The stock market rebounded on Tuesday after Monday’s loss as investors showed renewed positive sentiment.
The Nigerian Stock Exchange market capitalisation appreciated by N224bn, with 37 stocks making the gainers’ chart.
The market had started the week with a loss of N163bn on Monday, which was the first day of foreign exchange trading under the new forex framework.
The NSE market capitalisation rose to N10.105tn from N9.881tn, just as the All-Share Index appreciated to 29,422.71 basis points from 28,769.90 basis points.
A total of 533,317 million shares valued at N6.789bn exchanged hands in 5,736 deals.
Glaxo Smithkline Consumer Nigeria Plc, Champion Breweries Plc, Access bank Plc, Nigerian Aviation Handling Company Plc and Dangote Sugar Refinery Plc emerged the top five gainers.
GSK shares soared by N1.53 (10.20 per cent) to close at N16.53 from N15, while those of Champion Breweries closed at N4.04 from N3.70, appreciating by N0.34 (9.19 per cent).
The share price of Access Bank rose to N6.10 from N5.80, gaining N0.30 (5.17 per cent), while that of NAHCO appreciated by N0.20 (4.98 per cent) to close at N4.22 from N4.02.
Other gainers were AG Leventis Nigeria Plc, UAC Property Development Company Plc, United Bank for Africa Plc, Tiger Branded Consumer Goods Plc, Custodian and Allied Plc, AxaMansard Insurance Plc, Fidelity Bank Plc, Zenith Bank Plc, Transnational Corporation of Nigeria Plc, NPF Microfinance Bank Plc, Guinness Nigeria Plc, Lafarge Africa Plc and United Capital Plc.
An aggregate of 10 stocks plunged in their values led by Trans-national Express Plc, NEN Insurance Company Nigeria Plc, Unity Bank Plc, Caverton Offshore Support GRP Plc and Honeywell Flour Mill Plc, which were the top five losers.
Other losers were DN Meyer Nigeria Plc, Vitafoam Nigeria Plc, FCMB Group Plc, Diamond Bank Plc and Cadbury Nigeria Plc.
The share price of Trans-national Express depreciated by N0.14 (8.92 per cent) to close at N1.43 from N1.57, while that of NEM Insurance dropped to N0.99 from N1.04, losing N0.05 (4.81 per cent).
The Senate on Monday took a swipe at the Central Bank of Nigeria and beneficiaries of the N120bn released to the aviation sector out of the N500bn intervention fund for the power and the Small and Medium-scale Enterprises sectors in 2011.
The Senate Committee on Aviation and Anti-Corruption, at a public hearing, frowned on the way the N120bn allocated to the aviation sector as a bailout was allegedly mismanaged and diverted.
But the Minister of Transportation, Mr. Rotimi Amaechi, told the committee that his ministry and agencies under it, based on available records, were not aware of the fund.
Amaechi’s submission, however, forced the Chairman of the committee, Senator Hope Uzodinma, to demand from the Governor of the Central Bank of Nigeria, Godwin Emefiele, who was represented by a Director of the bank, Mudashiru Olaitan, for an explanation on how the money was used in view of the financial related problems still bedevilling the sector.
The CBN representative said out of the N120bn intervention fund injected into the sector, only N39.5bn had been recovered, while the balance of N81.2bn was still outstanding.
He admitted that some of the 10 airlines that benefitted from the fund were now moribund or had folded up, which according to him, was against the reasons behind the release of the fund.
Olaitan named Air Nigeria and Chanchangi Airlines as the already folded up carriers, while Arik, Dana, AeroContractors, Kabo, Overland, First Nation and Odenegene were still in operation on the strength of the intervention.
On why two out of the 10 airlines folded up in spite of the intervention fund, Olaitan said the responsibility of monitoring the utilisation of the fund by the beneficiaries was that of the Bank of Industry, being the facilitator of the loans to them.
But Mr. John Nnorom, who served as Finance Director of the defunct Air Nigeria, alleged that the diversion of the fund to other ventures led to the collapse of the airline.
He said, “The N34.5bn drawn from the fund by the airline was diverted to other personal business by the owner, Jimoh Ibrahim.
