted in favour of the demutualisation agenda during its extraordinary general meeting on March 30, 2017.
He said: “It is of particular importance to the Nigerian capital markets and the wider economy that the exchange be aided to successfully demutualise, as it enables the exchange to serve the capital markets ecosystem and economy more effectively than it has done in the past.”
According to him, the exercise will facilitate the development of the capital market, improve corporate governance and availability of resources from capital investments among other benefits.
Senate President, Dr. Bukola Saraki, represented by Senate Deputy Chief Whip, Senator Francis Alimikhena commended the exchange for its positive contributions to the growth of the economy, adding that it would open more opportunities for the economy.
House Speaker, Hon. Yakubu Dogara, represented by House Minority Leader, Hon. Leo Ogor, said the House was working on retooling the economy and would accept any initiative and ideas that would deepen the economy and create opportunities for growth.
However, Chairman, House Committee on Capital Markets and Institutions, Hon. Yusuf Tajudeen said the hearing was a “further demonstration of the commitment of the National Assembly through the Committees on Capital Market to re-position the NSE towards achieving its role not only as a critical institution but a major contributor to the economic development of Nigeria.”
FBN Holdings Plc yesterday reported its unaudited results for the half year ended June 30, 2017, showing a profit after tax of N29.5 billion, a decline of 17.8 per cent posted in the corresponding period of 2016.
The financial conglomerate posted gross earnings of N288.8 billion, up 7.8 per cent from N267 billion in 2016. Net interest income rose by 30.2 per cent from N126 billion to N164 billion, while impairment charges fell by 2.6 per cent from N69.9 billion to N62.4 billion.
However, profit before tax fell by 22.4 per cent to N45.9 billion from N35.6 billion, while PAT stood at N29.5 billion, as against N35.9billon in 2016. A further analysis of the results showed that total assets of N4.9 trillion, grew by 3.0 per cent to hit N4.9 trillion, from N4.7 trillion as at December 31, 2016.
Customer deposits was N3.0 trillion, down 3.5 per cent as against N3.1 trillion in December 31, 2016, just as customer loans and advances ended at N2.0 trillion, down 4.1 per cent from N2.1 trillion as at December.
In terms key ratios, net-interest margin improved to 8.5 per cent in 2017, from 7.2 per cent in 2016. Non-performing ration stood at 22 per cent, an improvement on the 22.8 per cent in June 2016 and 24.4 per cent in December 2016.
Commenting on the results, the Group Managing Director, FBN Holdings, Mr. Urum Kalu said: “FBN Holdings has again demonstrated its strong revenue generating capacity in the current economic environment reporting gross earnings of N288.8 billion – up 7.8 per cent.
In line with our strategic focus on improving asset quality; cost optimisation; and, enhancing revenue generation, we are beginning to see improvement across a number of metrics associated with these initiatives.”
He added: “Our focus on enhancing the quality of our loan book is reflected in a decline in non-performing loans, a reduction in our impairment charge following improvement in the asset quality outlook, and we will continue to prioritise this area through the rest of this year. Similarly, consistent improvement in the efficiency ratio is testament to the efficacy of our cost optimisation initiatives, though these results have been partly offset by the currency devaluation and high inflationary environment.
Overall, we have seen strong growth trajectory in our Merchant Banking & Asset Management and the Insurance Group. These businesses complement our Commercial Banking franchise and represent new frontiers for our Group, firmly supporting our aspiration of becoming a leading financial services institution in Middle Africa. We remain committed to maximising returns to our shareholders as well as creating sustainable value.”
The Nigerian equities gained N810 billion in capitalisation following a bull run for 13 trading days. The renewed demand for equities on the Nigerian bourse lifted the market capitalisation from N11.133trillion on July 5, to N11.945 trillion on Monday, July 24, 2017.
Although the return of more foreign portfolio investors due to the introduction of a new foreign exchange window by the Central Bank of Nigeria (CBN) in April had influenced the return of the bulls to the market, expectations that companies would release improved corporate results for the first half (H1) of the year helped to sustain the momentum.
