Investors in the country’s equities market on Thursday recorded N143bn advancement on their holdings at the close of trading on the floor of the Nigerian Stock Exchange.
A total of 31 gainers emerge, while 14 stocks declined.
Investor sentiment further strengthened as a total of 317.440 million shares worth N2.853bn exchanged hands in 3,327 deals.
The top performers were Linkage Assurance Plc, Presco Plc and Dangote Flour Plc, which recorded respective gains of 8.7 per cent, five per cent and 4.7 per cent.
The worst performers were Cadbury Nigeria Plc, MRS Oil Nigeria Plc and Continental Reinsurance Plc, which dropped by five per cent, five per cent and 4.9 per cent, accordingly.
“Performance in the near term will remain driven by investor expectation of Q3 2017 earnings results. Accordingly, we expect the market to close the week in the green,” analysts at Afrinvest Securities said in a post.
At the close of trading, the All-Share index expanded by 1.2 per cent to settle at 35,773.98 basis points while the year-to-date return advanced to 33.1 per cent.
Accordingly, investors gained N143bn as market capitalisation rose to N12.3tn.
Thursday’s positive close, according to the analysts, is attributable to price appreciations in Dangote Cement Plc, Nigerian Breweries Plc and Lafarge Africa Plc, which soared by 2.4 per cent, 1.2 per cent and four per cent, respectively.
Also, activity level waxed stronger as volume and value traded improved 82.4 per cent and 4.9 per cent to settle at 317.4 million units and N2.9bn, respectively.
The industrial goods index led gainers and was up by 2.8 per cent as a result of appreciations in Dangote Cement and Lafarge.
The banking index followed suit, rising by 0.8 per cent on the back of gains in Zenith Bank Plc and Guaranty Trust Bank Plc, which appreciated respectively by 1.2 per cent and 0.6 per cent.
The soaring of Nigerian Breweries shares pushed the consumer goods index 0.5 per cent higher. However, the insurance and oil/gas indices closed 0.4 per cent lower apiece due to losses in Continental Reinsurance Plc and Mobil Oil Nigeria Plc by 4.9 per cent, apiece.
Meanwhile, the average money market rate dipped by 2.05 per cent to settle at 7.71 per cent, as the open buy-back and overnight rates shed 1.93 per cent and 2.16 per cent, accordingly.
The average bonds yield declined by 0.04 per cent to close at 15.05 per cent.
Despite the positive market momentum towards last week close, investor cherry-picking across the market amid an overall cautious sentiment, is likely to prevail, according to market analysts.
“We expect this to filter into this week and anticipate sideways trading at week open,” Vetiva analysts said in the firm’s weekly report.
Shrugging off gains from the penultimate week, the Nigerian equities market opened last week in the red amid tepid investor participation. The tide turned at mid-week as gains in bellwethers buoyed the market to its first positive close for the week.
Sentiment remained positive till week close, albeit with weakening momentum as the All-Share Index advanced a marginal by three basis points on Friday.
Also, the Central Bank of Nigeria would be offering N130bn at the treasury bills Primary Market Auction this Wednesday.
Also predicting this week’s events, analysts at Meristem Securities said, “This week, we envisage renewed investor optimism in the Nigerian bourse, as we expect investors to take position on large cap stocks which shed significantly last week.
The Managing Consultant, CITC Global Consulting and fellow of the Institute of Chartered Accountants of Nigeria, Tayo Orekoya, says despite what is happening in the economy, the results released by quoted companies on the Nigerian Stock Exchange show that the economy is gradually getting out of the woods after the recession.
He said Nigeria had a cause to celebrate as things were beginning to look up despite the economic unease of the past year evident in the degree of forex fluctuations, infrastructural decadence, among other challenges.
Orekoya said these in an interview with our correspondent.
“So, despite the challenges that have been there, our companies are returning value to their stakeholders. We need to celebrate them, and we know that they deserve to be celebrated,” Orekoya added.
Considering the increasing challenges faced by regulators in the Nigerian capital market, he thus urged them (regulators) to sustain the tempo and also ensure that there was policy consistency.
He said the regulators should ensure that the market continued to consolidate on the current gains, adding “Though the market is gradually getting out of the woods and the bulls have taken over, we want a situation where the positive trend will be sustained so that the returns on investment would be worth the investment made by shareholders.
“We also want the regulators to ensure consistent education on the capital market operations so that confidence can be fully restored. We want them to look at encouraging more local companies to get listed on the Nigeria stock market.
