The Nigerian equities market closed in the green yesterday after opening on negative note the previous day. Price gains by some highly capitalised stocks such as Dangote Cement Plc, Transcorp Plc, Guinness Nigeria Plc and Nigerian Breweries Plc boosted the performance. The Nigerian Stock Exchange (NSE) All-Share Index rose by 2.23 per cent to close higher at 25,129.27, while market capitalisation closed at N8.697 trillion. Got something awesome to share with the world? Click here to share
However, Transcorp Plc led the price gainer’s chart in percentage terms with 7.14 per cent, trailed by Guinness Nigeria Plc and Dangote Cement Plc with 4.9 per cent apiece. The growth recorded in the market is believed to have been bolstered majorly by Dangote Cement, which has the highest capitalisation in the market. The company last week declared a dividend of N8.50 per share for the year ended December 31, 2016. According to the audited results of the leading cement manufacturing firm, revenue grew by 25 per cent from N492 billion in 2015 to N615 billion in 2016. Gross profit stood at N291 billion, up from N289 billion in 2015. A further analysis of the results showed that administrative expenses rose by 12 per cent to N36.7 billion in 2016, from N32.5 billion in 2015. Selling and distribution expenses followed similar trajectory, jumping by 54 per cent from N53.5 billion to N82.6 billion, depressing profit from operating activities to N182 billion in 2016, from N208 billion in 2015. Financing costs rose by 14 per cent to N45 billion, from N33 billion, making profit before tax to be at N180 billion as against N188 billion in 2015.
However, a tax credit recorded by the company lifted its before after tax to N187 billion from N181 billion in 2015. Commenting on the results, the Chief Executive Officer of Dangote Cement, Mr. Onne van der Weijde said: “It was a challenging year for many African economies but we achieved sales and revenue growth of 25 per cent and consolidated our position as Africa’s leading producer of cement. Sales from Nigerian operations increased by 13.8 per cent to nearly 15.1metric tonnes(Mt), at a growth rate far higher than the country’s GDP, which fell in 2016. “The New Year has started well and we expect much higher profitability in Nigeria in 2017, even though we may not see the volume growth we achieved in 2016. I am confident that we will deliver an even stronger performance in 2017 as we increase market share and extend our reach across Africa,” he said.
The Securities and Exchange Commission, on Tuesday, said it had paid about N42bn out of about N117bn unclaimed dividends to investors.
The Director-General, SEC, Mr. Munir Gwarzo, said this at a public hearing organised by the Joint Senate and House of Representatives Committees on Capital Market on “The need to determine the status of unclaimed N90bn dividends in securities for Nigerian investors.”
Gwarzo said efforts by the SEC to address the issue of unclaimed dividends were already showing result with the e-dividend registration system.
He said as a result unclaimed dividend had dropped from N117bn to N75bn.
Gwarzo said, “As of today, based on the reports we received from the registrars, almost N42bn unclaimed dividends have so far been paid, out of a total of N117bn unclaimed dividends as of December30, 2016, which means our message of unclaimed dividend is yielding positive results.”
The Chairman, Senate Committee on Capital Market, Senator Isiaka Adeleke, requested for the list of the beneficiaries.
The Director General of SEC said this would be transmitted to the panel as soon as possible.
The President of the Senate, Senator Bukola Saraki, while declaring the hearing open, said although the commission was making efforts to address the issue, it had remained prevalent.
Saraki, who was represented by the Majority Leader of the Senate, Senator Ahmad Lawan, said, “I am quite aware of the recent initiative of SEC by introducing the e-dividend policy to ensure that accounts of investors are credited directly within 24 hours after the declaration of the dividends by the companies.
“However, the issue of unclaimed dividends remains quite critical, as it has endangered the progress of the Nigeria capital market; an issue among others that has eroded our investor’s confidence.”
Stanbic IBTC Holdings Plc at its fourth annual general meeting held tuesday reiterated its commitment to deliver outstanding value to clients and stakeholders.
