Ashaka Cement Plc, GlaxoSmithkline Consumer Nigeria Plc, Fidson Healthcare Plc, Vitafoam Nigeria Plc and Transnational Corporation of Nigeria Plc emerged as the top five losers at the close of trading on the floor of the Nigerian Stock Exchange on Thursday.
The NSE market capitalisation closed flat, moving from N9.699tn to N9.703tn, while the NSE All_Share Index closed at 28,247.56 basis points from 28236.23 basis points.
An aggregate of 365.374 million shares worth N2.09bn exchanged hands in 2,905 deals.
The highest index point attained in the course of trading was 28,263.16 basis points, while the lowest and average index points were 28,236.23 and 28,248.58 basis points, respectively.
The equity market closed relatively flat with the ASI edging four basis points amid mixed closes across key sectors. Global markets closed higher following a rally in oil prices as the Organisation of Petroleum Exporting Countries struck an accord to cut production for the first time since 2008.
The oil and gas sector recorded a 3.07 per cent appreciation and was the only key sector to close higher in Thursday’s session supported by 6.92 per cent gain in the share price of Oando Plc, five per cent rise in the share price of Seplat Petroleum Development Company Limited and 4.72 per cent appreciation in the share price of Conoil Plc.
While the industrial goods sector closed flat, the consumer goods sector snapped its five-session gaining streak as GSK’s share price dropped by 4.39per cent, Vitafoam share price dropped by 4.01 per cent and Nigerian Breweries Plc also dropping by 1.07 per cent.
These losses offset advances in Unilever Nigeria Plc and Nestle Nigeria Plc, which appreciated by 3.25 per cent and 1.2 per cent, respectively.
The financial services sector declined by 0.66 per cent, driven by2.25 per cent, 0.94 per cent and 0.51 per cent declines in Guaranty Trust Bank Plc, FBN Holdings Plc and Zenith Bank Plc, respectively.
The market breadth turned positive with 29 advances and 19 declines.
Commenting on the possible outcome of the next trading session, analysts at Vetiva Capital Management Plc, in the firm’s daily market analysis, said, “Although the widely positive market breadth somewhat suggests improvement in overall market sentiment, we highlight that most bellwether stocks remain under pressure and think this could weigh on the ASI at week close.”
Amid relatively unchanged liquidity, the interbank call rate moderated slightly to 14.33 per cent, dropping 34 basis points. In the foreign Exchange interbank market, the naira appreciated N7.68 to close at N305.31 but the one year forward rate rose N36.60 to N388.20.
The Treasury bills market traded relatively bullish as yields moderated 11 basis points on average. The declines were particularly stark on the long-dated bills as yields on the 322 day-to-maturity and 357DTM bills declined to 21.40 per cent and 22.16 per cent respectively.
Meanwhile, the bond market continued its bearish streak with yields on most benchmark bonds inching higher. Notably, yield on the 12.50 per cent Federal Government of Nigeria March 2036 bond moderated 10 basis points to 15.03 per cent; but this was outweighed by advances in the yields of the 14.20 per cent FGN March 2024 and 12.14 per cent FGN July 2034 bonds as they closed at 15.02 per cent and 14.94 per cent respectively.
The Organisation of Petroleum Exporting Countries (OPEC) wednesday agreed to cut its oil output for the first time since 2008, with Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low oil prices, reported AFP.
According to reports, two sources in OPEC said the group would reduce output to 32.5 million barrels per day (mbpd) from current production of 33.24mbpd.
How much each country will produce is to be decided at the next formal meeting of OPEC in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia, sources said.
Responding to the news, oil prices jumped more than five per cent to trade above $48 per barrel after the outcome of OPEC’s informal meeting in Algeria took traders by surprise. Still, many said they wanted to see the details of the deal. “We don’t know yet who is going to produce what. I want to hear from the mouth of the Iranian oil minister that he is not going to go back to pre-sanction levels.
“For the Saudis, it just goes against the conventional wisdom of what they’ve been saying,” said Jeff Quigley, director of energy markets at Houston-based Stratas Advisors.
