Archives June 2019

Recapitalisation: Shareholders Ask Regency Alliance to Retain Dividend

Shareholders of Regency Alliance Plc, have urged the management of the company, to retain the dividend for the 2018 financial year, in order to support the company’s move to raise additional capital.

They made the recommendation during the company’s 25th Annual General Meeting in Lagos. The Chairman of the company, Amb Baba Gana Kingibe, had announced a dividend pay-out of N200 million for the financial year under review.

He explained: “But the shareholders suggested that the dividends should be ploughed back into the business in lieu of pending recapitalisation.”
The company’s gross premium rose by 1.30 per cent from N3.368 billion in 2017, to N3.408 billion in 2018.

The effect of increased premium generation, he added, was however significantly eroded by the 24.30 per cent increase in net claims, 8.93 per cent increase in underwriting expenses and 3.94 per cent increase in management expenses when comparing the 2018 figures with that of 2017.

He said there was an increase of 24.37 per cent in the investment income of the company, which was reflective of the high deposit rates and government yield rates offered during the year.
The chairman disclosed that there was an increase of 6.68 per cent in profit after tax, from N196.475 million in 2017 to N209.599 million in 2018.

“It is expected that our company, building on the gains of past financial discipline and strategic positioning, will continue to produce better results in the future,” he said.
The chairman said the total asset base of the company grew by 6.48 per cent from 7.345 billion in 2017 to N7.821 billion in 2018.

“This was due primarily to the effect of the foreign exchange translation loss arising from consolidating RegencyNem Insurance Limited Ghana’s account.
“Total assets for our group and our company as at December 31st, 2018 stood at N9.853 billion and N7.821 billion respectively,” he said.
The chairman said the company’s expansion into retail insurance was being pursued with renewed vigour.

According to him, the company intends to increase its market penetration through the deployment of an e-commerce platform on its website.

After presenting the 2018 performance of the company, Kingibe announced his departure from the board. He expressed his gratitude to the board, management, staff and shareholders for their support in the last nine years.

Source:© Copyright Thisday Online



Task Before SEC Board

Staff and management of the Securities and Exchange Commission (SEC), operators and investors in the nation’s capital market heaved a sigh of relief on Monday, when the federal government eventually inaugurated a board for the market regulator.

The board, which is headed by a lawyer and, former company secretary of United Bank for Africa Plc (UBA), Mr. Olufemi Lijadu, came in over four years after the last board of commission was sacked by President Muhammadu Buhari.

While Lijadu, who is from Ogun State would be the chairman, other non-executive commissioners are: Mr. Lamido Yuguda from Gombe State, Mrs Rekiya Ladi (Kaduna), Mr. Okokon Ekanem, representing the Ministry of Finance, and Dr. Alvan Ikoku, representing the Central Bank of Nigeria.

The acting Director-General, SEC, Ms Mary Uduk; Acting Executive Commissioner, Corporate Service, Mr. Henry Rowlands, other members of the board from SEC are Acting Executive Commissioner (Operations), Mr. Isyaku Tilde, and acting Executive Commissioner (Legal and Enforcement), Mr. Reginald Karawusa, are also members of the board.

The constitution of the board came after persisted calls by market stakeholders.
The Permanent Secretary, Federal Ministry of Finance, Mahmoud Isa-Dutse, who is also overseeing the office of the Minister of Finance inaugurated the board.

Speaking at the inauguration ceremony, Isa-Dutse said the inauguration of the SEC board came at a time when many players in the market were displaying weak corporate governance practices that could potentially dampen investor confidence and undermine the steady gains achieved since the 2008 stock market crash.
He, therefore urged the board members to play their own part as crucial enablers in the industry towards advancing a common vision for the growth and revitalisation of the market.

He added that Nigerian capital market was still growing and evolving, noting that to sustain its growth and eventually transform to a world class capital market, transparency and investor confidence were desirable.
He said like world markets across the globe, the Nigerian capital market should be characterised by high levels of liquidity, depth, breath and sophistication with a strong domestic investor base.