Approved by shareholders at the event was the 2015 financial statement of accounts. Stanbic IBTC had in a statement to the Nigerian Stock Exchange on December 21, 2016, disclosed that following the resolution of the dispute with the Financial Reporting Council of Nigeria, its 2015 audited financial statements had been signed off by the external auditors, Messrs. KPMG Professional Services and can now be made public. Chief Executive, Stanbic IBTC Holdings Plc, Mr. Yinka Sanni, said despite a slowing economy, the institution remained in very sound financial shape. Sanni emphasised that the institution remained on track to maintain its long-term strategic growth and profitability objectives by, prioritising asset quality through diligent and systematic approach to risk management.
“Our strategy of building a franchise capable of generating sustainable returns to our shareholders remains in place. Our continued investment in building a cost-efficient and customer-friendly organization, underpinned by our growing customer base, innovation and customized financial solutions should continue to ensure better earnings and indeed very positive outcomes for all stakeholders. Our customers and stakeholders are the epicentre of our existence and will remain so,” he stated.
During the meeting, shareholders approved a dividend as recommended by the Board of Directors, as well as re-elected retiring directors and appointed additional ones. The group, in the financial year ended December 31, 2015 posted gross earnings of N140.027 billion, up from N130.654 billion from 2014. Profit before tax stood at N23.651 billion during the period, while profit after tax was N18.891 billion. Total assets decreased to N937.6 billion by December 2015, while customer deposits was largely flat at N493.5 billion during the same period. “Our balance sheet remains strong and we believe it will get stronger in the coming years. We will continue to deliver exceptional service and value to our customers, together with profitability and growth in a sustainable manner”, Sanni said.
The Central Bank of Nigeria (CBN) said it plans to issue treasury bills worth N1,129,855,189 in the second quarter of the year.
According to the CBN’s Nigerian Treasury Bills issue programme posted on its website yesterday, 91-day treasury bills issue worth N242,673,157 would be sold in next quarter. In the same vein, 182-day valued at N197,891,045 would be issued during the period, just as 364-day bills valued at N689,290,987 would also be auctioned by the regulator next quarter.
Meanwhile, the naira closed at N460 to the dollar at some parallel market points in Lagos yesterday.
The interbank forex market traded $540,000 in early deals at N375 per dollar, near a record low exchange rate hit last November, Thomson Reuters data showed on Monday. The local currency traded at a record low of N375.50 to the dollar last November on the official interbank market before it reversed losses.
The interbank market traded a total of $3.77 million at multiple exchange rates on Monday, the data showed.
Traders said banks were selling dollars bought from international money transfer agents to retail customers at N375.
The Federal Government’s recent listing of the $1bn Eurobond on FMDQ OTC Securities Exchange market will pave the way for domestic listing of Nigerian corporates’ Eurobonds and ignite the vision for an ‘afrodollar’ market, according to the FMDQ.
The Federal Government, through the Debt Management Office, had for the first time listed its Eurobond domestically after successfully raising $1bn from the international markets in February, and following a series of strategic engagements that spanned at least three years with the FMDQ and other stakeholders.
The event was graced by the Director-General of the DMO, Dr. Abraham Nwankwo, along with key representatives from the DMO.
The OTC Exchange also hosted the Securities and Exchange Commission; the adviser to the issuer and co-sponsor of the Eurobond on FMDQ, Stanbic IBTC Capital Limited; the arranger/dealer and co-sponsor of the issue on FMDQ, Standard Chartered Capital and Advisory Nigeria Limited.
Other parties to the listing included representatives of Citigroup Global Markets Limited and the legal advisers to the issue, Banwo & Ighodalo and Udo Udoma & Belo-Osagie, amongst others.
In her opening remarks, the FMDQ’s Chairman, Dr. Sarah Alade, who was represented by the Vice Chairman of FMDQ, Mr. Jibril Aku, congratulated the issuer on the epochal step, noting that the move by the FGN to list on a domestic exchange, in addition to listing offshore, was a welcome development, and a stance, which would rightly position the nation to maximise its potential via the debt capital market.
In line with FMDQ’s vision for the transformation of the markets, the OTC Exchange, since its debut in the Nigerian financial market landscape, already granted trading status for $1.50bn of the previously issued FGN Eurobonds and $3.15bn of Eurobonds issued by Nigerian companies.