Saudi Energy Minister, Khalid al-Falih, said on Tuesday that Iran, Nigeria and Libya would be allowed to produce “at maximum levels that make sense” as part of any output limits which could be set as early as the next OPEC meeting in November.
That represents a strategy shift for Riyadh, which had said it would reduce output to ease a global glut only if every other OPEC and non-OPEC producer followed suit.
Iran also argued that it should be exempted from such limits as its production recovers after the lifting of EU sanctions earlier this year.
The Saudi and Iranian economies depend heavily on oil, but in a post-sanctions environment, Iran is suffering less pressure from the halving in crude prices since 2014 and its economy could expand by almost four per cent this year, according to the International Monetary Fund (IMF). Saudi Arabia, on the other hand, faces a second year of budget deficits after a record gap of $98 billion last year, a stagnating economy and is being forced to cut the salaries of government employees.
The naira slumped to a new all-time low of 470 to the dollar on the parallel market on Wednesday, posting its biggest daily decline since the Central Bank of Nigeria adopted a flexible foreign exchange regime.
The local currency stood at 452 to the dollar at the close of trading on Tuesday, down from 445 against the greenback on Monday.
The naira closed flat at 312.99 against the dollar at the interbank market on Wednesday, according to data from FMDQ OTC Securities Exchange.
Traders and analysts said dollar liquidity remained a major challenge in the market amid surging demand pressure on the greenback by parents paying schools fees of their children studying overseas as well as travellers.
The President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, told our correspondent, “The rate is N472 to the dollar as we await the kick-off of the distribution of dollars to the BDCs by Travelex on Friday.
“As we speak, no bank is dispensing dollars to the BDCs. The BDCs’ accounts were debited by some banks since Monday and they are not able to pay any of the BDCs so far debited by them. This is really sending a bad signal in the market.”
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said the parallel market was being used as a mirror of what the naira should be doing, adding, “For me, it may not really reflect naira’s performance. But basically, it is a demand and supply dynamics.”
According to him, the volatility in the parallel market will continue as long as the 41 items excluded from the official forex market remain banned.
“Around this time, a lot of people are paying school fees abroad and we see a lot of demand for forex for other sundry expenses or obligations. So, all of these will put pressure on the naira at the parallel market,” he added.
Noting that the naira had been relatively stable in the official market, Ezun said, “But the parallel market will always respond to liquidity, which is not available. The parallel market will help you to assess the level of liquidity in the market.
“So, if liquidity is high, we will see it in the parallel market. But as we speak today, there is no liquidity in the market, and that is why we keep seeing that volatility in the parallel market.”
The Ecobank analyst said the naira might hit 500 against the dollar in the coming days.
He explained, “The only way out is when there is dollar inflow into the market, and this is one of the reasons the CBN says it is not willing to cut the Monetary Policy Rate now. The idea is that why you are still trying to woo foreign investors into your fixed-income market, you should continue to be able to assure them of returns on their investment.
“What the CBN can do is to use monetary policy to keep encouraging inflows into the market.”
The Nigerian Stock Exchange’s market capitalisation fell by N4bn as 23 stocks depreciated at the close of trading on the Exchange’s floor on Wednesday.
The NSE market capitalisation slid to N9.699tn from N9.703tn, while the All-Share Index closed at 28,236.23 basis points from 28,248.86 basis points.
A total of 159.046 million shares valued at N1.454bn were trading in 3,237 deals.
The NSE ASI declined by four basis points following continued mixed performances across key sectors.
The industrial goods sector weighed most on the ASI following declines in Lafarge Africa Plc to the tune of 2.02 per cent and Dangote Cement Plc by 0.27 per cent.
While the consumer goods sector extended its four-session gaining streak on the back of 1.36 per cent advance in Nigerian Breweries Plc shares, 4.59 per cent appreciation in GlaxoSmithkline Consumer Nigeria Plc and 2.80 per cent rise in Champion Breweries Plc share prices.