He added: “It should be innovative, transparent due to robust investor base. It should be innovative, transparent due to robust disclosure regimes, and efficient both in price discovery and in the allocation of capital.
“We must have it in mind that world-class capital markets do far more than provide access to capital. They are enablers of socio-economic development because they hasten the rate of capital formation, foster a meritocracy and promote good corporate governance, innovation and entrepreneurship.

“Thus, our capital market should broaden access to economic prosperity by enabling the emergence of financially responsible citizens, accelerating wealth creation and wealth distribution, providing capital to small and medium scale enterprises (SMEs), and catalysing housing finance.”
“The administration of President Muhammadu Buhari is committed to transparency and accountability in corporate governance. To this end, I must emphasise that the role of governing board is to provide effective oversight and strategic adversary to management team.

“I would therefore like to advise all concerned to study and strictly adhere to laid down laws that have clearly defined the roles and responsibilities of the board members” he added.
Responding, Lijadu emphasised that capital markets are very important in the socio-economic development of any nation as it plays a critical role in attracting investments.

“As we all join hands together to build our country, we need investments and the capital market plays a critical role in that respect. We need to see how we can move forward to have a more orderly market, a market that is fair and transparent and can attract investments to build Nigeria. We need a market that is attractive to investors, both local and foreign

“We need a capital market where the rules are enforced and where the public who invests are all protected. We need to re-inforce the public trust. I therefore enjoin everyone to help us towards building a capital market that this country deserves”.

Also speaking, Uduk expressed delight at the inauguration of the board which she said would assist in moving the capital market forward. She welcomed the new members and expressed optimism that they would bring their wealth of experience to bear in the running of the commission and the market.

Agitation by stakeholders
Before now, the Chairman, Association of Securities Dealing of Houses of Nigeria (ASHON), Chief Patrick Ezeagu, had stressed the importance of a board for SEC.
“SEC, which is regulating a market of several trillions of naira should have a board to enable a smooth running. It is disheartening to know that most of the laudable projects espoused in the master plan are being affected by lack of a board, which is statutorily mandated to take some major decisions in that direction.

“Apart from not having a board, the DG and the commissioners are all in acting capacities. This does not send good signals to investors out there. Appointing a board for the commission and confirming the officers would significantly boost investor confidence, thereby restoring some level of stability to the market,” Ezeagu had said.

Speaking on why SEC urgently needed a board urgently, a senior market operator and lawyer had said the commission could not be an arbiter over corporate governance of listed companies whereas it does not have a board.

According to him, “can you give what you do not have it. You cannot be superintending over what you do not have.”
He added that SEC is signatory ‘A’ member of International Organisation of Securities Commissions (IOSCO), explaining that being a signatory ‘A’ member requires that the commission should have an institution in place and the head of that institution is the board.

“In terms of market dynamics, information is key and the timeliness of information is pivotal. For information, which is key and timely you must have a board that quickly take decisions because as it is today, the Ministry of Finance serves as a board.

“For any decision to be taken, the ministry, which is already saddled with the running of the economy, and over-burdened with such, what time will it have to attend to the commission. Though the ministry supervises the commission, what capacity with specific reference to capital market that the ministry to be able to give a guided advice to the commission,” he added.

Also, the Chairman of Ibadan Zone Shareholders Association of Nigeria (IZSAN), Mr. Eric Akinduro, had said constituting a board for SEC would enhance confidence in the market.
“The market is very sensitive. Anything that is not positive can easily drag the market down. Therefore, the best thing for the government is to take proactive step by ensuring that the board is constituted so that the growth the market is recording now can be sustained,” Akinduro said.

Similarly, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Mr. Adeniyi Adebisi had said people bearing the brunt of what was happening in SEC were the shareholders.
“The government should constitute board so that things can move in the right direction,” he Adebisi said.

Stakeholders task board
Reacting to the inauguration of the board, President, Association for Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, expressed delight over the appointment of the new chairman, who he described as knowledgeable and has a lot of integrity.

“My immediate advice to the board is that SEC should try as much as possible restore the credibility of organisation because we have never seen a situation, less than two years you have three DGs. It is not healthy for corporate governance.

“This happened because there was no board. The commission must quickly, bring back the credibility in issues in the market, especially issue regarding Oando Plc.