“The very moment the N34.5bn intervention fund was paid into the airline’s account through the United Bank for Africa, it disappeared into one of the private accounts of the owner without any amount from the fund injected into the airline, paving the way for its eventual collapse.”
Efforts by the committee to get further clarification on the alleged diversion were unsuccessful due to the absence of the Managing Director of the BoI and other relevant stakeholders.
The committee directed that the CBN governor and heads of other relevant agencies, including the management of the airlines to appear in person before it on Tuesday (today).
The Vice Chairman of the committee, Senator Bala Ibn Na’Allah, said one of the airlines diverted its share of the fund to Ghana.
He said, “As soon as the management of the airline got access to the money, it transferred a huge sum of money to a company in Ghana, apparently to acquire a business in Ghana with the money that is meant to develop aviation in Nigeria.
“Then, there were other transfers that were non-aviation related and they are in huge amounts. What we are saying is that they have collected this money to enhance the growth and development of aviation.
“Wherein lies the wisdom of making these huge transfers to non-aviation related areas, including transfers across the borders of Nigeria?”
He also said that one of the airlines collected N6bn loan for a repair that cost $4,000 from the Federal Government.
“An aircraft was grounded because of an equipment that cost just $4,000, which is the Emergency Locator Transmission, even after collecting N6bn loan,” Na’Allah stated.
The Securities and Exchange Commission has lifted the suspension it placed on Falcon Securities Limited and its sponsored individuals three years ago. SEC said in a statement on its website that the suspension was lifted because the firm has resolved all issues that led to its suspension and has complied with the Commission’s directives.
SEC had in June, 2013, suspended of Falcon Securities Limited and its sponsored individuals from all capital market activities as an enforcement action for failing to respond to issues regarding the filing of its quarterly reports with the Commission.
The company was suspended for failing to attach the company’s schedule of investments marked to market and failure to report its investments in quoted securities at market value.
Also, the company was found guilty of reporting a false and misleading financial status of its 2012 annual reports, as well as complete erosion of the company’s shareholders’ funds as shown in its returns for the period ended December 31, 2012.
In line with its resolve to protect investors and rid the market of infractions, SEC recently suspended the Managing Director of BGL Plc, Mr. Albert Okumagba, his deputy, Chibundu Edozie from capital market activities for 20 years for infractions.
The Director General of SEC, Mounir Gwarzo recently visited the Inspector General of Police, Solomon Arase, and called for the collaboration to ensure that infractions are reduced, or completely eliminated from the capital market.
Gwarzo solicited the support of the IGP to enhance the ongoing co-operation between the police and the commission towards ensuring that laid down rules and procedures are adhered to in the capital market, and also ensure that perpetrators of fraudulent acts are brought to book appropriately.
He appreciated the police on the work they have been doing since the collaboration started and sought for more in areas of specialised discipline such as forensic investigation to enhance the operations of the capital market.
Arase assured the commission that the Nigerian Police under his leadership would do all that it could to assist the commission in ensuring that incidents of infractions within the capital market are brought to the barest minimum.
Lafarge Africa Plc has concluded its Series I and II N60bn bond issuance, comprising N26,386,000,000 three-year bond at 14.25 per cent, which is due in 2019, and a N33,614,000,000 five-year bond 14.75 per cent due in 2021.
The firm stated that the proceeds of the bond issuance would be used to part refinance the debt of its wholly-owned subsidiary, United Cement Company of Nigeria Limited.
“The dual-series issuance, the first of its kind and largest ever bond issuance by a corporate in Nigeria’s debt capital markets, was concluded following a book build, with the order book oversubscribed. This transaction is Lafarge Africa’s second bond issuance in the Nigerian capital markets, having previously issued a N11.8bn three-year fixed rate bond in 2011,” the company said in a statement.
It stated that a signing ceremony in respect of the Series I and Series II bonds was held on Wednesday last week following the Securities and Exchange Commission’s approval, adding that the bonds would be listed on the FMDQ OTC.
According to the firm, Chapel Hill Denham acted as the lead financial adviser, lead issuing house and lead book runner on the transaction, while Citibank Nigeria acted as the joint lead financial adviser and book runner, with Standard Chartered and Stanbic IBTC as joint issuing houses and book runners.