The oil and gas sector remained in negative territory due to 7.71 per cent loss in Oando share price and 2.75 per cent fall in Total Nigeria Plc shares.
The financial services sector fell by 0.07 per cent following mixed closes across players. Stanbic IBTC Group Plc shares appreciated by 3.16 per cent, Zenith Bank Plc by 1.15 per cent; while the share prices of Wema Bank Plc and Union Bank of Nigeria Plc declined by 4.35 per cent and 2.44 per cent respectively.
Market breadth remained even with 23 advances and 23 declines.
On the global front, Asian markets traded mixed amidst a relatively stronger Yen, whilst European stock traded higher as oil prices rose following a surprise decrease in the United States crude inventory. The US markets are set to open higher ahead of a barrage of Fed speakers.
On what will shape the next trading session, analysts at Vetiva Capital Management Plc, said, “The sustained even market breadth and persistent mixed performances across key sectors somewhat underscore that investor sentiment remains mixed. We believe this would continue to drive sideways trading in the sessions ahead.
Amid relatively unchanged liquidity, the interbank call rate moderated slightly to 14.67 per cent, representing a fall by 50 basis points. In the foreign exchange interbank market, the naira depreciated by one kobo to close at N312.99 while the one-year forward remained unchanged at N351.60.
Sentiment turned bearish in Wednesday’s session as yields on fixed income instruments trended upwards. In the Treasury bills space, yields climbed 20 basis points on average amid sell pressure on mid-dated maturities.
In particular, yields on the 148 day-to-maturity, 176DTM, and 225DTM bills closed at 19.83 per cent, 19.24 per cent, and 20.31 per cent respectively.
Likewise, the bond market turned bearish with yields on benchmark bonds advancing five basis points on average. The largest changes were on the yields of the auction bonds as the 15.54 per cent Federal Government of Nigeria February 2020 and 12.40 per cent FGN March 2026 bonds advanced six basis points and eight basis points to close at 14.89 per cent and 15.13 per cent respectively.
The value of global mergers and acquisition (M&A) has declined by 27.4 per cent to $1.8trillion between January and August 2016, according to data obtained by THISDAY on Monday. The data contained in the Global Merger Report showed that value of M &A was $2.5 trillion between January and August 2015.
However, is has declined by 27.4 per cent this year. Monthly analysis of the data indicated that the value fell by 34.7 per cent to 946 deals worth $182.2 billion, the lowest value since August 2013.
Private equity was less active on the buyout side in August 2016 with only 138 deals worth $18.9 billion, down 51.3 per cent by value compared to the same period last year (199 deals worth $38.9 billion).
“Exits, on the other hand, were relatively stable with 138 deals worth $42.3 billion, a slight 1.1% decrease compared to August 2015 ($42.8 billion). Energy, Mining & Utilities (EMU) was the most active sector in August, contributing 15.8 per cent to the total global market share with 84 deals worth $28.8 billion, despite a 28.1 per cent drop compared to August 2015 ($40 billion),” Mergermarket intelligence said.
M&A activity targeting the Middle East & Africa region during August stood at 24 deals, worth $2.8 billion, showing a decline of 10.9 per cent compared to August 2015 when 30 deals, worth $3.1 billion was recorded. The highest valued inbound deal saw Singapore-based investment firm Yangon Investment acquiring a 52.3 per cent stake in Israeli insurance firm The Phoenix Holdings, for a total of $518 million.
In Africa, despite an overall decline in deals targeting the rest of the world, South Africa continues to dominate the region’s outbound M&A activity, accounting for a 39.2 per cent share in total outbound deal value. This figure has decreased 12.3 per cent by value to $5.9 billion in 2016, down from US$6.7bn during the same period of 2015. The deal volume, however, has increased by six to reach 21 deals to date in 2016.
According to Mergermarket intelligence, while cash-rich South African companies will continue to eye opportunities for diversification and exposure to hard currencies, many will wait to see how the British exit from the European Union (EU) could impact European growth prospects.