“What has happened in Oando Plc is not giving the market a good image in the eyes of the international investors. Ministry will intervene, court will come and all these have not been good for the market,” Umar said.
He added that the new chairman should concern himself with issues that would move the market forward instead issues that are very inconsequential.

“They should be concerned with developing the market. They should come out with policies that attract investors instead of meddling into affairs of companies and talking about gifts at annual general meetings (AGMs) and companies interacting with shareholders. These are minor issues that SEC should not interfere,” he added.

Also speaking, the founding National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, said Lijadu was a company secretary of a quoted company and should know more about the attitude of SEC to issues.

“The first thing he and other board members should do is to sit down and look at the management of SEC and do the needful to encourage the people to work by confirming those that need power to move ahead and do the job.

“And then, they should look at the relationship with those that there regulating and the shareholders. The outcry of the shareholders must not be ignored. This is very important because of the shareholders that have regulators. It is shareholders that continue to sustain the regulators.

“If you look at it from every angle, it is the shareholders’ contributions that sustain the market and everything must be considered before a decision is taken,” Nwosu said.
He said the board should also look at the issue of Oando Plc because it has the capacity to impact negatively on SEC, shareholders and investment terrain.

“A just decision must be taken. Either to start all over again on the issue and regain the credibility of SEC because the credibility of SEC is in doubt due to the political interference on everything about SEC.
“The capital market is a capitalist market and does not require office of Chief of Staff or Presidency to continue to micromanage SEC. Micromanaging does not help. Rather it creates problem.

“You see people who do not understand the regulation interfering and saying this is what we want to enforce on the people. Even we know that SEC DG is appointed by the Presidency, the appointment does not say the Presidency will now be managing SEC,” Nwosu said.
On his part, Akinduro said the board should work towards ensuring that all policies in the 10-year capital market master plan are implemented.

“Also, the investments of investors should be paramount and the board should listen to the views of minority shareholders which are the back bone of the market,” he said.

In his opinion, the National Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said the board should ensure the management is made up of technocrats and professionals to run its affairs and not mere political appointees.
According to him, the crop of staff in SEC may not be able to take the commission to the level people expect it to be.

“I believe the government is eager to take the economy back on track and the capital market regulated by SEC has a vital role to play. There is the need to have strong management in SEC. That is the only option to restore investor confidence give hope investments in the Nigerian capital market,” he added.

A market operator said one key issue the board should look at is how to resolve executive matters raised by the Ministry of Finance by the panel that looked at the allegations made against Mounir Gwarzo.

Irrespective of what the courts have said, there are fundamental issues that panel report pointed and should be addressed and settled by the board to ensure discipline and strong governance in the commission,” he said.
He said the commission should also intensify its market development function by organising enlightenment programmes through workshops/seminars,town hall meetings among others.

“SEC should look at its market development functions as contained in 13(e) (f) (i) (j) of the ISA No. 29 of 2007 so as to ensures that all stakeholders including investors, academic community, market operators, law makers, professional bodies, government functionaries are appropriately educated on the activities and initiatives of the commission in order to deepen the market,” he said.

Source:© Copyright Thisday Online

Forte Oil Shares Rise as Adeosun is Appointed Chief Operating Officer

Shares in Forte Oil Plc rose further by 2.5 per cent to N32.00 per share as investors reacted positively to the appointment of Mr. Olumide Adeosun as the new chief executive officer(CEO) of the company and Mr. Moshood Olajide as chief financial officer(COO).

Their appointment followed the acquisition of 74 per cent equity stake in Forte Oil Plc by Ignite Investments and Commodities Limited led by Prudent Energy Services Limited, divested by Femi Otedola. Adeosun has extensive knowledge developed over 18 years of experience encompassing oil and gas, renewable energy, power, and strategy both locally and internationally.

The CEO began his career at Price Waterhouse Cooper (PwC) in London in 1998, where he provided advisory services to a range of multinational clients in the financial sector. In 2004, he worked as a consultant to British Petroleum (BP) Plc on a compliance program and eventually moved to join the company as Group Control Manager, BP Finance. At BP Plc, he helped to deliver a successful organisational transformation program, reducing complexity across the firm’s global financial business processes.