This was to ensure price formation and provision of information transparency to protect investors’ interests.
The SEC’s Director-General, Mr. Mounir Gwarzo, represented by Mr. Adamu Sambo, in his remarks, also commended the issuer for achieving this milestone and reiterated the SEC’s commitment to continue to support the development of the nation’s debt capital markets, ensuring that integrity and efficiency would be upheld for the protection of investors.
Delivering the keynote address, Nwankwo highlighted critical milestones achieved by this transaction.
He also stated that it was the longest tenored debt security, at 15 years, issued by the FBN in the international capital markets.
The DMO DG said the wide infrastructural gap, which constrained the development efforts of the nation, could be better matched by tapping into long-term financing options, via domestic and foreign debt capital markets.
Stanbic IBTC Capital Limited, represented by Mr. Yinka Sanni, the Chief Executive Officer of Stanbic IBTC Holdings Plc, said, “This is indeed a testament to international investor confidence in Nigeria’s road map towards economic recovery and growth.
“The overwhelming success of the transaction on the whole evidences the underlying potential of Nigeria, and Stanbic IBTC Capital Limited is indeed proud to be part of this transaction. We are also pleased to sponsor the quotation of this Eurobond on FMDQ’s platform. Though Stanbic IBTC Capital Limited has sponsored many listings on FMDQ’s platform, this particular listing is very special as it represents the first ever Eurobond on the OTC Exchange,” he said.
Some commercial banks have heeded the Central Bank of Nigeria’s (CBN) directive on the opening of teller points for retail foreign exchange transactions, THISDAY investigations have shown. The CBN had said the new directive was a reaffirmation of its willingness, capability and determination to meet FX demand in the market. Some of the commercial banks branches visited in Abuja yesterday to assess the level of compliance with the directive had already created special points for FX transactions as well as electronic display boards to show current FX rates. However, officials of some banks’ branches visited around the Asokoro area of Abuja expressed ignorance of the central bank’s new directive. When asked if his bank had complied with the new directive, a senior official in one of the second generation banks said his branch was not aware of the directive.
He said it was the headquarters of the bank that should preoccupy itself with handling such directives, adding that the directive he was familiar with was the one mandating commercial banks to create FX sales points at airports to attend to travellers’ FX needs. He, alongside a female colleague, said the banks needed some time to comply with the latest directive. In issuing the new directive, the CBN said the initiative was aimed at easing access to buying and selling of FX at all locations as well as easing access by customers and other users, without any hindrance. The CBN on Sunday also directed all commercial banks to process and meet the demand for travel allowances (PTA/BTA) by end-users within 24 hours of such applications. THISDAY investigations showed that although some of the banks within the Federal Capital Territory (FCT) had electronic monitors for FX rates, they posted insufficient information on rates. For instance, while some of them displayed only their selling rates without the buying rate, others showed the rate at which they were buying but not selling.
THISDAY further observed that most of the banking halls visited had only a few customers conducting FX transactions. In a related development, the central bank yesterday sustained its intervention in the FX market, when it provided another $367,134,329.93 in forwards sales. A breakdown showed that $144,073,753.07 was for 45 days forwards, while $223,060,576.86 was for 60 days. However, the naira traded between N455 and 460 to the dollar at some parallel market points in Lagos. The CBN acting Director in charge of Corporate Communications, Isaac Okorafor, confirmed the release, adding that the move was in line with the Bank’s determination to ease the FX pressure on various sectors through forward sales under the new flexible regime to keep the market liquid. The CBN recently introduced new FX measures, which among other things, are aimed at easing the burden of travellers and to ensure that transactions are settled at much more competitive exchange rates. The central bank had also directed all commercial and deposit banks to open FX retail outlets at major airports as soon as logistics permit.
International Energy Insurance Plc says it is set for repositioning as shareholders have given the interim board the approval to recapitalise the company for growth and competitiveness.
A statement from the firm said the expected new capital when injected would enhance the firm’s working capital, improve IT infrastructure, meet solvency requirement and provide new investment opportunities.