The Chairman, Lafarge Africa, Bolaji Balogun, was quoted as saying that the bond was the largest ever by a corporate organisation in the country’s capital market, making the firm a prime issuer.
Lafarge Africa’s Group Managing Director, Michel Puchercos, was also quoted as saying that the proceeds would deliver savings in financing costs to Unicem and Lafarge Africa.
“Unicem is currently undergoing a 2.5 million-metric-tonne per annum capacity expansion, which will be completed by the end of 2016,” he stated.
The Chartered Institute of Stockbrokers has lauded the Central Bank of Nigeria for the re-introduction and re-modelling of the floating single foreign exchange policy, saying it is a positive and bold step.
The move, it noted in a statement on Monday, attested to the dynamism of the apex bank in policy evolution for the greater benefit of the economy.
“The operating dynamics of the new framework as stipulated by the CBN is in accordance with the tenets of democratic capitalism of which the highlights are, market-driven systems, free participation within individual limitations and the ‘invisible hand’,” it explained.
The introduction of a forward market to hedge volatility in the foreign exchange market, and the licensing of foreign exchange primary dealers, according to the body, are well commended innovations which will deepen the market.
Barring systemic malfunction, the CIS it was convinced that the implementation of the new framework would boost dollar supply; and with clarity, define the exact exchange rate, ease the challenges of businesses across the board and return the economy to the path of growth.
The currency peg of the past 16 months resulted in a dearth of dollar currency and prompted large scale capital flight with the attendant growth challenges in the economy, it said.
The CIS added, “Foreign inflows into the capital market dropped by 32 per cent in 2015, as reported by the Nigerian Stock Exchange, just as the benchmark equity index fell by 17 per cent this year.
“The new foreign exchange policy will bolster investor confidence, trigger inflow of foreign portfolio investments and boost the velocity of the stock market.”
The CIS reiterated its supports for the continual restriction of the 41 excluded items from the interbank foreign exchange market, saying the the exclusion of the items supported the infant industry argument.
“CIS believes that an admixture strategy of the floating foreign exchange policy, an intensive export promotion drive, support for the infant industry argument and pump priming will give fillip to the economy. Going forward, we are optimistic on the growth prospects of the economy in 2017,” the statement added.
Meanwhile, the Chartered Institute of Stockbroker’s President and Chairman of the Council, Mr. Oluwaseyi Abe, said that the coast was already clear for the investors to shore up their holdings as market had begun to rebound.
According to him, there is nothing unusual about the current state of the market as the market essentially mirrors the economy and moves in phases.
Corroborating him, the Institute’s First Vice-President, Mr. Dapo Adekoje, assured investors that uncertainty which characterised the investment climate would soon disappear completely.
Deposit Money Banks have asked customers to submit bids ahead of the start of new interbank foreign exchange trading on Monday.
The Central Bank of Nigeria had on Wednesday announced plans to begin market-driven trading of the naira to alleviate chronic foreign exchange shortages.
Banks asking customers to submit bids is a signal that the new forex trading platform will be driven by market forces and not dominated by internal bank trading.
After a meeting with the CBN officials and banks’ chief executive officers late on Friday, banks asked their clients to send them pending Letters of Credit for them to resubmit and to quote a rate at which they want to buy dollars, Reuters reported quoting its source said.
Customers had so far submitted bids between N210 and N290 to the dollar, the source said.
“I got a memo from my bank yesterday asking us to contact all our customers with pending LCs to resubmit their LCs and say at what rate they would want to buy the dollars,” the source said.
“Liquidity will likely return to the market because central bank will now sell its dollars at higher rates.”
The CBN has pegged the naira rate at 197 to the dollar for the past 16 months after a slump in oil revenues hammered public finances and its foreign reserves.
But the naira trades at around 355 on the parallel market.
A Reuters poll found that analysts expect that when the naira floats freely on Monday it will trade at 275 to 300 per dollar.
There is a $4bn backlog of demand in the market which could take three to four weeks to clear, the central bank has said.
Banks will set the first exchange rate of the naira versus the dollar when the local currency is allowed to float freely after the CBN abandoned its dollar peg, bankers have said.
The average rate at which the market clears the demand will become the new exchange rate, according to the banking source.