The continent has been one of the favoured deal destinations for South African growth due to similar time zones, relatively cheap debt and exposure to hard currency. Domestic activity remained strong throughout 2016, with 118 deals worth $32.1 billion, representing a 192.9 per cent rise in deal value compared to the same period in 2015 ($11.0 billion in 175 deals). The transaction between South African firms Redefine Income Fund and The Pivotal Fund, valued at $756 million, was the largest deal targeting the region in August.
The shares of Ashaka Cement Plc, Presco Plc, Caverton Offshore Support Group Plc and Conoil Plc emerged as the top five losers at the close of trading on the floor of the Nigerian Stock Exchange on Tuesday.
The NSE market capitalisation slid to N9.703tn from N9.708tn, while the All-Share Index closed at 28,248.86 basis points from 28,263.16 basis points.
An aggregate of 294.909 million shares valued at N1.413bn exchanges hands in 3,142 deals.
The highest index points attained in the course of trading was 28,263.16 basis points, while the lowest and average index points stood at 28,166.42 and 28,228.02 basis points, respectively.
A total of 20 stocks appreciated while 18 plummeted, according to NSE data.
The shares of Ashaka Cement closed at N18.02 from N19.95, losing N1.93 (9.67 per cent), while Presco shares shed N4 (8.89 per cent) to close at N41 from N45.
Similarly, Caverton shares plummeted by N0.08 (8.42 per cent) to close at N0.87 from N0.95, while the share price of Conoil Plc closed at N36 from N39, shedding N3 (7.69 per cent).
Also, Oando share price depreciated by N0.27 (4.82 per cent) to close at N5.32 from N5.59.
Other losers were Champion Breweries Plc, Livestock Feeds Plc, Ikeja Hotels Plc, AIICO Insurance Plc, Skye Bank Plc, 7UP Bottling Company Plc, Stanbic IBTC Holdings Plc, NPF Microfinance Bank Plc, Sterling Bank Plc, FBN Holdings Plc, Access Bank Plc, Forte Oil Plc, Guaranty Trust Bank Plc, Cadbury Nigeria Plc and Nascon Industries Plc.
On the other hand, UAC Property Development Company Plc, Law Union and Rock Insurance Plc, Guinness Nigeria Plc, Cutix Plc and Flour Mills Nigeria Plc emerged as the top five losers.
UAC Property share price soared to N3.74 from N3.40, appreciating by N0.34 (10 per cent), while Law Union and Rocks Insurance shares closed at N0.61 from N0.57, gaining N0.04 (7.02 per cent).
The share price of Guinness gained N4.64 (4.99 per cent) to close at N97.64 from N93, while Cutix shares appreciated to N2.13 from N2.03, adding N0.10 (4.93 per cent).
Flour Mill shares also rose by N0.96 (4.56 per cent) to close at N22 from N21.04.
The Nigerian Communications Commission has written the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami, demanding the transfer of the initial N50bn paid by MTN Nigeria Communications to the regulator’s account with the Central Bank of Nigeria.
The Executive Vice Chairman, NCC, Prof. Umar Danbatta, disclosed this in Abuja on Monday while answering questions from journalists at a press conference to mark the one year anniversary of his coming on board.
The NCC boss, who said the money had been lodged in a recovery account opened by the OAGF with the CBN, added that it needed to be transferred to the NCC account before it could be moved to the Consolidated Revenue Account of the Federal Government.
The commission had imposed a fine of N1.04tn on MTN Nigeria Communications Limited in October 2015 for failing to disconnect 5.2 million improperly registered subscribers from its network. After initial negotiations, MTN went to court.
However, in a twist, it withdrew the case out of the court and paid N50bn through the OAGF to show the government that it was ready to embark on full negotiation in a bid to settle the matter out of court.
There appeared to be crack in the government’s handling of the matter when the Minister of Communications, Mr. Adebayo Shittu, denied that his ministry and its agencies took part in the negotiation and subsequent receipt of the money.
When the government and the NCC eventually entered into fresh negotiations with MTN, the fine was reduced to N330bn spread over a period of three years. The initial N50bn paid by the company was regarded as the first instalment.