Following the successful delivery of the transformation programme, he held several commercial roles in BP Plc, eventually culminating in his playing a key role in the integrated supply and trading business. He supported the development of a West Africa trading and shipping strategy, which was instrumental in opening oil trades with Nigerian and West African counterparties. In 2011, he was appointed Vice President, Commercial Development & Operations for BP’s Nigeria trading business, which delivered a gross profit of $12 million in the first year of operations in West Africa.

Prior to his recent appointment as Adeosun, led the Energy & Power (West Africa) PWC. He held various leadership roles including, Head of Strategy Consulting for West Africa and Head of Capital Projects and Infrastructure where he was lead adviser on a number of multi-billion-dollar projects. Notably, he co-led the buy-side advisory of one of the largest acquisition deals in the Nigerian downstream oil and gas sector.

While at PwC, he contributed to leading industry publications including “Nigeria’s Refining Revolution” (2016), which still serves as a roadmap for local refining in Nigeria. He is also a PwC Africa Values Award Winner (2017).

He holds a BSc in Architecture from Woodbury University, California and an MSc in Mathematics from Royal Holloway College, University of London.

On the other hand, the Moshood Olajide, who is the new CFO, is a lawyer with dual Nigerian and New York Bar memberships. A Chartered Accountant and Tax Professional, he enjoyed rapid growth at PWC. His responsibilities spanned financial reporting, statutory audit, capital projects and infrastructure deals advisory; Energy, Utility and Mining deals advisory, general tax advisory, deal structuring and compliance services; regulatory services; client training services and company secretarial services covering many sectors of the economy especially Oil and Gas.

Prior to this, he had a stint with Aluko & Oyebode Law Firm where he had the responsibilities for general legal advisory, company secretariat, negotiation drafting and review of commercial agreements, litigation and arbitration.

He holds an LL.M Degree from Columbia Law School and a Bachelor of Law from Obafemi Awolowo University. Additionally, he Is also a member of the Nigerian Bar Association, Association of Chartered Certified Accountants, New York County Lawyers’ Association and Chartered Institute of Taxation of Nigeria.

Source:© Copyright Thisday Online

NSE All-Share Index Sheds 0.65% Despite 762% Rise in Trading Volume

The Nigerian stock market was highly active last week as volume and value of trading rose by 762 per cent and 477 per cent respectively.

High trading in the shares of Wema Bank Plc Forte Oil Plc boosted trading volume and value to 7.476 billion shares worth N91.107 billion exchanged in 17,192 deals up from the 868.739 million shares valued at N15.792 billion in 12,201 deals the previous week.

However, the bearish trend was sustained as the Nigerian Stock Exchange (NSE) All-Share Index declined by 0.65 per cent to close lower at 29,851.29 while market capitalisation shed 59 per cent to be at N13.155 trillion.

This was the third consecutive decline the market is recording, thereby worsening the month-to-date and year-to-date to 3.39 per cent and 5.02 per cent in that order.

In terms of sectoral performance, the NSE Consumer Goods Index shed 1.6 per cent, followed by the NSE Industrial Goods Index that shed 1.5 per cent. On the positive side, the NSE Insurance Index led with 8.7 per cent, trailed by the NSE Banking Index with 2.6 per cent. The NSE Oil & Gas Index appreciated by 0.7 per cent.

Considering the fact that the decline recorded last week was lower than previous week’s and it was expected that the bulls would return to the market this week.

Commenting on the market performance, analysts at Cordros Capital Limited said: “We reiterate our view that the blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for market recovery in the medium term. However, we guide investors to tread the cautious trading path in the short term.”

The capital market community last week explored opportunities in the Islamic finance in Nigeria. Decision-makers, regulators and investors came together in Lagos to exchange their views and experiences on those opportunities.

The forum featured a mix of panel sessions, onstage interviews and interactive sessions on a number of themes in Islamic finance including, Corporate Financing and Capital Raising in Nigeria; Funding Infrastructure and Social Welfare Requirements in West Africa and Islamic Finance, Investment, Banking and Takaful in Nigeria.