“Rising from the company’s 42nd annual general meeting held in Kano, the shareholders approved that the directors in conjunction with the technical committee should further recapitalise the company by raising additional N9bn, which when added to initial recapitalisation approval of N4bn given at its 41st annual general meeting amounts to a total approval of N13bn,” the company stated.
The firm also said the money could be raised from the capital markets, local, or foreign investors whether by way of private placement, public or rights offer and/or issuing ordinary and/or preference shares of the company for such equity, whether by bonds, convertible loans or other debt instruments, with or without the option of converting such bonds, loans or other debt instruments to ordinary and or preference shares of the company, or by debt equity conversion upon such terms and conditions as the directors might deem fit, subject to all relevant approvals.
Besides that, the IEI said the directors were also authorised to constitute a technical committee of the board and shareholders to renegotiate and restructure the company’s indebtedness to Daewoo Securities (Europe) Limited.
The Interim chairman of the board, Mohammad Ahmad, who was appointed on May 18, 2015 following regulatory intervention by the National Insurance Commission, said the board had taken necessary actions to stabilise and ensure sound management and growth of the company.
The House of Representatives investigating the huge debts owed to the Pipelines and Products Marketing Company (PPMC) by oil marketers has heard that the subsidiary of Nigerian National Petroleum Corporation (NNPC) is being owed about N7.6 billion by Oando Plc, and Conoil. The committee at the resumption of sitting frowned on the development, attributing it to a lack of clearly spelt out penalties for those who default on payments.
The lawmakers lamented that many of the marketers were guilty of continuous and deliberate breach of the 15-day credit line for lifted products. The Hon. Mahmud Gaya – led committee therefore directed Oando with a debt of N4.5 billion to PPMC, to expediently honour its agreements, or risk being cut off oil supplies.
Similarly, Conoil, which owes N3.1billion to the PPMC, was directed to pay at least 50 percent, failing which, the oil firm would also be stopped from accessing oil products. Gaya also gave the assurance that the terms of accessing oil supplies from the PPMC by oil marketers would be reviewed to prevent the marketers from holding on to public funds.
“Because there is no well spelt terms on penalties for default, we found out that Conoil was last penalised for default in 2012, for instance. We discover that a revolving credit facilities given to Conoil allowed it to owe with credit line for two weeks but it has defaulted for over two months since the end of December 2017. Yet, it continues to lift products from PPMC,” the Chairman said.
“Is it fair to owe such a huge amount of Nigerian money? The country cannot move forward when this is happening. It is not impossible that they deliberately divert the money to other businesses since they know there is no penalty,” Gaya declared.
Meanwhile, Hon. Jarigbe Agom Jarigbe (Cross River PDP) who moved the motion that mandated the investigative hearing, appealed to the federal government to urgently clear the subsidy debts owed to the marketers. The marketers at last week’s hearing had claimed they were being owed about N300 billion in subsidy payments for 2014-2015 by the government. The Group Chief Executive Officer (GCEO) of Forte Oil Nigeria, Mr. Akin Akinfemiwa, at the hearing put the subsidy outstanding claims owed his company at N13.8 billion.
Jarigbe, speaking with THISDAY in an interview, said the committee set up by the government over the debts, should do its best to ensure that the debts are settled, to avoid a cascading effect on the economy. “Government should do everything to settle the debts so our economy does not get affected. The oil marketers also have to be encouraged, they are part of our society and economy” he added.
The lawmaker noted that while the committee cannot go beyond its mandate, which is to ensure oil marketers clear their debts to PPMC, the companies can petition or lobby relevant House committees to facilitate the payment of their subsidy claims.
Jarigbe however frowned at the practice where some of the oil marketers lift products from the PPMC under the 15 credit agreement, sell the products, and fail to pay for the products.
“Some do not honour the throughput agreements. The government stores products in their tank farms, they sell the products, and then refuse to pay. Some take loans at MPR rates, but fail to repay the loans,” he observed.