Danbatta said MTN had since paid another N30bn, which means that the company has so far paid N80bn, with an outstanding balance of N250bn.
The NCC helmsman also said that the regulator declined a request by MTN to acquire the spectrum being used by Visafone even though it approved the acquisition of 100 per cent shareholding in the company by MTN.
The nation’s chief telecom regulatory officer argued that the acquisition of Visafone’s frequency could perpetuate MTN’s dominant position in the Nigerian telecommunications market, adding that the NCC would subject the request to a public inquest.
Danbatta also said that MTN would roll out services on the 2.6MHz spectrum acquired through a bidding process.
He said, “In the recent wireless broadband frequency bidding process for the 2.6MHz spectrum by the commission, MTN Nigeria Limited emerged the winner of six slots. The licensing of frequency in this slot has suffered several setbacks until recently when six slots out of 14 made available by the commission were allocated for immediate deployment of 4G-LTE services.
“By the rollout plans for this service as provided by the winner, broadband services on this frequency spectrum will be available in the last quarter of 2016.”
He added, “We have initiated processes for licensing of more broadband services on the 5.4GHz spectrum band. We have opened the process for the allocation of frequencies in the 70/80GHz band (e-band).
“Approval has been given for the deployment of 4G Long Term Evolution Technology by NATCOM Development and Investment Limited, which has launched the first Voice over LTE call on February 25.”
Danbatta also announced that the country’s broadband penetration had reached 20.95 per cent.
“Equally, on the percentage of Internet penetration, the country has reached a milestone of 47.44 per cent, second to South Africa on the continent,” he said.
On unsolicited text messages, Danbatta said the NCC had constituted a task force to verify the compliance of telecoms operators with the directives issued to them.
He said the regulatory agency would not shy away from sanctioning operators found wanting.
Access Bank Plc is set to issue the first Eurobond from Nigeria in almost two years after choosing banks to arrange a new deal.
Nigeria’s fourth-largest lender by assets will meet investors in the United States and Europe from Tuesday through October 3rd, and plans to sell five-year debsetups Chief Executive Officer, Herbert Wigwe told Bloomberg.
Barclays Plc, Citigroup Incorporated and JPMorgan Chase & Co would arrange the deal, he said.
“It will be for working capital, for lending to investment-grade names,” including Nigerian companies seeking to expand their exports, Wigwe said.
But he didn’t say how much Access Bank intends to raise. It would be the first Eurobond out of Nigeria since October 2014, when oil company Seven Energy Finance Limited issued $300 million of securities. That year, Nigerian companies and banks including Access Bank, Zenith Bank Plc and FBN Holdings Plc sold $2.55 billion of dollar debt. The Nigerian government, which is planning to raise $1 billion this year, last tapped the Eurobond market in 2013.
Access Bank, which has $12 billion of assets, has two deals outstanding; one of $350 million due in July next year and another of $400 million maturing in June 2021.
Honeywell Oil & Gas Limited, one of the leading indigenous oil and gas marketing companies within and outside Nigeria, has announced that the company has officially changed its business name to HOGL Energy Limited.
In line with this change, a new logo which is now the company’s corporate identity has been unveiled. The company’s website and email addresses changed effective September 15th, 2016. All other details and organizational structure remain unchanged.
Speaking from the corporate headquarters in Lagos, the Managing Director, Honeywell Oil & Gas Limited (now HOGL Energy Limited), Olatokunbo Amosu, said, ‘’Honeywell Oil & Gas Limited has recently undertaken an extensive rebranding effort and is now marketing under the name; HOGL Energy Limited. The change of name is in line with our renewed business focus, which is to position the company to take advantage of emerging opportunities in Nigeria, indeed West Africa’s, oil and gas market. This name change therefore reflects the current and future direction of the company’’.