Speaking at the forum, the Chief Executive Officer, NSE, represented by the Divisional Head, Trading Business, NSE, Mr. Jude Chiemeka, applauded the federal government, the Debt Management Office, the Securities and Exchange Commission, the National Pension Commission for showing unwavering commitment to the deepening and growth of Islamic Finance in Nigeria.

“The Islamic finance sector presents numerous opportunities for enhancing the economic fortunes of Nigeria and the exchange will continue to work with market stakeholders to ensure the development of a robust Islamic finance sector. In 2016, for example, we developed and publicised our rules governing the listing of Sukuk and similar debt securities to provide regulatory guidance for issuers seeking to list their instruments on our platform.

“In line with the SEC’s non-Interest Capital Markets Product Master Plan, we have also identified five strategic pillars critical for the growth of the sector. These include a strong regulatory framework, capacity building, product development, robust primary and secondary markets, and market awareness programs such as these.

“We have already started executing on these pillars and recently hosted a training exercise for the market. We will also continue to provide an efficient and liquid market for investors and businesses in Africa, to save and access capital. We promise to continue our collaboration with all market stakeholders, to collectively contribute towards the enhancement of this new asset class, and ultimately towards the growing Islamic finance in Nigeria and Africa at large,” he said.

Some of the speakers at the event included Acting Director-General (DG) Securities and Exchange Commission (SEC), Ms Mary Uduk; Director-General, DMO, Ms Patience Oniha; Acting DG, National Pension Commission (Pencom), Hajia Aisha Dahir-Umar; Managing Director/CEO, Lotus Capital, Hajara Adeola among others.

But the Director General of Debt Management Office (DMO), said the federal government was perfecting arrangements to float another N100 billion Sukuk Bond to finance some infrastructure projects listed in the 2019 budget.

Sukuk are bonds structured to generate returns to ethical investors without infringing on the Islamic law which forbids interest payments.

Oniha said: “It represents an ownership interest in the asset to be financed rather than a debt obligation. It will be this year 2019 you God’s grace because the budget has been approved. The projects would be those included in the budget and the borrowing will also be what has been approved in the budget, part of new domestic borrowing. So, it will be this year.”

According to her, the second Sukuk bond (N100 billion Ijarah Sukuk) issued last December would be listed in July.

Market turnover

Meanwhile, an analysis of the activity chart showed that the Financial Services Industry led with 6.121 billion shares valued at N17.460 billion traded in 8,479 deals, thus contributing 81.87 per cent and 19.16 per cent to the total equity turnover volume and value respectively. The Oil & Gas Industry followed with 1.002 billion shares worth N65.058 billion in 2,019 deals. The third place was ICT Industry with a turnover of 115.320 million shares worth N3.387 billion in 866 deals. Trading in the top three equities namely, Wema Bank Plc, Forte Oil Plc and Zenith Bank Plc accounted for 6.573 billion shares worth N77.492 billion in 2,895 deals, contributing 87.91 per cent and 85.06 per cent to the total equity turnover volume and value respectively.

Also, a total of 662 units valued at N990,530.00 were traded last week in four deals compared with a total of 2,163 units valued at N354,065.06 that was transacted the previous week in six deals.

Similarly, a total of 21,682 units of Federal Government Bonds valued at N22.552 million were traded in 29 deals compared with a total of 235 units valued at N229,216.74 transacted two weeks in 14 deals

Price gainers and losers

The price movement chart showed that 34 equities appreciated in price during the week, higher than 19 in the previous week, while 33 equities depreciated in higher than 31 equities of the previous week.

Linkage Assurance Plc led the price gainers for the week with 37.5 per cent trailed by NEM Insurance Plc that gained 33.3 per cent. Thomas Wyatt Nigeria Plc garnered 21.2 per cent, while Lafarge Africa Plc chalked up 18.4 per cent.

Champion Breweries Plc gained 18.3 per cent just as Dangote Sugar Refinery Plc and Ecobank Transnational Incorporated rose 15.2 per cent.

Other top price gainers included: Glaxosmithkline Consumer Nigeria Plc (10 per cent); Law Union & Rock Insurance Plc (8.7 per cent) and Wema Bank Plc 8.0 per cent).