Shareholders of Ecobank Transnational Incorporated (ETI) have approved a dividend pay-out of $48.2 million earlier declared by the pan-African bank. The dividend pay-out amounted to two cents per share.
The approval was given at the bank’s annual general meeting (AGM) that took place in Lome, Togo, at the weekend. ETI recorded a dip of 68 per cent in profit after tax (PAT) for the year ended December 31, 2015 in line with its warning of revenue drop for the period. ETI was among the five banks that sent profit warnings to the capital market community that revenue growth would be lower than expected due to a combination of low oil prices as weaker currencies hampered economic performance across the continent.
The audited results of the bank showed that profit before tax (PBT) declined by 53 per cent from N86.4 billion in 2014 to N40.6 billion in 2015. PAT dipped by 68 per cent from N65.7 billion to N21.25 billion.
Speaking at the AGM at the bank’s head office in Lome, the Group Chairman, ETI, Mr. Emmanuel Ikazoboh said: “Our financial results were poor and clearly not representative of the earnings potential of our diversified pan- African business model.
“Ecobank reported diluted earnings per share of $0.28, a fall of 83 per cent compared with the $1.69 reported in 2014. Return on total shareholders’ equity was 4.2 per cent in 2015 versus 16.5 per cent the prior year. Profit attributed to shareholders of ETI amounted to $66 million compared to $338 million in 2014.”
On dividends, he said: “I am happy to report that in light of the improvement in the parent company’s profit which increased from $5.8 million in 2014 to $60.8 million in 2015, the board has recommended a total cash dividend of $48.2 million, which translates to a dividend of $0.2 per ordinary shares for the 2015 financial year.”
The board passed a resolution that a nominal value of the ordinary shares of the company be increased from 2.5 US cent per share to 50 US cent per share. This would be done by consolidating every 20 ordinary shares held into one new ordinary share each, and issuing in replacement, new ordinary shares of 50 US cents each
Speaking against this consolidation, a former chairman, ETI, Mr. Sunny Kuku expressed concerns over consolidating the shares and the impact it would have on its share price.
Shareholders of CAP Plc, a subsidiary of UAC of Nigeria Plc, are to receive a total dividend of N1.645 billion for the year ended December 31, 2015, following an impressive performance for the year.
The dividend, which translated to 235 kobo per share, comprises 115 kobo interim, and 120 kobo final.
While the interim had been paid since December last year, the final dividend was approved by the shareholders at the annual general meeting of the company held last Thursday.
CAP Plc recorded a turnover of N7.06 billion and a profit after tax of N2.57 billion. Speaking at the AGM in Lagos, Chairman of the company, Mr. Larry Ettah, Chairman CAP Plc to further improve the brand visibility and accessibility to consumers, they opened additional Dulux Colour Centres in Yola and Gombe and Dulux Colour Shops in Lafia, Ada-George Port Harcourt, Ado-Ekiti, Dugbe Ibadan, Agbor, Suleja, Lugbe Abuja and Jalingo.”
“The company retained its ISO 9001:2008 and 14001:2004 certifications on Quality and Environmental standards respectively as we continued to offer high quality products and services to customers while complying with regulatory requirements and conduct our operations in a healthy and safe manner, ensuring minimal impact on the environment.”
Speaking on the on the outlook for 2016, Ettah said fiscal policy is expected to be largely expansionary as the government seeks to stimulate economic activities and generate employment.
“The year has, however, started on an adverse mode, with acute shortage of foreign exchange. The cumulative effect of the scarcity of forex, falling oil prices, and the resurgence of restiveness in the Niger Delta, which could endanger the production output of 2.2m barrels per day and the continued depletion of foreign reserves pose serious threats to businesses and social activities in 2016.”
The challenging environment notwithstanding, the chairman stated that the board and management of CAP Plc company is alive to these challenges.
“The board and management and of your company is alive to these challenges and have outlined mitigating strategies to ensure that these headwinds do not significantly impact our business negatively in 2016,” he said.
The Senate Committee on Communications has accused some top Federal Government officials of short-changing the country by the reduction of the fine imposed on MTN Nigeria for operational misconduct by the Nigerian Communications Commission.
In a letter entitled: ‘Re: Settlement between NCC and MTN over fine’ and addressed separately to all the government officials in the deal, the committee expressed concern over the agreement for the payment of N330bn reached with MTN instead of the N1.04tn initial fine.
