The Series 1 offer for sale of 575 million shares held by the MTN Group to Nigerian investors, which held last December, has been successfully completed and was oversubscribed by 139.47 per cent. This was an additional 82.25 million MTN Nigeria shares.
A statement from the telecommunication company explained that the oversubscription raised the initial number of shares sold from 575 million to a total of 661.25 million shares.
The offer was implemented by way of a book-build to qualified institutional investors and a fixed price offer of N169.00 per share to retail investors.
According to the statement, the breakdown of the sale showed that approximately 76 per cent of successful applicants via digital platform were women, while 85 per cent of the sale was from persons under 40 years of age.
Following the successful completion of the offer, “MTN Group’s shareholding in MTN Nigeria reduced by 3.25 percentage points, from 78.83 per cent to 75.58 per cent.”
According to the statement by MTN Nigeria, signed by the Company Secretary, Uto Ukpanah, the offer was oversubscribed with valid applications for a total of 801.97 million units, leading to the activation of the approved 15 per cent over-subscription clause of an additional 86.25 million MTN Nigeria shares.
It said, “In all, 661.25 million MTN Nigeria shares were allotted. A total of 126,720 retail investors submitted valid applications and received full allotment.
“Institutional investors, including pension funds, insurance companies, asset managers, corporates, and foreign portfolio investors that participated in the book-build were allotted 72.09 per cent of their applications. This includes Nigerian pension funds representing approximately 6.5 million Nigerian contributors.
“In line with the innovative incentive structure of 1 free share for every 20 purchased, subject to a maximum of 250 free shares per investor, an additional 4.28 million MTN Nigeria shares will be allotted to qualifying investors who hold the shares allotted to them for 12 months till 31 January 2023.”
The statement also said MTN Group adopted a unique structure in the offering by determining a fixed price of N169 per share for the retail offer through a book-build to qualified investors that was completed on November 26, 2021. The fixed price offer to retail investors was at a discount of 11 per cent to the closing price of MTN Nigeria stock on the day the book-build was completed.
The offer commenced on December 1, 2021, and was completed on December 14, 2021.
Nigerian investors across the country supported the Offer through multiple channels – Receiving Agents, Issuing Houses and Primary Offer (a digital application platform).
MTN said, “The offer is a landmark transaction and a true reflection of Nigerian investor confidence in MTN Nigeria. It marks the first time a digital application platform was used to democratise investing in a public offer and maximise investor participation across the country.
“More than 89 per cent of retail offer subscribers applied through the Primary Offer platform (mobile and web), and 114,938 new Central Securities Clearing System (CSCS) accounts were opened by first-time investors.”
CEO of MTN Group, Ralph Mupita, said, “We are pleased that this offer has given so many Nigerians the opportunity to become owners of MTN Nigeria.
“With over 6.6 million Nigerians directly or indirectly becoming shareholders in MTN Nigeria, the objective of broadening the shareholder base, and creating shared value has been achieved. We are proud that our offer was the first Nigerian public offer to use the digital application platform, primary offer, which enabled wider investor participation across Nigeria. We thank the Nigerian authorities for their support of this offer. We remain committed to playing our humble role in driving digital and financial inclusion in Nigeria over the medium.”
Commenting on the offer, the CEO of MTN Nigeria, Karl Toriola, said, “We are delighted to welcome so many new shareholders to the MTN family, up 11.6 times from the number before the offer.
“It has been inspiring to see so many Nigerians, many of whom are young, acquire shares for the first time, and use a digital platform to do so. This is the beginning of a journey to broaden our shareholding and there will be more opportunities to participate.
“We are pleased with the level of digital innovation we championed with this offer with the active collaboration of our lead issuing house and the various regulatory bodies. Deepening retail participation in Nigeria’s capital markets is a process, and we are off to a great start, demonstrating the role digital platforms can play in expanding access.
“I am particularly pleased that we completed this transaction in an accelerated time frame ensuring new shareholders can realise value almost immediately through participation in our 2021 full-year dividend.
“I would specifically like to thank the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, the Nigerian Communications Commission and the wider federal government for the opportunity to execute this Offer.
“I thank the Securities and Exchange Commission, the Nigerian Exchange Limited, the CSCS, and all the parties involved for their support in delivering this ambitious Offer structure.
“I also appreciate our staff who worked tirelessly with our advisers on this project. Most of all I would like to thank our new shareholders for having confidence in us and in our future. We are delighted to have you on board for this journey to building a digital future together.”