Conversely, Chams Plc led the price losers with 13.8 per cent, trailed by CAP Plc with 11.5 per cent. Okomu Oil Palm Plc, C & I Leasing Plc, Associated Bus Company Plc shed 10 per cent apiece. Ikeja Hotel Plc went down by 9.6 per cent, while Presco Plc lost nine per cent. Royal Exchange Plc and Livestock Feeds Plc depreciated by 8.3 per cent each.

Source:© Copyright Thisday Online

Lafarge Africa Reduces Loss to N8.8bn on Tax Credit

Cement firm, Lafarge Africa Plc has posted a loss of N8.8 billion for the year ended December 31, compared with N34.39 billion in 2017. The company had delayed the filing of the results due to some pending actions required for the resolution of key matters.

However, the audited results have been released showing revenue of N308 billion as against N299 billion in 2017. Finance cost rose to N45.973 billion from N43.217 billion, while loss before tax stood at N19.508 billion. But a tax credit of N10.707 billion reduced the loss after tax to N8.802 billion.

Meanwhile, the company is to sell 100 per cent of the issued share capital in Lafarge South Africa Holdings Limited to Caricement B.V, a subsidiary of LafargeHolcim for $316.3 million. The proceeds is expected to reduce the liabilities, which the company’s auditors, KPMG Professional Services raised concerns about.

The auditors had said Lafarge Group incurred a loss after tax for the year ended 31 December 2018 of N8.8 billion (2017: N34.6 billion), noting that as of that date, the Group’s current liabilities exceeded its current assets by N119.3 billion (2017: N189.6 billion) while the company’s current liabilities exceeded its current assets by N114.2billion (2017: N174.1 billion).

However, the auditors explained that December 4,2018, the company launched a Rights Issue scheme to raise N89.2 billion which was fully subscribed, while on 24 May 2019, the board approved the disposal of LSAH.

“The disposal was negotiated and the sales price was agreed at USD 316.3 million (N115.2 billion). The proceeds from the sale will be used to settle the company’s shareholder loan which represents the only existing foreign currency loan in the books of the company. The full repayment of the Shareholder Loan will result in a significant reduction in debt, interest charges and foreign exchange exposures which will in turn enhance the company’s profitability, financial position and cash flows. Additionally, the deconsolidation of LSAH which has been loss making and in a net current liabilities position will further enhance the Group’s financial performance and position,” the auditors said.

“Based on the foregoing, the directors believe that the Group and company will continue to be able to meet their obligations as they become due in the normal course of business. Accordingly, these financial statements have been prepared on the basis of accounting policies applicable to a going concern,” they added.

Source:© Copyright Thisday Online

SEC Restates Commitment to Increased Investment in Technology

The Acting Director-General, Securities and Exchange Commission (SEC), Mary Uduk, has reiterated the Commission’s commitment to investing more in technology.

This, she stressed would attract more participants in the capital market.

Uduk, said this during the 19th annual conference of the Risk Managers Association of Nigeria, with the theme, “Economic recovery: Leveraging technology innovation,” held in Lagos recently, where she spoke on the topic: “Deepening Capital Market Activities through Technological Innovation: Opportunities and Challenges.”

Uduk, who was represented by the Head, Risk Management, SEC, Mr. Okey Umeano said, “We have started to spend money to learn how we can use technology to make thing more efficient in the sector and facilitate investment for all those who are interested in investing in the stock market. If our country will compete with other countries in the world, we must put the right regulation in place.”

According to her, fintechs were fast growing, saying there was a need to adapt to the changes that technology had brought into the system.

She said the Commission had created a market-wide fintech committee to form a roadmap that would channel the efforts towards the development of the market.

Furthermore, she said protection of the investors in the market would remain a priority to SEC, no matter how the market sought to make profit.

However, she pointed out that adoption of technology comes with challenges such as skills gap and inadequate capacity.

“Each of these new products is unique and has to be treated as such, and regulators have to be knowledgeable about it,” she said.

Another challenge she mentioned, was that the cost of technology acquisition was high, and maintenance and implementation could be difficult.

On her part, the Chairman, RIMAN, Ms. Folakemi Fatogbe said: “The topic discussed today is a very apt topic for this time because similar oil producing countries like us such as Saudi Arabia and UAE are actually doing a lot in terms of technology to diversify the economy and the view really is that Nigeria would benefit a lot from technological innovation.