Mr. Amosu reiterated that the company, with over two decades of business presence in the industry, has established a name and an enviable pedigree for itself in the marketing and distribution of petroleum products within and outside Nigeria. He reassured the company’s esteemed customers and valued stakeholders of the company’s continued commitent to its vision, mission and core values that have distinguished her as the preferred energy supplier. ‘’Building on the successes and brands of its forerunners within the Honeywell Group, the Company will continue to provide its services with utmost integrity and professionalism in all the spheres of its business’’, he stated.
HOGL Energy Limited will continue to play a very significant role in marketing and distribution of white fuels and other petroleum products to industrial, commercial and retail customers across the country. Specifically, the company has, over the years, established itself as a major supplier of all types of fuel including: AGO, PMS, DPK, LPFO and lubricants to industries. Today, the company sells to well over two hundred industrial customers in different sectors of the economy.
Cartels only work when their members stick together — but precious little unity is likely to be on show among OPEC producers at a key meeting in Algiers on Wednesday. Members of the Organization of the Petroleum Exporting Countries seem doomed to disagree on whether to freeze production to reverse a collapse in oil prices.
At most, say analysts, the group will agree on the need to stabilise the market after two years of surpluses that have sloshed around global markets, depressing prices.
Early flutters of optimism that the informal gathering could hammer out a deal to actually drain the surplus have yielded to scepticism. A previous bid to freeze output, led by OPEC linchpin Saudi Arabia, fell apart in Doha in April when Iran refused to play ball, arguing it needed to bring its production back up to pre-Western sanctions levels.
“An agreement on a production freeze accepted by everyone would be a surprise,” said Didier Houssin, head of research group IFPEN.
“Analysts expect more a comment that’s a bit calming on the need to continue to follow the market… and to stabilise production. Without binding measures, without specific quotas.”
– OPEC ‘no longer exists’ –
Prices have plunged from peaks of more than $100 a barrel in mid-2014 to near 13-year lows below $30 in January.
They rose this month when non-OPEC Russia pledged with Saudi Arabia to work on addressing the supply glut, but the governments provided scant detail on their plans.
The OPEC talks will take place on the sidelines of a three-day International Energy Forum gathering — in which Russia will participate — from Monday.
So far the two major producers have not taken any action to reduce the oversupply, which has resulted from a boom in US fracking and from OPEC’s nearly two-year-old strategy to throw open the spigots to defend market share.
OPEC chief Mohammed Barkindo, of Nigeria, has himself dampened expectations, describing the meeting as consultative.
On the other hand, mutual desperation could favour a consensus, given the toll that low prices have inflicted on OPEC economies.
Algerian Energy Minister Noureddine Boutarfa has notably said OPEC could call a special decision-making meeting in Algiers.
Bloomberg has reported Saudi Arabia is willing to cut production provided Iran freezes its output at current levels.
Tehran lifted production to 3.6 million barrels per day last month, according to the International Energy Agency (IEA), approaching its pre-sanction 4.0 mb/d levels.
Even so, the Saudi concession could founder on old rivalries.
“OPEC, in the current context, no longer exists, because the political divergences are such that the secretary general finds it difficult to control anything at all,” said Olivier Appert, head of the French Council of Energy.
– Wait it out? –
Like Iran, Libya and Nigeria are reluctant to limit production after conflicts that have weakened their economies and left pumping below capacity.
Last week, an oil tanker left the key Libyan port of Ras Lanuf with the first crude shipment from the terminal since fighting halted exports in 2014.
Russia meanwhile judges a possible five-percent reduction of its production to be realistic.
But Pierre Terzian, who runs the newsletter Petrostrategies, said Russia has never reduced or frozen its production. “They say it, but will they do it?”
For Saudi, a too-sharp upturn in prices could also backfire as it would drive production in the US, which has now adapted to recent low pricing thanks to technological innovation.
The temptation then is to await a rebalancing of the market, Appert said. Prices have strengthened since lows at the start of the year and currently stand at around $45 a barrel, within striking distance of the $50 to $60 range desired by some OPEC members.
But the glut is such that it looks set to last at least six months longer than previously thought, the IEA said this month, causing prices to fall back.