“They should look at the listing regulations and how these can be streamlined and stepped down so that more companies from the telecoms, oil sector can be listed. They need to get into the market. We believe that if the regulators do this, the market will be better for it. As it will be deepened and then we can consolidate on the gains.”
In the bid to grow the Nigerian debt capital market, the FMDQ OTC Securities Exchange brought together local and international financial markets participants at its 2017 Nigerian Debt Capital Markets Conference and Awards held in Lagos to develop strategies for the markets’ advancement.
The forum provided a platform to discuss various pre-requisites needed to position the Nigerian debt capital markets to support sustainable economic growth and development.
The conference was adequately supported by the Federal Government of as the Vice-President of the Federal Republic of Nigeria, Prof. Yemi Osinbajo, represented by the Director-General of the Debt Management Office, Ms. Pat Oniha, underscored the importance of the debt capital market to its overall economic recovery and growth plan.
The legislative arm of government was also ably represented at the conference via the active participation of respective Chairmen of the Senate and House Committees on Capital Markets, Senator Foster Ogola and Honourable Tajudeen Yusuf.
In addition, the Director-General of the Securities and Exchange Commission, Mr. Mounir Gwarzo, ably represented by Ms. Mary Uduk, the director, Investment Management, also lent his voice to the growing relevance of the debt capital market to the much desired turnaround of the Nigerian economy.
Subject matter experts from the International Finance Corporation led by Mr. Jingdong Hua, vice-president and Treasurer, alongside other senior executives of the IFC, participated at the forum.
The Chairman, FMDQ, Mr. Joseph Nnanna, represented by Mr. Jibril Aku, the vice-chairman, FMDQ, commended all stakeholders for the support given to FMDQ thus far, while noting that the OTC Exchange would continue to provide the requisite platform to power growth and foster the deepening of the Nigerian DCM.
The Nigerian vice-president charged all participants to support the Federal Government’s diversification efforts by embracing the DCM and the opportunities therein.
He noted the pivotal role being played by the FMDQ in transforming the Nigerian DCM and called for greater commitment from the private sector to complement the government’s efforts especially in the area of infrastructure development.
In the same vein, the Minister of Finance, Mrs. Kemi Adeosun, who gave a special address, recognised the opportunities inherent in the DCM and assured participants that the Federal Government was taking bold steps towards putting the necessary reforms to support private sector-led growth, even as the country exits recession.
Gwarzo’s keynote address provided an overview of the recent milestones achieved in the Nigerian DCM and further highlighted that the Nigerian Economic Recovery and Growth Plan underscores the role of the private sector in leading the growth that Nigeria desired.
“To sustainably develop Nigeria, reliance must be shifted from ‘owners’ capital’ and short-term funding from commercial banks to long-term capital from the DCM,” the SEC boss said.
While reiterating FMDQ’s commitment to remain steadfast towards the development of the Nigerian DCM, and the Nigerian economy at large, the Managing Director/Chief Executive Officer of FMDQ, Mr. Bola Onadele, recognised market participants/key stakeholders in the Nigerian DCM who had performed creditably in relation to primary market activities, over the past two years.
He noted that the exceptional performances by these market players had contributed to the overall development and progress of the markets in different ways.
Also present at the forum were: Managing Director, Chief Economist Africa, Standard Chartered Bank, London, Ms. Razia Khan, and Chief Executive Officer, Chapel Hill Denham, Mr. Bolaji Balogun, among financial markets stakeholders.
The Islamic sukuk bond recently issued by the Federal Government was oversubscribed by more than N5bn, the Debt Management Office said on Tuesday.
The N100bn seven-year sukuk offered by the Federal Government, which closed on Friday, attracted a subscription of N105,878,320,000, according to a statement issued in Abuja by the DMO.
According to the DMO, the project-tied investment facility attracted investors from across a broad spectrum of the public, including pension funds, banks, fund managers and institutional as well as retail investors.
Reacting to the oversubscription, the Director-General, DMO, Ms Patience Oniha, said that the acceptance of the offer was an indication of the viability of the instrument as an investment option as well as a demonstration of utmost faith in the Nigerian economy.
She commended the Federal Government and, in particular, the Minister of Finance, Mrs. Kemi Adeosun, for the policy support that led to the success of the initial offer, which industry watchers accepted as another window that had opened for the government to raise funds to fill the nation’s yawning infrastructure gap.