“It has been seen as a way of moving countries forward in terms of their economic growth and given our own population demographics where we have significant youth population and the youth population can be energised and galvanised by technology. Technology can also aid economic growth by creating efficiencies and by creating reach.”

Source:© Copyright Thisday Online

Nigerian Equities Now Cheapest in Africa

Long term investors now have very good opportunity to invest in the Nigerian equities market and reap significant capital gains as the market parades some of cheapest prices among capital markets in Africa and beyond.

The sustained bearish trading at the stock market has depressed the prices of many stocks to very affordable level compared to other markets. THISDAY checks showed that as at Monday, the Nigerian Stock Exchange (NSE) All-Share Index recorded a year-to-date (YTD) stood at 4.7 per cent, lower than that of Ghana which stood at 5.7 per cent. This implies that most stocks in both markets are trading significantly lower than their year’s opening values.

Apart from having recorded a YTD of 4.7 per cent, the Nigerian equities market has an average price earnings ratio multiple of 8.1x, while Ghana has 19.3x, indicating low valuation compared to their peers in Africa.

For instance, Egyptian market has a YTD gain of 9.2 per cent as at Monday, its PE multiple stood at 15.5x per cent. Kenya posted YTD growth of 6.9 per cent and PE multiples of 11.8x. South Africa market (JSE Securities Exchange) has YTD growth of 4.6 per cent and PE multiples of 17.5x. Frontier markets has YTD gain of 9.8 per cent and PE multiples of 13.6 per cent, just as emerging markets has YTD appreciation of 5.1 per cent and PE multiples of 13.2 per cent.

While the NSE ASI has depreciated by 4.7 per cent, some companies have suffered higher price depreciation despite their strong fundamentals.

In the banking sector, for instance, Ecobank Transnational Incorporated has depreciated by 29.6 per cent as at Monday, while United Bank for Africa Plc, Fidelity Bank Plc, Zenith Bank Plc and Guaranty Trust Bank Plc shed 20 per cent, 17.2 per cent, 13.2 per cent and 10 per cent respectively.

The banks had reported improved results for the first quarter ended March 31, 2019 and are also expected to record better performance in first half of the year ending June 30, 2019.
UBA grew its Q1 profit after tax (PAT) by 21 per cent to N28.665 billion up from N23.736 billion in the corresponding period of 2018. Profit after tax (PAT) rose 10.37 per cent N44.67 billion in 2018 to N49.302 billion in 2019.

GTBank Plc’s PAT rose 10.37 per cent from N44.67 billion in 2018 to N49.302 billion in 2019, while Zenith Bank Plc’s PAT rose seven per cent to N50.2 billion, compared with N47.79 billion in 2018. Also, despite a 235 per cent in Q1 PAT, the share price of Cement Company of Northern Nigeria Plc has declined by 30 per cent.

In the breweries sector, International Breweries Plc has shed 39 per cent, Champion Breweries Plc (34 per cent) and Nigerian Breweries Plc (32 per cent). In the consumer goods sector, Flour Mills of Nigeria Plc has lost 39 per cent, Dangote Sugar Refinery Plc (30 per cent), NASCON Industries Plc (17.7 per cent) Honeywell Flour Mills Plc (15.6 per cent).

Source:© Copyright Thisday Online

IFC, subsidiary to sell stake in Ecobank

The International Finance Corporation and the IFC Asset Management Company, a wholly-owned subsidiary of IFC, are in advanced discussions to sell equity holding in Ecobank Transnational Incorporated.

ETI, the parent company of the Ecobank Group, said the IFC and investment funds managed by the AMC had entered into a Share Purchase Agreement with a Dutch investment firm, Arise B. V, for the sale of their about 14.1 per cent stake in ETI.

It said in a statement, “The completion of the transaction is expected in the coming months, subject to due diligence, internal and regulatory approvals. IFC and ETI have worked together since 1993 to broaden access to finance, enhance trade liquidity, and strengthen Ecobank.

“Since 2009, IFC and the funds managed by the IFC Asset Management Company, through their investments, have been supporting Ecobank’s growth strategy across Africa in building a preeminent banking franchise.”