The development made the market to appreciate for 13 consecutive trading days, leading to a gain of N810 billion or 7.3 per cent. The Nigerian Stock Exchange (NSE) All-Share Index rose by same margin from 32,302.32 to close at 34,652.52. The market appreciated every trading day from July 6 to Monday, July 24.
Market analysts said investors have been taking position ahead of H1 corporate announcements. The results so far released showed improved performance compared to the previous year. For instance, Unilever Nigeria posted a revenue of N45.105 billion in H1 of 2017, up 39 per cent from N32.278 billion in the corresponding period of 2016. Cost of sales was up at N32.197 billion in 2017. Sales and distribution expenses also went up from N1.502 billion to N1.942 billion in 2016.
However, marketing and administrative expenses reduced from N6.689 billion to N5.571 billion. Unilever ended the period with profit before tax (PBT) of N5.044 billion, compared with N1.487 billion in 2016, showing a growth of 239 per cent, while profit after tax (PAT) stood at N3.676 billion, up by 236 per cent from N1.093 billion in 2016.
Lafarge Africa posted N154.8 billion, indicating an increase of 44.2 per cent from N107.3 billion in 2016. Cost of sale grew by 19.7 per cent from N92.2 billion to N110 billion, while sales and marketing expenses followed same uptrend to hit N2.12 billion, from N1.98 billion. Administrative expenses rose from N10.23 billion to N16.3 billion.
Technical fees soared by 202 per cent from N1.584 billion in 2016 to N4.798 billion in 2017. But the company ended the H1 with PBT of N18.2 billion, compared a loss of N30.2 billion in 2016, while PAT stood at N19.7 billion. Also, Transnational Corporation of Nigeria Plc, which released its results on Monday, recorded PAT of N4.164 billion recorded in H1 of 2017, compared with a loss of N12.191 billion posted in the corresponding period of 2016.
Specifically, Transcorp Plc recorded revenue of N32.174 billion in 2017, up from N24.779 billion in 2016. Cost of sale stood at N19.3 billion, as against N13.3 billion in 2016, while administrative expenses rose to N5.663 billion, compared with N5.265 billion in 2016. Net finance cost fell from N17.268 billion in 2016 to N4.988 billion in 2017. Consequently, Transcorp ended H1 2017 with PAT of N4.164 billion, a recovery from a loss of N12.191 billion in 2016.
Leading pension fund administrator (PFA), Trustfund Pensions Limited has adopted a cost reduction strategy designed to boost revenue to consolidate on the company’s corporate governance goal.
In line with this strategy, it posted a drop in its cost-to-income ratio from 83 per cent in December 2015 to 78 per cent as at December 31, 2016. The company Chairman, Mr. Ismaila Mohammed Agaka, who made the disclosure at its 9th annual general meeting (AGM) in Abuja, stated that despite the rough economic dynamics, the company performed well.
He described Trustfund’s operating results for 2016 as encouraging when juxtaposed with the 2015 figures, noting that the company posted N4.971 billion revenues, N3.892 billion expenses and a profit after tax of N1.249 billion.
Addressing the shareholders, he said: “These results are encouraging when compared with total revenues of N4.662 billion, expenses of N3.850 billion and profit after tax of N1.018 billion for the year ended 31st December 2015.” Based on the performance, a 25 kobo per share dividend was approved for shareholders whose names are contained in the company’s register of members as at close of business on December 31, 2016.
On the future of the company, Agaka said: “Distinguished shareholders, our company has over the years grown consistently evidenced by the healthy key financial indicators. We intend to sustain the momentum with a forward-looking board, sound management and resilient workforce.” In an interview with THISDAY on the sidelines of the AGM, Agbaka expressed confidence in the company’s future, adding with a stringent corporate governance structure, an entrenched resolve on cutting the ratio of cost in favour of income, the future was looking very bright for Tertfund.
Also, in an interview, the President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba said the labour centre was pleased with the performance of Tertfund. He assured that the NLC would continue to encourage workers to repose their confidence in Tertfund. The NLC is one of the shareholders of Tertfund with more than 5 per cent of the issued capital of the company.