The DMO said that in the run up to the offer, Nigerians developed tremendous enthusiasm as they embraced the investment instrument advertised nationwide through roadshows by officials from the office; Ministry of Power, Works and Housing; and Central Bank of Nigeria in Lagos, Port Harcourt, Kano, Abuja and Kaduna.
The awareness campaign, which drew attention to the projects the sukuk aimed at, including the construction and rehabilitation of 25 roads across the six geopolitical zones, aroused in the investors the patriotic fervour that led to the oversubscription.
The office said, “Investment experts are optimistic that with this issuance, a new instrument, the sovereign sukuk, has been introduced to Nigeria’s capital market, and has added to the variety of products available for domestic issuers and investors.
“A look at the investors that subscribed for the sovereign sukuk revealed that another significant objective was achieved through the participation of over a thousand retail investors from across the nation who accounted for over four per cent of the total subscription.”
With the oversubscription, the DMO said it had been energised to continue with its role of meeting the government’s funding needs as well as introducing new instruments to develop Nigeria’s capital market.
It is hoped that with the success of the offer and the proceeds from it, the Ministry of Power, Works and Housing will begin work on the road projects in earnest, the DMO added.
The Ministry of Power, Works and Housing had said that it would allocate about N16.7bn from the fund to the construction of roads in each of the six geopolitical zones of the country.
LASACO Assurance Plc has been commended for the recent transfer of N1.063 billion legacy funds in its custody to the Pension Transition Arrangement Directorate (PTAD).
The money was part of pension entitlements for six federal government parastatals under the Defined Benefit Scheme (DBS) which has been under its custody.
The fund transfer was in compliance with recent directive by PTAD that all insurance firms, who have such funds in their custody, should transfer same to it (PTAD).
Since the directive last year, insurance firms concerned have shown signs of compliance despite the impact it has on their accumulated premium and reserves. While some had complied, others are warming up for to do so.
A statement by the LASACO, said PTAD gave the commendation through its Divisional Manager, Mrs. Christianah Adebote. According to the statement, Adebote had already issued a ‘Letter of Clearance’ and has urged other companies that were yet to settle their obligations based on the directive to take a cue from those that have complied.
Adebote, said that the PTAD, last year, issued demand notices on the insurance companies holding legacy funds meant for payment of Pensioners under the Defined Benefit Scheme (DBS) to transfer outstanding funds into dedicated e-Collection account of the directorate with the Central Bank of Nigeria (CBN).
She explained that the Pensions Reform Act (PRA) 2014 vested all pension assets, funds and liabilities in PTAD and warned that other concerned companies yet to comply with the directive should do so without further delay.
She also noted that the intention of the federal government’s request for the release of the funds was to grow them for the prompt payment of pension to Pensioners.
The General Manager (Marketing) LASACO Assurance Plc, Ademoye Shobo, while receiving the Letter of Set Off from PTAD, having fully paid the amount due, said the legacy funds managed on behalf of six federal government parastatals as required by section 42 of the Pension Reform Act (2014) was fully remitted in July 2017.
LASACO achieved a profit before tax of N1.14 billion for the financial year ended December 2016, representing an increase of 183 per cent when compared with the N404 million achieved in 2015.
The Nigerian equities market advanced by N70bn at the close of trading on the floor of the Nigerian Stock Exchange on Thursday notwithstanding depreciation in 22 stocks.
The market recorded 15 gainers as 128.312 million shares valued at N2.728bn exchanged hands in 3,241 deals.
At the end of the day’s trade, the All-Share Index closed positive, gaining 55 basis points while the year-to-date return improved to 32.7 per cent.
“The major drivers of today’s performance were Dangote Cement Plc, Nestle Nigeria Plc and Nigerian Breweries Plc, which appreciated by 2.4 per cent, 1.3 per cent and 0.3 per cent, respectively. Ex-Dangote Cemen), the market would have shed 17 basis points,” analysts at Afrinvest Securities said in a post.
Investors gained N70.0bn as market capitalisation advanced to N12.293tn from N12.223tn. Likewise, activity level rose as volume and value traded climbed 11.9 by per cent and 73.1 per cent to N128.3m units and N2.7bn, respectively.
The NSE industrial goods index led gainers, up by 1.1 per cent due to an uptick in Dangote Cement. The insurance index followed suit, closing 0.4 per cent higher on account of price appreciation in Continental Reinsurance Plc and NEN Insurance (Nigeria) Plc, which recorded respective gains of 2.1 per cent and 3.6 per cent.