The stock market recorded a turnover of 12.07 billion shares worth N44.39 billion in the first two months of 2017, showing the weak investor demand for equities. An analysis of the performance showed that January accounted for the highest turnover as investors traded 7.68 billion shares valued at N47.33 billion. The month of February accounted for 4.39 billion shares worth N37.06 billion, showing a decline compared to the month of January.
The month of February also recorded a decline in market value as the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) depreciated by 2.72 per cent. Apart from the NSE ASI, all the sectoral indices declined in February 2017 compared with January 2017, except the NSE Banking Index which remained flat. The NSE Consumer Goods Index recorded the highest depreciation of 11.03 per cent. The NSE Industrial Index recorded a decline of 8.59 per cent, while the NSE Oil/Gas Index fell by 3.7 per cent. The NSE Insurance Index declined by 1.5 per cent. However, analysts at FSHD Merchant Bank Research are bullish on the month of March, saying that the market would record positive performance.
They hinged their optimism on the trend in the past five years. According to them, the performance of the equity market in the last five years showed that the market recorded positive performances between February and March.
For instance, in 2012 the market rose by 3.07 per cent between February and March 2012, 1.39 per cent in 2013, declined by 2.05 per cent in 2014. It appreciated by 5.4 per cent in 2015 and 2.9 per cent in 2016. “The equity market may follow historical trend as the economic outlook becomes increasingly positive,” the analysts said.
In their outlook for the month of March FSDH said they expect to see some improvements in investor appetite for investment in 2017.
“The following factors may drive performance: improved supply of foreign exchange at the foreign exchange market; improved confidence on the outlook of the Nigerian economy, the increase in oil prices and production and expected gradual return of foreign investors into the (equity) market,” they said. Commenting on the strategies to adopt by investors going forward, the analysts recommended that investors should maintain a medium-to-long term position in the equity market.
“We maintain that long-term investors should take long positions in the stocks that have strong fundamentals. Building materials, food and beverages, agro-allied processing and banking stocks,” they said.
The federal government has stated that it is working towards increased foreign direct investments ( FDIs) in flow in the country, noting that with the current state of the economy, all hands are on deck to seek areas where Nigeria can attract the much needed foreign exchange to carry out developmental projects for economic prosperity and sustainability.
The Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, during a business seminar organised by Japan External Trade Organisation (JETRO), assured investors of a safe and business friendly environment for their investments, noting that the federal government was doing all it can to improve the ease of doing business in the country.
The minister, who was represented by the Executive Secretary, Nigerian Investment Promotion Commission (NIPC), Ms. Yewande Sadiku, stated that there are more investment opportunities Nigeria and Japan can explore considering the size of Japan, while adding that Nigeria is seeking increased trade and investment inflows from Japan.
According to him: ”There is a lot more that both countries can do together. The federal government is doing all it can to improve the ease of doing business in the country, it is as a result of this, the federal government inaugurated the Presidential Enabling Business Environment Council (PEBEC) chaired by the Vice President. This council has been focused on making life more convenient for businesses in the country.”
Also speaking at the event, the Director General, JETRO Paris, Mr. Susumu Kataoka, added that at the Tokyo International Conference on Africa Development, the Prime Minster of Japan, announced its commitment to invest about $30 billion in Africa for the sustainable development in Africa especially in infrastructure, human resources development, technology, improvement of living conditions and regional stability.
He said the international conference had since started to create certain dynamism among the Japanese companies, saying that more Japanese companies are getting more interested in doing new businesses in Nigeria or expanding their activities in other African countries.
“This is why I am here with the delegation of Japanese companies who are not yet fully based in this country, but are showing their interest in investing in this country. The Japanese private sector is now motivated in doing businesses here in Nigeria with a huge potential especially in terms of your population and the volume of the economy. The purpose of our visit here is to know the business environment and this seminar is step to further deepen the existing relationship between both countries.
In her capacity as Executive Secretary, Sadiku said Africa is yet to get its fair share of investment in flow, pointing out that the continent share is miniscule when compared to many developed economies of the world. She said although Nigeria accounts for 11 per cent of FDIs into Africa, but stressed that the amount is a far cry when compared to the potential of Africa.