Source:© Copyright Punch Online

Ellah Lakes lists additional 1.88 billion shares on NSE

Ellah Lakes Plc has listed an additional 1.88 billion shares on the main board of the Nigerian Stock Exchange.

The company said on Monday that the listing would create options for investors in the agri-business segment of the NSE, and “is expected to provide increased liquidity to existing shareholders.”

The outgoing Chief Executive Officer, Ellah Lakes, Frank Ellah, at the Facts behind the Listing at the NSE, said, “Today marks a milestone in the history of our company. After a number of years of challenging operational performance and trading illiquidity, with our new management in place, I am pleased to see the new trajectory of our growth as a business.

“We welcome existing and new shareholders to participate in our growth story.”

The new Chief Executive Officer, Chuka Mordi, said, “We are pleased to be embarking on this new phase in the journey of Ellah Lakes Plc. With the business combination of the assets of Telluria, Ellah Lakes is in a great position to deliver value to all shareholders.”

He said the enlarged Ellah Lakes was built on a foundation of growth to meet the needs of Nigerians for agricultural products, both as retail consumers and as industrial partners.

“We believe and expect to partake in Nigeria’s growth story as we continue to support the communities we operate in, and all our stakeholders,” Mordi added.

The CEO, NSE, Oscar Onyema, said the listing had marked the beginning of a new era for the company after the previous shutdown of its operations due to militant activities and vandalism of the company’s assets.

He said the new management team had successfully revived the company’s operations and turned around its listing status at the NSE.

Onyema said, “We are pleased that the company has chosen to use this platform to inform the market of its strategic plans, operational developments and financial projections.

The Exchange recognizes the role played by the board, management and other parties in the Telluria Limited acquisition transaction. We also commend ongoing efforts to restructure and diversify the company’s operations from fish farming to a more competitive business in oil palm cultivation and processing.

Source:© Copyright Punch Online

We’ll use fintech to grow financial inclusion – SEC

The acting Director-General, Security and Exchange Commission, Mary Uduk, has said that the commission is committed to boosting financial inclusion in the sector, by investing in technology that will make it easier for people to invest in the sector.

She said this during the 19th annual conference of the Risk Managers Association of Nigeria with the theme, ‘Economic recovery: Leveraging technology innovation,’ in Lagos.

The SEC boss spoke on the topic, ‘Deepening capital market activities through technological innovation: Opportunities and challenges’.

Uduk, who was represented by the Head, Risk Management, Okey Umeano, said, “We have started to spend money to learn how we can use technology to make things more efficient in the sector and facilitate investment for all those who are interested in investing in the stock market.

“If our country will compete with other countries in the world, we must put the right regulation in place.”

She said fintech was fast growing and there was a need to adapt to the changes it was bringing into the system.

She said that the commission had created a market-wide fintech committee to draw a road map that would channel the efforts it was putting into fintech to get result.

However, in its drive to adopt technology, Uduk said that it was encountering challenges which included skills gap and inadequate capacity.

“Each of these new products is unique and has to be treated as such, and regulators have to be knowledgeable about it,” she added.

Another challenge she mentioned was that the cost of technology acquisition was high, and maintenance and implementation could be difficult.

She said that the development of its rules and regulations and the amendment of the ISA Act could not be completed by the 8th National Assembly.

The SEC boss said, “Development of standard rules and guidelines is difficult. We must make our market safe and attractive to investors.”

On her part, the Chairman, RIMAN, Ms Folakemi Fatogbe, said, “The topic discussed today is a very apt topic for this time because similar oil producing countries like us such as Saudi Arabia and UAE are actually doing a lot in terms of technology to diversify the economy and the view really is that Nigeria would benefit a lot from technological innovation.

“It has been seen as a way of moving countries forward in terms of their economic growth and given our own population demographics where we have significant youth population and the youth population can be energised and galvanised by technology.

“Technology can also aid economic growth by creating efficiencies and by creating reach. So we recognise in RIMAN and as risk managers that we need to educate our people more on technology and how technological innovation can be used for the benefit of Nigeria.”

Source:© Copyright Punch Online