The NSE consumer goods index marginally rose by 0.2 per cent following positive sentiment towards Nestle Nigeria and Nigerian Breweries.
On the other hand, the NSE oil/gas index fell by one per cent on the back of losses in Oando Plc, which plummeted by five per cent, while the NSE banking index dropped by 0.6 per cent, dragged by declines in Zenith Bank Plc and Guaranty Trust Bank Plc, which shed 2.4 per cent and 0.2 per cent, respectively.
At the top of gainers’ chart were Okomu Oil Palm Plc, C & I Leasing Plc and Airline Services and Logistics Plc , which appreciated by 5.7 per cent, 4.4 per cent and four per cent, accordingly.
Neimeth International Pharmaceuticals Plc, Conoil Plc and Unilever Nigeria Plc topped the losers’ chart, shedding 8.4 per cent, five per cent and five per cent, respectively.
“In line with our expectation, the day’s market performance was largely driven by bargain hunting in market bellwethers. Hence, we expect the market to trade in similar trend on Friday,” the analysts noted.
One of the leading financial advisory firms in the world, UBS Wealth Management’s Chief Investment Office (CIO), has predicted that the Gross Domestic Product (GDP) of some economies in Africa, such as Egypt, Kenya and Nigeria, can comfortably grow at five per cent or more in the years ahead.
The firm stated this in its latest report titled: ‘Africa – Cradle of diversity’. It noted that the region’s young and growing population and its prospering middle class would be the key to sustaining such high growth rates.
For Nigeria, figures from the National Bureau of Statistics (NBS) last week showed that the economy exited recession by expanding marginally in the second quarter (Q2) of the year. The NBS figures showed that the economy grew by 0.55 per cent (year-on-year) in Q2 2017.
However, the UBS-CIO report stated that achieving sustainable economic growth would require necessary economic reforms, infrastructure investment and measures to encourage a more diversified economy continue and expand, especially in countries that are the least diversified, especially Nigeria.
It further stated that fostering economic integration within the region and nurturing its role as a global manufacturing hub were two of the many exciting trends that would help shape Africa’s future. For Nigeria, it held the view that Africa’s largest economy offers significant potential but it must widen its tax base and broaden its activities away from oil.
It also argued that liberalisation of naira exchange rates will be crucial in attracting foreign investment. The report highlighted 64 nations the International Monetary Fund had projected to have average real GDP growth of more than four per cent in the next five years, stating that more than half are in Africa. According to the report, as Africa’s largest country both in terms of GDP and population, Nigeria offers enormous potential for the nation’s domestic market.
The UN expects Nigeria’s population to reach up to one billion people by 2100, offering unusual potential for growth. At the same time, population growth presents a significant challenge in terms of job creation for new labor market entrants and the nation’s geographic limitations, considering Nigeria’s territory is approximately the size of Texas.
In addition, the UBS CIO research showed that indicators relating to governance and ease of doing business were clearly weaker than for peers, thus underpinning the need for reforms as foreseen in Nigeria’s Economic Recovery and Growth Plan. Decisive factors outlined in the report included efforts to broaden the country’s tax base and to diversify its economy. Nigeria’s revenue base heavily relies on oil-related activities, which exposes the nation’s fiscal balance to energy price shocks and volatility risks.
Nigeria is Africa’s largest oil exporter and while commodity exports remain a major growth driver in many African countries, their importance is slowly declining as domestic demand plays an expanding role in sustaining growth. Some of the continent’s fastest growing economies are concentrated in non-resource-rich countries like Côte d’Ivoire, Senegal, Kenya and Ethiopia, which are expected to grow between seven per cent and eight per cent in the next few years.
The report pointed out that the manufacturing industry was probably one of the most overlooked sectors in Africa, despite the continent’s potential to become the world’s next low-cost manufacturing hub and a leading global player in resource-intensive manufacturing.
“Competitive labor costs, abundance of raw materials, convenient transit locations for export and large markets for local consumption position many African countries well to replace Asian competitors as attractive locations to produce goods and draw manufacturing foreign direct investment.
In the short term, further progress toward the liberalisation of the Nigerian currency’s exchange rate will have a decisive impact on the inflow of such investment,” it added.