It, therefore, summoned all the parties involved to appear before it on Thursday to explain their role in the deal.
Those summoned include the Minister of Justice and Attorney General of the Federation; Minister of Communications; the Executive Vice Chairman, NCC; Accountant-General of the Federation; Managing Director/CEO of MTN; and Governor of the Central Bank of Nigeria.
The Chairman of the committee, Senator Gilbert Nnaji, also noted with regret that the sanction, which was originally N1.04tn, was initially reduced to N780bn before the final resolution at N330bn.
Nnaji, in the letter dated June 15, 2016, said the entire transaction was fraught with suspected criminal tendencies as it was allegedly perfected in secrecy.
The letter read in part, “As a committee and representatives of the Nigerian people, we are saddened about this development at a time when the Nigerian economy needs all the available capital infusion to bolster it.
“It is our strong opinion that Nigeria has been short-changed in this whole process on account of the ridiculous settlement payment plan coupled with the disparity in the exchange rate regime when the fine was imposed ab initio compared with the current prevailing exchange rate when it was agreed to cut the fine to N330bn.
“We wondered why the NCC should engage in such a negotiation that is tainted with a lot of questionable conclusions without the knowledge of the committee.
“The committee is worried about this development because it is on record that during our last investigative meeting with all the relevant parties to this matter on Thursday, March 10, 2016, the committee was informed that the case was still in court and that it was adjourned till March 18.
“The committee was not aware of the outcome of the court case neither was it privy to any active negotiation that led to the fine being reduced to N330bn.”
The committee described the deal as ridiculous and asked the government officials to bring along documents containing the Presidential directive, which approved that MTN should pay N330bn to the government.
The stock market gained additional N205bn on Thursday after 32 firms made the gainers’ chart. The Nigerian Stock Exchange All-Share Index, therefore, appreciated by 2.14 per cent at the close of trading on the Exchange’s floor.
The NSE market capitalisation soared to N9.784tn from N9.579tn, while the index rose to 28,489.89 basis points from 27,891.96 basis points.
An aggregate of 618.248 million shares valued at N5.41bn were traded in 6,757 deals.
The highest index point attained in the course of trading was 28,489.89 basis points, while the lowest and average index points stood at 27,034.05 and 27,550.38 basis points, respectively.
The stocks of Champion Breweries Nigeria Plc, Unity Bank Plc, Lafarge Africa Plc, Wema Bank Plc and Nigerian Breweries Plc emerged as the top five gainers.
The shares of Champion Breweries appreciated by N0.30 (9.87 per cent) to close at N3.34 from N3.04, while those of Unity Bank gained N0.09 (8.33 per cent) to close at N1.17 from N1.08.
Similarly, Lafarge (WAPCO) shares soared to N83.91 from N78.88, gaining N5.03 (7.29 per cent), while Wema Bank shares appreciated by N0.05 (6.33 per cent) to close at N0.84 from N0.79.
In the same vein, Nigerian Breweries share price recorded a N8.01 (5.99 per cent) appreciation to close at N141.76 from N133.75.
Other gainers were Oando Plc, Cement Company of Northern Nigeria Plc, Zenith Bank Plc, Ikeja Hotel Plc, Axa Mansard Insurance Plc, Neimeth International Pharmaceuticals Plc, Custodian and Allied Plc, Continental Reinsurance Plc, Livestock Feeds Plc, Caverton Offshore Support GRP Plc, Dangote Sugar Refinery Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, Cadbury Nigeria Plc, among others.
On the other hand, 15 stocks recorded losses in their prices. Glaxo Smithkline Consumer Nigeria Plc, Learn Africa Plc, NPF Microfinance Bank Plc, Africa Prudential Registrars Plc and Unilever Nigeria Plc emerged the top five losers.
Other losers were NEN Insurance Company Nigeria Plc, May & Baker Nigerian Plc, PZ Cussons Nigeria Plc, Fidson Healthcare Plc, Vitafoam Nigeria Plc, Diamond Bank Plc, Guinness Nigeria Plc, Tiger Branded Consumer Goods Plc, Union Bank of Nigeria Plc and Access Bank Plc.