The CEO of Chapel Hill Denham, the Lead Issuing House, Bolaji Balogun, said, “Chapel Hill Denham is honoured to have worked with MTN to complete Nigeria’s first digital and predominantly green offering. I wish to thank the SEC, the NGX, the CSCS, all the professional firms and other stakeholders, for delivering a big win for Nigeria’s capital markets in enabling the adoption of primary offer and this transaction marks a new and exciting future.
“Over 90 per cent of subscribers to the offer were first time participants in the capital markets and MTN Nigeria’s strong investment case made this possible.”
Chief Executive Officer, Nigerian Exchange Limited (NGX), Temi Popoola, said, “The NGX is proud to have worked with MTN Nigeria, Chapel Hill Denham and other parties to the transaction in advancing Nigeria’s capital market through the adoption of forward-looking technology.
“In the NGX era, we are resolute in our commitment to democratise finance in Nigeria in order to ensure every type of investor has access to public markets where they can invest in companies they believe in and reap value.
“With the digitised MTN Nigeria offering, we have made a tremendous stride in our plans for a full digital transformation of the Nigerian capital markets and we look forward to building on this.”
Similarly, CEO of Central Securities Clearing System Plc, Haruna Jalo-Waziri, said, “We are excited to be part of the innovation brought by the offer, which afforded the successful launch of primary offer digital application platform.
“This further buttresses the necessity for digital transformation, allowing market access for all categories of investors, including institutional and retail investors within and outside of the country.
“At CSCS, digital transformation has been the core of our strategic direction. We will continue to collaborate with our participants, issuers and other stakeholders to efficiently and effectively ease market access with innovative solutions through the investment cycle.”
The stock market of the Nigerian Exchange Limited (NGX) yesterday extended its positive outing into February with a gain of N263 billion.
The market was lifted by gains recorded by Seplat Energy Plc, Presco Plc, MTN Nigeria Communications (MTNN) Plc, Conoil Plc and 34 other stocks on the bourse.
The NGX All-Share Index (ASI) increased by 486.54 basis points or 1.04 per cent to close at 47,111.21 basis points, while the overall market capitalisation size gained N263 billion to close at N25.387 trillion.
Sector performances were broadly positive yesterday with the Oil and Gas gaining 5.43 per cent, Banking index added 2.15 per cent, Industrial index rose by 0.38 per cent and Consumer Goods index inched up by 0.19 per cent.
As measured by market breadth, market sentiment was positive as 36 stocks gained relative to 21 losers. SEPLAT Energy recorded the highest price gain of 10 per cent to close at N869.00, per share. Conoil followed with a gain 9.79 per cent to close at N24.10, while Academy Press rose by 9.57 per cent to close at N1.03, per share.
R. T. Briscoe went up by 9.09 per cent to close at 24 kobo, while Presco appreciated by 8.75 per cent to close at N105.00, per share. On the other hand, Caverton Offshore Support Group led the losers’ chart by 9.50 per cent to close at N1.62, per share. Eterna followed with a decline of 9.17 per cent to close at N5.45, while NCR shed 9.09 per cent to close at N3.00, per share.
Japaul Gold and Ventures lost 7.50 per cent to close at 37 kobo, while Ecobank Transnational Incorporated (ETI) shed 7.20 per cent to close at N11.60, per share.
However, the total volume traded decreased by 21.63 per cent to 341.516 million units, valued at N3.692 billion, and exchanged in 6,417 deals.
Transactions in the shares of Transnational Corporation of Nigeria (Transcorp) topped the activity chart with 32.110 million shares valued at N37.462 million. Fidelity Bank followed with 25.155 million shares worth N71.503 million, while Access Bank traded 23.463 million shares valued at N238.277 million.
Guaranty Trust Holding Company (GTCO) traded 21.119 million shares valued at N587.324 million, while Nigerian Exchange Group (NGXGroup) transacted 20.512 million shares worth N502.540 million.
Analysts at InvestmentOne Research said: “The equities market closed northwards due to the gains printed across major sectors. Going forward, we expect investor’s sentiments to be swayed by the search for real positive returns and developments in the interest rate space.
“We reiterate that this may be a great period to pick up some quality names with a medium to long-term investment horizon.”
The stock market of the Nigerian Exchange Limited (NGX) yesterday resumed trading for 2022 on a positive note as it gained N887 billion in market capitalisation. .
The All Share Index (ASI) rose by 309.79 points, representing an increase of 0.72 per cent to close at 43,026.23 basis points, while the overall market capitalisation value gained N887 billion, representing a growth of 3.98 per cent to close at N23.184 trillion.