The Head of Central and Eastern Europe, Middle East and Africa, France and Belgium International at UBS Wealth Management, Ali Janoudi, said: “We see tremendous potential for Nigeria’s economy, which is Africa’s largest, but in order to achieve its potential, current reform programs must be implemented and in some instances, accelerated. The current climate of higher energy prices and relative domestic stability indicate now is the right time to act.” On his part, the Head of Emerging Market Asset Allocation at UBS Wealth Management’s CIO, Michael Bolliger, said: “In the near term, oil will remain an important source of income for Nigeria. However, the impressive growth rates of non-resource-rich countries in Africa clearly indicate that development beyond oil is the way forward.” The report stated further that Africa’s glass half-empty, half-full perception of the opportunities on offer hinges on whether one believes the region’s significant potential for development can be realised.
The successful conduct of the 40th annual general meeting (AGM) of Oando Plc on Monday has been described as a good development that would impact positively on the operations of the company going forward.
The founding National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunday Nwosu, stated that he was excited at the outcome of the meeting.
While the meeting was going on in Ibom Hall, Uyo, AkwaIbom State, there was a protest outside the venue by some aggrieved shareholders, under the aegis of Oando Shareholders Solidarity Group. However, Oando Plc had said in a statement that all shareholders were allowed access to the venue to raise their legitimate concerns to management and the Board.
According to the company, the protest lost steam after 15 minutes as the protesters quietly dispersed without causing any disruption to the AGM.
“However before dispersing key representatives of the shareholder associations addressed the protestors asking that they raise their concerns the legitimate way either via writing to the company or by attending the AGM,” the company said..
Expressing excitement on the successful AGM, Nwosusaid: “The AGM was very successful, nothing more. We discussed all the issues that needed to be discussed and we voted to keep the management and the Board. The protest that happened outside the venue was carried out by non-shareholders who did not have any business being there in the first place. I went out and spoke with the protesters. I told them that if they were shareholders, they would have known that the right way to raise their concerns about Oando is to officially write to the company secretary. The protest did not disrupt the meeting in anyway.”
The Group Chief Executive Officer of Oando, Mr. Wale Tinubu, at the AGM thanked the shareholders for their continued support of the company in the challenging times and assured them that the management team would focus on sustaining the company’s profitability and ensuring returns to shareholders.
“As your management team, we assure you that our main focus will continue to be geared towards sustaining your company’s profitability and ensuring adequate return for you our esteemed shareholders,” he said.
Speaking on the attempts to stop the AGM through petitions, Tinubu said: “The petitioners requested a postponement of our AGM, but we provided the Securities and Exchange Commission (SEC) with all the information required and we were cleared to hold the AGM.”
Investors last week renewed demand for the shares of Caverton Offshore Support Group Plc (COSG), following the news of award of a contract to it by Chevron Nigeria Limited (CNL).
COSG was awarded a five-year logistics support contract by CNL operator of the Nigerian National Petroleum Corporation (NNPC/CNL Joint Venture, for the provision of aviation services with a two- year renewable option. Confident that the contract would boost the bottomline of COSG going forward, investors increased demand for the shares of the company. The high demand led to a growth of 16 per cent in the stock, rising from N1.00 to N1.16 per share last week.
COSG had explained that the contract was awarded following an extended competitive tendering process. “Caverton emerged successful after scaling through both the technical and commercial evaluation ahead of other bidders. Given CNL’s reputation for very high safety and quality standards, it is safe to say that Caverton’s commitment to safety, quality and continuous improvement contributed in no small measure to this successful bid. Caverton will service this contract with 11 Bell manufactured helicopters in line with CNL’s requirement. As part of the contract, Caverton will provide guaranteed medevac response to CNL 24 hours a day, seven days a week, covering their entire area of operations,” the company had said.
Speaking on the development, the Group Chairman of the Caverton, Mr. Remi Makanjuola said: “We are thankful to our clients, the aviation regulators, our shareholders, our staff and many others who have played a role in our development and success as a company. Special recognition to the Access Bank Group that has supported Caverton on various projects over the years. Caverton Helicopters is poised to continue to work on consolidating its vision to be the leading provider of premium aviation services in sub-Saharan Africa to the oil and gas industry.” Over the past decade, Caverton has worked hard to raise the bar in key areas in this specialised sector: helicopter availability, on-time departure, service and maintenance quality; doing all this while pursuing a robust local content strategy. “The positive impact of these efforts is the growing confidence in our services by the international oil companies and others, resulting in an increasing market share,” the company said.
Stock market operators had said the contract was a good development that will boost the financial performance of COSG, noting that the company would deliver improved returns to investors going forward.