Analysis of market numbers showed that the Consumer Goods dropped by 0.9per cent, Oil & Gas index also dropped 0.5per cent and Insurance was down by 0.4 per cent while the Industrial Goods appreciated by three per cent and Banking index gained 0.4 per cent.
The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; BUA Cement, Stanbic IBTC Holdings, Flour Mills of Nigeria, Zenith Bank and Neimeth International Pharmaceuticals.
Market sentiment, as measured by market breadth, was negative as 27 stocks declined, relative to 18 gainers. Academy Press recorded the highest price gain of 10 per cent to close at 55 kobo, per share.
Wema Bank followed with a gain 9.72 per cent to close at 79 kobo, while Cornerstone Insurance up by 8.70 per cent to close at 50 kobo, per share.
Neimeth International Pharmaceuticals rose by eight per cent to close at N1.89, while BUA Cement appreciated by 7.31 per cent to close at N71.95, per share.
On the other hand, Ardova, Northern Nigeria Flour Mills and Vitafoam Nigeria led the losers’ chart by 10 per cent each, to close at N11.70, N7.20 and N20.25, respectively, per share.
Chams followed with a decline of 9.09 per cent, to close at 20 kobo, while SUNU Assurances depreciated by 8.89 per cent to close at 41 kobo, per share.
The total volume of trades decreased by 52.4 per cent to 216.651 million units, valued at N1.516 billion, and exchanged in 4,080 deals. Transactions in the shares of Chams topped the activity chart with 29.865 million shares valued at N6.080 million. Wema Bank followed with 17.111 million shares worth N13.309 million, while Zenith Bank traded 11.035 million shares valued at N278.219 million.
Transnational Corporation of Nigeria (Transcorp) traded 10.755 million shares valued at N10.496 million, while Sovereign Trust Insurance transacted 10.476 million shares worth N2.862 million.
This week, United Capital expected the January buying interest to resume in no distant time as investors begin to position for full year, 2021 dividend announcements.
Despite the Nigerian Exchange Limited (NGX) All-Share Index or ASI closing positive, two sectors, the Alternative Securities Market (ASeM) and Industrial Goods indices have emerged as worst performing on the bourse in 2021.
Analysis of market performance for 2021 revealed that while the NGX ASI closed 2021 with a gain of 6.07 per cent to 42,716.44 basis points, the ASeM and Industrial goods indices depreciated by 8.11per cent and 2.15per cent respectively.
THISDAY checks revealed that investors’ profit-taking in the two indices heavy-weight affected overall performances in the year under review.
Specifically, investors’ profit-taking in Juli Plc weakened the ASeM index, while downward in stock price of BUA Cement Plc depreciated the industrial good index in 2021.
The stock price of BUA cement dropped by 13.32 per cent to N67.05 in 2021 from N77.35 it opened for trading.
BUA cement’s 13.3 per cent decline in stock price was related to its Basic Earnings Per Share.
The company closed nine months ended September 30, 2021 with N0.66 Basic Earnings Per Share as against N0.55 recorded in prior nine months of 2020.
“For BUA cement, the stock price in 2021 was not commensurate with the company’s Basic Earnings Per Share and investors decided to selloff, ””said Capital market analyst, Mr. Rotimi Fakeyejo.
Other stocks in the industrial goods recorded decline in the year on the heels of poor corporate earnings.
For einstance, stock price of CAP Plc dropped by 2.75 per cent to close at N19.45 from N20.00 it opened in 2021, while Beta Glass Plc. Dropped by 4.4 per cent to N52.95 from N55.40.
Four companies are listed on the AseM board of the Exchange such as; Smart Products Nigeria Plc, Capital Oil Plc and Rak Unity Pet. Company Plc that closed flat last year.
The stock price of Juli dropped by nearly 40 per cent to N0.91 in 2021 from N1.51, while Smart Products Nigeria traded flat at N0.20 for the second consecutive year.
Both Capital Oil and Rak Unity Pet. Company also traded flat N0.2 and N0.30 in 2021 respectively.
Reacting on the AseM index poor performance, analyst at PAC Holdings, Mr. Wole Adeyeye attributed the decline to investors profit-taking in Juli.
According to him: “The share price of Juli declined by 39.74 per cent to N0.91 kobo in 2021. The prices of other stocks under ASeM Index (such as Smart Products Nigeria Plc, Capital Oil Plc, Rak Unity Pet. Comp. Plc) remained flat in 2021.
“Of course, investors are expected to react over the company’s poor corporate earnings due to economy challenges. Juli in 2020 financial year reported N56.5million loss as against N1.57million loss reported in 2019.”
The Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf said the manufacturing sector in Nigeria is too dependent on import, which is a major shortcoming of the Nigerian manufacturing sector.
According to him: “The sector accounts for about three per cent of foreign exchange earnings andover 30% of import bill. This demonstrates that the sector is not properly aligned with the vision of self-reliance being promoted by the current government.
“Local value addition is still very weak. The most sustainable segment of the manufacturing sector are the food & beverage industries, and the cement industries where the local content is well over 60%. This explains the competitive strength of the sector.”
The current challenges he highlighted are, “Weak infrastructural base – power, transportation, Apapatraffic issues, railway system, and the ports; High cost of fund, absence of long-term funds, challenges of access to credit by SMEs as well as other firms in the sector, because of perception of manufacturing is very risky in the economy. Except for intervention funds, especially from the Bank of Industry (BoI), the cost of fund in the Nigerian economy has been well over 20% for industrialists. It is difficult to achieve a competitive manufacturing investment with this kind of fund.”
He added that the sector also suffer from the challenges of weak institutions. This makes regulation ineffective – faking and counterfeiting, smuggling, under invoicing , among others.
Meanwhile, the Oil & gas index on the NGX emerged as the best performing index on the NGX amid impressive profit and revenue driven by hike in prices of Premium Motor Spirits (PMS), among others.
The index gained 52.52 per cent to close 2021 at 345.01 basis points from 226.20basis points it closed in 2020.
The three drivers in the index, Totalenergies Marketing Nigeria, Oando Plc, and Conoil Plc appreciated in prices.
The stock price of Totalenergies Marketing Nigeria gained 71 per cent to close 2021 at N221.9 from N130.00, while Oando gained 19.5 per cent from N3.70 it closed in 2020 to N4.42.
In addition, Conoil gained 5.52 per cent in stock price to close at N22 from N20.85 it opened for trading.
The federal government this year tends to suspend subsidy payment on crude importation and the global oil price gained significantly over Crude oil production cut by the Organization of the Petroleum Exporting Countries (OPEC).
A report by National Bureau of Statistic (NBS) revealed that average retail of premium Motor Spirit (petrol) paid by consumers increased by 0.19 per cent on a year-on-year basis from a lower cost of N167.27 per litre recorded in corresponding month of last year to a higher cost of N167.60 per litre in November 2021.
However, the fact that the price of the commodity is still been sold at an average of N162/N163 per litre stations across the country, meant that the Federal Government, through the Nigerian National Petroleum Corporation (NNPC) is still subsiding a litre of the commodity for Nigerians.
Capital market analysts have urged investors to invest in listed Oil and gas stocks with strong fundamentals rather than patronizing banking stocks as most are struggling to survive numerous policies of the regulating bodies.
TotalEnergies Marketing Nigeria in its third quarter 2021 unaudited results for the period ended September 30, 2021 reported 881 per cent increase in profit before tax to N19.7billion, driven by 50 per cent growth in revenue that moved from N152billion in Q3 2020 to N242billion in Q3 2021.
In the period, multinational petroleum marketing company declared interim dividend of N4.00.
Conoil also grew profit before tax by 44 per cent to N2.36billion in Q3 2021 as revenue gained 15 per cent from N88billion in Q3 2020 to N101billion in Q3 2021.
The growth in profit drive the company’s Earning Per Share to N2.30 in Q3 2021, about 43.8 per cent increase over N1.60 reported in Q3 2020.
Speaking further, Fakayejo attributed the Oil & Gas performance to higher margin in crude oil products, stressing that the ease of movement also contributed to revenue and profit.
According to him, “These companies reported increase in revenue due to higher margin in products the sale this year. The restriction of movement eroded their revenue last year but with the ease on COVID-19 lockdown, they were able to grow revenue that translates into profit.”
He maintained that investors can always consider buying Total Nigeria shares over its intrinsic fundamentals on the NGX.
In his words, “Total Nigeria is one of the most reliable Oil & gas stock on NGX and the company by year end is going to have EPS of N35.00. The company’s payout is always 70 to 80 per cent every year and they may still pay dividend of N20.00 at the end of 2021 financial year. It makes a lot of sense for investors to buy Total Nigeria and Seplat Petroleum shares on NGX.”
